Illinois Law professors Bob Lawless and Ralph Brubaker, along with Northwestern law professor Bruce Markell, have filed an amicus brief in Anderson v. Credit One Bank, No. 16-2496, a case pending before the U.S. Court of Appeals for the Second Circuit in New York. 

In the case, Anderson alleged that Credit One's credit reporting practices were intended to pressure him into paying his prebankruptcy debt to Credit One and thereby would rob him of the fresh start that the bankruptcy laws give to the "honest but unfortunate debtor." Credit One has asserted that its credit card agreement means Anderson gets his day with an arbitrator and not his day in court. 

The brief demonstrates how Congress intended that only the bankruptcy court has the power to enforce the rules about debt forgiveness in bankruptcy, which are known as the "bankruptcy discharge." The issues raised by this Second Circuit case go to the heart of the bankruptcy system. Requiring arbitration of the bankruptcy discharge could undermine the bankruptcy system's effectiveness for the nearly one million Americans who use it each year, especially considering that nearly every consumer-lending agreement has an arbitration clause. 

A full copy of the brief can be downloaded at SSRN, and Professor Lawless has blogged about the brief on Credit Slips.