Aug. 28, 2009
Bankruptcies on the rise, but teaching how to do them doesn't change
One thing about bankruptcy law, says University of Iowa law professor Pat Bauer, is that there will be a demand for it at some point.
You might just have to wait awhile.
"Bankruptcy law is always relevant, it's just a matter of when," said Bauer (left), who's taught bankruptcy law at the UI College of Law since 1980. "In boom times, law students are taking the 'let's make a deal' course. Now, they're taking the 'let's undo the deal' course."
As the economy struggles, personal and corporate bankruptcy filings remain high, and analysts aren't optimistic things will change soon. Still, regardless of the economic cycles, Bauer said law students will always need to understand bankruptcy and bankruptcy law. Even in go-go times, dealmakers need bankruptcy attorneys to help lay out what happens if the deal goes sour.
"You can't do a deal to start with unless you know how to undo it when the wheels fall off," he said.
Bauer said bankruptcy law can be easily understood by dividing it into two types: laws that help people who don't have the money to pay back their debts but want to, and laws that force people who do have the money to pay back their debts but won't.
No matter how good or bad the economy is, he said those principles always inform bankruptcy law, and the courses offered to teach it in law school. As a result, he said the economy has little effect on how courses are taught. Nor does it affect much the motivations of the students who take the classes. For the most part, he said students discover the field in law school and pursue it from there.
"Nobody wants to be a bankruptcy lawyer when they come to law school," Bauer said. "Many of them see themselves as helpers, and they come to see bankruptcy law as a way to help people get out of messes, often created by other people."
One exception was in the 1980s, when the farm crisis ravaged Iowa's economy and directly touched many law students.
"Their ability to emotionally grasp what we were learning was enhanced by their connection," he said. "They lived through the farm crisis, and many of them came from families that lost the family farm through bankruptcy."
One significant change in teaching bankruptcy law came in 2005, when federal laws were extensively re-written. In response, the law school reorganized the way it teaches bankruptcy, reducing required classes from three to two and changing content where necessary to conform to the new laws.
Unfortunately, Bauer said the nature of the reforms makes teaching those new laws difficult.
"They don't hang together, and there's no uniform animating philosophy behind them," he said. "It's confusing and frequently makes no sense, and sometimes one section will contradict something in another section. That makes it very difficult to teach, but once you fret over complaining about things, you just try to help the students understand it as best you can."
STORY SOURCE: University of Iowa News Service, 300 Plaza Centre One, Suite 371, Iowa City, Iowa 52242-2500
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