CreditSlips

Arbitration Double Standards

01/31/12

A case out of the Third Circuit demonstrates the frustration that many of us have with the current state of consumer arbitration law. The consumer had purchased a Dell computer that he alleged had design flaws leading to repeated failure of his motherboard. After Dell refused to fix the computer a third time, he brought a class action against Dell for the alleged design defects.

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Private Equity Works on Its Image Problem

01/31/12

Bloomberg out with an interesting story about how private equity firms are buying single family homes at foreclosure to rent out. It surprises me that there is real interest in what remains a relatively small scale, highly heterogeneous asset.

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The Backdrop for BROKE: Consumer Debt Then and Now

01/30/12

In the introductory chapter of the book, Broke: How Debt Bankrupts the Middle Class,  I present some data about consumer debt levels in the United States.

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Of Babies and Bucks

01/29/12

The Credit Slips bloggers are engaged in a virtual enterprise, which means we sometimes don't see each other for a long time. One of my fellow bloggers recently asked "What's up?" and learned that I had a new baby two months ago. That experience, along with trying to stem the tide of "I want it! I need it!" that comes with having two preschoolers during the holidays, has left me thinking about how we teach children about money, debt, and consumerism.

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Evaluating Mandatory Financial Education in Bankruptcy

01/28/12

In 2005, Congress amended bankruptcy law to require individual debtors with primarily consumer debts to complete an "instructional course on personal financial management" to be eligible to receive a discharge of their debts.

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The GM & Chrysler Success

01/28/12

During the State of the Union address, the President crowed about the success of the GM/Chrysler bailouts, noting that these companies were thriving again. An NPR program this evening was holding up GM/Chrysler as a beacon of hope for Kodak, as if bankruptcy were now the fountain of corporate youth.  

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Vee Haf Vays Uf Making You Pay!

01/28/12

Anna Gelpern's Gunboat Diplomacy post pretty much sums out the leaked German term sheet on Greece. I would only note one other thing--the highly idiosyncratic use of "absolute priority." The Germans seem to have taken the language of Chapter 11 and repurposed it, with absolute priority meaning foreign unsecured creditors get paid in full before anyone else sees a cent.

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Consumer Friendly Forms for Bankruptcy

01/28/12

In many respects, bankruptcy is a one-size-fits-all legal process. Yes, there are ample differences in the law (and a world of difference in practice) between the bankruptcy of a large corporation and a typical consumer. But the Bankruptcy Code itself contains plenty of provisions of general applicability. A major example of the one-size-fits-all approach to bankruptcy is the official forms for filing a case.

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Greek Gunboat Diplomacy Eupdate and More ECB/EFSF

01/28/12

Someone who wanted to be very mean to the Germans just leaked this document, where they manage to come off as both desperate and inept. The proposal purports to address Greek failure to meet program targets by installing an EU overlord, whose job it would be among other things to pay off the foreign bondholders before funding public services in Greece.

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The Crisis of Fake Constraints: Greek Denouement Eupdate

01/27/12

Unless Greece and its creditors reach a deal in the next few days, Greece has no money to pay €15 Billion or so due to its bondholders in March.

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