Bespoke Bankruptcy

Abstract

The Bankruptcy Code is the primary source of bankruptcy relief for debtors in the United States. But it is not the only source. Over the years, Congress has occasionally created bespoke bankruptcy – customized debt relief designed for a particular group of debtors. Bespoke bankruptcy may provide desperately-needed bankruptcy relief to entities that are ineligible or otherwise unable to access bankruptcy through the Bankruptcy Code. But bespoke bankruptcy is also fraught with difficulties. To what extent should bespoke bankruptcy be used or developed instead of the Bankruptcy Code?

This Article takes up this question. It begins by acknowledging the limitations of the Bankruptcy Code and highlighting instances where Code-based bankruptcy relief does not work. It then introduces the concept of bespoke bankruptcy and devises a framework that policymakers can use to decide when and how to implement it. In so doing, the Article sets the stage for a new direction in bankruptcy law: one where bespoke bankruptcy performs a limited, but critical, role in providing relief to entities that the Bankruptcy Code does not or cannot assist.