United States: What Might A Trump Administration Mean For Bankruptcy Lawyers?

Last Updated: January 25 2017
Article by John Melissinos

Inauguration is still about 2 months away, but it is not too early to begin thinking about what the Trump Administration will mean for commercial lawyers in general and bankruptcy lawyers in particular.

Bankruptcy Reform?

We are not hearing anything about a push for bankruptcy reform as part of the new administration's agenda. Two potential exceptions are the fate of the proposed Financial Institution Bankruptcy Act of 2016, H.R. 2947, 114th Cong. (2016), which would add a new chapter to the Bankruptcy Code dealing with large financial institutions. Another is the potential for the new administration to take a different position than the Obama administration on Czyzewski v Jevic Holding Corp., which is now pending before the United States Supreme Court. To date, the Solicitor General has argued that the Third Circuit was wrong to affirm the Bankruptcy Court's approval of the "structured settlement" which resolved that case.1 With so many other issues swirling about, it does not seem likely that bankruptcy reform per se is in the offing. However, a number of other potential policies may impact bankruptcy practices.

Infrastructure Spending

Early word is that the administration will attempt to get some sort of very significant infrastructure spending package through Congress, including with a "public-private" aspect. On the one hand, this kind of spending might keep the economy humming along, forestalling any significant increase in bankruptcy work. However, to the extent that some of these large projects involve private funds, significant structuring issues may have to be addressed. This might especially be true if new special districts or authorities are created to fund public works projects. As always, the greater the complexity, the greater the need for lawyers. On the other hand, this spending is already leading to an increase in inflation expectations, which in turn has dramatically increased bond yields in the weeks since the election.2

Potential for Higher Interest Rates

Any bankruptcy and restructuring professional knows that the biggest reason for the decrease in bankruptcy filings is the availability of cheap and plentiful credit. If inflation picks up and interests rates rise, many companies dependent on cheap sources of funding may rapidly find that their business models are "upside down." We have been hearing for years that any rise in interest rates may have a dramatic effect on the economy,3 and we may soon be able to see whether these predictions are correct.

A Decrease in Property Values Is Not Impossible

It is no secret that an important driver of the Southern California economy is property values, both commercial and residential. Higher property values allow for continued construction spending, and ever increasing home values give everyone the confidence to spend on that extra purchase. This economic churn in turn helps state and municipal budgets because of the

increased tax revenue they receive when the economy is doing well. It has been a while since this economic feedback-loop has been thrown into reverse, but higher interest rates certainly have the potential to cause market conditions to change.

Repeal or Modification of Dodd-Frank Protections

Early signs are that the Trump Administration and a Republican Congress may try to roll back some of the more onerous reporting and regulatory requirements imposed under the Dodd-Frank financial reforms enacted after the 2008 recession. If these changes make the business environment more investment friendly, as we presume they will be intended to do, the increased economic activity is likely to be a boon for the economy.

Tax Reform

A number of tax reform proposals are floating around, including potential corporate and individual tax cuts,4 and changes to the estate tax system.5 Again, these efforts will be undertaken to stimulate the economy. Although these changes are not likely to directly impact bankruptcy lawyers in terms of increased bankruptcy work, any change in the legal environment may lead to increased planning and counseling assignments as old assumptions are challenged.

Consumer Financial Protection Bureau

Another reform perceived to be business-friendly would be a cutback in the power of the Consumer Financial Protection Bureau (or the "CFPB"). The CFPB has been a target of Republican ire since it was created, and it seems possible that in a Trump Administration the CFPB's work will be curtailed.6 If this were to occur, it is hard to see how it would have an immediate impact on bankruptcy filings. However, we recently learned that for the first time ever, in the third quarter of 2016 more than one-half of all residential mortgages nationwide were originated by non-bank companies.7 And, student loan debt is at an all-time high as consumer credit amounts begin to climb.8 Given the huge portion of our economy that is consumer-driven, the economic health of America's consumers is the most important drivers of economic activity. Stay tuned...


[1] Woolley, Richard, "Trump Takes the White House, Lawyers Take Stock," Global Restructuring Review, November 14, 2016.

[2] Kim, Narae, "These Charts Show That Trump Is Bringing the 1990s Back to Markets," Bloomberg News, November 22, 2016.

[3] Noble, Kenneth, "Bankruptcies Soaring as High Interest Rates Cause Cash Shortages," New York Times, March 30, 1981.

[4] Reuters, "Trump Adviser Calls for Tax Reform as Bipartisan 'Jobs' Bill," New York Times, November 16, 2016.

[5] Sullivan, Paul, "A Wider Path to Dynastic Wealth," New York Times, November 12, 2016.

[6] Reuters, "Donald Trump Could Defang This Consumer Financial Protection Agency," Fortune, November 11, 2016.

[7] Andriotis, Annamaria, "Banks No Longer Make the Bulk of U.S. Mortgages," Wall Street Journal, November 2, 2016; Nuiry, Octavio, "Big Banks Cede Market Share to Nonbanks," Inman, November 1, 2016.

[8] Kirk, Chris, "Five Charts That Show Americans Families' Debt Crisis," Slate, May 12, 2016.

Originally published November 28, 2016

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.