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ABI Endowment-Funded Study Finds Unsecured Creditor Recoveries Have Decreased Post-BAPCPA

Alexandria, Va. —Despite the financial services industry’s goal that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) would improve unsecured creditor recoveries in consumer bankruptcy cases, an American Bankruptcy Institute Endowment-funded study finds that recoveries in fact declined. Prof. Lois Lupica of the University of Maine School of Law, who also authored the ABI Endowment-funded Consumer Bankruptcy Fee Study in 2011, was the reporter and principal investigator for "The Consumer Bankruptcy Creditor Distribution Study" to examine creditor recoveries before and after the enactment of BAPCPA. Prof. Lupica also set out to discover whether consumers are able to repay a larger percentage of their unsecured debts under BAPCPA. “Our analysis reveals BAPCPA does not appear to have achieved the primary objective of its proponents, as unsecured distributions as a percentage of unsecured claims declined nationally by a statistically significant 3.2 percentage points in the post-BAPCPA time period,” Prof. Lupica writes in the findings. “Moreover, unsecured distributions as a percentage of total distributions declined by 2.5 percentage points, a result that was also statistically significant.” To access a copy of the study, please click here. Analyzing data extracted from chapter 7 and 13 consumer bankruptcy cases filed nationally between 2003 and 2009, Prof. Lupica was able to compare creditor distributions for consumer cases filed under chapter 13 during pre-BAPCPA and post-BAPCPA time periods. In light of the significant increase in access costs and the fact that in many cases some or all of the chapter 13 and all of the chapter 7 attorney’s fee is paid post-petition from estate assets, Prof. Lupica found that creditors received lower distributions as a percentage of their claims under both chapter 13 and in chapter 7 asset-cases post-BAPCPA. For more information about ABI’s “Consumer Bankruptcy Creditor Distribution Study” or to arrange an interview with Prof. Lupica, please contact John Hartgen at 703-894-5935 or [email protected]. ### ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 13,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit For additional conference information, visit the Events page.