Report on an Empirical Study of District Variations, and the Roles of Judges, Trustees and Debtors' Attorneys in Chapter 13 Bankruptcy Cases

• Published in: The American bankruptcy law journal 2007-09, Vol.81 (4), p.431
• Main Authors: Norberg, Scott F, Compo, Nadja Schreiber
• Format: Article
• Language: English
• Subjects: Attorneys; Bankruptcy laws; Court decisions; Debt; Debt restructuring; Federal courts; Personal bankruptcy; Statistical significance; Trustee in bankruptcy; Trustees
• ISSN: 0027-9048

While bankruptcies throughout the United States are governed by the same Bankruptcy Code and Rules of Bankruptcy Procedure, there are wide variations across federal judicial districts and divisions in how the law works in practice. The empirical findings that are reported here are based on data from the Chapter 13 Project, a multi-district study of the Chapter 13 system and the extent to which it has fulfilled two of its principal purposes - debtor fresh start and creditor repayment. In this article, reports are presented on differences among districts in the debtors who used Chapter 13 and in local case administration practices. This report also begin to explore the roles of the key legal actors in Chapter 13 cases - the bankruptcy judges, Chapter 13 standing trustees and debtors' attorneys. While it is well-established that Chapter 13 discharge rates vary widely across judicial districts, and that bankruptcy and Chapter 13 filing rates differ substantially as well, our data reveal additional, sometimes unexpected, district variations in the debtors who used Chapter 13. Regarding the roles of the key legal actors in Chapter 13 cases, the data reveal significant differences in case outcomes based on the identity of the bankruptcy judge in a few single-judge divisions in three of the sample districts. These findings appear to confirm the influence that bankruptcy judges have over their case outcomes when they can cleanly exert that influence. The findings also imply that judges in multi-judge districts collectively may influence case results decisively, while either different practices or attitudes, or a tendency to gravitate toward common practices and attitudes, among the judges tends to moderate their individual influence. Notably, the data reveal no significant differences in judges' discharge rates based on the rate at which they dismissed cases before confirmation of a plan. Predictably, debtors who were not represented by an attorney were much less likely to achieve a discharge. Debtors represented by a higher-volume practitioner also were significantly less likely (but more likely than pro se debtors) to complete a plan and attain a discharge than debtors represented by a lower volume practitioner. There are wide variations across federal judicial districts in how the bankruptcy laws work in practice, and these differences go well beyond Chapter 7 and Chapter 13 filing rates and proposed distributions to unsecured creditors in Chapter 13 cases. Furt