Bankruptcy in America, in stark contrast to its status in most other countries, typically signifies not a debtor’s last gasp but an opportunity to catch one’s breath and recoup. Why has the nation’s legal system evolved to allow both corporate and individual debtors greater control over their fate than imaginable elsewhere? Masterfully probing the political dynamics behind this question, David Skeel here provides the first complete account of the remarkable journey American bankruptcy law has taken from its beginnings in 1800, when Congress lifted the country’s first bankruptcy code right out of English law, to the present day.
Skeel shows that the confluence of three forces that emerged over many years–an organized creditor lobby, pro-debtor ideological currents, and an increasingly powerful bankruptcy bar–explains the distinctive contours of American bankruptcy law. Their interplay, he argues in clear, inviting prose, has seen efforts to legislate bankruptcy become a compelling battle royale between bankers and lawyers–one in which the bankers recently seem to have gained the upper hand. Skeel demonstrates, for example, that a fiercely divided bankruptcy commission and the 1994 Republican takeover of Congress have yielded the recent, ideologically charged battles over consumer bankruptcy.
The uniqueness of American bankruptcy has often been noted, but it has never been explained. As different as twenty-first century America is from the horse-and-buggy era origins of our bankruptcy laws, Skeel shows that the same political factors continue to shape our unique response to financial distress.
A thorough, well-written history of US bankruptcy law Mr. Skeel’s book is an excellent description of the meandering history of bankruptcy legislation in the United States, linked to the conflicting reactions bankruptcy legislation has always provoked (debtors are expected to pay; but those who for, reasons beyond their control, become unable to do it, are morally entitled to relief and to a fresh start). The book’s introductory chapter explains well the basic legal concepts underlying subsequent chapters and makes the book quite accesible to…