Individual Chapter 11 Cases After BAPCPA

What Happened to the “Fresh Start”?

With the bankruptcy amendments contained in the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”), Congress attempted to address two of the issues that plagued many chapter 11 individual cases: the earnings exception and the absolute priority rule. However, in doing so, Congress radically changed chapter 11 for individuals. Regrettably, these changes created more confusion than they cleared up and stripped chapter 11 individual debtors of many of benefits of the coveted “fresh start.”

Article reprinted with the permission of West Group.