Document Type

Article

Publication Title

Fordham Journal of Corporate and Financial Law

Abstract

In their article, But Can She Keep the Car? Some Thoughts on Collateral Retention in Consumer Chapter 7 Cases, Marianne Culhane and Michaela White argue, in essence, that bankruptcy law should provide consumer debtors with a soft landing, at least a softer landing than proposed by the House and Senate versions of the still pending Bankruptcy Reform Act of 2001. This is not to say that the Culhane & White policy recommendations are wrong. Positive externalities from a fresh start could be a determinant factor. Moreover, there is some debate over whether the consumer credit market is in fact competitive. And as I have argued before, in my article with Polak and Schwartz, where a creditor is a monopolist, retention does disadvantage borrowers with little bargaining power. In addition, where creditors frequently use deceptive practices to extract payments from debtors, as Culhane & White believe they do, a bankruptcy system that facilitates such practices is undesirable, or potentially undesirable, on too many grounds to mention. My point, then, is not that permitting aggressive creditor collection necessarily enhances social welfare. Rather, my point is that it may. The question is harder than Culhane & White sometimes make it seem.

First Page

499

Volume

7

Publication Date

2001

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