The Bankruptcy Code has approximately 275 different sections. The number of its subsections and subparagraphs is well into the thousands. It is impossible to select the “most significant” provision in the Bankruptcy Code, but among the candidates for that title is certainly § 105 of the Code.
Section 105(a) of the Bankruptcy Code provides in part that “The court may issue any order, process, or judgment that is necessary to carry out the provisions of this title.” The importance of this “all writs” provision is obvious. It specifically authorizes bankruptcy courts to make the rest of the Bankruptcy Code effective, even if Congress has not specifically included in the other provision of the Code any directive that puts those provisions into motion. When the Bankruptcy Code addresses an issue, § 105 (a) is available to ensure that the issue can be resolved and the solution implemented.
The Supreme Court recently took on the task on determining the limits of the reach of § 105(a) in the case of Law v. Siegel. In Siegel, Stephen Law filed for Chapter 7 bankruptcy in 2004. Among the listed assets in the case was Law’s house in California. Law valued the house at approximately $350,000, and he claimed $75,000 of that amount as exempt under the California homestead exemption. The debtor’s schedules also stated that the house was subject to two mortgages. The first mortgage was identified as being held by Washington Mutual Bank and was in the amount of nearly $150,000. …
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