A Guide for the Self-Represented Debtor in a Bankruptcy Case · united states bankruptcy court for...

UNITEDSTATESBANKRUPTCYCOURTFORTHE

DISTRICTOFMASSACHUSETTS

AGUIDEFORTHESELF‐REPRESENTEDDEBTORINABANKRUPTCYCASE

April2016

INTRODUCTION

TheCourthasalwayswelcomedthoseindividualswhowishtoasserttheirrighttofilebankruptcywithouttheservicesofanattorney.Theterm“prose”isaLatinadjectivemeaning"forself",thatisappliedtosomeonewhorepresentshimselforherselfwithoutalawyerinacourtproceeding,whetherasadefendantoraplaintiffandwhetherthematteriscivilorcriminal.Thisstatusissometimesknownas"propriapersona"or"proper".Thisguideisforindividualproseorself‐representedfilersofconsumerbankruptcycases.

Thebankruptcylawsarecomplexandarecontinuouslyevolving.Thelawsandrulesmaybedifficulttounderstand,andthedecisionsthatmustbemadearenotalwaysaseasyastheymightappear.Forexample,thereisthedecisionofwhatchapterofbankruptcytofileandwhichexemptionsyoushouldclaim.Thereistheunderstandingofwhatdebtsmayormaynotbedischarged.

Manyofthesequestionscanbestbeansweredbyacompetentandqualifiedattorneywhounderstandsthesecomplexities.Acompetentbankruptcyattorneycanhearallofthefactsaboutyouruniquesituationandcangiveyouadviceandcounselyoumayrelyon.Nevertheless,theCourtunderstandsthatsomeindividualswillchooseto“goitalone.”

Thismanualispreparedforthatperson:theindividualwhohasmadethedecisiontoproceedwithabankruptcyfilingwithoutanylegalassistance.WhileneithertheCourtnoranyemployeeoftheCourtcanprovidelegaladvice,1thereareanumberofproceduralstepsinfilingabankruptcypetitionandmanagingthecasethroughdischargethatcanbecomplicated.Themanualisintendedtoassisttheprosedebtorinnavigatingthoseproceduralsteps.

InDecember2015,theJudicialConferenceoftheUnitedStatesadoptedmodernizedOfficialFormstobeusedinbankruptcycasesthroughoutthecountry.DebtorsmustusetheseOfficialForms.Inadditiontothisguide,thereareinstructionstothosenewforms.However,thereisnotaformforeverything.Somepleadingsordocumentsneedtobecreated,suchasmotionsthatseekrelieffromthecourtorcomplaintsseekingtodischargestudentloanobligations.

Thisguideshouldnotbecitedorrelieduponaslegalauthority.TheinformationinthisbookletdoesnotsubstitutefortheUnitedStatesBankruptcyCode,theFederalRulesofBankruptcyProcedure,ortheLocalRulesofthisCourt.

1 Courtshaveadoptedthepolicythatemployeesoftheclerk’sofficeareprohibitedfromgivinglegaladvicetothepublic.Courtsuse28U.S.C.§955tosupportthisposition,reasoningthatprovidinglegaladvicecomeswithinthedefinitionofthe“practice”oflawprohibitedby§955.

Inaddition,theinformationinthisbookletalsodoesnotserveasasubstitutefortheadviceofcompetentlegalcounsel.Itisnecessarilylimitedandisintendedonlyasaguidetosomebasicaspectsofbankruptcylaw.Itdoesnotincludeallofthecontrollinglaw(suchastheentireBankruptcyCode,theFederalRulesofBankruptcyProcedure,thisCourt’sLocalBankruptcyRules,andcourtdecisions).

TableofContents

Subject PageNumber

LegalAuthority,StatutesandRules.......................................................................................1

OverviewoftheBankruptcyProcess.....................................................................................1

TheConsequencesofRepeatFilings......................................................................................4

AutomaticStay

Discharge...........................................................................................................................4

BeforeFilingforBankruptcyProtection..............................................................................5

WorkingwithProfessionals.......................................................................................................5

Petitionpreparers..........................................................................................................5

Attorneys...........................................................................................................................6

Self‐Representation:Prose...........................................................................................................7

ProseClerk......................................................................................................................7

CommunicatingwiththeCourt................................................................................................8

GettingStarted.................................................................................................................................8

PreparingyourPaperwork........................................................................................................9

B101–TheVoluntaryPetitionforIndividualsFilingforBankruptcy......10

‐Part2,B101........................................................................................10

‐Part3and4,FormB101 ‐Part5,FormB101............................................................................11

‐Part6,FormB101 ‐Part7,FormB101............................................................................12 OfficialForm121:StatementAboutYourSocialSecurityNumbers........12

OfficialLocalForm1:MatrixofCreditors.............................................................12

OfficialFormB106A/B:ScheduleA/B:Property............................................13

‐Part1.........................................................................................................13

‐Part2,Part3,Part4,Parts5and6.............................................14

‐Part7,Part8..........................................................................................15

OfficialFormB106C:ScheduleC:ThePropertyYouClaimasExempt...15

OfficialFormB106D:ScheduleD:CreditorsHoldingSecuredClaims....16

OfficialFormB106E/F:ScheduleE/F: CreditorsWhoHaveUnsecuredClaims:...................................16 OfficialFormB106G:ScheduleG:ExecutoryContractsand UnexpiredLeases................................................................................18 OfficialFormB106H:ScheduleH:YourCodebtors.........................................18 OfficialFormB106I:ScheduleI:YourIncome..................................................18

OfficialFormB106J:ScheduleJ:YourExpenses..............................................19

OfficialFormB106Sum:SummaryofYourAssetsand LiabilitiesandCertainStatisticalInformation.......................19 OfficialFormB106Dec:DeclarationConcerningDebtor’sSchedules....19

OfficialFormB107:StatementofFinancialAffairsfor IndividualsfilingforBankruptcy.................................................19 OfficeFormB108:StatementofIntentionforIndividuals FilingunderChapter7......................................................................20 OfficialFormB119A:BankruptcyPetitionPreparer’sNotice DeclarationandSignature..............................................................20 ‐Part1,Part2.......................................................................................20

OfficialFormB122A‐1:Chapter7StatementofCurrentMonthlyIncome

OfficialFormB122A‐1Supp:StatementofExemptionfrom PresumptionofAbuseunder§707(b)(2)

OfficialFormB122A‐2:Chapter7MeansTestCalculation

OfficialFormB122B:Chapter11StatementofYourCurrentMonthlyIncome

OfficialFormB122C‐1:Chapter13StatementofYourCurrentMonthlyIncome AndCalculationofCommitmentPeriod

OfficialFormB122C‐2:CalculationofYourDisposableIncome................21

‐Chapter7 ‐‐FormB122A‐1Supp ‐‐FormB122A‐2 ‐Chapter11............................................................................................22 ‐Chapter13 ‐‐FormB122C‐1 ‐‐FormB122C‐2...................................................................................23ThePlan ....................................................................................................................23

IncompleteFilings...........................................................................................................23 Amendments......................................................................................................................24 FilingthePetition...........................................................................................................................24 CaseNumber Caption ElectronicFiling................................................................................................................25TheBankruptcyProcess MeetingofCreditorsPursuantto341(a)..............................................................25 PreparingfortheMeetingofCreditors..................................................................26 AftertheMeetingofCreditors....................................................................................27 FinancialManagementCourse...................................................................................27 BankruptcyCrime............................................................................................................28Motions,HearingsandCourtAppearances.........................................................................28

CertificatesofServiceHearings...............................................................................................................................29

CourtAppearances..........................................................................................................30

AdversaryProceedings................................................................................................................31

Chapter7:LiquidationundertheBankruptcyCode.......................................................32

Chapter11:ReorganizationundertheBankruptcyCode.............................................40

Chapter12:FamilyFarmerorFamilyFishermanBankruptcy..................................55

Chapter13:IndividualDebtAdjustment.............................................................................61

DischargeinBankruptcy.............................................................................................................69

RequiredLists,Schedules,Statements,andFees.............................................................74

Glossary..............................................................................................................................................79

LEGALAUTHORITY,STATUTESANDRULES

Theletters“U.S.C.”refertotheUnitedStatesCode.Thenumberthatprecedes“U.S.C.”referstothetitleoftheU.S.Code(e.g.,11U.S.C.).Throughouttheguide,youwillseethissymbol:“§”or“§§”whichisusedtoreferto“section”or“sections.”Thenumbersfollowing“U.S.C.”refertothesectionofthetitleoftheU.S.Code(e.g.“11U.S.C.§109”).

TheUnitedStatesBankruptcyCodeisfoundinTitle11oftheU.S.Code.CopiesoftheUnitedStatesCodeareavailableatpubliclibrariesandmayalsobefoundonline(linkstotheCodearefoundattheU.S.BankruptcyCourt’swebsite:www.mab.uscourts.gov).

Inthisguide,referencesonlytothesectionnumberrefertothesectionoftheBankruptcyCode(i.e.,title11).

InadditiontotheU.S.Code,thereareFederalandLocalRulesthatapplytoeverycase.LinkstotheFederalRulesofBankruptcyProcedure(“Fed.R.Bankr.P.”)aswellastheLocalRulesfortheU.S.BankruptcyCourtfortheDistrictofMassachusetts(“LocalRules”or“MBLR”),andlinkstoOfficial,ProceduralandLocalFormscanbefoundattheU.S.BankruptcyCourt’swebsite:www.mab.uscourts.gov.Inthisguide,theyarecollectivelyreferredtoasthe“Rules.”

IfyouareaprosedebtoryoumustreviewthislegalauthoritytobetterunderstandthedutiesandobligationsimposedbytheCodeandtheRules.

OVERVIEWOFTHEBANKRUPTCYPROCESS

Thissectionwillgiveyouaquickglimpseintothebankruptcyprocess,thestepsinvolvedinmostcases,andwhatadebtormustdotoeffectivelynavigateacasethroughthisCourts.

1. Alldebtors1mustreceive“anindividualorgroupbriefing(includingabriefingconductedbytelephoneorontheInternet)thatoutlinestheopportunitiesforavailablecreditcounselingandassistssuchindividualinperformingarelatedbudgetanalysis.”§109(h).Inajointcase,bothdebtorsmustreceiveabriefingandthebriefingmustbeobtainedwithin180daysbeforethepetitionisfiled.Inajointcase,thedebtorswillreceiveseparatecertificates.Thecourtmayexcusethis

1 “Theterm‘debtor’meansaperson….concerningwhichacaseunderthistitlehasbeencommenced.”11U.S.C.§101(13).Forotherdefinitionsofterms,see§101.

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requirementifexigentcircumstancesexist,orinthecaseofdisability.See§109(h)(3),(4).

2. AlldebtorsmustuseOfficialForms,includingtheMeansTestCalculationformapplicabletoyou;theymustbecompletedaccuratelyandfiledwiththeCourt.FormsareavailableattheBankruptcyCourt’swebsite:www.mab.uscourts.gov.

3. Thecertificate(s)ofcreditcounselingmustbefiledwiththecourtwiththeOfficialForms.

4. Alldebtorsmustpaythefilingfeeinfullor:

a. FileanApplicationtoHavetheChapter7FilingFeeWaivedwhichmustbeapprovedbytheCourt.SeeLocalRule1006‐2(b)andOfficialForm103B;

b. FileanApplicationforIndividualstoPaytheFilingFeeinInstallments,whichmustbeapprovedbytheCourt.SeeLocalRule1006‐2(a)andOfficialForm103A.

5. Atleast7daysbeforethescheduledmeetingofcreditors(alsoreferredtoasa“§341meeting”),alldebtorsmustsendthetrusteeacopyoftheirprioryear’sfederalincometaxreturn,includingallattachments.2SeeFed.R.Bankr.P.4002;LocalRule4002‐1.Debtorsshouldensurethatonlythelastfourdigitsoftheirsocialsecuritynumberarevisibleonthedocument.SeeFed.R.Bankr.P.9037.

6. Inadditiontothetaxreturn,atleast7daysbeforethescheduledmeetingofcreditors,alldebtorsmustsendthetrusteecopiesofallpaystubsandotherevidenceofincomereceivedwithinthe60dayperiodpriortothefilingofthecase.SeeLocalRule1007‐1(c).Debtorsshouldensurethatonlythelastfourdigitsoftheirsocialsecuritynumberarevisibleonthedocument.

7. Ifacreditorrequestsacopyofthetaxreturnatleast15daysbeforethemeetingofcreditors,thedebtor(s)mustprovideacopytothatcreditoratleast7daysbeforethemeeting.SeeFed.R.Bankr.P.4002;LocalRule4002‐1.Debtorsshouldensurethatonlythelastfourdigitsoftheirsocialsecuritynumberarevisibleonthedocuments.Ifthedebtorhasminordependents,redactallbutthelastfourdigitsoftheirsocialsecuritynumberandredacttheirnames;refertothembytheirageonly.

8. Atthemeetingofcreditors,debtorsmustprovidetwoformsofidentification:photoidentificationissuedbyagovernmentunit,suchasadriver’slicenseorpassport,andaproofofsocialsecuritynumber(socialsecuritycard,correspondencefromtheSocialSecurityAdministration,IRSformW‐2or1099).Thetaxreturn,which

2 Debtorsmayalsoprovidethetrusteeand/oracreditorwithatranscriptoftheapplicabletaxreturn.AtranscriptisavailablebymailfromtheInternalRevenueServicebyusingIRSForm4506.Formoreinformation,visittheIRSatwww.irs.gov.

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referencesthesocialsecuritynumber,willnotsatisfythisrequirement.SeeFed.R.Bankr.P.4002;LocalRule4002‐1.

9. Alldebtorsmustattendthemeetingofcreditorsandbeexaminedunderoathbythetrustee.Creditorsareinvitedtoattendthismeeting.See§341.

10. Alldebtorsmustcooperatewiththetrusteeandrespondtoallreasonablerequestsforinformationanddocuments.

11. Within60daysafterthefirstscheduleddateofthemeetingofcreditors,alldebtorsmustcompleteaFinancialManagementCourseapprovedbytheOfficeoftheUnitedStatesTrusteeandfileacertificateofcompletionwiththeCourt.See§111,§§727(a)(11)and1328(g);seealso,OfficialFormB423

12. InChapter13cases,adebtormustcommencemakingplanpaymentstothetrusteenotlaterthanthirty(30)daysafterthecaseisfiled.See§1326(a).

13. InChapter13cases,adebtormustfileevidenceofcurrentandsufficientliabilityandpropertyinsurancewithrespecttoanyrealpropertyorvehiclesthatthedebtorownsorhasaninterestin.SeeMLBRAppendix1,LocalChapter13Rule13‐2.

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THECONSEQUENCESOFREPEATFILINGS

Abankruptcycasecanbedismissedformanyreasons.Missingadeadline,failingtofiledocumentsandfailingtoobtainthecreditcounselingbriefingorfilethecreditcounselingcertificatearejustsomeofthemanyreasonswhyacasecanbedismissed.Whenacaseisdismissed,thedebtordoesnotreceivethedischarge.Inotherwords,thedebtordoesnotreceivethedebtreliefthattheywereseeking.Perhapsmoresimplystated:thedebtorisbackwheretheystarted.Whileadebtormayfileanothercaseinanefforttoobtainthatdebtrelief,thereareconsequencesofrepeatfilings.

AUTOMATICSTAY

Thefilingofthebankruptcycaseoperatesasastay.Mostdebtcollectionactivitiesmuststop.See§362.However,ifyouhadabankruptcycasependinginthepast12monthswhichwasdismissed,theautomaticstaywilltakeeffectuponthefilingofthesecondcase,butitwilllastforonly30days.Ifyouhavehadtwocasespendinginthepast12months,nostaywilltakeeffectuponthefilingofthenewcase.ReadthecodesectionandtheLocalRulestodeterminewhetherthismayapplytoyou.

Thestaybecomeseffectiveimmediatelyuponthefilingofthepetition.Iftheonecasein12monthruleappliestoyou,youmustfileamotiontoextendthestay,serveacopyofthemotiononallofyourcreditors,andattendahearingbeforethejudge.See§362,andLocalRule4001‐1(d).Ifamotionisnottimelyfiledandheardbythejudge,thestaywillautomaticallyterminate30daysafterthepetitionisfiled.

DISCHARGE

Ifyouhavefiledabankruptcycasepreviouslyandreceivedadischarge,thelawlimitshowoftenyoumayreceiveanotherdischargeofyourdebts.YoumayfileaChapter7caseandreceiveadischargeofdebtsonlyonceevery8years.See§727(a)(8).Thetimeiscalculatedfromthedateoffilingofeachofthecases.YoumayfileaChapter13andreceiveadischargeofdebttwoyearsafterapriorChapter13,butfouryearsafteranyotherchapter.See§1328(f).Ifyoufileanothercasewithinthesetimeframes,thelawstatesthatyouwillnotreceiveadischargeofyourdebtsinthatcase.

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BEFOREFILINGFORBANKRUPTCYPROTECTION

Theinitialgoalofabankruptcyfilingistorelieveanindividualofunmanageabledebtand,throughtheuseoftheallowedexemptions,toleavetheindividualwiththemeanstosupporthimselforherselfandtheirdependents.Anothergoalcanbetoprovideanopportunityforadebtortoreorganizeorofferarepaymentplan.Thelikelihoodofsuccessparticularlyunderchapters11,12and13isseverelydiminishedwithoutcompetentlegalcounsel.

