Thursday, September 21, 2006

BAPCPA Winners and Losers


As you many of you know, the new bankruptcy law, The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA") went into effect on October 17, 2005. We are closing in on the one year anniversary of the law and have taken a look back in an attempt to see who are the winners and the losers under the new legislation. The consensus among many practitioners and experts in the field is that the automobile finance industry is the major beneficiary of BAPCPA.

The benefit to auto lenders comes as a result of the final paragraph of BAPCPA's Section 1325(a). The consequence of this "hanging paragraph," as it is known, is that lenders who made loans for cars acquired by debtors within 910 days of their bankruptcy filings are entitled to receive the full amount of their claims via the Chapter 13 plans.

Holding on to collateral is a major objective of many individuals who file for bankruptcy. To the extent that Chapter 13 now requires higher repayment to retain cars and other personal property, fewer debtors will be able to afford to make those repayments for collateral and less money will be available to pay unsecured creditors.

Shenwick & Associates is proud to announce that we have updated our personal bankruptcy website, which can now be found at and we have started a legal blog on bankruptcy and real estate which can be found at

September 20, 2006

Jim Shenwick

Shenwick & Associates
230 Park Avenue
17th Floor
New York, N.Y. 10169
(W) 212-541-6224 ext. 7592
Cell Phone: 917-363-3391
Fax 646-218-4600
E Mail:

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