Lesson From the Trenches: Debtor Educator in Theory and Practice

Fordham Journal of Corporate & Financial Law, Dec 2019

By Susan Block-Lieb, Karen Gross, and Richard L. White, Published on 01/01/01

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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 - 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)


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Susan Block-Lieb, Karen Gross, Richard L. White. Lesson From the Trenches: Debtor Educator in Theory and Practice, Fordham Journal of Corporate & Financial Law, 2001, Volume 7, Issue 2,