Thebankruptcycoderequiresthatadebtorseekcreditcounselingpriortofilingabankruptcypetition.Inotherwords,exploreotheravenuesofdebtreliefbeforedecidingwhetherbankruptcyisthebestorthedebtor’sonlyoption.TheOfficeoftheUnitedStatesTrusteehasanapprovedlistofcreditcounselingagenciesforeachstate.TheBankruptcyCourt’swebsitehasalinktotheU.S.Trustee’slist.Thislistisupdatedregularly.

Thecreditcounselingbriefingmaybeprovidedinperson,overthetelephoneorviatheinternet.Ifafterthecounselingsessionyoudeterminethatyouneedtoseekbankruptcyprotection,youmustobtainacertificatefromthecounselingagencyattestingtothefactthatyouattendedthebriefingandyoumustfileitwithyourbankruptcypetition.Ifarepaymentplanwasdeveloped,thenyoumustfileitalongwiththecreditcounselingcertificate.

Ifyoumustfileapetitionquicklyandyouhavenotobtainedthecreditcounselingbriefing,thepetitionmaybefiledwithoutit.However,youmustfileastatementof“exigentcircumstances”andmustattendthecounselingwithin30daysofthefilingofthepetition.See§109(h)(3)(A).ThecertificationmustbesatisfactorytotheCourt.See§109(h)(3)(A)(iii).Failuretoobtainthecertificatepriortothefilingofthecase,orthefailuretofilethecertificationofexigentcircumstanceswhichissatisfactorytotheCourtandthenobtainthecounselingwithin30daysofthebankruptcyfilingwillresultinthecasebeingdismissed.

WORKINGWITHPROFESSIONALS

PETITIONPREPARERS

Youmayworkwithabankruptcypetitionpreparerwhowillassistyouwiththenecessarypaperwork.However,apreparerisnotanattorneyandhe/sheisprohibitedfromgivinglegaladvice.Bydefinition,apetitionpreparerisa“aperson,otherthananattorneyforthedebtororanemployeeofsuchattorneyunderthedirectsupervisionofsuchattorney,whopreparesforcompensationa[bankruptcy]documentforfiling.”See§110(a).

PetitionpreparersmustcomplywiththeBankruptcyCodewhichrequiresthemtoprovidetheirtaxidentificationnumberandtodiscloseanyandallcompensationyoupaid

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fortheservices(orwerepaidbysomeoneelseonyourbehalf).Theresponsibilitiesofpetitionpreparerscanbefoundin§110.Whileapreparermayhelpyouwithforms,theyareprohibitedfromadvisingyouonwhichchapteryoumayfile,whatexemptionsyoumayclaim,andhowsecureddebtmaybeaffectedinbankruptcy.Theycannotfiledocumentsforyou.Infact,bankruptcypetitionpreparersareprohibitedfromtellingyouhowtocompletetheforms.Evenwithabankruptcypetitionpreparer,youarestillproseorself‐represented.Evenwhenyouhiretheservicesofabankruptcypetitionpreparer,theresponsibilityforensuringthatalldocumentsarecompletedcorrectlyandfiledtimelyisyours.

Bankruptcypetitionpreparersmaynotaccompanyyoutoameetingofcreditorsnorappearincourtonyourbehalf.Theymaynotpreparepleadings,suchasmotionsorcomplaints.

Inaddition,itisimportantforyoutoknowthatneitherMassachusettsnortheBankruptcyCourthasanycertificationprocessforbankruptcypetitionpreparersorforparalegalsandothernon‐attorneyprofessionalswhomayprovidebankruptcypetitionpreparationservices.

ATTORNEYS

Youmayworkwithalicensedattorneywhocangiveyouspecificlegaladviceandguidance,tailoredtoyourpersonalsituation.

Remember,bankruptcycourtpersonnelcannotgiveyoulegaladvice.Onlyalicensedattorneycan:

Explainthemeaningofastatutoryprovisionorrule; Provideaninterpretationofcaselaw; Explaintheresultoftakingornottakingactioninacase; Helpyoucompleteformsandadviseyouregardingwhatislegallyrequired

whenaformrequiresyoutoprovideinformation; Advisewhetherjurisdictionisproperinacase; Advisewhetheracomplaintproperlypresentsaclaim; Adviseonthebestproceduretoaccomplishaparticulargoal; Advisewhoshouldreceivepropernoticeorserviceofpapers; Appearincourtonyourbehalf; Accompanyyoutothecreditorsmeetingasyourlegalrepresentative.

TolegallypracticelawintheU.S.BankruptcyCourtfortheDistrictofMassachusetts,theattorneymustbeamemberingoodstandingofthebaroftheU.S.DistrictCourtfortheDistrictofMassachusetts.BeforeanattorneycanbecomeamemberofthebaroftheU.S.DistrictCourtfortheDistrictofMassachusetts,theattorneymustbeamemberofthebaroftheCommonwealthofMassachusetts.

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TodeterminewhetherapersonisanattorneylicensedtopracticelawintheCommonwealthofMassachusetts,visittheBoardofBarOverseerswebpage:www.massbbo.org.

Ifyouarenotsurewheretofindacompetentattorney,pleasevisittheBankruptcyCourt’swebpageforlinkstolawyerreferralagencies.YouarealsoencouragedtocontacttheProSeClerkforareferraltoanagency.

SELF‐REPRESENTATION:PROSE

Ifyouplantofileabankruptcypetitionwithouttheassistanceofaprofessional,thefirststepintheprocessistoobtaintheproperforms.Theofficialforms,authorizedbytheJudicialConferenceoftheUnitedStates,areavailableonlineatwww.mab.uscourts.gov.Theyareavailableforfree.

Thefirstproblemyouwillencounteristhatyoumustdeterminewhichtypeofbankruptcyisthebestforyou:Chapter7,Chapter11,Chapter12orChapter13.Basicinformationaboutthesechaptersisincludedinthisguide.

InaChapter7,youturnoveryournonexemptassetstoatrusteewhothenliquidates,orsellsthem,topayyourcreditors.InChapter13,youproposeaplantopayyourcreditorsoveraperiodoftime,nolongerthanfiveyears.See§§1322‐1325.YoumustusetheCourt’sOfficialLocalFormfortheChapter13plan.Also,intheLocalRulesyouwillfindaspecialsectionforChapter13rules.SeeLocalRules,Appendix1.TherearelimitationsontheamountofdebtapersoncanoweinordertofileaChapter13.See§109(e)

IndividualswhohavedebtshigherthantheamountsallowableinChapter13canfileaChapter11andproposeaplantopaycreditorsoveraperiodoftime.Chapter11hasadditionalreportingandaccountingrequirementsandthereispotentialforthecreationofacreditorscommittee,allofwhichcanbeundulyburdensomeandexpensive.Chapter12isdesignedforfamilyfarmersorfisherman.

Becausethisguidecanofferonlybasicinformation,youareencouragedtoobtainlegaladvicefromaqualifiedandexperiencedbankruptcyattorneywhocanbesthelpyoudecidewhichchapterofbankruptcyisrightforyou

PROSECLERK

TheCourthasaProSeClerkwhomaintainsapresenceinallthreeDivisions:Boston(Eastern),Springfield(Western)andWorcester(Central).TheProSeClerkcannotgiveyoulegaladvice.

HerearesomeexamplesofsomebasicquestionsthattheProSeClerkmaybeabletoanswerforyou:

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“WhatdoIneedtodotogetadischarge?” “WhatdoIneedtofiletorespondtoamotion?” “HowdoIamendadocument?” “Whatdocumentsdoesmytrusteerequire?” “HowdoIserveasummons?” “WhatdoIneedtoknowaboutmyMeetingofCreditors?”(The

Section341meeting) “CanIgetfreelegalassistance?”

ContactinformationfortheProSeClerk’sOfficeisfoundattheendofthishandbook.

COMMUNICATINGWITHTHECOURT

AsamatterofstandingpolicyandinkeepingwithFederalBankruptcyRule9003,thelocalrulesofthisCourtandthecanonsofjudicialethics,thejudgemaynotreceiveorparticipateinex‐partecommunicationsfromdebtors,creditors,counsel,trusteesortheircounsel,orthegeneralpublicinconnectionwithpendingorclosedcases.Ifyouneedtocommunicatewiththecourt,contacttheClerkofCourt,theProSeClerkorthecaseadministratorassignedtothecase.

Visitthecourt’swebsiteatwww.mab.uscourts.govandclick“ContactCourtStaff”;click“ContactNumbers”under“Judges’Sessions.”Caseadministratorsareassignedbyjudgeandthelasttwodigitsofthecasenumber.

Apartywhowantsaformofreliefand/orwhowantstoexpressanobjectiontoanother’srequestforreliefmustcommunicateinwritingandintheformofanappropriatepleading.Thepleadingordocumentmustalsobeaccompaniedbyacertificateofservicewhichshowsthatallpartieswhoareentitledtonoticeweremailedacopyofthepleading.Thisprocesshelpsensurethatallconcernedpartiesareprovidedanopportunitytosubmittheirviews.Formoreinformation,pleaseseeFederalRuleofBankruptcyProcedure9013andLocalBankruptcyRule9013‐1and9013‐3.

GETTINGSTARTED

Bankruptcyisacomplexlegalworldthathasavocabularyallitsown.Manycommonlyuseddefinitionsarefoundin§101.Therearesomeothertermsthatyouwillcomeacross.Knowingthesetermswillhelpyouunderstandtheprocess.Forexample:

Estate:theestateisdefinedby§541.Refertothissectiontolearnwhatconstitutes“propertyoftheestate.”

Prepetitionandpost‐petition:Theterm“prepetition”meansbeforethebankruptcypetitionwasfiled.Theterm“post‐petition”meansafterthecasewasfiled.

Inadditiontounderstandingmanyterms,itisveryimportantthatyouprotectyourselfandyourfamily.Almosteverydocumentfiledinabankruptcycaseispublic

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record.Whileyoumustprovidetruthfulandcompleteinformationinyourbankruptcyschedulesandrelateddocuments,youshouldtakecarenottodisclosehighlypersonalandprivateinformation:

Onlyonedocumentrequiresyoutoprovideyourfullsocialsecuritynumber.3Inallotherfilingsyoushouldprovideonlythelastfourdigitsofyoursocialsecuritynumber.

Donotdisclosefullaccountnumbers(includingcreditoraccountnumbers,bankaccountnumbers,brokerageandretirementaccounts,etc.)onanyschedules,statementsordocuments,oronanyotherfilings.Useonlythelastfourdigitsoftheaccountnumber.

Donotidentifyanyminorchildrenand/ordependentsbytheirname.Listthemonlyas“minorson”or“minorstepdaughter”orthelike,andprovidetheirages,oruseonlytheirinitials

Donotdisclosethefulldateofbirthofanyindividual.Useonlytheyearofbirth.

FormoreinformationonprotectingprivacyinfilingsmadewiththebankruptcyseeFed.R.Bankr.P.9037.

PREPARINGYOURPAPERWORK

Onceyouhaveobtainedthenecessaryformsanddeterminedwhichchapteryouwillbefiling,youmustcompletetheofficialforms.Beforedoingthat,gatheryourpaperwork:pastandpresentbills,collectionnotices,paystubs,taxreturns.Obtainacopyofyourcreditreportatwww.annualcreditreport.com.Openyourmail.Getasmuchinformationasyoucanabouthowmuchyouoweandtowhomyouoweit.Asforyourassets,gatherasmuchinformationasyoucan:appraisals,insuranceinformation,andthelike.

Theinformationconcerningtheformsincludedinthisguideisintendedtohelpyouunderstandwhatinformationisrequiredtoproperlyprepareandfileyourdocuments.Ifyouarerepresentingyourself,youareresponsibleforthepropercompletionoftheforms.Reviewtheindividualformsasyoureadtheinformationbelow.

Everyquestiononthepetitionandtheotherdocumentsdiscussedbelowmustbeansweredwithcompleteaccuracyandhonesty.Byyoursignatureyouareswearingunderthepainsandpenaltiesofperjurythateachstatementyoumakeistruthful.Title18oftheU.S.Codeprovidespenalties,includingfinesandincarceration,forfalsifyingbankruptcyschedules,concealingassets,andotherbankruptcyrelatedcrimes.

Importanttips:

Individualormarriedcouples(jointdebtors)willusetheOfficialFormsinthe100series.Soleproprietorswillalsouseformsinthe100series.

3 OfficialFormB121,StatementofSocialSecurityNumber.

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Ifyourunoutofroomonanyform,attachaseparatesheetandwriteyournameandcasenumber(ifknown)atthetop.Also,identifytheformandthelinenumbertowhichtheadditionalinformationapplies.

Ifmarriedpeoplearefilingajointcase,bothareequallyresponsibleforsupplyingthecorrectinformationontheforms.

Donotidentifythenamesofminorchildren.See§112,Fed.R.Bank.P.1007(m),9037.

Keepcopiesofallbankruptcydocumentsandattachmentsyoufile.

TheForms

B101–THEVOLUNTARYPETITIONFORINDIVIDUALSFILINGFORBANKRUPTCY4

Thisformopensthecase.Thepetitionitselfiseightpages(ifyoudonothaveanattorney)andisfairlyself‐explanatory.Youmustanswerallquestionsthatapplytoyou.Onpages6and8,youmustsignthepetition.Ifitisajointpetition,bothspousesmustsign.Anindividualandacorporationmaynotfileajointpetition.

Ifyouownanunincorporatedbusiness,youmayincludethatbusinessnameandthedebtsitowesinyourpetition.Forexample,JohnDoerunsadelicalledJD’sDeli&Subs.Itisnotacorporation.HispetitioncouldidentifyhimasJohnDoed/b/a(doingbusinessas)JD’sDeli&Subs,andincludeanydebtsthatthebusinessowessinceheispersonallyresponsibleforthosedebts.Ifthebusinesswasincorporated,itwouldhavetofileitsownbankruptcypetition.5

‐Part2,B101

Readeachquestioncarefullyandrespondtruthfully.

Forno.8,youarepresentedthreeoptionsforpayingthefilingfee.First,youmaypaythefilingfeeinfull.

Second,youmayapplytopaythefilingfeeininstallments.Ifyouwishtoapplyforinstallments,youwillneedtocompleteOfficialFormB103A.PleasealsoreadLocalBankruptcyRule1006‐2.

Andfinally,ifyouarefilingchapter7,youmayaskthatthefilingfeebewaived.Forthefilingfeetobewaived,youwillalsoneedtocompleteOfficialFormB103B.Thecourtmay(butisnotrequired)towaiveyourchapter7filingfeeifyourincomeis150%ofthe

4Corporations,trusts,LLCsandothernon‐individualentitiesmustuseOfficialFormB201andallrelatednon‐individualforms.Becausetheseentitiesmustberepresentedbyanattorneyinabankruptcycase,theseformsarenotdiscussedinthisguide. 5 Corporationsmaynotappearproseevenwhenthepersonseekingtorepresentitistheonlyofficerand/orstockholder.

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povertyguidelinesandyouareunabletopayininstallments.Povertyguidelineinformationisupdatedannually,andmaybefoundonthecourt’swebsite.

Paymentsoffilingfeesmaybemadebybankcheckormoneyorderonly.Cashisacceptedattheclerk’scounter(butshouldneverbemailed),andastheclerkmaynotmakechange,theexactamountisrequired.

Forno.11,readthequestioncarefully.Ifyourentyourresidenceandifyourlandlordhasobtainedanevictionjudgmentagainstyou(alsoknownasajudgementforpossession),andyouwanttostayinyourresidence,youmustcompleteOfficialFormB101Aandfileitwiththepetition.Readthatformcarefullyandcompletely.ThatformalsoincludesspecificreferencestosectionsoftheU.S.BankruptcyCodewhichyoushouldread.

Ifyouwishtostayinyourrentedresidencebeyondthirtydays,youwillneedtocompleteandfileOfficialFormB101B.

Youarerequiredtoserveacopyofthecompletedformonyourlandlordandyouarerequiredtopayrenttotheclerkasnotedontheinstructionsontheform.

‐Part3and4,FormB101

Pleasereadthesesectionscarefully.Ifthesesectionsapplytoyou,pleaseconsiderspeakingwithanattorney.

‐Part5,FormB101

Readthissectioncarefully.Checkthecorrectboxesandfileitwiththepetition.Ifthecreditcounselingcertificatehasbeenobtained,itshouldbefiledwiththisdocumentalongwithanypaymentplandevelopedwiththeagency.

Ifyouhaveobtainedthebriefingbutdonothavethecertificate,pleaseknowthatyoumustfileacopyofthecertificateandanypaymentplandevelopedwiththeagencywithin14daysofthefilingofthecase.

AvoidCommonmistakes:Youdonothave14daysafterthecaseisfiledtoobtainthebriefing.Youhave14daystofilethecertificateconfirmingyouobtainedabriefingbeforethecasewasfiled.See§109(h)formoreinformation.

Ifexigentcircumstancespreventedyoufromobtainingthebriefing,youmaybeeligiblefora30‐daytemporarywaiver.Torequestthiswaiver,youwillneedtocompleteandfileOfficialLocalForm9.

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‐Part6,FormB101

Readeachquestioncarefully.Ifyoudonotunderstandaquestion,theProSeClerkmightbeabletoanswerit.Ifnot,youmayneedtospeaktoanattorney.

