Katherine Porter

90 Texas L. Rev. 103

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Professor Katherine Porter examines whether the one-in-three discharge rate realized in Chapter 13 bankruptcies suggests that Chapter 13 may not be the consumer protection triumph that most bankruptcy experts and legal commentators tout it to be. Porter analyzes the results of an empirical study in which she interviewed debtors who were unable to obtain a Chapter 13 discharge in order to determine whether Chapter 13 dismissals should be considered “successful” outcomes for Chapter 13 debtors. The results show that most debtors whose Chapter 13 cases were dismissed did not achieve the goals they had when filing for bankruptcy and did not reach a permanent solution to their financial distress; nevertheless, a staggering 83% of families she interviewed reported that filing bankruptcy was “a very good or somewhat good decision,” blaming their failure to reach discharge on themselves, their attorneys, or their bankruptcy trustees rather than on the bankruptcy system itself. Porter argues that the reluctance of debtors and policy makers to criticize the bankruptcy system is derived from the fact that Chapter 13 is a “pretend solution”—a social program that does not work, but that is not critiqued or reformed because its flaws are hidden. Porter utilizes the results of her study to propose an overhaul of the existing consumer bankruptcy framework that would trade the current system of broad consumer choice for a simpler, outcome-oriented system of “rough justice.” She concludes by using the lessons learned through her Chapter 13 analysis to identify five characteristics of pretend solutions and to expound upon an approach to policy design that promises to transform pretend solutions into actual solutions.