• The Last Dance: Righting the Supreme Court's Greatest Bankruptcy Apostasy

    Lawrence Ponoroff
    MSU Law Faculty Repository
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    In 1992, the United States Supreme Court entered its decision in Dewsnup v. Timm, which, although widely criticized by courts and commentators alike, has nonetheless endured for thirty years. Opportunities to overrule Dewsnup have been squandered even as many courts have expressed reservations over the wisdom and coherence of its reasoning. While thus ripe for reconsideration, the question is how to maneuver the issue back in front of the Court, assuming, as is almost certainly the case, Congress fails to act first. This Article proposes that perhaps the last best hope for doing so is in the form of an issue that has split the lower courts more or less down the center, and that well may in time split the circuits when it reaches that juncture. Ironically, and perhaps poetically, that issue is one that derives from the legacy of Dewsnup itself. That is, how to value for Chapter 13 purposes an unsecured claim arising from strip off of a wholly underwater lien that has been discharged in a prior Chapter 7 case. Not definitively resolvable under the current text of the Bankruptcy Code, that question could, if properly postured and presented, compel reexamination of the Dewsnup holding. As currently constituted, the Supreme Court might well finally walk back from a regrettable holding that has caused the bankruptcy system and its participants considerable angst and confusion.
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    1 year ago


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