‐Part7,FormB101

Readeachsectioncarefully.Yoursignatureontheseformsisyouracknowledgementthatyouhavereadthepetitionandalloftheinformationontheform.Ifyoupaiddsomeonewhoisnotanattorneytohelpyoucompletetheforms(abankruptcypetitionpreparer),youmustidentifythepersoninthissectionandyoumustcompleteandfileOfficialForm119.

Youarerequiredtoobtainandreadthenoticerequiredby§342(b).ThatnoticecanbefoundinOfficialForm2010:NoticeRequiredby11U.S.C.§342(b)forIndividualsFilingforBankruptcy.Youarenotrequiredtofilethenotice,butwhenyousignPart7ofFormB101,amongotherthings,youcertifythatyouobtainedandreadthenotice.Ifyouhavequestionsabouttheinformationonthatform,pleasespeaktotheProSeClerkortoanattorney.

OFFICIALLOCALFORM121:STATEMENTABOUTYOURSOCIALSECURITYNUMBERS

Unlikeallotherdocumentsfiledinthecase,thisdocumentdoesnotappearonthepublicdocketandisnotmadeavailabletothepublic.Toprotectyourprivacy,thecourtwillmakeonlythelastfourdigitsofyournumberknowntothegeneralpublic.However,thefullsocialsecuritynumberismadeavailabletoyourcreditors,theUnitedStatesTrusteeandthetrusteeassignedtoyourcase.

Avoidcommonmistakes:Doubleandtriplecheckthenumber(s)youdisclosetoensuretheyareaccurateandinthecorrectorder.Ifyoulaterdiscoverthatthenumberwaswrong,youwillhavetoprepare,fileandserveacorrectednotice.SeeFed.R.Bankr.P.1009(b).Thesecostsanddelaysmaybeavoidedwiththoroughpreparationbyyou.

OFFICIALLOCALFORM1:MATRIXOFCREDITORS

TheCourtwillsendanoticeofthemeetingofcreditorstoallofthecreditorsandotherpartiesyoulistonyourschedules,providedthatyoualsolistthosecreditorsandotherpartiesonthematrixofcreditors.Unlikemostoftheformsdiscussedinthisguide,thereisnoformthatyoucandownload,completeandfile.Ratherthisisaformthatyou

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create.Itisatypedlistofallcreditorsandotherpartiesthatshouldreceivenoticeofthebankruptcycase.SeeOfficialLocalForm1.

OfficialLocalForm1isnottechnicallyaform.Rather,itisasetofinstructionsonhowtocompletethelistofcreditors.

Providingnoticeofyourbankruptcyisimportant,bothforyouandforyourcreditors.Acreditorwillnotknowthatitmuststopcollectionactivitiesifitdoesnotknowaboutyourbankruptcyfiling.Perhapsmoreimportantly,adebtmightnotbedischargedifitwasnotscheduledandnoticedproperly.Inaddition,ifyouforgetacreditor,youmayneedtoamendyourcreditormatrix,whichwillrequireanadditionalfee.Ifyourcaseclosesandyouneedtoreopenyourcasetolistanothercreditorclaim,therewillbeevenmorefees,andthereisnoguaranteethattheCourtwillallowyoutoreopenthecaseoramendyourschedulestoaddacreditoryouforgot.Andtocompoundallofthat,ifyouforgettolistacreditorclaiminthecase,yourcasewillexperiencedelay.

Ifyouhavemorethanoneaddressforacreditor,usealladdresses.Ifyouarenotsureifyouoweacreditor,listthemonthecreditormatrixanyway.Therecanbenosuchthingas“toomuchnotice,”especiallywhentheremaybecostlyandlongtermconsequencesforinsufficientnotice.

OFFICIALFORMB106A/B:SCHEDULEA/B:PROPERTY

ScheduleA/Biswhereyoulistallownershipinterestsyouhaveinproperty.Aninterestincludesbutisnotlimitedtoanyjointinterests,futureinterestsorco‐ownershipyoumayhavewithothers.

‐Part1

Ifyouhaveanylegalorequitableinterestinanyrealestate,readthesesectionscarefullyandanswerallofthequestions.Theterm“legalorequitableinterest”isverybroadandincludesmanykindsofpropertyinterests,includingbothtangibleandintangibleproperty.Thesizeofyourownershipinterestisnotrelevant;anyinterestinrealestatemustbedisclosed.Thisincludesland,ahome,investmentproperty,avacationhomeoracondominium(evenifthatcondominiumisaparkingspace).Theseexamples,aswellasthoseintheformitself,aremeanttoprovideanideaofwhattoincludeinthecategory.Theyarenotintendedtobecompletelistsofeverythingwithinthatcategory.

Incertaincategories,currentvaluemaybedifficulttofigureout.Whenyoucannotfindthevaluefromareputablesource(suchasapricingguideforyourcar),estimatethevalueandbepreparedtoexplainhowyoudeterminedit.

Ifyouownnorealestate,check“No”Ifyouleaveitcompletelyblank,theCourtwillviewthisasdeficientandwillissueanorderrequiringyoutofileacompleteschedule.

Avoidcommonmistakes:Whenprovidinginformationaboutthevalueoftheproperty,donotdeducttheamountofanyloanstheremaybe

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againsttheproperty,anddonotdeductanyexemptionsthatyoubelievemayapply.Ifyouownthepropertywithothers,identifythetotalvalueofthepropertyandthevalueoftheportionyouown.

‐Part2

Readthiscarefully:thissectionisself‐explanatory.LikePart1,ifyoudonotownorleasevehicles,check“No.”Otherwise,besureyoucompleteallinformation.

Avoidcommonmistakes:Whenprovidinginformationaboutthevalueofthevehicles,donotdeducttheamountofanyloanstheremaybeagainstthem,anddonotdeductanyexemptionsthatyoubelievemayapply.Ifyouownthevehicles,identifyboththetotalvalueofthepropertyandthevalueoftheportionyouown.

‐Part3

Thissectioniswhereyoulistallpersonalandhouseholdproperty.Thissectionisneverblank.Everyoneownspersonalproperty.Everythingfromtoyourhouseholdgoodsandclothing,toanythingelsenotspecificallylisted.Carefullyreadeachquestionontheleftsideoftheformandanswerithonestlyandcompletely.Ifyouhavenopropertythatfitsintothatparticularcategory,besuretochecktheboxinthe“none”column.

Avoidcommonmistakes:Answering“none”basedontheassumptionthatyouhavenothingofvalue.Youarenotbeingaskedtodiscloseitemsyouhaveofvalue;youarerequiredtodiscloseeverything.

‐Part4

Readeachquestioncarefullyandrespond.Remembernottoincludeaccountnumbers(exceptforthelast4digits).Ifaccountsarejointlyheld,identifythatfact.Atrusteemayrequireyoutoproducestatementsofaccounts.Ifyoudonothavethemonhand,youshouldobtainthemassoonaspossible.Adelayindisclosurewilldelaythecase.

AvoidCommonmistakes:Answering“none”becauseyoudonotunderstandthequestion.Somequestionsareabitcomplicatedanduselegalterms.Ifyouhavequestionsaboutwhataquestionmeans,youshouldspeakwithanattorney.

‐Parts5and6

Ifyouhaveorhadabusiness,includingbutnotlimitedtofarmingorcommercialfishing,reviewthesepartscarefullyandanswereachquestion.

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‐Part7

Thisquestionseekseverythingelse.Thepriorpartsallidentifiedcategoriesofproperty,suchasclothing,householdgoodsandcash.Youmayhavepropertythatyoubelievedoesnotfitintoacategory–andthisiswhereyoushoulddisclosethatproperty.

‐Part8

Addupallofthefigures.Useacalculatortobeaccurate.

OFFICIALFORMB106C:SCHEDULEC:THEPROPERTYYOUCLAIMASEXEMPT

Section541describesthepropertythatconstitutestheestate.However,debtorsarepermittedtoclaimcertainpropertyexempt(orexcluded)fromtheestate.Thisform–anditspropercompletion‐isveryimportant.

Exemptionsarenotautomatic.Forpropertytobeconsideredexempt,youmustlistthepropertyonOfficialFormB106C.Astheformstates,youmust“claim”thepropertyasexempt.Ifyoudonotlisttheproperty,thetrusteemaysellitandpayalloftheproceedstoyourcreditors.Inaddition,youmayunnecessarilylosepropertyifyoudonotclaimexemptionstowhichyouareentitled.Youarestronglyencouragedtohireaqualifiedattorneytoadviseyou.

TheBankruptcyCodeprovidesthatyouusetheexemptionsinthelawofthestatewhereyouhadyourlegalhomefor730daysbeforeyoufileforbankruptcy.Specialrulesmayapplyifyoudidnothavethesamehomestatefor730daysbeforeyoufile.Also,ifyouonlypurchasedoracquiredyourhomeinthe1,215dayperiodpriortofiling,yourhomesteadexemptionmaybelimited.Youshouldspeakwithanattorneyifyoubelievethisappliestoyou.

InMassachusetts,youhaveachoiceofwhichexemptionsyoumayelecttouse:thoseavailableunderfederalbankruptcylaworthoseavailableunderMassachusettslaw.Youmustchooseeitherthefederalorthestateexemptions;youcannotpickandchooseormixandmatch.Ifyouandyourspousearefilingajointpetition,eachofyoumustchoosethesamesetofexemptions,thestateorfederal.

Inaddition,thedecisionofwhichexemptionstoelectandwhatpropertytoclaimasexemptisalegaldecisionthatonlyyoucanmake.Neithercourtpersonnelnorapetitionpreparerispermitted,qualifiedortrainedtogiveyouthiscriticallegaladvice.Youshouldknowthatyoucouldmaylosepropertyifyoudonotusethebestexemptionsforyoursituation.Again,youareurgedtospeakwithanattorney.

Thelistoffederalbankruptcyexemptionsmaybefoundunder§522(d).ThedollaramountsforexemptionsadjusteverythreeyearsandarenextscheduledtoadjustinApril1,2019.

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Forthestateexemptionsapplicabletoyou,refertothesectiononexemptionsunderthestatelawofthestatethatappliestoyou–whichmayormaynotbeMassachusetts,evenifyouarefilinginMassachusetts.Seee.g.§522(b)(3)(A).Whenyouhavemadeyourdecision,checkthebox(no.1)inPart1oftheForm.

OFFICIALFORMB106D:SCHEDULED:CREDITORSHOLDINGSECUREDCLAIMS

Somecreditorsmayholdasecuredclaim.Inotherwords,thecreditorholdsasecurityinterestinproperty,orwhatisalsooftenreferredtoascollateral.Thesecurityinterestgivesthecreditortherighttoseizethepropertywhenyoufailtomakeagreeduponloanpayments.Anexamplemightincludeacarloanormortgageloanonrealestate.Itmightalsoinclude(butnotbelimitedto)householditemsyoupurchase,suchaselectronics,appliances,jewelry,andpowertools.InPart1ofScheduleDyouarerequiredtoidentifyandlistanysecuredinterestthatacreditorholdsinanyofyourproperty.

Certaincreditorsalsowouldbelistedonthisscheduleiftheyhavealienagainstyourproperty,suchasacreditorwhoobtainedacourtjudgmentagainstyouandthenplacedalienorattachmentonyourpropertyto“secure”paymentofthatjudgment.Creditorswhoare“underwater”,thatis,theyareowedmorethanthevalueofthepropertysecuringtheclaim,shouldbeidentifiedonScheduleD.Pleaseremember,thatsecurityinterestswillsurviveabankruptcy(evenifyoumistakenlylistthemonthewrongschedule,orifyouincorrectlyassumethatthereisnosecurityinterest).Ifyouhavequestionsabouttherightsofsecuredcreditorsasitrelatestoyouruniquesituation,youshouldconsultwithanattorney.

Listthedebtonlyonce.InPart2listotherswhoshouldbenotifiedaboutthebankruptcyfilingforadebtyouhavelistedinPart1.Thisincludescollectionagenciesandattorneys.Youneednotcompletethissectioniftherearenoadditionalpartieswhoshouldreceivenotice.Seetheglossaryforinformationonwhatmaybeacontingent,disputedorunliquidatedclaim.

BesurethateverycreditorlistedonScheduleDisalsolistedonthecreditormatrix.Also,refertoAppendix4oftheLocalRulesfortheU.S.BankruptcyCourtfortheDistrictofMassachusettsfortheaddressestosendnoticestoagenciesoftheUnitedStatesofAmericaandtheCommonwealthofMassachusetts.

OFFICIALFORMB106E/F:SCHEDULEE/F:CREDITORSWHOHAVEUNSECUREDCLAIMS

Unsecuredclaimsarethosewhereacreditordoesnothaveasecurityinterestinpropertyorcollateral.Therearetwotypesofunsecuredclaims:priorityclaimsandnonpriorityclaims.

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‐Part1:ListAllofYourPRIORITYUnsecuredClaims

Informationonpriorityandthosecreditorswhoareentitledtoprioritycanbefoundin§507(a).Creditorsholdingpriorityclaimsinclude,butarenotlimitedto,taxauthorities,domesticsupportobligations6,depositsheldandthelike.Listingprioritycreditorsdoesnotmeanthattheywillbedischarged.Remember,youarerequiredtolistallassetsandallliabilities.

Besurethateverycreditorlistedinthissectionisalsolistedonthecreditormatrix.Also,refertoAppendix4oftheLocalRulesfortheU.S.BankruptcyCourtfortheDistrictofMassachusettsfortheaddressestosendnoticestoagenciesoftheUnitedStatesofAmericaandtheCommonwealthofMassachusetts.

‐Part2:ListAllofYourNONPRIORITYUnsecuredClaims

Inmostindividualcases,thisschedulehasthelargestnumberofcreditors.Ifacreditorisnotsecuredandisnotentitledtopriority,thenthecreditorhasanunsecurednonpriorityclaimandshouldbelistedhere.Commonexamplesinclude,butarenotlimitedto,creditcardcompanies,utilitycompanies,unsecuredpersonalloans(suchasfromalender,bank,relativeorfriend),debtsowedasaco‐signoronaloan,studentloansandtortclaims(peopleorpropertyinjuredordamagedduetoyourallegedfaultorwrongdoing).Seetheglossaryforinformationonwhatmaybeacontingent,disputedorunliquidatedclaim.

Besurethateverycreditorlistedinthissectionisalsolistedonthecreditormatrix(LocalForm1).Also,refertoAppendix4oftheLocalRulesfortheU.S.BankruptcyCourtfortheDistrictofMassachusettsfortheaddressestosendnoticestoagenciesoftheUnitedStatesofAmericaandtheCommonwealthofMassachusetts.

InPart3youcanlistotherswhoshouldbenotifiedaboutthebankruptcyfilingforadebtyouhavelistedinParts1and/or2.Thisincludescollectionagenciesandattorneys.Youneednotcompletethissectioniftherearenoadditionalpartieswhoshouldreceivenotice.InPart4,youmayneedtobreakoutsomeoftheclaimsyouidentifiedintothecategoriesreflected.Useacalculatorifyouneedto.

Avoidcommonmistakes:Whenindoubtastowhetherornottoaddorincludeanycreditortoanyoftheseschedules,erronthesideofcautionandincludetheirnameontheappropriateschedule.Amendingitlatermaycausedelayandmayresultinmorefees.Include:

o Relativeandfriendsyouownmoneyto;o Ex‐spouses,formerroommatesandbusinesspartners;o Lendersonaccountsyouco‐signed;

6 Theterm“domesticsupportobligation”canbefoundin101(14A).

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o Peopleorentitiesthathavesuedyou;o Peopleorentitiesthatmaysueyou;o Billcollectors.

OFFICIALFORMB106G:SCHEDULEG:EXECUTORYCONTRACTSANDUNEXPIREDLEASES

Thisscheduleidentifiesallunexpiredleasesandexecutorycontractsthatyouareapartyto,eitherasthelessororlesseeoraparty.Foranindividualthemostcommontypeofleasemightinvolvetheleasingofanautomobile,butapersonmightalsobeinvolvedinaleaseforresidentialorcommercialproperty.Anindividualinvolvedinanunincorporatedbusinessmighthavemanyleasesinvolvingsuchthingsascopiers,computers,equipmentandthelike.Ifabusinessisnotacorporation,thenthedebtorsignedtheleasesasanindividual,anddebtorsshouldlistthoseleasesonthisschedule.

Avoidcommonmistakes:Whenindoubtastowhethertoaddalessor,alesseeoranycreditortoanyoftheschedulesofdebt,erronthesideofcautionandincludetheirnameonthisschedule.Amendingitlatermayresultindelayandmorefees.

OFFICIALFORMB106H:SCHEDULEH:YOURCODEBTORS

Onthisschedule,identifyanypersonorentity(suchasanincorporatedbusiness)thatisaco‐signororajointobligoronanydebt.Youmustlistanyonewhoisresponsiblealongwithyouforrepayingadebt.However,donotidentifyyourspouseasacodebtorifyouarefilingajointcase

OFFICIALFORMB106I:SCHEDULEI:YOURINCOME

Thisformrequiresyoutoindicatetheamountofincomethatyou,andyourspouse,receiveonamonthlybasisfromallsources.Readeachquestionandansweritaccuratelyandtruthfully.Theincomeofthespousemustbeincludedbyjointdebtors,andbyeverymarrieddebtor,regardlessofwhetherajointpetitionisfiled.Donotleaveblanks.Eachlineshouldhaveanumber,evenifthatnumberiszero. Ifyoureceiveincomefrommorethanoneemployer,attachadditionalsheetsandincludethetotal(s)inline8h.

