Failure and Forgiveness
Bankruptcy professionals (myself included) have been accused at times of not just forgetting the forest for the trees, but forgetting the trees for the twigs and leaves on an individual tree. We recognize that each debtor, and indeed each creditor involved with each debtor, is unique, and requires specific solutions and advice for its individual situation. Professor Gross forces us to look at the entire forest in ways which may not have been considered before in her book Failure and Forgiveness.
The first part of her book functions as a basic primer on the Bankruptcy Code and the bankruptcy process, and could function as a general introduction to anyone unfamiliar with bankruptcy. Gross goes beyond the basics very quickly and takes a critical look at the numbers we are all so used to seeing in evaluating the bankruptcy system nationwide: the number of filings and the number of dollars involved. She also brings out those numbers, which, although not necessarily tabulated by the Administrative Office of the U.S. Courts, are important to the bankruptcy system. For example, the number of employees, retirees and non-filing spouses and family members associated with the hundreds of thousands of case filings around the country.
In the sections on debtors and creditors, Gross reminds us why the United States has a bankruptcy system, but she also focuses on the psychological, as well as financial, rehabilitation of debtors, and the social interest in allowing debtors a fresh start. Gross argues that the system should provide this "true" rehabilitation of debtors and examines the present system to see how it could accomplish it—but, admittedly, she offers no specific program for change. She recognizes quite accurately that perhaps the only players within the bankruptcy system who could expand their role are the U.S. Trustee. But that group, as a whole, is not particularly trained for social service at present.
Perhaps Professor Gross’s greatest contribution to the present debate about the bankruptcy system is her argument that the interests of the "community" be considered in each confirmation proceeding in both chapter 11 and chapter 13 cases. She would, for example, include the provision within 11 U.S.C.§1173(a)(4), which requires a judicial determination that any plan proposed in a railroad case be "consistent with the public interest" be included in §1129 and §1325. This approach, however, would expand the power of bankruptcy judges over policy in a way not likely contemplated by Congress.
Despite Gross’ "social service" viewpoint to the bankruptcy process, this reader wishes she had spent more time exploring the avenue suggested by her critique of the bankruptcy system: That it has become the social safety net for low- and lower-middle income people during the 1980s and 1990s. If, in fact, low- and lower-middle income people are using credit cards and sub-prime lenders in place of unemployment insurance and the like, then Gross’s expanded definitions of fresh start and rehabilitation should be addressed not by amendments to the Bankruptcy Code, but by broader changes in the way the government functions.