The sub rosa subchapter: Individual debtors in chapter 11 after BAPCPA

Reorganization under the Bankruptcy Code serves the public interest by providing worthy debtors a mechanism to gain relief from crushing debt while maintaining some measure of fidelity to creditors. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 initiated fundamental changes to this mechanism in an effort to ensure the continued worthiness of bankruptcy applicants. BAPCPA changes a number of provisions in the Code with respect to individual debtors. This article suggests that BAPCPA's provisions have created and will continue to create unexpected anomalies in individual chapter 11 cases, due in large part to the manner in which BAPCPA provisions affecting such individuals are scattered throughout the Code. The author contends that BAPCPA's reworking of chapter 11 created a hidden category of individual reorganization. As Congress was building this mystery, it unnecessarily masked the import of substantive changes to chapter 11. Attempting to shed light on the matter, the author explores the roots of the BAPCPA provisions and summarizes the five most significant adjustments relevant to individual debtors in chapter 11, contrasting chapter 11's operation with that of chapter 13. Chapter 11 for individuals post-BAPCPA tends to work mischief at all stages in the reorganization process. New concerns arise with regard to the debtor's ability to pay expenses necessary to achieve confirmation of the reorganization plan. Uncertainties exist regarding the allocation of property into the estate, and as to who may have standing in postconfirmation plan modifications. As the article suggests, Congress could have avoided, or even discovered, many of these difficulties if BAPCPA's provisions had been grouped together as a separate subchapter to chapter 11.