CreditSlips

Student Loan Fixes

04/01/19

While presidential candidates propose sweeping new policy initiatives, a few simple legislative fixes could go a long way to alleviate the student loan crisis. Three numbers set by Congress have a huge impact on the burden borne by millions of borrowers: the Stafford loan interest rate, the income-driven repayment plan income share, and the number of years to balance forgiveness.

[more]

A New Proposal for Restructuring Venezuelan Debt

03/28/19

The Venezuelan debt crisis has dragged on for so very long now that there are literally dozens of proposals out in the public domain (aka ssrn.com) on how Venezuela should do its restructuring.  Given how quickly the situation on the ground is changing, the plausibility of these various proposals also has been moving with great speed. 

[more]

Senate Banking Committee Testimony on Housing Finance

03/25/19

I'll be testifying on Tuesday at a Senate Banking Committee hearing on housing finance that is focused on Chairman Crapo's reform outline.  My written testimony may be found here.  Suffice it to say, I'm skeptical.  I argue that a multi-guarantor system is a path to disaster and that the right approach is a single-guarantor system with back-end credit-risk transfers.

[more]

Restatement of Consumer Contracts—On-Line Symposium

03/21/19

The Yale Journal on Regulation is holding an on-line symposium about the draft Restatement of the Law of Consumer Contracts, which is scheduled for a vote at the American Law Institute's annual meeting this May.  The launching point for the symposium are a pair of articles in JREG that take sharp issue with the empirical studies that underlie the draft Restatement.

[more]

Puerto Rico, the Board, and the Appointments Clause

03/04/19

As many will have seen in the press, the First Circuit has said that PROMESA's Oversight Board was appointed in violation of the Appointments Clause.

[more]

Pug Repossession

03/03/19

If you missed it, Thursday's New York Times had a story about a debt collector who seized the family's dog over unpaid bills. The pet, a purebred pug, was sold for the equivalent of $800 on eBay which apparently meant it could be seized under German law which allows valuable pets to be seized in repayment of debts. Mutts are exempt.

[more]

The curious persistence of Plan B (bankruptcy lite)

02/27/19

I've come across a phenomenon numerous times over the years, again recently, that reveals the purpose of and resistance to discharge as the ultimate solution/relief for bankruptcy.

[more]

Deleveraging is over

02/26/19

An unsustainable run-up in consumer housing debt and other debt was a fundamental structural cause of the 2008 global financial cScreen Shot 2019-02-26 at 11.59.42 AM

[more]

CDS Strikes Again (Aurelius and Windstream)

02/24/19

Long ago I warned that the growth the of the CDS (credit default swap) market represented a threat to traditional understandings of how workouts and restructurings are supposed to happen. The recent Windstream decision from the SDNY shows that these basic issues are still around, notwithstanding an intervening financial crisis and resulting regulatory reform.

[more]

Alix-McKinsey Update

02/19/19

Lots of news in the restructuring area this week, and I hope to blog about Puerto Rico and Windstream before the week is out. But first, a quick update about everyone's favorite professional retention litigation.

[more]