Lesson From the Trenches: Debtor Educator in Theory and Practice
Fordham Journal of Corporate & Financial Law
Susan Block-Lieb
Karen Grossy
Richard L. Whitez
z Copyright c 2002 by the authors. Fordham Journal of Corporate & Financial Law is produced by The Berkeley Electronic Press (bepress). http://ir.lawnet.fordham.edu/jcfl
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2002
Article 13
1. Susan Block-Lieb is a Professor of Law at Fordham Law School:
<>. Karen Gross is a Professor of Law at New York
Law School where she is the director of the NYLS Economic Literacy
Consortium: <>. Both serve as officers and members of the
Board of Directors of the Coalition for Consumer Bankruptcy Debtor Education
(the "Coalition"), a not-for-profit corporation. Dr. Richard L. Wiener is the
chair of, and a professor in, the Department of Psychology at Baruch College.
City University of New York: <richard >. Dr. Wiener
is neither an officer nor a member of the Board of Directors of the Coalition.
The views expressed herein belong to the authors, and do not necessarily
represent the views of the Coalition or any of its individual members. The
financial education project described in this Article (the "Project") has been
funded by generous grants from the National Endowment for Financial
Education ® (Project Number 005-10-2001), the Educational Endowment Fund
of the National Conference of Bankruptcy Judges, and the American College of
Bankruptcy.
2. The easiest and fastest way to keep up with bankruptcy legislative
developments is by logging onto www.abiworld.org, a website maintained by the
American Bankruptcy Institute, a membership organization dedicated to
developing information and understanding of the bankruptcy system.
3. The Bankruptcy Abuse Prevention and Consumer Protection Act of
2001, H.R. 333, 107th Cong. (2001); The Bankruptcy Reform Act of 2001, S. 420,
107th Cong. (2001).
4. See Bankruptcy Legislation Hits Latest Wall, AM. BANKR. INST. J., Oct.
pause has not stopped discussion and debate about what type of
legislation might ultimately emerge and whether that contemplated
is justified, wise, and feasible.
It is in that spirit that this Article focuses its attention on one
particular proposed change to the bankruptcy laws: the
introduction of a post-filing financial management course.5
Interestingly, post-filing financial management courses and
prebankruptcy debtor counseling have been one of the less frequently
debated features of the pending legislation. In his recent book,
Debt's Dominion, Professor David Skeel observes that educational
initiatives were supported by creditors, as they would serve to
increase consumer debtor repayment and fiscal responsibility and
to decrease utilization of the bankruptcy process.6 Skeel suggests
that debtor advocates, such as ourselves, might be expected to be
disinclined toward these educational proposals, but in fact, have
been supportive - consistent with longstanding beliefs in fostering
consumer empowerment.7 Our Article begins with a discussion of
the rationale for post-filing debtor education. We then turn to a
detailed description of a pilot project to provide a voluntary
financial management course to 1200 individual debtors in the
Eastern District of New York,' sponsored by the Coalition for
2001, at 3.
5. H.R. 333, §§ 105 & 106; S. 420, §§ 105 & 106. The proposed legislation
contemplates a mandatory postpetition course for every individual debtor in the
United States who commences a chapter 7 or chapter 13 bankruptcy case. Under
the proposed legislation, an individual debtor's failure to complete such a course
may result in the denial of his or her discharge. For a discussion of the pending
legislation related to debtor education, see Susan Block-Lieb & Karen Gross,
Debtor Education: Making Sure A Good Idea Doesn't Go Awry, 1 NORTON
BANKR. L. ADVISER 6 (2000). For copies of the key legislative provisions, see
Appendix C, 7 FORDHAM J. CORP. & FIN. L. Cl (2002).
6. DAVID A. SKEEL, JR., DEBT'S DOMINION: A HISTORY OF BANKRUPTCY
LAW IN AMERICA 207-08 (2001).
7. Id.
8. The Eastern District of New York spans Brooklyn, Queens, Staten
Island, and Long Island (both Nassau and Suffolk Counties), and encompasses
urban, suburban and rural areas. The district is ideally suited for a pilot, given its
enormous diversity on all levels. Indeed, the district served previously as a pilot
region for the in forma pauperisproject run by the Federal Judicial Center. See
generally ELIZABETH C. WIGGINS, IMPLEMENTING AND EVALUATING THE
Consumer Bankruptcy Debtor Education (the "Coalition").9 Our
"in the trenches" work in developing, implementing, overseeing,
and studying the Pilot Project has enabled, and will continue to
enable, us to reach certain conclusions with respect to the
development and implementation of financial management courses
for debtors, as well as the mandate for debtor education in the
pending bankruptcy bills.
II. RATIONALE FOR POST-FILING DEBTOR EDUCATION
We live in a world in which money and credit play a central
role in our daily lives. Over the past two deca (...truncated)