The Dewsnup Decision
In Dewsnup, over a vigorous dissent, the Supreme Court ruled that a chapter 7 debtor may not employ §§ 506(a) and 506(d) of the Bankruptcy Code to “strip down” an undersecured mortgage. Largely ignoring the language of the statute and substituting the majority’s economic policy in lieu of choices made by Congress, Dewsnup has been the subject of harsh criticism by commentators and judges alike.

One commonly discussed example involves Internal Revenue Code (IRC) § 280E, which bars businesses involved with cannabis from taking ordinary and necessary business deductions typically available for tax purposes, with the exception of the company’s cost of goods sold. Another is the benefit and protection allowed under the U.S. Bankruptcy Code, as we will explore in this article. Additionally, we will discuss the issues that still may exist despite the recent passage of the Agricultural Improvement Act of 2018.

With automotive debt over $1.1 trillion, almost half of Americans have a car loan. The average loan is $31,099 for a new car and $19,589 for a used car, with average monthly payments at $515 and $371, respectively. These payments can be much higher for individuals with poor credit scores deemed high risk by lenders.