Association of American Law Schools Home  Calendar

Workshop on Bankruptcy

May 17–19, 2001
St. Louis, Missouri

Back to Workshop Program

  Expanding the Horizons of a Consumer Bankruptcy Course

Michael M. Greenfield
Walter D. Coles Professor of Law
Washington University School of Law

  1. Breadth of Topic
    1. Bankruptcy Code provisions
      1. §541(a)(1): the estate includes “all legal or equitable interests of the debtor in property”
      2. §502(b)(1): the court shall allow claims of creditors except to the extent the claim is unenforceable against the debtor
    2. Encompasses virtually any kind of consumer protection claim or defense
    3. Criterion for inclusion: likelihood of arising in the course of a bankruptcy case
      1. Claims and defenses concerning property the consumer has given as collateral
      2. Claims concerning coercive collection efforts
  2. Coercive Collection Activity
    1. Fair Debt Collection Practices Act [15 U.S.C. §1692]
      1. Validation within 5 days after the initial communication [§809, 15 U.S.C. §1692g]
      2. Prohibition against communicating with anyone other than the consumer, the consumer’s spouse, or the consumer’s attorney [§805(b), 15 U.S.C. §1692c(b)]
      3. Right to compel the debt collector to cease all contact [§805(c), 15 U.S.C. §1692c(c)]
      4. Prohibition against harassment: use or threat of force; obscene language; repeated phone calls made with the intent to annoy, abuse, or harass [§806, 15 U.S.C. §1692d]
      5. Prohibition against deception: misrepresentation of the amount or legal status of the debt; representation that nonpayment will result in arrest or judicial repossession unless that action is lawful and the debt collector intends to take it; a threat to take any action unless it is lawful and the debt collector actually intends to take it [§807, 15 U.S.C. §1692e]
      6. Prohibition against unfair practices: collection of any amount that is not specifically authorized by the contract or by state statute; repossession or threat of repossession if there is no right to repossess or if the debt collector does not intend to repossess [§808, 15 U.S.C. §1692f]
      7. Remedy: actual damages plus statutory damages of up to $1000, plus costs and attorney’s fees [§813, 15 U.S.C. §1692k]
      8. Scope: third-party debt collectors but not creditors collecting their own debts [§803(6), 15 U.S.C. 1692(6)]
    2. State Statutes
    3. Common Law
      1. Invasion of the right of privacy
      2. Intentional infliction of emotional distress
      3. Greenfield, Coercive Collection Tactics-- An Analysis of the Interests and the Remedies, 1972 Wash. U. L.Q. 1
  3. Enforcement of Security Interests
    1. Restrictions on Collateral
      1. Personal property
        1. After-acquired property [UCC §9-204(2)/9-204(2)]
        2. Future advances [UCC §9-204(3)/9-204(3)]
        3. Limits on Bankruptcy Code §522(f)
        4. FTC Credit Practices Rule, 16 C.F.R. §444.2(a)(4): nonpossessory, non-purchase money security interest in “household goods”
        5. Uniform Consumer Credit Code §3.301-.303 (1974) (permits cross-collateralization in other property sold by the seller to the consumer but specifies the way in which the security interest in each item is released)
        6. Ariz. Rev. Stat. §44-6002; Cal. Civ. Code §1808.1; Wis. Stat. §422.418
        7. Common law contract doctrine [E.g., In re Kim, 2000 Bankr. LEXIS 1588 (Bankr. S.D. Cal. 2000); In re Wollin, 249 B.R. 555 (Bankr. Or. 2000); In re Gibson, 249 B.R. 645 (Bankr. E.D. Pa. 2000)]
      2. Real property
        1. Cure: Bankruptcy Code §1322
        2. Rescission: Truth-in-Lending Act §125 [15 U.S.C. §1635; Regulation Z § 226.15, 12 C.F.R. §226.15 (open-end credit); Regulation Z §226.23, 12 C.F.R. §226.23 (closed-end credit)]: the security interest is void and the consumer is not liable for any amount, including any finance charge; the creditor has 20 days to tender any money or property the consumer has given; the creditor is unsecured. See E. Renuart & K. Keest, Truth in Lending §6.12.3, at 400 (NCLC 1999). Remedy: TIL §130(a)(2)(A), 15 U.S.C. § 1640(a)(2)(A)
    2. Limits on Repossession
      1. Self help repossession without breach of the peace [UCC §9-503/9-609]
      2. Notice and sale of collateral [UCC §9-504(3)/9-610 to 614]
      3. Issues
        1. Breach of the peace
        2. Sufficiency of notice
        3. Consequences of a violation [UCC 9-507(1)/9-625(c)(2)]: damages, loss of deficiency claim
  4. Holder in Due Course
    1. FTC Preservation of Consumers’ Claims and Defenses Rule (Holder Rule) [16 C.F.R. §433]
      1. Required legend: “Any holder of this consumer credit contract is subject to all claims and defenses which the debtor could assert against the seller of goods or services obtained pursuant hereto or with the proceeds hereof. Recovery hereunder by the debtor shall not exceed amounts paid by the debtor hereunder”
      2. Effect of omission
        1. New UCC §9-403(d)
        2. Iron & Glass Bank v. Franz, 9 Pa.D.&C.3d 419 (Pa. Common Pleas 1978) (violates deceptive practices act)
    2. Fair Credit Billing Act §170(a) [15 U.S.C. 1666i(a)]

Resources

Consumer Law Casebooks
1. Greenfield, Consumer Transactions 3rd ed. (Foundation 1999)
2. Spanogle et al., Consumer Law 2nd ed. (West 1991)
3. Whaley, Consumer Law 2nd ed. (Aspen 1998)
4. Miller et al., Consumer Law (Carolina 1998)

Treatises
1. Greenfield, Consumer Law (Aspen 1995)
2. Alperin & Chase, Consumer Law (West 1986)
3. Pridgen, Consumer Protection and the Law (Clark Boardman 1986)
4. Pridgen, Consumer Credit and the Law (Clark Boardman 1990)
5. Marsh, Consumer Protection Law 3rd ed. (West Nutshell 1999)

National Consumer Law Center Series
 Sommer, Consumer Bankruptcy Law and Practice 6th ed. (2000)
Hobbs, Fair Debt Collection 4th ed. (2000)
Loonin et al., Repossessions and Foreclosures 4th ed. (1999)
Renuart & Keest, Truth in Lending 4th ed. (1999)
Sheldon & Carter, Unfair and Deceptive Acts and Practices 4th ed. (1997)
Keest & Renuart, The Cost of Credit 2nd ed. (2000)
Ogburn, Fair Credit Reporting Act 4th ed. (1998)
Sheldon, Automobile Fraud (1998)
Sheldon & Carter, Consumer Warranty Law (1997)
Pereira, Credit Discrimination 2nd ed. (1998)

Top of Page