Throughout the past century’s cyclical battles for bankruptcy reform, legislators and scholars have debated the need for federal control over bankruptcy estate exemptions. Millionaire criminals and Wall Street hucksters shielding assets from creditors provide perennial fuel for the argument that bankruptcy exemptions inspire systemic abuse. Few legislators, scholars, or pundits, however, have investigated the actual economic and social policy wisdom in state-specific exemptions as they affect the lives of millions of Americans. This Article examines the origins and policy implications of state-specific exemption laws and argues in favor of limited federal deference to state law.

First Page