Avoidcommonmistakes:Calculateyourincomeaccurately.Ifyoudonotreceivethesameamountofincomeeachmonthoreachpayperiod,youwillneedtoproratetheincome.Howyoudothatwilldependonthecircumstancesinyourcase.Anothermistake,forgettingornotincludingsupportand/orassistancefromfamilyandfriends.Andfinally,besureyoucompleteline13.

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OFFICIALFORMB106J:SCHEDULEJ:YOUREXPENSES

Thisformrequiresyoutoidentifyanditemizethevariousmonthlyexpensesyouincur.Donotincludepaymentsforcreditcarddebtsoranyotherdischargeabledebt(sincenofurtherpaymentswillbedue).Donotdisclosethenamesofdependents,onlytheirrelationship,ageandwhethertheyresidewithyou.Donotleaveblanks.Eachlineshouldhaveanumber,evenifthatnumberiszero.

Inajointcase,ifoneofthedebtorsmaintainsaseparatehousehold,OfficialFormB106J‐2mustbecompleted.Pleasereadcarefullythedirectionsregardingtheinformationtobereported,includingthatofdependents.

Avoidcommonmistakes:Ifyourexpensesarenotthesameeverymonth(asmaybethecasewithcertainutilities),proratetheexpense.Howyoudothatwilldependonthecircumstancesinyourcase.Anothermistake:ifthereisacategoryofexpensesthatyoudonotsee,orifyouarenotsurewhichcategoryanexpenseisin,attachaseparatesheetandincludethetotalonline21.Andfinally,besureyoucompleteline24.

OFFICIALFORMB106SUM:SUMMARYOFYOURASSETSANDLIABILITIESANDCERTAINSTATISTICALINFORMATION

ThisformmightbetheeasiestformtocompleteifyouhaveproperlycompletedtheinformationontheSchedules.Eachlineineachparttellsfromwhereontheschedulestheinformationisfound.InformationisalsorequiredfromtheStatementofYourCurrentMonthlyIncome,whichisdiscussedfurtheronpage____.

OFFICIALFORMB106DEC:DECLARATIONCONCERNINGDEBTOR’SSCHEDULES

Providetherequestedinformationontheform.YousignthisformattestingunderthepainsofperjurythattheschedulesyouarefilingwiththeCourtare“trueandcorrecttothebestof[your]knowledge,informationandbelief.”

OFFICIALFORMB107:STATEMENTOFFINANCIALAFFAIRSFORINDIVIDUALSFILINGFORBANKRUPTCY

AlldebtorsprovideinformationinParts1through11.Readeachquestionandansweritaccuratelyandtruthfully.Useadditionalsheetsiftheyareneededtofullyrespondtothequestions.Ifaquestiondoesnotapplytoyou,besureyouchecktheboxthatsays“No.”Donotleaveanyquestionblank.Afterallpartshavebeencompleted,gotoPart12tocomplete,dateandsign.

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Avoidcommonmistakes:Readthequestioncarefully.Thequestionsareintendedtoelicitinformationfromyou.Donotassumethatthequestionisaskingforsomethingthatisnotclearlyrequested.IfyouhavequestionsaboutanypartoftheStatementofFinancialAffairs,theProSeClerkmaybeabletoprovideguidance,oryoumaywishorneedtospeakwithanattorney.

OFFICIALFORMB108:STATEMENTOFINTENTIONFORINDIVIDUALSFILINGUNDERCHAPTER7

Thisformasksyoutostatewhatyouplantodowithanypropertythatissecured(i.e.,thepropertyyouproperlyidentifiedonScheduleD)oranypropertysubjecttoalease(ScheduleG).Pleasenote,thattherearedeadlinesbywhichyoumustfulfillyourstatedintentions.Failuretodosowillterminatetheautomaticstayastothepropertyinvolved.See,§362(h).

Ifyouarenotsurewhatyoushoulddowithregardtothisformoryourintentions,youmustspeakwithanattorney.

OFFICIALFORMB119:BANKRUPTCYPETITIONPREPARER’SNOTICE,DECLARATION,ANDSIGNATURE

Ifyoureceivedtheassistanceofabankruptcypetitionpreparer,thisformmustbecompletedandfiled.Youthedebtormustreceiveacopyofthisform.Abankruptcypetitionpreparerisdefinedin§110..

‐Part1

Thenoticeclearlystateswhatabankruptcypetitionpreparerisprohibitedfromdoing.Ifyouusetheservicesofapreparer,theymustgiveyouthedebtoracopyofthisformandyoumustsignitbeforetheyprepareanydocumentsforfilingoracceptcompensation.Besureyourpetitionpreparer’sidentityisdisclosedwhereindicated.YousignanddatePart1.

‐Part2

Thebankruptcypetitionpreparermustcomplete,signanddatePart2.Atthebottomofthepage,thepreparermustdisclosetheirfullsocialsecuritynumber.Section110requiresbankruptcypetitionpreparerstodisclosethisnumberonthispublicdocument.

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OFFICIALFORMB122A‐1:CHAPTER7STATEMENTOFYOURCURRENTMONTHLYINCOME

OFFICIALFORMB122A‐1SUPP:STATEMENTOFEXEMPTIONFROMPRESUMPTIONOFABUSEUNDER§707(B)(2)

OFFICIALFORMB122A‐2:CHAPTER7MEANSTESTCALCULATION

OFFICIALFORMB122B:CHAPTER11STATEMENTOFYOURCURRENTMONTHLYINCOME

OFFICIALFORMB122C‐1:CHAPTER13STATEMENTOFYOURCURRENTMONTHLYINCOMEANDCALCULATIONOFCOMMITMENTPERIOD

OFFICIALFORMB122C‐2:CALCULATIONOFYOURDISPOSABLEINCOME

In2005,CongressenactedtheBankruptcyAbusePreventionandConsumerProtectionAct,orBAPCPA.Underthislaw,a“meanstest”wascreatedthatdetermineswhetherthereisa“presumptionofabuse”inachapter7filingandthelengthofthe“applicablecommitmentperiod”and“disposableincome”inachapter13filing.See§1325(b)(2).Thelawalsocreatedanewterminbankruptcy:“currentmonthlyincome”whichisdefinedin§101(10A).

Theseformsarecomplexandtheywillrequiremuchefforttocompleteaccurately.Tocompletetheformapplicabletoyourcase,youwillneedtoknowthemedianfamilyincomeinyourlocation,andyoumayneedtoknowtheIRSGuidelinesforexpensesandallowances.ThisinformationcanbefoundontheCourt’swebsite(www.mab.uscourts.gov)orfromtheOfficeoftheU.S.Trustee(www.justice.gov/ust).

DebtorswhofileChapter11mustcompleteandfileFormB122B;

DebtorswhofileChapter7mustcompleteandfileFormB122A‐1(andinsomecases,B122A‐2)unlesstheyareexempt,inwhichcaseB122A‐1Suppmustbecompletedandfiled;DebtorswhofileChapter13mustcompleteFormB122C.Alongwithpropercompletionoftheforms,Chapter7and13debtorsmayhaveadditionalconsiderationsandissues.

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‐CHAPTER7

Allchapter7debtorsmustfirstdeterminewhattheir“CurrentlyMonthlyIncome”orCMIis.CurrentlyMonthlyIncomeisnotnecessarilywhathasbeendisclosedonScheduleB106J.IftheCMIfallsbelowtheState’smedianincomefigures,youonlyneedtocompleteOfficialFormB122A‐1.Toensureyouhavecompletedthiscorrectly,completetheformonestepatatimeandcarefullyfollowtheinstructions.CompleteParts1and2,andifbox14aischecked,turnbacktothefrontpage,checktheboxthatsays“Thereisnopresumptionofabuse.””

IfaftercompletingParts1and2youfindthattheboxinline14bischeckedyouhavetwopossibleoptions:FormB122A‐1SupporFormB122A‐2.

‐‐FormB122A‐1Supp.

Somechapter7debtorsareexemptfromanydeterminationofwhetherthereisa“presumptionofabuse.”FormB122A‐1Suppisdesignedtoobtaininformationtohelpdeterminewhetheryouareexempt.Readtheformcarefully.Ifyouareexempt,youonlyneedfilethisformandFormB122A‐1.

‐‐FormB122A‐2

Ifyoucannotcheckbox1that“[t]hereisnopresumptionofabuse,”andyoudidnothaveany“qualifiedmilitaryservice”asdescribedonFormB122A‐1Supp,youmustcompletethisform.

Toproperlycompletethisform,youwillneedtoknowyour“currentmonthlyincome”andtheIRSNationalandLocalStandardsforcertainexpenseamounts.Alinkto“MeansTestInformation”isfoundonthecourt’swebsite.

Simplystated,theChapter7MeansTestCalculationmaybeverydifficulttocomplete.Ifyouhaveconcernsaboutcompletingthisformproperly,orabouttherebeingapresumptionofabuse,youshouldspeaktoacompetentandexperiencedbankruptcyattorney.

‐CHAPTER11

Ifyoufileunderchapter11andyouareasmallbusinessdebtor,inadditiontofilingtheChapter11StatementofYourCurrentMonthlyIncome(OfficialFormB122‐B),youmustalsofileyourmostrecentbalancesheet,statementofoperations,cash‐flowstatement,andfederalincometaxreturns.

Chapter11isverycomplicatedandrequiresyoutofileadditionaldocumentsthatarebeyondthescopeofthisguide;youareurgedtoconsultacompetentandexperiencedbankruptcyattorney.

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‐CHAPTER13

‐‐FormB122C‐1

Readtheformandtheinstructionscarefully.Iftheformisnotaccurate,youmayberequiredtoamend.Theinformationonthisformdeterminesanimportantfactor:thelengthofyourchapter13plan.

Allchapter13debtorsmustdeterminewhattheircurrentmonthlyincome(CMI)is.CurrentlyMonthlyIncomeisnotnecessarilywhathasbeendisclosedonSchedule106J.IftheCMIfallsbelowtheState’smedianincomefigures,yourapplicablecommitmentperiodasdefinedby§1325(b)(4)willbenolessthanthreeyears.IftheCMIisoverthemedian,yourapplicablecommitmentperiodisnomorethan5years.

‐‐FormB122C‐2

Debtorswithanapplicablecommitmentperiodofnolessthanthreeyearsdonotneedtocompletethisform.Iftheapplicablecommitmentperiodisnomorethan5years,thisformmustbecompleted.Readtheformandtheinstructionscarefully.Thisformdeterminestheamountofyour“disposableincome.”Thisamountmaybetheminimumamountyou,asthedebtor,mustpaymonthlyinachapter13plan.

THEPLAN

Adebtorwhofilesacaseunderchapter12or13mustfileaplan.See§§1221,1321.Adebtorinchapter11mayfileaplan.See§1121.TheDistrictofMassachusettsusesaformplanforchapter13cases.SeeOfficialLocalForm3and3A.

Chapters11,12and13havespecificprovisionsonwhataplanmaydoandwhataplanmustdo.TheCourtstronglyurgesallChapter11,12and13debtorstoretaincounsel.

INCOMPLETEFILINGS

Ifyoufileyourbankruptcypetitionanddonothavealloftherequiredforms,schedules,theentirefilingfee,orthecreditormatrix,theCourtwillissueanOrdertoUpdate.Thisorderwillsetforthspecificdeadlinestofilemissingdocuments.

Formostitems,youwillhave14daystofileyourdocuments,butthecreditormatrixmustbefiledinnomorethan5days;theStatementofSocialSecurityNumbermustbefiledin3days.IfyoudonotfileanydocumentbythedeadlinereflectedintheOrdertoUpdate,yourcasecanbedismissed.TheOrdertoUpdateisjustthat:anOrderfromtheBankruptcyCourt.FailingtocomplywiththeorderalsomeansthatyouhavefailedtoadheretotherequirementsoftheBankruptcyCode.Remember,ifyourcaseisdismissed,thismayimpactyourrightsinanyfuturecaseyouneedtofile.

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AMENDMENTS

Ifyoudiscoverthatadocumentneedstobecorrectedorthatacreditororclaimneedstobeadded,youmayfileanamendment.Youmayneedtofileamotionoranoticetoamend,andyoumayneedtoservethedocumentsonsomeorallofyourcreditors.Formoreinformationonamendments,pleasereviewFed.R.Bankr.P.1009andLocalBankruptcyRule1009‐1.

Ifamendingschedules,youwillalsoneedtoincludeamendedSummariesaswellasaverification(OfficialFormsB106SumandB106Dec).

FILINGTHEPETITION

Oncealltheformsarecompleted,youshoulddelivertheminhand,ormailthemtotheU.S.BankruptcyCourt.Filingsareacceptedbetween8:30a.m.and4:30p.m.onbusinessdays,buttheofficeisopenuntil5:00p.m.TheaddressesfortheCourtare:

EasternDivision/Boston: CentralDivision/Worcester:

UnitedStatesBankruptcyCourt UnitedStatesBankruptcyCourtJohnW.McCormackPostOfficeandCourtHouse DonohueFederalBuilding5PostOfficeSquare,Suite1150 595MainStreetBoston,MA02109‐3945 Worcester,MA01608‐2076

WesternDivision/Springfield:

UnitedStatesBankruptcyCourtUnitedStatesCourthouse300StateStreetSpringfield,MA01105

WhiletheBankruptcyCourtholdshearingsinHyannis,theHyannislocationdoesnotacceptanypleadingsforfiling.ForcasesassignedtotheCapedivision,allpleadingsmustbefiledintheBostonCourt.

Todeterminewhichdivisiontomaildocuments,pleaserefertotheOrdersyoumayhavereceivedfromtheCourt,orrefertoAppendix5oftheLocalRulesfortheU.S.BankruptcyCourtfortheDistrictofMassachusetts.TheserulescanbefoundontheCourt’swebsite:www.mab.uscourts.gov.Pleasenote,youmayfileacaseinanyoftheCourts,butyourcasewillbeassignedtotheDivisionprovidedforintheLocalRules.

Important:DocumentsareconsideredfiledwhentheyarereceivedbytheClerk.

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CASENUMBER

AllcasesfiledwiththeCourtareassignedacasenumber.Thecasenumberisbrokendownintosections.Forexample,casenumber11‐22665MSH:the“11”istheyearthatthecasewasfiled.Inthiscase,itwasfiledin2011.The“22665”isthenumberassignedtothecase.“MSH”indicatesthejudgetowhomthecasewasassigned.Inthiscase,itwasassignedtoChiefMelvinS.Hoffman.

AllpleadingsanddocumentsfiledwiththeCourtmusthavethecasenumberonthecase.Whenspeakingtoanycourtpersonnel,includingtheProSeClerk,besureyouhavethisinformationhandy.

CAPTION

Allfilings,withtheexceptionofOfficialForms,shouldhaveacaption.ExamplesofwhatacaptionlookslikecanbefoundinOfficialFormB416A,BandD.

ELECTRONICFILING

TheCourtallowsonlyregisteredECFusers(attorneysandforsomelimitedpurposes,creditors),tofilebankruptcydocumentselectronically.AllprosedebtorsmustfiletheirdocumentsmanuallybyeithermailingthemorbybringingthemtotheCourt.

Whileprosedebtorsmaynotfiledocumentselectronically,youmayviewallCourtfilingsinyourcaseonthepubliccomputerterminalslocatedintheClerk’sofficeineachDivision.YoumayalsoobtainaPACERloginandpassword,whichwouldenableyoutoviewdocumentsfromanycomputer,ordownloadandsavedocumentsdirectlytoyourcomputer.ToobtainaPACERloginandpassword,youmustvisitwww.pacer.govandclickthelinkforCaseSearchOnlyRegistration,andcompletetheon‐lineregistrationform.Thisserviceisnotfree;thereisachargeof$.10foreverypagethatyouview.However,coststoaccessasingledocumentiscappedat$3.00andbyJudicialConferencepolicy,feesarewaivedifyourusagedoesnotexceed$15.00inaquarter.Thiscapdoesnotapplytonamesearches,reportsthatarenotcase‐specific,andtranscriptsoffederalcourtproceedings.

THEBANKRUPTCYPROCESS

MEETINGOFCREDITORSPURSUANTTO§341(a)

Shortlyafteryourbankruptcycaseisfiled,theCourtwillsendyou,thetrustee,theU.S.trusteeandallcreditorslistedonyourcreditormatrixa“NoticeofChapter___Case,

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MeetingofCreditors,andDeadlines.”Inthespaceafterchapter,thenoticewillindicatewhichchapteryoufiled:7,11,12or13.Thisnoticealertscreditorsthatyouhavefiledabankruptcypetitionandtheymaybeprohibitedfromtakingcertainactionsagainstyouoryourpropertytocollectadebt.Italsoinformsthemofkeydeadlines,suchas:

ThetimewithinwhichtheyhavetofileaProofofClaim,ifthecaseisachapter12or13,orinachapter7ifitappearsthattherewouldbeassetsthatthetrusteecanliquidatetopaycreditors;

Thetimewithinwhichtofileacomplaintobjectingtothedischargeoftheirparticulardebtunder§522(a)orobjectingtothedischargeofalldebtsunder§727(a);and

ThetimewithinwhichtoobjecttothepropertyyouclaimedasexemptonScheduleC.

