Faculty Post: Consumer Bankruptcy As A Social Safety Net

by Daniel A. Austin
Associate Professor of Law

Our society provides a variety of benefits for people in difficult financial circumstances—food stamps, subsidized housing, low-cost or no-cost health care, disability and unemployment compensation, to mention just a few.  These are in addition to Social Security and Medicare for older citizens, which are available even for those who are not in financial distress.  Most of us do not consider consumer bankruptcy to be part of the social safety net, but, in fact, bankruptcy is one of the first things that people consider when facing serious financial problems such as loss of income, excessive debt, or debilitating medical circumstance.  And, unlike government assistance that is available only to people with lower incomes, consumer bankruptcy (with some conditions) is accessible for people in middle-income brackets.  Thus, bankruptcy is part of the social safety net that allows people to continue their lives with a degree of normalcy even when faced with severe economic circumstances.

I teach bankruptcy and commercial law.  Prior to joining the faculty at Northeastern University School of Law, I practiced for sixteen years as a bankruptcy and commercial law attorney.  While much of my legal practice was on behalf of corporate and business creditors, my research at Northeastern is focused mainly on consumer bankruptcy, in particular, issues related to family and individual debt.  Recently, I examined the treatment and growth of student loan debt in consumer bankruptcy, including what policy changes should be made so that student loan debt can be more readily discharged in bankruptcy.  This work would not have been possible without the excellent research assistance of six law students.  My current work deals with medical expenses as a component of consumer bankruptcy.  Again, a number of law students are working with me to create a database of medical debt information from some 5,000 consumer bankruptcy cases filed between 2004 and 2011.  After the project is complete, the database will be publicly available for researchers and others interested in this issue.  This type of research collaboration between professors and students is typical of NUSL.

Northeastern University School of Law is not a place where you can quietly hide in class and just look to the final exam for your grade.  NUSL classes require you to analyze real-client facts and prepare written work product in a format and quality that is expected in legal practice.  This type of class experience combined with NUSL’s four co-ops provides unparalleled preparation for a career in law.

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