In certain types of bankruptcy proceedings, the debtor who is seeking relief must propose a plan to pay off a portion (or sometimes all) of his debt over a period of years. If the Bankruptcy Court confirms such a plan, dissatisfied parties (such as creditors) can appeal. But what if the court rejects a debtor's proposed plan, and he believes no other plan is workable? Can he appeal the denial?
No, answered the Supreme Court yesterday, in a unanimous decision in Bullard v. Blue Hills Bank. The Court held that the federal bankruptcy law is best interpreted not to permit an appeal from a decision that does not end the proceedings but instead invites them to continue with the proposal of further plans.
The Court did recognize that its decision can put debtors in a tough spot:
The debtor’s only two options would be to seek or accept dismissal of his case and then appeal, or to propose an amended plan and appeal its confirmation. The first option is not realistic, Bullard contends, because dismissal means the end of the automatic stay against creditors’ collection efforts. Without the stay, the debtor might lose the very property at issue in the rejected plan. . . . The second option is no better, says Bullard. An acceptable, confirmable alternative may not exist. . . . All good points.
In response, the Court noted, "our litigation system has long accepted that certain burdensome rulings will be only imperfectly reparable by the appellate process" (citation and internal quotation marks omitted). The Court then expressed confidence that Bankruptcy Courts usually get it right. And:
even when they slip, many of their errors—wrongly concluding, say, that a debtor should pay unsecured creditors $400 a month rather than $300—will not be of a sort that justifies the costs entailed by a system of universal immediate appeals.
Much has been written about the Justices' own experiences providing important background for their own views of hotly contested issues — whether a Justice who has never been pulled over can sympathize with a driver who is wrongfully or excessive detained, for instance, or whether a Justice who has never met an openly gay person is less sympathetic to LGBT rights.
I think there's a lot to be said for personal experience when it comes to the rights of poor people, too: for the Justices, a difference of $100 in monthly payments might not be a significant error worth correcting expediently, but for a debtor, it might make a huge difference.
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No justice has likely had any experience with being behind the eight ball like low and middle income debtors.