Thereversesideofthatnoticehasimportantinformationthatyoushouldread.

Thenoticeofthemeetingofcreditorsinformsyouandthecreditorsofaspecificdate,timeandlocationforthemeeting,whichcreditorsareinvitedtoattend.Thenoticealsoinformseveryonethatatrusteehasbeenassignedtothecase,andthename,addressandothercontactinformationforthetrustee.Itisthetrustee’sroletoexamineyouatthemeetingofcreditorsregardingyourfinancialsituationtodetermineifthereareanyassetsthatyouhavethatmaynotbeexemptandthatheorshecouldliquidate(i.e.,sell)togeneratecashtopaycreditors.

PREPARINGFORTHEMEETINGOFCREDITORS

TheBankruptcyCodeandtheLocalRulesrequirethatyouprovidethetrusteewithacopyofyourmostrecentlyfiledfederalincometaxreturnnolessthan7dayspriortothescheduledMeetingofCreditors.DonotfilethesedocumentswithyourpetitionandschedulesunlessexpresslyorderedbytheCourttodoso.Also,ifacreditorrequestsacopyofyourtaxreturnatleast15daysbeforetheMeetingofCreditors,thenyoumustalsoprovideacopyofyourreturntothatcreditor.

Inbothinstances,youmustdeleteorblackoutcertainprivateinformation,suchasthenamesofyourchildren,accountnumbers(exceptthelast4digits),datesofbirth(excepttheyear),andyoumustonlygivethelastfourdigitsofyoursocialsecuritynumber.Failuretoprovidethetaxreturntimelycanresultindelayonyourcase.Failuretoprovidethetaxreturnasrequiredbylawmayresultindismissalofyourbankruptcycase.Andremember,dismissalmayimpacttheimpositionorlengthoftheautomaticstayinanysubsequentcasefiledwithin12months.

Youmustbringtwoformsofidentificationwithyoutothemeeting.Thefirstisphotoidentification:driver’slicense,passport,etc.Thesecondissomethingwithyoursocialsecuritynumberonit:asocialsecuritycard,aW‐2,anIRSForm1099.Yourincometaxreturnwillnotsufficebecauseitisadocumentpreparedbyyou(evenifyouretaineda

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professionaltopreparethereturn).Thesedocumentswillbereviewedbythetrusteetoconfirmthatyouarewhoyousayyouareinthepetition.

All§341Meetingsarerecordedonaudiotapeorbydigitalrecorder.Afteryouareadministeredanoath7,thetrusteewillthenaskyoutoverifythatyoucompletedthepetitionandschedulesandthattheyaretruthfulandaccurate.Youcanexpectotherquestionstobeasked.Youareresponsibleforansweringthemtruthfullyandaccurately.

Assumingyouhavemadecomplete,truthfulandaccuratedisclosures,andthatthetrusteeissatisfiedwiththeresponsestothequestionsposedattheMeetingofCreditorsandtherearenoassetsthatheorshemaysell,thenheorshewillfilea“noassetreport”withtheCourt.ThisreporttellstheCourtandeveryoneelsethatthetrusteehasexaminedyouandhasfoundnononexemptassetsthatcanbesoldforthebenefitofcreditors.

AFTERTHEMEETINGOFCREDITORS

Creditorsandthetrusteehaveadeadlineof60daysfollowingthedateofthefirstscheduledcreditor’smeetingtofileacomplaintobjectingtoyourdischarge.ExtensionsofthatdeadlinemaybeallowedifrequestedbyfilingatimelymotionwiththeCourt.Youwillreceivenoticefromthepartyseekinganextensionoftimetofileacomplaint.Thedeadlineisstatedonthecreditor’smeetingnoticesenttoyoushortlyafterfiling.Ifthatdeadlinepassesandthereisnocomplaintobjectingtoyourdischarge,andnoextensionoftimehasbeenallowed,thecourtwillenteradischarge.Simplystated,thedischargerelievesyouofanypersonalliabilityforalldischargeabledebtslistedinyourbankruptcyschedules.Thedischargeisexplainedinmoredetailonp.___.

Creditorsandthetrusteehaveadeadlineof30daysfollowingtheconclusionofthecreditor’smeetingtoobjecttoanyclaimedexemptions.ExtensionsofthatdeadlinemaybeallowedifrequestedbyfilingatimelymotionwiththeCourt.Youwillreceivenoticefromthepartyfilinganymotiontoextendtime.

FINANCIALMANAGEMENTCOURSE

Youwillnotreceiveadischargeunlessyouhavetakenacourseinpersonalfinancialmanagement.YoumustfileacertificateofcompletionwiththeCourtwithinthe60dayperiodfollowingthedateofthefirstscheduledcreditors’meeting.Asapracticalmatter,youcantakethecourseandfilethecertificateofcompletionatanytimeafteryouhavefiledyourcaseandreceivedacasenumber..However,ifyoudonotcompletethiscourse,andifyoudonotfilethecertificatebeforethedeadlinetoobjecttoyourdischargeexpires,yourcasewillclosewithoutthedischargebeingentered.Youwillthenneedtofilea

7 Remember,anyquestionthatyoufailtoanswertruthfullymaysubjectyoutofederalprosecutionforperjuryoritcanleadtoadenialofyourdischarge.

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MotiontoReopenyourcaseandpaythefilingfeesoyoumayfileyourcertificateandreceiveyourdischarge.Thiscostcanbeavoidedifyouadheretothedeadlines.

Somefinancialmanagementproviderswillfilethecertificateonyourbehalf.Verifywithyourproviderthattheywilldothat;donotassumetheywill.

Insteadofacertificate,youarepermittedtofileOfficialFormB423.Theinformationontheformisthesameasappearingonthecertificateandyouwillneedthecertificatetocompletetheform.

BANKRUPTCYCRIME

Ifyouhideassetsorpropertyfromthetrustee,orfailtodiscloseinformationaccuratelyandcompletelyonyourschedules,youmaybeprosecutedbytheUnitedStatesAttorneyforabankruptcycrimeunderTitle18oftheU.S.Code.Bankruptcyfraudisaseriouscrime;youcouldbefinedandimprisonedifyoucommitfraudinyourbankruptcycase.Makingafalsestatement,concealingproperty,orobtainingmoneyorpropertybyfraudinconnectionwithabankruptcycasecanresultinfinesofupto$250,000orimprisonmentforupto20years,orboth.See18U.S.C.§§152,1341,1519and3571.

Thetrusteerepresentstheestateforthepurposesofensuringamaximumdistributiontocreditors.Youarerequiredbylawtocooperatewiththetrusteeandtodiscloseallassets,whereverlocatedandbywhomeverheld,thatyoumayhaveanyinterestinwhatsoever.Failuretocooperatewiththetrusteemaycausethetrusteetofileacomplaintobjectingtoyourdischargeunder§727(a).Ifacomplaintisfiledagainstyoubyanypartychallengingyourdischarge,thatcomplaintwouldbeheardbythebankruptcyjudgeassignedtoyourcase.

MOTIONS,HEARINGSANDCOURTAPPEARANCES

Duringabankruptcycase,circumstancesmaycallforyoutoobtainanorderfromtheCourt.Forexample,ifyouhavereceivedanOrdertoUpdatethatrequiresyoutofileadocumentbyacertaindate,andyouneedmoretimetofileit,youmustrequestanextensionoftime.Thisisaccomplishedbyamotion.

Amotionisarequesttothejudgeforreliefofsomesortorforadecisiononaparticularmatter.Thepartyfilingthemotionisgenerallyreferredtoasthe“movingparty”orthe“movant.”Somemotionsorrequestsmaybemadeorallyinopencourt,butinbankruptcy,mostmotionsmustbemadeinwriting.

Inthewrittenmotion,themovingpartymakestherequestandthenexplainstothecourtwhythereliefisrequested.TheCourtmayactonthemotionwithoutahearingunderappropriatecircumstances.

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TheFederalRulesofBankruptcyProcedureaswellastheLocalRulesoftheU.S.BankruptcyCourtfortheDistrictofMassachusettshaveavarietyprovisionsdealingwithmotions,aswellasprovisionsonhowtorespondtomotions.Ifyouneedtofileamotion,orifyouneedtorespondtoamotion,itisveryimportantthatyoubecomeacquaintedwiththoserules.VirtuallyallmotionshavenoOfficialorLocalform.However,theProSeClerkmaybeabletoprovideguidanceonhowyourmotionmaybeformatted.Pleaseremember,theClerk’sofficecannotprovidelegaladvice,andthisincludesadvisingyouhowtophraseordraftyourrequestforrelief.

Toavoiddelayofthereliefbeingsought,ortoavoidthemotionbeingdenied,itisveryimportanttoensurethatyourmotionisappropriatelyservedonthepartiesentitledtonotice.

CERTIFICATESOFSERVICE

AcertificateofserviceisawrittenstatementfiledwiththeCourtindicatingthatyoumailedcopiesofaparticularpleading,noticeormotiontoallpartiesentitledtonotice.Todeterminewhoisentitledtonotice,youshoulddetermine(1)whohasfiledanappearanceinyourcase;(2)whoisthetrusteeassignedtoyourcase;(3)whohasrequestednoticeinyourcase;and(4)whattheFederalRulesofBankruptcyProcedureandtheLocalRulesfortheU.S.BankruptcyCourtfortheDistrictofMassachusettsprovideasthenecessaryandappropriatepartiestoserveinyourcase.

Certificatesofserviceareimportant.TheyprovidetheCourtwithclearproofthatservicehasbeenaccomplishedandthatpartieshavebeennotifiedoftheirrightsandtheiropportunitytobeheard.Motionscanbedenied,andhearingsmaybedelayed,ifacertificateofserviceisdeficientorwasneverfiled.

Acertificateofservicemustbeincludedwiththepleadingyouarefilinganditmustbesignedbyyou.Thecertificatemuststatethefollowing:

Thedateofservice,thatis,thedatethatyoumaileditordeliveredittothepersonbeingserved;

Thenameofthedocumentserved; Themethodofservice(mail,overnightcourier,fax,email,byhand,etc.); Thenamesandaddressesofthepartiesserved.

ForadditionalreadingonCertificatesofService,pleaseseeLocalRule9013‐3andFed.R.Bankr.P.2002.

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HEARINGS

Fromtimetotime,theCourtwillscheduleahearingonamotion.Whenthatoccurs,theCourtwillnotifyyou.Ifyouarethepartywhofiledthemotion,alsoreferredtoasthemovingparty,youwillreceiveanoticeofhearing.Inmostcircumstances,thenoticeofhearingwilldirectyoutoserveacopyofthenoticeofhearingonallpartiesandtofileacertificateofservicedemonstratingthatyoucomplied.

Timeanddatesofhearingsarescheduleddaysandsometimesweeksinadvance.Ifyouhaveaconflict,youshouldimmediatelyrequestanewdatebyfilingaMotiontoContinueHearingandservingallparties.IfyouhavenotheardbackfromtheCourtpriortothescheduledhearingdate,youarethenencouragedtocalltheCaseAdministratortoseeifyourMotiontoContinueHearingwasallowedordenied.IftheMotiontoContinueHearingwasdenied,youwillneedtoappearatthehearing.

TolearnwhoyourCaseAdministratoris,goto“ContactCourtStaff”>“PhoneNumbers”ontheCourt’swebsite:www.mab.uscourts.gov.TheCaseAdministratorisassignedbyjudgeandthelasttwonumbersinthecase.

COURTAPPEARANCES

ArrivetoCourtontime.Besureyoudressappropriately:yourhearingwillbeinaU.S.BankruptcyCourtandthedecisionmadebyaU.S.BankruptcyJudge.Considerwearingwhatyoumightwearifyouweretoattendareligiousserviceonaholiday,orifyouweretoattendanimportantjobinterview.

Pleaseplanaccordinglyforweather,traffic,publictransportationandparking.Insteadofbringingsmallchildrentocourt,considermakingalternativechildcarearrangementssoyourattentioncanbefocusedexclusivelyonthelegalandfactualissuesthatarescheduledtobeheardbythecourt.Allcourtbuildingshavesecurity,andinBoston,youwillneedtogothroughtwosecurityscreenings:onefortheFederalBuilding,andonefortheCourt.Youmayberequiredtoremovebeltsandothermetalandyourbagsmaybesubjecttosearch.Prosedebtorsandthegeneralpublicareprohibitedfrombringingcameras,pagers,cellphones,laptopcomputers,tablets,recordingdevicesandotherelectronicdevicesintoanyCourt.Youwillberequiredtoleavethemwithbuilding/courtsecurity.

Ifyouarriveinthecourtroomandthejudgehasnotyettakenthebench,youmaywanttospeaktotheCourtroomDeputy(whomaybesittingatadeskinfrontofthejudge’sbench)tocheckin.Ifthejudgesittingonthebench,courtisinsessionandyoushouldquietlytakeaseatandwaitforyourcasetobecalled.

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Infederalcourts,partiesspeakfromapodiumwhichisusuallylocatedbetweentwotablesinthecourtroom.Partiesshouldspeakonlyfromthepodium,andintothemicrophone.

Thecourtusesdigitalaudiotechnology.Itisveryimportantthatyouidentifyyourselfbeforespeakingforthefirsttime(forexample,“JohnSmith,creditor”)andthatyouspeakclearly.

BepreparedtoanswertheCourt’squestionsandtorespondtoanyargumentsorstatementsmadebyotherparties.Becourteousandrespectfulatalltimes.Whileyoumaybeprose,youareexpectedtocomporttothelevelofdignityanddecorumexpectedofanyoneappearingbeforetheCourt.YouarealsoexpectedtohaveanunderstandingofthelawandfactsthatconcerntheissuethatisbeforetheCourt.

ADVERSARYPROCEEDINGS

ADVERSARYPROCEEDINGS

Adversaryproceedingsareaseparateprocessinabankruptcy.Inanadversaryproceeding,thereisaplaintiffandadefendant,ratherthanacreditorandadebtor.Theplaintiffinitiatestheadversaryproceeding,andthedefendantistherespondingordefendingparty.

TherulesthatgovernadversaryproceedingsarefoundinPartVIIoftheFederalRulesofBankruptcyProcedure.Fed.R.Bankr.P.7001identifiesthetypesofactionsthatwouldbeconsideredadversaryproceedings.Acreditormayfinditselfasadefendantinanadversaryproceedingifthetrusteebelievestheyreceivedapreferentialpaymentorifthedebtorseekstodeterminewhetheraparticulardebtisdischarged.Acreditormayalsobeaplaintiffinanadversaryproceedingifthecreditorseeksadeterminationofnondischargeabilityoftheirparticulardebt.

Whetheryouarebringinganadversaryproceedingorfindyourselfdefendinganadversaryproceeding,itisimportanttoknowthatadversaryproceedingscanbeexceptionallycomplicated.TheproceduralrulesareidenticalinmostrespectstotheFederalRulesofCivilProcedure.Discoverymechanismssuchasdepositionsandrequestsforproductionmightbeutilized.

Assumingthereisnolegalbasistodismisstheclaimsearlyon,theCourt’sfinaldecisionswillbebasedonevidence.Thosefinaldecisionsmaycomeaftermotionshavebeenfiled(seee.g.Fed.R.Bankr.P.7056)oratrial,wherewitnessesareexaminedandcrossexaminedanddocumentsareadmittedintoevidence.TherulesrelatingtoevidenceadmissibilityarefoundintheFederalRulesofEvidence(separatefromtheFederalRulesofBankruptcyProcedure).Ifyouarecontemplatingbringinganadversaryproceeding,orifyoufindyourselfasapartyinanadversaryproceeding,youarestronglyencouragedtoconferwithlegalcounselortheProseClerk.

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Chapter7:LiquidationundertheBankruptcyCode

ThechapteroftheBankruptcyCodeprovidingfor"liquidation,"(i.e.,thesaleofadebtor'snonexemptpropertyandthedistributionoftheproceedstocreditors.)

AlternativestoChapter7

Debtorsshouldbeawarethatthereareseveralalternativestochapter7relief.Forexample,debtorswhoareengagedinbusiness,includingcorporations,partnerships,andsoleproprietorships,mayprefertoremaininbusinessandavoidliquidation.Suchdebtorsshouldconsiderfilingapetitionunderchapter11oftheBankruptcyCode.Underchapter11,thedebtormayseekanadjustmentofdebts,eitherbyreducingthedebtorbyextendingthetimeforrepayment,ormayseekamorecomprehensivereorganization.Soleproprietorshipsmayalsobeeligibleforreliefunderchapter13oftheBankruptcyCode.

Inaddition,individualdebtorswhohaveregularincomemayseekanadjustmentofdebtsunderchapter13oftheBankruptcyCode.Aparticularadvantageofchapter13isthatitprovidesindividualdebtorswithanopportunitytosavetheirhomesfromforeclosurebyallowingthemto"catchup"pastduepaymentsthroughapaymentplan.Moreover,thecourtmaydismissachapter7casefiledbyanindividualwhosedebtsareprimarilyconsumerratherthanbusinessdebtsifthecourtfindsthatthegrantingofreliefwouldbeanabuseofchapter7.11U.S.C.§ 707(b).

