Erosion of Access to Consumer Bankruptcy’s “Fresh Start Policy” in the U.S.

Note from the Digital Editor: In order to highlight the high-level of research and scholarship from the authors who have published in the William & Mary Policy Review’s peer-reviewed print journal, we have reproduced the abstracts from Volume 7, Issue 1 along with a link to an electronic copy of the full form of the piece.

There is limited ability of qualified debtors to access justice in the form of bankruptcy relief in the United States. One-third of bankruptcy filers are below the poverty level. In the words of one researcher, “debtors are simply too broke to file.” This paper explores issues of access to justice through the Chapter 7 bankruptcy proceeding in the United States, in particular, access to justice in the era following the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the “Reform Act”). We show how, to date, policymakers have not adequately addressed the issue of access to justice raised by this paper. We argue that increased access to justice though bankruptcy is fundamental to the social and economic goals under Chapter 7 bankruptcy proceedings and that access to justice (or relief) is at the core of bankruptcy law and policy in the United States. One of the chief policies undergirding the Reform Act is to ensure that debtors who can pay creditors actually pay their creditors. For those debtors who cannot pay their creditors, bankruptcy proceedings extend relief. However, access for these debtors to bankruptcy relief is limited due to a number of barriers. We explore the limitations and barriers preventing debtors from accessing justice through Chapter 7 bankruptcy proceedings. We explore contending conceptions of justice in the context of bankruptcy and argue the purpose or intent behind bankruptcy relief is inherently a liberal conception of social justice. We propose several specific statutory reforms that will increase access to justice through Chapter 7 bankruptcy proceedings.

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Robert J. Landry, III is an Associate Professor of Finance at College of Commerce and Business Administration, Jacksonville State University, Jacksonville, AL.

David W. Read is an Assistant Professor of Management at Goddard School of Business & Economics, Weber State University, Ogden, UT.