The New Bankruptcy Law for 2011
As of December 22, 2010, there is a new bankruptcy law. Technically it is just an amendment rather than an all out reform such as that seen in 2005 with the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). BAPCPA has been described by legal scholars, practitioners, and the courts as poorly drafted and ambiguous. On December 22, 2010, the President signed H.R. 6198: Bankruptcy Technical Corrections Act of 2010 (BTCA) into law to correct technical errors – though I would hardly say an error in the law is technical.
The BTCA makes numerous “technical” corrections to the BAPCPA such as correcting incorrect cross-references from one part of the Code to another, inserting missing language and words, removing improperly placed words, etc. The technical corrections effect (1) the power of the court; (2) waiver of sovereign immunity; (3) public access to papers; (4) who may be a debtor; (5) penalties for fraudulent or negligent preparation of bankruptcy petitions; (6) debtor reporting requirements; (7) automatic stay; (8) case administration; (9) determination of tax liability; (10) priorities of creditors and claims; (11) debtor's duties; (12) exceptions to a discharge; (13) restrictions on debt relief agencies; (14) property of the estate; (15) abandonment of property of the estate; (16) treatment of certain liens; (17) conversion or dismissal; (18) bankruptcy crimes; (19) bankruptcy appeals; and (20) bankruptcy statistics.
While the insertion, correction, or deletion of language may seem like a mere technicality, when dealing with the law, it can be of major significance. For example, a recent story from Virginia proves this point. In 2010, a driver in Virginia was ticketed for failing to stop for a school bus. The statute read:
"A person is guilty of reckless driving who fails to stop, when approaching from any direction, any school bus which is stopped on any highway, private road or school driveway for the purpose of taking on or discharging children."
If you read the statute carefully, it is missing the word “at” after the second comma. The statute, as written, is criminalizing a person who fails to stop a school bus that is stopped. Is it still a mere technicality? The bottom line is our lawmakers write laws and courts must interpret them as written if they are clear, no matter how absurd the result.
With the BTCA, the Congress is trying to correct numerous “technical” mistakes but it has left behind numerous ambiguities that plague practitioners and the courts; it is no wonder the U.S. Supreme Court has had one of the most active terms for its cases on bankruptcy issues.
Substantively, probably the most relevant change relating to most debtors in Southwest Florida is the change to the pre-filing credit counseling requirement. The cases across the country have split as to whether it needs to be done a day before filing or if it can be done the same day but before the filing time. The cases from courts in Middle District of Florida have held it must be the day before. The BTCA makes clear that credit counseling may be completed the same day as filing so long as it is completed before filing.
This Blog was written by Attorney David Fineman, Esq. of The Dellutri Law Group, P.A. Mr. Fineman practices Bankruptcy Law, Fair Credit Reporting Act Law, Fair Debt Collection Practices Act Law and in other areas of Consumer Law.