Ifthedebtor's"currentmonthlyincome"1ismorethanthestatemedian,theBankruptcyCoderequiresapplicationofa"meanstest"todeterminewhetherthechapter7filingispresumptivelyabusive.Abuseispresumedifthedebtor'saggregatecurrentmonthlyincomeover5years,netofcertainstatutorilyallowedexpenses,ismorethan(i)$12,850,or(ii)25%ofthedebtor'snonpriorityunsecureddebt,aslongasthatamountisatleast$7,700.2Thedebtormayrebutapresumptionofabuseonlybyashowingofspecialcircumstancesthatjustifyadditionalexpensesoradjustmentsofcurrentmonthlyincome.Unlessthedebtorovercomesthepresumptionofabuse,thecasewillgenerallybeconvertedtochapter13(withthedebtor'sconsent)orwillbedismissed.11U.S.C.§707(b)(1).

1 The "current monthly income" received by the debtor is a defined term in the Bankruptcy Code and means the average monthly income received over the six calendar months before commencement of the bankruptcy case, including regular contributions to household expenses from nondebtors and including income from the debtor's spouse if the petition is a joint petition, but not including social security income or certain payments made because the debtor is the victim of certain crimes. 11 U.S.C. § 101(10A).

2 To determine whether a presumption of abuse arises, all individual debtors with primarily consumer debts who file a chapter 7 case must complete Official Bankruptcy Form B122A‐1, entitled "Chapter 7 Statement of Your Current Monthly Income ." They may also have to complete Official Form 122A‐2 “Chapter 7 Means Test Calculation.” (The Official Forms may downloaded from the internet at www.mab.uscourts.gov.)Pleasenote,theseamountsadjusteverythreeyears.TheyarenextscheduledtoadjustonApril1,2019.

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Debtorsshouldalsobeawarethatout‐of‐courtagreementswithcreditorsordebtcounselingservicesmayprovideanalternativetoabankruptcyfiling.However,debtorsshouldinvestigatetheseservices.Formoreinformation,see“CopingwithDebt”availableonthewebsiteoftheFederalTradeCommission.3

Background

Achapter7bankruptcycasedoesnotinvolvethefilingofaplanofrepaymentasinchapter13.Instead,thebankruptcytrusteegathersandsellsthedebtor'snonexemptassetsandusestheproceedsofsuchassetstopayholdersofclaims(creditors)inaccordancewiththeprovisionsoftheBankruptcyCode.Partofthedebtor'spropertymaybesubjecttoliensandmortgagesthatpledgethepropertytoothercreditors.Inaddition,theBankruptcyCodewillallowthedebtortokeepcertain"exempt"property;butatrusteewillliquidatethedebtor'sremainingassets.Accordingly,potentialdebtorsshouldrealizethatthefilingofapetitionunderchapter7mayresultinthelossofproperty.

Eligibility

Toqualifyforreliefunderchapter7oftheBankruptcyCode,thedebtormaybeanindividual,apartnership,oracorporationorotherbusinessentity.11U.S.C.§§101(41),109(b).Subjecttothemeanstestdescribedaboveforindividualdebtors,reliefisavailableunderchapter7irrespectiveoftheamountofthedebtor'sdebtsorwhetherthedebtorissolventor

3 See http://www.consumer.ftc.gov/articles/0150‐coping‐debt

insolvent.Anindividualcannotfileunderchapter7oranyotherchapter,however,ifduringthepreceding180daysapriorbankruptcypetitionwasdismissedduetothedebtor'swillfulfailuretoappearbeforethecourtorcomplywithordersofthecourt,orthedebtorvoluntarilydismissedthepreviouscaseaftercreditorssoughtrelieffromthebankruptcycourttorecoverpropertyuponwhichtheyholdliens.11U.S.C.§§109(g),362(d)and(e).

Inaddition,noindividualmaybeadebtorunderchapter7oranychapteroftheBankruptcyCodeunlessheorshehas,within180daysbeforefiling,receivedcreditcounselingfromanapprovedcreditcounselingagencyeitherinanindividualorgroupbriefing.11U.S.C.§§109,111.ThereareexceptionsinemergencysituationsorwheretheU.S.trustee(orbankruptcyadministrator)hasdeterminedthatthereareinsufficientapprovedagenciestoprovidetherequiredcounseling.Ifadebtmanagementplanisdevelopedduringrequiredcreditcounseling,itmustbefiledwiththecourt.

Oneoftheprimarypurposesofbankruptcyistodischargecertaindebtstogiveanhonestindividualdebtora"freshstart."Thedebtorhasnoliabilityfordischargeddebts.Inachapter7case,however,adischargeisonlyavailabletoindividualdebtors,nottopartnershipsorcorporations.11U.S.C.§727(a)(1).Althoughanindividualchapter7caseusuallyresultsinadischargeofdebts,therighttoadischargeisnotabsolute,andsometypesofdebtsarenotdischarged.Moreover,abankruptcydischargedoesnotextinguishalienproperty,suchasamortgageforexample.

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HowChapter7Works

Achapter7casebeginswiththedebtorfilingapetitionwiththebankruptcycourtservingtheareawheretheindividuallivesorwherethebusinessdebtorisorganizedorhasitsprincipalplaceofbusinessorprincipalassets.4Inadditiontothepetition,thedebtormustalsofilewiththecourt:(1)schedulesofassetsandliabilities;(2)schedulesofcurrentincomeandexpenditures;(3)astatementoffinancialaffairs;and(4)ascheduleofexecutorycontractsandunexpiredleases.Fed.R.Bankr.P.1007(b).Debtorsmustalsoprovidetheassignedcasetrusteewithacopyofthetaxreturnortranscriptsforthemostrecenttaxyearaswellastaxreturnsfiledduringthecase(includingtaxreturnsforprioryearsthathadnotbeenfiledwhenthecasebegan).11U.S.C.§521.

Individualdebtorswithprimarilyconsumerdebtshaveadditionaldocumentfilingrequirements.Theymustfile:acertificateofcreditcounselingandacopyofanydebtrepaymentplandevelopedthroughcreditcounseling;evidenceofpaymentfromemployers,ifany,received60daysbeforefiling;astatementofmonthlynetincomeandanyanticipatedincreaseinincomeorexpensesafterfiling;andarecordofanyinterestthedebtorhasinfederalorstatequalifiededucationortuitionaccounts.Id.Individualsmayfileapetition,oramarriedcouplemayfileajointpetition.11U.S.C.§302(a).Eveniffilingjointly,bothspousesaresubjecttoallofthedocumentfilingrequirementsofindividualdebtors.(TheOfficialForms

4 An involuntary chapter 7 case may be commenced under certain circumstances by a petition filed by creditors holding claims against the debtor. 11 U.S.C. § 303.

maydownloadedfromtheinternetatwww.uscourts.gov/bkforms/index.html.FormsarealsoavailableattheCourt.)

Thecourtsmustchargeafilingfee.Forinformationaboutfilingfees,pleasevisitthecourt’swebsite,www.mab.uscourts.gov.Normally,thefeesmustbepaidtotheclerkofthecourtuponfiling.Withthecourt'spermission,however,individualdebtorsmaypayininstallments.28U.S.C.§1930(a);Fed.R.Bankr.P.1006(b);LocalRules1006‐1,1006‐2;5andLocalRules,Appendix3.Thenumberofinstallmentsislimitedtofour,andthedebtormustmakethefinalinstallmentnolaterthan120daysafterfilingthepetition.Fed.R.Bankr.P.1006.Forcauseshown,thecourtmayextendthetimeofanyinstallment,providedthatthelastinstallmentispaidnotlaterthan180daysafterfilingthepetition.Id.Debtorsshouldbeawarethatfailuretopaythesefeesmayresultindismissalofthecase.11U.S.C.§707(a).

Ifthedebtor'sincomeislessthan150%ofthepovertylevel(asdefinedintheBankruptcyCode),andthedebtorisunabletopaythechapter7feesevenininstallments,thecourtmay,butisnotrequiredto,waivetherequirementthatthefeesbepaid.28U.S.C.§1930(f).

InordertocompletetheOfficialBankruptcyFormsthatmakeupthepetition,statementoffinancialaffairs,andschedules,thedebtormustprovidethefollowinginformation:

Alistofallcreditorsandtheamountandnatureoftheirclaims;

5 The term “Local Rule” refers to the Local Bankruptcy Rules, United States Bankruptcy Court for the District of Massachusetts.

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Thesource,amount,andfrequencyofthedebtor'sincome;

Alistofallofthedebtor'sproperty;and

Adetailedlistofthedebtor'smonthlylivingexpenses,i.e.,food,clothing,shelter,utilities,taxes,transportation,medicine,etc.

Marriedindividualsmustgatherthisinformationfortheirspouseregardlessofwhethertheyarefilingajointpetition,separateindividualpetitions,orevenifonlyonespouseisfiling.Inasituationwhereonlyonespousefiles,theincomeandexpensesofthenon‐filingspousearerequiredsothatthecourt,thetrusteeandcreditorscanevaluatethehousehold'sfinancialposition.

Amongtheschedulesthatanindividualdebtorwillfileisascheduleof"exempt"property.TheBankruptcyCodeallowsanindividualdebtor6toprotectsomepropertyfromtheclaimsofcreditorsunderfederalbankruptcylaworunderthelawsofthedebtor'shomestate.11U.S.C.§522(b).ManystateshavetakenadvantageofaprovisionintheBankruptcyCodethatpermitseachstatetoadoptitsownexemptionlawinplaceofthefederalexemptions.Inotherjurisdictions,theindividualdebtorhastheoptionofchoosingbetweenafederalpackageofexemptionsortheexemptionsavailableunderstatelaw.Thus,whethercertainpropertyisexemptandmaybekeptbythedebtorisoftenaquestionofstatelaw.Thedebtorshouldconsultanattorneytodeterminetheexemptionsavailableinthestatewherethedebtorlives.

6 Each debtor in a joint case can claim exemptions under the federal bankruptcy laws. 11 U.S.C. § 522(m).

Filingapetitionunderchapter7"automaticallystays"(stops)mostcollectionactionsagainstthedebtororthedebtor'sproperty.11U.S.C.§362.Butfilingthepetitiondoesnotstaycertaintypesofactionslistedunder11U.S.C.§362(b),andthestaymaybeeffectiveonlyforashorttimeinsomesituations.See11U.S.C.§362(c).Thestayarisesbyoperationoflawandrequiresnojudicialaction.Aslongasthestayisineffect,creditorsgenerallymaynotinitiateorcontinuelawsuits,wagegarnishments,oreventelephonecallsdemandingpayments.Thebankruptcyclerkgivesnoticeofthebankruptcycasetoallcreditorswhosenamesandaddressesareprovidedbythedebtor.

Between20and40daysafterthepetitionisfiled,thecasetrustee(describedbelow)willholdameetingofcreditors.IftheU.S.trusteeorbankruptcyadministratorschedulesthemeetingataplacethatdoesnothaveregularU.S.trusteeorbankruptcyadministratorstaffing,themeetingmaybeheldnomorethan60daysaftertheorderforrelief.Fed.R.Bankr.P.2003(a).Duringthismeeting,thetrusteeplacesthedebtorunderoath,andboththetrusteeandcreditorsmayaskquestions.Thedebtormustattendthemeetingandanswerquestionsregardingthedebtor'sfinancialaffairsandproperty.11U.S.C.§343.Ifajointpetitionisfiled,bothspousesmustattendthecreditors'meetingandanswerquestions.Within10daysofthecreditors'meeting,theU.S.trusteewillreporttothecourtwhetherthecaseshouldbepresumedtobeanabuseunderthemeanstestdescribedin11U.S.C.§704(b).

Itisimportantforthedebtortocooperatewiththetrusteeandtoprovideanyfinancialrecordsordocumentsthatthe

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trusteerequests.TheBankruptcyCoderequiresthetrusteetoaskthedebtorquestionsatthemeetingofcreditorstoensurethatthedebtorisawareofthepotentialconsequencesofseekingadischargeinbankruptcysuchastheeffectoncredithistory,theabilitytofileapetitionunderadifferentchapter,theeffectofreceivingadischarge,andtheeffectofreaffirmingadebt.Sometrusteesprovidewritteninformationonthesetopicsatorbeforethemeetingtoensurethatthedebtorisawareofthisinformation.Inordertopreservetheirindependentjudgment,bankruptcyjudgesareprohibitedfromattendingthemeetingofcreditors.11U.S.C.§341(c).

Inordertoaccordthedebtorcompleterelief,theBankruptcyCodeallowsthedebtortoconvertachapter7casetoacaseunderchapter11,12,or137aslongasthedebtoriseligibletobeadebtorunderthenewchapter.However,aconditionofthedebtor'svoluntaryconversionisthatthecasehasnotpreviouslybeenconvertedtochapter7fromanotherchapter.11U.S.C.§706(a).Thus,thedebtorwillnotbepermittedtoconvertthecaserepeatedlyfromonechaptertoanother.

TheRoleoftheChapter7Trustee

Whenachapter7petitionisfiled,theU.S.trusteeappointsanimpartialcasetrusteetoadministerthecaseandliquidatethedebtor'snonexemptassets.11U.S.C.§§701,704.Ifallthedebtor'sassetsareexemptorsubjecttovalidliens,the

7 A fee is charged for converting, on request of the debtor, a case under chapter 7 to a case under chapter 11. There is no fee for converting from chapter 7 to chapter 13. For additional information about fees, please visit www.mab.uscourts.gov.

trusteewillnormallyfilea"noasset"reportwiththecourt,andtherewillbenodistributiontounsecuredcreditors.Mostchapter7casesinvolvingindividualdebtorsarenoassetcases.Butifthecaseappearstobean"asset"caseattheoutset,unsecuredcreditors8mustfiletheirclaimswiththecourtwithin90daysafterthefirstdatesetforthemeetingofcreditors.Fed.R.Bankr.P.3002(c).Agovernmentalunit,however,has180daysfromthedatethecaseisfiledtofileaclaim.11U.S.C.§502(b)(9).

Inthetypicalnoassetchapter7case,thereisnoneedforcreditorstofileproofsofclaimbecausetherewillbenodistribution.Ifthetrusteelaterrecoversassetsfordistributiontounsecuredcreditors,theBankruptcyCourtwillprovidenoticetocreditorsandwillallowadditionaltimetofileproofsofclaim.Althoughasecuredcreditordoesnotneedtofileaproofofclaiminachapter7casetopreserveitssecurityinterestorlien,theremaybeotherreasonstofileaclaim.Acreditorinachapter7casewhohasalienonthedebtor'spropertyshouldconsultanattorneyforadvice.

Commencementofabankruptcycasecreatesan"estate."Theestatetechnicallybecomesthetemporarylegalownerofallthedebtor'sproperty.Itconsistsofalllegalorequitableinterestsofthedebtorinpropertyasofthecommencementofthecase,includingpropertyownedorheldbyanotherpersonifthedebtorhasaninterestintheproperty.Generally

8 Unsecured debts generally may be defined as those for which the extension of credit was based purely upon an evaluation by the creditor of the debtor's ability to pay, as opposed to secured debts, for which the extension of credit was based upon the creditor's right to seize collateral on default, in addition to the debtor's ability to pay.

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speaking,thedebtor'screditorsarepaidfromnonexemptpropertyoftheestate.

Theprimaryroleofachapter7trusteeinanassetcaseistoliquidatethedebtor'snonexemptassetsinamannerthatmaximizesthereturntothedebtor'sunsecuredcreditors.Thetrusteeaccomplishesthisbysellingthedebtor'spropertyifitisfreeandclearofliens(aslongasthepropertyisnotexempt)orifitisworthmorethananysecurityinterestorlienattachedtothepropertyandanyexemptionthatthedebtorholdsintheproperty.

Thetrusteemayalsoattempttorecovermoneyorpropertyunderthetrustee's"avoidingpowers."Thetrustee'savoidingpowersincludethepowerto:setasidepreferentialtransfersmadetocreditorswithin90daysbeforethepetition;undosecurityinterestsandotherprepetitiontransfersofpropertythatwerenotproperlyperfectedundernonbankruptcylawatthetimeofthepetition;andpursuenonbankruptcyclaimssuchasfraudulentconveyanceandbulktransferremediesavailableunderstatelaw.Inaddition,ifthedebtorisabusiness,thebankruptcycourtmayauthorizethetrusteetooperatethebusinessforalimitedperiodoftime,ifsuchoperationwillbenefitcreditorsandenhancetheliquidationoftheestate.11U.S.C.§721.

Section726oftheBankruptcyCodegovernsthedistributionofthepropertyoftheestate.Under§726,therearesixclassesofclaims;andeachclassmustbepaidinfullbeforethenextlowerclassispaidanything.Thedebtorisonlypaidifallclassesofclaimshavebeenpaidinfull.Accordingly,thedebtorisnotparticularlyinterestedinthetrustee'sdispositionoftheestateassets,exceptwithrespecttothepaymentofthosedebtswhichfor

somereasonarenotdischargeableinthebankruptcycase.Theindividualdebtor'sprimaryconcernsinachapter7casearetoretainexemptpropertyandtoreceiveadischargethatcoversasmanydebtsaspossible.

