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Journal of American Arbitration (JAA) - Vol. 5, No. 2

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ARTICLES

Third Circuit Court of Appeals Holds that
the Bankruptcy Court Lacked the Discretion
to Deny Enforcement of an Arbitration Clause
Absent a Showing of Congressional Intent in
In re Mintze v. American General Financial
Services, Inc.
By Johannah Hartley

I. OVERVIEW
To afford a new heater in her row home, Ethel M. Mintze entered
into a loan agreement with American General Financial Services
(AGFS). In re Mintze v. Am. Gen. Fin. Serv., Inc., 434 F.3d 222, 225 (3d
Cir. 2006). The agreement was conditioned upon Mintze consolidating
all her debt with AGFS. Id. at 226. The resulting loan had a principal
balance of $44,716, consisting of $3,800 for the heater, $10,464 credit
card debt, $25,603 mortgage, $2,821 settlement charges, and $2,029 for
two insurance policies. Id. The loan agreement contained a binding
arbitration clause. Id. Approximately a year after entering into the loan
agreement, Mintze voluntarily filed for Chapter 13 bankruptcy because
she could not keep up with her loan payments. Id. Mintze subsequently
filed a complaint against AGFS in bankruptcy court, alleging AGFS
violated federal and state consumer protection laws, as well as the Truth
in Lending Act, 15 U.S.C. §§ 1601-1667f. In response to these