Almost every civil law course in law school is about reciprocal rights and duties between parties and liability for breach. Almost none of these courses covers law concerning how this liability is enforced, that is, how the injured party collects (usually damages) from the injuring party.
Enforcing liability is a separate area of law that is often labeled debtors’ rights and creditors’ remedies. It’s an umbrella subject that includes the state law means for creditors to enforce liability. The subject is often called creditors’ remedies and is mainly state law.
The state law of creditors remedies includes creditors with liens and creditors without liens. In most situations involving substantial contract credit, the creditor will acquire a lien by “consent.” If the collateral – the property subject to the lien – is personal property, Article 9 applies, which explains why we have a course called secured transaction which is really UCC Article 9. If the collateral is real property, different law applies which explains why we have courses related to real estate finance.
But fortuitous creditors – such as employees and tort victims and many other categories of fortuitous creditors don’t acquire consensual liens These creditors are known as unsecured creditors. A disparate bunch of state laws and a very few federal non-bankruptcy laws give them by default (bv operation of law) remedies against the person who wronged them.
This course covers these default, state law remedies of unsecured creditors and shows how this area of law fits with secured transactions and real estate finance.
The course also introduces bankruptcy to which many, many debtors – individuals and legal entities – eventually seek protection from creditors’ state law remedies. The course covers forms of bankruptcy (Chapter 7 and 13) most often pursued by individuals, sole proprietorships, and SMBs and introduces and provides a foundation for studying Chapter 11, which is mainly the home to large corporate debtors seeking to reorganize and continue business.
Thus, this course sets the stage for further, in-depth study of large business bankruptcies which –standing alone -- is very, very important, broad, and fascinating subject triggering incredibly important social issues and challenging, new constitutional issues. And it therefore meshes perfectly with the separate course in Corporate Bankruptcy.
The two courses are very different but entirely complimentary and cumulative. They are not duplicative. They are interlocking. And whatever piece or part of bankruptcy law is studied, you cannot fully understand any of it without understanding the state law of creditors’ remedies against which bankruptcy is, in large part, a reaction.