TheChapter7Discharge

Adischargereleasesindividualdebtorsfrompersonalliabilityformostdebtsandpreventsthecreditorsowedthosedebtsfromtakinganycollectionactionsagainstthedebtor.Becauseachapter7dischargeissubjecttomanyexceptions,debtorsshouldconsultcompetentlegalcounselbeforefilingtodiscussthescopeofthedischarge.Generally,excludingcasesthataredismissedorconverted,individualdebtorsreceiveadischargeinmorethan99percentofchapter7cases.Inmostcases,unlessapartyininterestfilestimelyacomplaintobjectingtothedischargeoramotiontoextendthetimetoobject,thebankruptcycourtwillissueadischargeorderrelativelyearlyinthecase–generally,60to90daysafterthedatefirstsetforthemeetingofcreditors.Fed.R.Bankr.P.4004(c).

Thegroundsfordenyinganindividualdebtoradischargeinachapter7casearenarrowandareconstruedagainstthemovingparty.Amongotherreasons,thecourtmaydenythedebtoradischargeifitfindsthatthedebtor:failedtokeeporproduceadequatebooksorfinancialrecords;failedtoexplainsatisfactorilyanylossofassets;committedabankruptcycrimesuchasperjury;failedtoobeyalawfulorderofthebankruptcycourt;fraudulentlytransferred,concealed,ordestroyedpropertythatwouldhavebecomepropertyoftheestate;orfailedtocompleteanapproved

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instructionalcourseconcerningfinancialmanagement.11U.S.C.§727;Fed.R.Bankr.P.4005.

Securedcreditorsmayretainsomerightstoseizepropertysecuringanunderlyingdebtevenafteradischargeisgranted.Dependingonindividualcircumstances,ifadebtorwishestokeepcertainsecuredproperty(suchasanautomobile),heorshemaydecideto"reaffirm"thedebt.Areaffirmationisanagreementbetweenthedebtorandthecreditorthatthedebtorwillremainliableandwillpayalloraportionofthemoneyowed,eventhoughthedebtwouldotherwisebedischargedinthebankruptcy.Inreturn,thecreditorpromisesthatitwillnotrepossessortakebacktheautomobileorotherpropertysolongasthedebtorcontinuestopaythedebt.

Ifthedebtordecidestoreaffirmadebt,heorshemustdosobeforethedischargeisentered.Thedebtormustsignawrittenreaffirmationagreementandfileitwiththecourt.11U.S.C.§524(c).TheBankruptcyCoderequiresthatreaffirmationagreementscontainanextensivesetofdisclosuresdescribedin11U.S.C.§524(k);seealsoLocalRule,OfficialLocalForm6.Amongotherthings,thedisclosuresmustadvisethedebtoroftheamountofthedebtbeingreaffirmedandhowitiscalculatedandthatreaffirmationmeansthatthedebtor'spersonalliabilityforthatdebtwillnotbedischargedinthebankruptcy.Thedisclosuresalsorequirethedebtortosignandfileastatementofhisorhercurrentincomeandexpenseswhichshowsthatthebalanceofincomepayingexpensesissufficienttopaythereaffirmeddebt.Ifthebalanceisnotenoughtopaythedebttobereaffirmed,thereisapresumptionofunduehardship,andthecourtmay

decidenottoapprovethereaffirmationagreement.Unlessthedebtorisrepresentedbyanattorney,thebankruptcyjudgemustapprovethereaffirmationagreement.

Ifthedebtorwasrepresentedbyanattorneyinconnectionwiththereaffirmationagreement,theattorneymustcertifyinwritingthatheorsheadvisedthedebtorofthelegaleffectandconsequencesoftheagreement,includingadefaultundertheagreement.Theattorneymustalsocertifythatthedebtorwasfullyinformedandvoluntarilymadetheagreementandthatreaffirmationofthedebtwillnotcreateanunduehardshipforthedebtororthedebtor'sdependents.11U.S.C.§524(k).TheBankruptcyCoderequiresareaffirmationhearingifthedebtorhasnotbeenrepresentedbyanattorneyduringthenegotiatingoftheagreement,orifthecourtdisapprovesthereaffirmationagreement.11U.S.C.§524(d)and(m).Thedebtormayrepayanydebtvoluntarily,however,whetherornotareaffirmationagreementexists.11U.S.C.§524(f).

Whenanindividualreceivesadischargeinachapter7bankruptcycase,creditorsmaynolongerinitiateorcontinueanylegalorotheractionagainstthedebtortocollectadischargeddebt.Butnotallofanindividual'sdebtsaredischargedinchapter7.

Debtsnotdischargedincludedebtsforalimonyandchildsupport,certaintaxes,debtsforcertaineducationalbenefitoverpaymentsorloansmadeorguaranteedbyagovernmentalunit,debtsforwillfulandmaliciousinjurybythedebtortoanotherentityortothepropertyofanotherentity,debtsfordeathorpersonalinjurycausedbythe

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debtor'soperationofamotorvehiclewhilethedebtorwasintoxicatedfromalcoholorothersubstances,anddebtsforcertaincriminalrestitutionorders.11U.S.C.§523(a).Thedebtorwillcontinuetobeliableforthesetypesofdebtstotheextentthattheyarenotpaidinthechapter7case.

Debtsformoneyorpropertyobtainedbyfalsepretenses,debtsforfraudordefalcationwhileactinginafiduciarycapacity,anddebtsforwillfulandmaliciousinjurybythedebtortoanotherentityortothepropertyofanotherentitywillbedischargedunlessacreditortimelyfilesandprevailsinanactiontohavesuchdebtsdeclarednondischargeable.11U.S.C.§523(c);Fed.R.Bankr.P.4007(c).

Thecourtmayrevokeachapter7dischargeontherequestofthetrustee,acreditor,ortheU.S.trusteeifthedischargewasobtainedthroughfraudbythedebtor,ifthedebtoracquiredpropertythatispropertyoftheestateandknowinglyandfraudulentlyfailedtoreporttheacquisitionofsuchpropertyortosurrenderthepropertytothetrustee,orifthedebtor(withoutasatisfactoryexplanation)makesamaterialmisstatementorfailstoprovidedocumentsorotherinformationinconnectionwithanauditofthedebtor'scase.11U.S.C.§727(d).

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WhatIndividualDebtorsNeedtoKnowAboutChapter11:Reorganizationunderthe

BankruptcyCode

ThechapteroftheBankruptcyCodeproviding(generally)forreorganization,usuallyinvolvingacorporationorpartnership.(Achapter11debtorusuallyproposesaplanofreorganizationtokeepitsbusinessaliveandpaycreditorsovertime.Peopleinbusinessorindividualscanalsoseekreliefinchapter11.)1

Background

Acasefiledunderchapter11oftheUnitedStatesBankruptcyCodeisfrequentlyreferredtoasa"reorganization"bankruptcy.

Anindividualcannotfileunderchapter11oranyotherchapterif,duringthepreceding180days,apriorbankruptcypetitionwasdismissedduetothedebtor'swillfulfailuretoappearbeforethecourtorcomplywithordersofthecourt,orwasvoluntarilydismissedaftercreditorssoughtrelieffromthebankruptcycourttorecoverpropertyuponwhichtheyholdliens.See11U.S.C.§§109(g),362(d)‐(e).

Inaddition,noindividualmaybeadebtorunderchapter11oranychapteroftheBankruptcyCodeunlessheorshehas,within180daysbeforefiling,receivedcreditcounselingfromanapprovedcreditcounselingagencyeitherinanindividualorgroupbriefing.11U.S.C.§§109,111.

1Thissectionisintendedforindividualdebtors.Non‐individualdebtorsarerequiredtohavelegalcounsel.SeeMLBR9010‐1(c).

ThereareexceptionsinemergencysituationsorwheretheU.S.trustee(orbankruptcyadministrator)hasdeterminedthatthereareinsufficientapprovedagenciestoprovidetherequiredcounseling.Ifadebtmanagementplanisdevelopedduringrequiredcreditcounseling,itmustbefiledwiththecourt.

HowChapter11Works

Achapter11casebeginswiththefilingofapetitionwiththebankruptcycourtservingtheareawherethedebtorhasadomicileorresidence.Apetitionmaybeavoluntarypetition,whichisfiledbythedebtor,oritmaybeaninvoluntarypetition,whichisfiledbycreditorsthatmeetcertainrequirements.11U.S.C.§§301,303.AvoluntarypetitionmustadheretotheformatofOfficialFormB101oftheOfficialFormsprescribedbytheJudicialConferenceoftheUnitedStates.Unlessthecourtordersotherwise,thedebtoralsomustfilewiththecourt:(1)schedulesofassetsandliabilities;(2)schedulesofcurrentincomeandexpenditures;(3)ascheduleofexecutorycontractsandunexpiredleases;and(4)astatementoffinancialaffairs.Fed.R.Bankr.P.1007(b).

Ifthedebtorisanindividual(includingjointdebtorsifamarriedcouplefilestogether),thereareadditionaldocumentfilingrequirements.Suchdebtorsmustfile:acertificateofcreditcounselingandacopyofanydebtrepaymentplandevelopedthroughcreditcounseling;evidenceofpaymentfromemployers,ifany,received60daysbeforefiling;astatementofmonthlynetincomeandanyanticipatedincreaseinincomeorexpensesafterfiling;andarecordofany

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interestthedebtorhasinfederalorstatequalifiededucationortuitionaccounts.11U.S.C.§521.Individualsmayfileapetition,ormarriedcouplesmayfileajointpetition.11U.S.C.§302(a).(TheOfficialFormsmaybedownloadedatwww.mab.uscourts.gov.)

Thecourtsarerequiredtochargeafilingfee.Informationaboutfilingfeesmaybefoundonthecourt’swebsite.Thefeesmustbepaidtotheclerkofthecourtuponfilingormay,withthecourt'spermission,bepaidbyindividualdebtorsininstallments.See28U.S.C.§1930(a);Fed.R.Bankr.P.1006(b);BankruptcyCourtMiscellaneousFeeSchedule,Item8.Fed.R.Bankr.P.1006(b)limitstofourthenumberofinstallmentstopaythefilingfee.Thefinalinstallmentmustbepaidnotlaterthan120daysafterfilingthepetition.Forcauseshown,thecourtmayextendthetimeofanyinstallment,providedthatthelastinstallmentispaidnotlaterthan180daysafterthefilingofthepetition.Fed.R.Bankr.P.1006(b).Debtorsshouldbeawarethatfailuretopaythesefeesmayresultindismissalofthecase.11U.S.C.§1112(b)(10).

Thevoluntarypetitionwillincludestandardinformationconcerningthedebtor'sname(s),lastfourdigitsofsocialsecuritynumberortaxidentificationnumber,residence,locationofprincipalassets(ifabusiness),andarequestforreliefundertheappropriatechapteroftheBankruptcyCode.Uponfilingavoluntarypetitionforreliefunderchapter11or,inaninvoluntarycase,theentryofanorderforrelief,thedebtorautomaticallyassumesanadditionalidentityasthe"debtorinpossession."11U.S.C.§1101.Thetermreferstoadebtorthatkeepspossessionandcontrolofitsassetswhileundergoingareorganization

underchapter11,withouttheappointmentofacasetrustee.Adebtorwillremainadebtorinpossessionuntilthedebtor'splanofreorganizationisconfirmed,thedebtor'scaseisdismissedorconvertedtochapter7,orachapter11trusteeisappointed.

Theappointmentorelectionofatrusteeoccursonlyinasmallnumberofcases.Generally,thedebtor,as"debtorinpossession,"operatesthebusinessandperformsmanyofthefunctionsthatatrusteeperformsincasesunderotherchapters.11U.S.C.§1107(a).

Generally,awrittendisclosurestatementandaplanofreorganizationmustbefiledwiththecourt.See11U.S.C.§§1121,1125.Thedisclosurestatementisadocumentthatmustcontaininformationconcerningtheassets,liabilities,andbusinessaffairsofthedebtorsufficienttoenableacreditortomakeaninformedjudgmentaboutthedebtor'splanofreorganization.11U.S.C.§1125.Theinformationrequiredisgovernedbyjudicialdiscretionandthecircumstancesofthecase.Ina"smallbusinesscase"(discussedbelow)thedebtormaynotneedtofileaseparatedisclosurestatementifthecourtdeterminesthatadequateinformationiscontainedintheplan.11U.S.C.§1125(f).

Thecontentsoftheplanmustincludeaclassificationofclaimsandmustspecifyhoweachclassofclaimswillbetreatedundertheplan.See11U.S.C.§1123.Creditorswhoseclaimsare"impaired,"i.e.,thosewhosecontractualrightsaretobemodifiedorwhowillbepaidlessthanthefullvalueoftheirclaimsundertheplan,voteontheplanbyballot.See11U.S.C.§1126.Afterthedisclosurestatementisapprovedbythecourtandtheballotsarecollectedandtallied,the

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courtwillconductaconfirmationhearingtodeterminewhethertoconfirmtheplan.11U.S.C.§1128.

Theindividualchapter11casebearssomesimilaritiestochapter13.Forexample,propertyoftheestateforanindividualdebtorincludesthedebtor'searningsandpropertyacquiredbythedebtorafterfilinguntilthecaseisclosed,dismissedorconverted;fundingoftheplanmaybefromthedebtor'sfutureearnings;andtheplancannotbeconfirmedoveracreditor'sobjectionwithoutcommittingallofthedebtor'sdisposableincomeoverfiveyearsunlesstheplanpaystheclaiminfull,withinterest,overashorterperiodoftime.11U.S.C.§§1115,1123(a)(8),1129(a)(15).

TheChapter11DebtorinPossession

Chapter11isoftenusedtoreorganizeabusiness,whichmaybeacorporation,partnershiporsoleproprietorship.Acorporationexistsseparateandapartfromitsowners,thestockholders.Thechapter11bankruptcycaseofacorporation(corporationasdebtor)doesnotputthepersonalassetsofthestockholdersatriskotherthanthevalueoftheirinvestmentinthecompany'sstock.

Likeacorporation,apartnershipexistsseparateandapartfromitspartners.Inapartnershipbankruptcycase(partnershipasdebtor),however,thepartners'personalassetsmay,insomecases,beusedtopaycreditorsinthebankruptcycaseorthepartners,themselves,maybeforcedtofileforbankruptcyprotection.

Asoleproprietorship(ownerasdebtor),ontheotherhand,doesnothaveanidentityseparateanddistinctfromits

owner(s).Accordingly,abankruptcycaseinvolvingasoleproprietorshipincludesboththebusinessandpersonalassetsoftheowners‐debtors.2

Section1107oftheBankruptcyCodeplacesthedebtorinpossessioninthepositionofafiduciary,withtherightsandpowersofachapter11trustee,anditrequiresthedebtortoperformallbuttheinvestigativefunctionsanddutiesofatrustee.Theseduties,setforthintheBankruptcyCodeandFederalRulesofBankruptcyProcedure,includeaccountingforproperty,examiningandobjectingtoclaims,andfilinginformationalreportsasrequiredbythecourtandtheU.S.trusteeorbankruptcyadministrator(discussedbelow),suchasmonthlyoperatingreports.11U.S.C.§§1106,1107;Fed.R.Bankr.P.2015(a).Thedebtorinpossessionalsohasmanyoftheotherpowersanddutiesofatrustee,includingtheright,withthecourt'sapproval,toemployattorneys,accountants,appraisers,auctioneers,orotherprofessionalpersonstoassistthedebtorduringitsbankruptcycase.Otherresponsibilitiesincludefilingtaxreturnsandreportswhichareeithernecessaryororderedbythecourtafterconfirmation,suchasafinalaccounting.TheU.S.trusteeisresponsibleformonitoringthecomplianceofthedebtorinpossessionwiththereportingrequirements.

RailroadreorganizationshavespecificrequirementsundersubsectionIVofchapter11,whichwillnotbeaddressedhere.Inaddition,stockandcommoditybrokersareprohibitedfromfilingunderchapter11andarerestrictedtochapter7. 11U.S.C.§109(d).

2Althoughstronglydiscouraged,soleproprietorsmayrepresentthemselvesprose.

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TheU.S.Trustee

TheU.S.trusteeplaysamajorroleinmonitoringtheprogressofachapter11caseandsupervisingitsadministration.TheU.S.trusteeisresponsibleformonitoringthedebtorinpossession'soperationofthebusinessandthesubmissionofoperatingreportsandpaymentofrequiredquarterlyfees.Additionally,theU.S.trusteereviewsapplicationsforcompensationandreimbursementfiledbyprofessionalshiredinthecase,anyplansanddisclosurestatementsfiledwiththecourt,andappointsthecreditors'committees.TheU.S.trusteeconductsameetingofthecreditors,oftenreferredtoasthe"section341meeting,"inachapter11case.11U.S.C.§341.TheU.S.trusteeandcreditorsmayquestionthedebtorunderoathatthesection341meetingconcerningthedebtor'sacts,conduct,property,andtheadministrationofthecase.

TheU.S.trusteealsoimposescertainrequirementsonthedebtorinpossessionconcerningmatterssuchasreportingitsmonthlyincomeandoperatingexpenses,establishingnewbankaccounts,andpayingcurrentemployeewithholdingandothertaxes.Bylaw,thedebtorinpossessionmustpayaquarterlyfeetotheU.S.trusteeforeachquarterofayearuntilthecaseisconvertedordismissed.28U.S.C.§1930(a)(6).Theamountofthefee,whichmayrangefrom$250to$10,000,dependsontheamountofthedebtor'sdisbursementsduringeachquarter.ShouldadebtorinpossessionfailtocomplywiththereportingrequirementsoftheU.S.trusteeorordersofthebankruptcycourt,orfailtotakethe

appropriatestepstobringthecasetoconfirmation,theU.S.trusteemayfileamotionwiththecourttohavethedebtor'schapter11caseconvertedtoanotherchapteroftheBankruptcyCodeortohavethecasedismissed.

Creditors’Committees

Creditors'committeescanplayamajorroleinchapter11cases.ThecommitteeisappointedbytheU.S.trusteeandordinarilyconsistsofunsecuredcreditorswhoholdthesevenlargestunsecuredclaimsagainstthedebtor.11U.S.C.§1102.Amongotherthings,thecommittee:consultswiththedebtorinpossessiononadministrationofthecase;investigatesthedebtor'sconductandoperationofthebusiness;andparticipatesinformulatingaplan.11U.S.C.§1103.Acreditors'committeemay,withthecourt'sapproval,hireanattorneyorotherprofessionalstoassistintheperformanceofthecommittee'sduties.Acreditors'committeecanbeanimportantsafeguardtothepropermanagementofthebusinessbythedebtorinpossession.

TheSmallBusinessCaseandtheSmallBusinessDebtor

InsomesmallercasestheU.S.trusteemaybeunabletofindcreditorswillingtoserveonacreditors'committee,orthecommitteemaynotbeactivelyinvolvedinthecase.TheBankruptcyCodeaddressesthisissuebytreatinga"smallbusinesscase"somewhatdifferentlythanaregularbankruptcycase.Asmallbusinesscaseisdefinedasacasewitha"smallbusinessdebtor."11U.S.C.§101(51C).Determinationofwhetheradebtorisa"smallbusinessdebtor"requiresapplicationofatwo‐parttest.

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First,thedebtormustbeengagedincommercialorbusinessactivities(otherthanprimarilyowningoroperatingrealproperty)withtotalnon‐contingentliquidatedsecuredandunsecureddebtsof$2,566,0503orless.Second,thedebtor'scasemustbeoneinwhichtheU.S.trusteehasnotappointedacreditors'committee,orthecourthasdeterminedthecreditors'committeeisinsufficientlyactiveandrepresentativetoprovideoversightofthedebtor.11U.S.C.§101(51D).

Inasmallbusinesscase,thedebtorinpossessionmust,amongotherthings,attachthemostrecentlypreparedbalancesheet,statementofoperations,cash‐flowstatementandmostrecentlyfiledtaxreturntothepetitionorprovideastatementunderoathexplainingtheabsenceofsuchdocumentsandmustattendcourtandtheU.S.trusteemeetingthroughseniormanagementpersonnelandcounsel.Thesmallbusinessdebtormustmakeongoingfilingswiththecourtconcerningitsprofitabilityandprojectedcashreceiptsanddisbursements,andmustreportwhetheritisincompliancewiththeBankruptcyCodeandtheFederalRulesofBankruptcyProcedureandwhetherithaspaiditstaxesandfileditstaxreturns.11U.S.C.§§308,1116.

Incontrasttootherchapter11debtors,thesmallbusinessdebtorissubjecttoadditionaloversightbytheU.S.trustee.Earlyinthecase,thesmallbusinessdebtormustattendan"initialinterview"withtheU.S.trusteeatwhichtimetheU.S.trusteewillevaluatethedebtor'sviability,inquireaboutthedebtor'sbusinessplan,andexplaincertaindebtorobligations

3ThisamountappliestocasesfiledonorafterApril1,2016andadjustseverythreeyears.ItisscheduledtoadjustonApril1,2019.

includingthedebtor'sresponsibilitytofilevariousreports.28U.S.C.§586(a)(7).TheU.S.trusteewillalsomonitortheactivitiesofthesmallbusinessdebtorduringthecasetoidentifyaspromptlyaspossiblewhetherthedebtorwillbeunabletoconfirmaplan.

Becausecertainfilingdeadlinesaredifferentandextensionsaremoredifficulttoobtain,acasedesignatedasasmallbusinesscasenormallyproceedsmorequicklythanotherchapter11cases.Forexample,onlythedebtormayfileaplanduringthefirst180daysofasmallbusinesscase.11U.S.C.§1121(e).This"exclusivityperiod"maybeextendedbythecourt,butonlyto300days,andonlyifthedebtordemonstratesbyapreponderanceoftheevidencethatthecourtwillconfirmaplanwithinareasonableperiodoftime.Whenthecaseisnotasmallbusinesscase,however,thecourtmayextendtheexclusivityperiod"forcause"upto18months.

TheSingleAssetRealEstateDebtor

SingleassetrealestatedebtorsaresubjecttospecialprovisionsoftheBankruptcyCode.Theterm"singleassetrealestate"isdefinedas"asinglepropertyorproject,otherthanresidentialrealpropertywithfewerthanfourresidentialunits,whichgeneratessubstantiallyallofthegrossincomeofadebtorwhoisnotafamilyfarmerandonwhichnosubstantialbusinessisbeingconductedbyadebtorotherthanthebusinessofoperatingtherealpropertyandactivitiesincidentalthereto."11U.S.C.§ 101(51B).TheBankruptcyCodeprovidescircumstancesunderwhichcreditorsofasingleassetrealestatedebtormayobtainrelieffromthe

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automaticstaywhicharenotavailabletocreditorsinordinarybankruptcycases.11U.S.C.§362(d).Onrequestofacreditorwithaclaimsecuredbythesingleassetrealestateandafternoticeandahearing,thecourtwillgrantrelieffromtheautomaticstaytothecreditorunlessthedebtorfilesafeasibleplanofreorganizationorbeginsmakinginterestpaymentstothecreditorwithin90daysfromthedateofthefilingofthecase,orwithin30daysofthecourt'sdeterminationthatthecaseisasingleassetrealestatecase.Theinterestpaymentsmustbeequaltothenon‐defaultcontractinterestrateonthevalueofthecreditor'sinterestintherealestate.11U.S.C.§362(d)(3).

AppointmentorElectionofaCaseTrustee

Althoughtheappointmentofacasetrusteeisararityinachapter11case,apartyininterestortheU.S.trusteecanrequesttheappointmentofacasetrusteeorexamineratanytimepriortoconfirmationinachapter11case.Thecourt,onmotionbyapartyininterestortheU.S.trusteeandafternoticeandhearing,shallordertheappointmentofacasetrusteeforcause,includingfraud,dishonesty,incompetence,orgrossmismanagement,orifsuchanappointmentisintheinterestofcreditors,anyequitysecurityholders,andotherinterestsoftheestate.11U.S.C.§1104(a).Moreover,theU.S.trusteeisrequiredtomoveforappointmentofatrusteeiftherearereasonablegroundstobelievethatanyofthepartiesincontrolofthedebtor"participatedinactualfraud,dishonestyorcriminalconductinthemanagementofthedebtororthedebtor'sfinancialreporting."11U.S.C.§1104(e).

ThetrusteeisappointedbytheU.S.trustee,afterconsultationwithpartiesininterestandsubjecttothecourt'sapproval.Fed.R.Bankr.P.2007.1.Alternatively,atrusteeinacasemaybeelectedifapartyininterestrequeststheelectionofatrusteewithin30daysafterthecourtorderstheappointmentofatrustee.Inthatinstance,theU.S.trusteeconvenesameetingofcreditorsforthepurposeofelectingapersontoserveastrusteeinthecase.11U.S.C.§1104(b).

Thecasetrusteeisresponsibleformanagementofthepropertyoftheestate,operationofthedebtor'sbusiness,and,ifappropriate,thefilingofaplanofreorganization.Section1106oftheBankruptcyCoderequiresthetrusteetofileaplan"assoonaspracticable"or,alternatively,tofileareportexplainingwhyaplanwillnotbefiledortorecommendthatthecasebeconvertedtoanotherchapterordismissed.11U.S.C.§1106(a)(5).

UpontherequestofapartyininterestortheU.S.trustee,thecourtmayterminatethetrustee'sappointmentandrestorethedebtorinpossessiontomanagementofbankruptcyestateatanytimebeforeconfirmation.11U.S.C.§1105.

TheRoleofanExaminer

Theappointmentofanexaminerinachapter11caseisrare.Theroleofanexaminerisgenerallymorelimitedthanthatofatrustee.Theexaminerisauthorizedtoperformtheinvestigatoryfunctionsofthetrusteeandisrequiredtofileastatementofanyinvestigationconducted.Iforderedtodosobythecourt,however,anexaminermaycarryoutanyotherdutiesofatrusteethatthecourtordersthedebtorinpossessionnot

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toperform.11U.S.C.§1106.Eachcourthastheauthoritytodeterminethedutiesofanexaminerineachparticularcase.Insomecases,theexaminermayfileaplanofreorganization,negotiateorhelpthepartiesnegotiate,orreviewthedebtor'sschedulestodeterminewhethersomeoftheclaimsareimproperlycategorized.Sometimes,theexaminermaybedirectedtodetermineifobjectionstoanyproofsofclaimshouldbefiledorwhethercausesofactionhavesufficientmeritsothatfurtherlegalactionshouldbetaken.Theexaminermaynotsubsequentlyserveasatrusteeinthecase.11U.S.C.§321.

TheAutomaticStay

Theautomaticstayprovidesaperiodoftimeinwhichalljudgments,collectionactivities,foreclosures,andrepossessionsofpropertyaresuspendedandmaynotbepursuedbythecreditorsonanydebtorclaimthatarosebeforethefilingofthebankruptcypetition.AswithcasesunderotherchaptersoftheBankruptcyCode,astayofcreditoractionsagainstthechapter11debtorautomaticallygoesintoeffectwhenthebankruptcypetitionisfiled.11U.S.C.§362(a).Thefilingofapetition,however,doesnotoperateasastayforcertaintypesofactionslistedunder11U.S.C.§362(b).Thestayprovidesabreathingspellforthedebtor,duringwhichnegotiationscantakeplacetotrytoresolvethedifficultiesinthedebtor'sfinancialsituation.

Underspecificcircumstances,thesecuredcreditorcanobtainanorderfromthecourtgrantingrelieffromtheautomaticstay.Forexample,whenthedebtorhasnoequityinthepropertyandthepropertyisnotnecessaryforaneffectivereorganization,thesecuredcreditorcan

seekanorderofthecourtliftingthestaytopermitthecreditortoforecloseontheproperty,sellit,andapplytheproceedstothedebt.11U.S.C.§362(d).

TheBankruptcyCodepermitsapplicationsforfeestobemadebycertainprofessionalsduringthecase.Thus,atrustee,adebtor'sattorney,oranyprofessionalpersonappointedbythecourtmayapplytothecourtatintervalsof120daysforinterimcompensationandreimbursementpayments.Inverylargecaseswithextensivelegalwork,thecourtmaypermitmorefrequentapplications.Althoughprofessionalfeesmaybepaidifauthorizedbythecourt,thedebtorcannotmakepaymentstoprofessionalcreditorsonprepetitionobligations,i.e.,obligationswhicharosebeforethefilingofthebankruptcypetition.Theordinaryexpensesoftheongoingbusiness,however,continuetobepaid.

WhoCanFileaPlan

Thedebtor(unlessa"smallbusinessdebtor")hasa120‐dayperiodduringwhichithasanexclusiverighttofileaplan.11U.S.C.§1121(b).Thisexclusivityperiodmaybeextendedorreducedbythecourt,butinnoeventmaytheexclusivityperiod,includingallextensions,belongerthan18months.11U.S.C.§1121(d).Aftertheexclusivityperiodhasexpired,acreditororthecasetrusteemayfileacompetingplan.TheU.S.trusteemaynotfileaplan.11U.S.C.§307.

Achapter11casemaycontinueformanyyearsunlessthecourt,theU.S.trustee,thecommittee,oranotherpartyininterestactstoensurethecase'stimelyresolution.Thecreditors'righttofileacompetingplanprovidesincentiveforthe

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debtortofileaplanwithintheexclusivityperiodandactsasacheckonexcessivedelayinthecase.

AvoidableTransfers

Thedebtorinpossessionorthetrustee,asthecasemaybe,haswhatarecalled"avoiding"powers.11U.S.C.§547(b).Thesepowersmaybeusedtoundoatransferofmoneyorpropertymadeduringacertainperiodoftimebeforethefilingofthebankruptcypetition.Byavoidingaparticulartransferofproperty,thedebtorinpossessioncancancelthetransactionandforcethereturnor"disgorgement"ofthepaymentsorproperty,whichthenareavailabletopayallcreditors.Generally,andsubjecttovariousdefenses,11U.S.C.§547(c),thepowertoavoidtransfersiseffectiveagainsttransfersmadebythedebtorwithin90daysbeforefilingthepetition.Buttransfersto"insiders"(i.e.,relatives,generalpartners,anddirectorsorofficersofthedebtor)madeuptoayearbeforefilingmaybeavoided.11U.S.C.§§101(31),101(54),547,548.Inaddition,under11U.S.C.§544,thetrusteeisauthorizedtoavoidtransfersunderapplicablestatelaw,whichoftenprovidesforlongertimeperiods.Avoidingpowerspreventunfairprepetitionpaymentstoonecreditorattheexpenseofallothercreditors.

CashCollateral,AdequateProtectionandOperatingCapital

Althoughthepreparation,confirmation,andimplementationofaplanofreorganizationisattheheartofachapter11case,otherissuesmayarisethatmustbeaddressedbythedebtorinpossession.

Thedebtorinpossessionmayuse,sell,orleasepropertyoftheestateintheordinarycourseofitsbusiness,withoutpriorapproval,unlessthecourtordersotherwise.11U.S.C.§363(c).Iftheintendedsaleoruseisoutsidetheordinarycourseofitsbusiness,thedebtormustobtainpermissionfromthecourt.

Adebtorinpossessionmaynotuse"cashcollateral"withouttheconsentofthesecuredpartyorauthorizationbythecourt,whichmustfirstexaminewhethertheinterestofthesecuredpartyisadequatelyprotected.11U.S.C.§363.Section363defines"cashcollateral"ascash,negotiableinstruments,documentsoftitle,securities,depositaccounts,orothercashequivalents,wheneveracquired,inwhichtheestateandanentityotherthantheestatehaveaninterest.Itincludestheproceeds,products,offspring,rents,orprofitsofpropertyandthefees,charges,accountsorpaymentsfortheuseoroccupancyofroomsandotherpublicfacilitiesinhotels,motels,orotherlodgingpropertiessubjecttoacreditor'ssecurityinterest.

When"cashcollateral"isused(spent),thesecuredcreditorsareentitledtoreceiveadditionalprotectionundersection363oftheBankruptcyCode.Thedebtorinpossessionmustfileamotionrequestinganorderfromthecourtauthorizingtheuseofthecashcollateral.Pendingconsentofthesecuredcreditororcourtauthorizationforthedebtorinpossession'suseofcashcollateral,thedebtorinpossessionmustsegregateandaccountforallcashcollateralinitspossession.11U.S.C.§363(c)(4).Apartywithaninterestinpropertybeingusedbythedebtormayrequestthatthecourtprohibitorconditionthisusetothe

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extentnecessarytoprovide"adequateprotection"tothecreditor.

Adequateprotectionmayberequiredtoprotectthevalueofthecreditor'sinterestinthepropertybeingusedbythedebtorinpossession.Thisisespeciallyimportantwhenthereisadecreaseinvalueoftheproperty.Thedebtormaymakeperiodicorlumpsumcashpayments,orprovideanadditionalorreplacementlienthatwillresultinthecreditor'spropertyinterestbeingadequatelyprotected.11U.S.C.§361.

Whenachapter11debtorneedsoperatingcapital,itmaybeabletoobtainitfromalenderbygivingthelenderacourt‐approved"superpriority"overotherunsecuredcreditorsoralienonpropertyoftheestate.11U.S.C.§364.

Motions

Beforeconfirmationofaplan,severalactivitiesmaytakeplaceinachapter11case.Continuedoperationofthedebtor'sbusinessmayleadtothefilingofanumberofcontestedmotions.Themostcommonarethoseseekingrelieffromtheautomaticstay,theuseofcashcollateral,ortoobtaincredit.Theremayalsobelitigationoverexecutory(i.e.,unfulfilled)contractsandunexpiredleasesandtheassumptionorrejectionofthoseexecutorycontractsandunexpiredleasesbythedebtorinpossession.11U.S.C.§365.Delaysinformulating,filing,andobtainingconfirmationofaplanoftenpromptcreditorstofilemotionsforrelieffromstay,toconvertthecasetochapter7,ortodismissthecasealtogether.

AdversaryProceedings

Frequently,thedebtorinpossessionwillinstitutealawsuit,knownasanadversaryproceeding,torecovermoneyorpropertyfortheestate.Adversaryproceedingsmaytaketheformoflienavoidanceactions,actionstoavoidpreferences,actionstoavoidfraudulenttransfers,oractionstoavoidpost‐petitiontransfers.TheseproceedingsaregovernedbyPartVIIoftheFederalRulesofBankruptcyProcedure.Attimes,acreditors'committeemaybeauthorizedbythebankruptcycourttopursuetheseactionsagainstinsidersofthedebtoriftheplanprovidesforthecommitteetodosoorifthedebtorhasrefusedademandtodoso.Creditorsmayalsoinitiateadversaryproceedingsbyfilingcomplaintstodeterminethevalidityorpriorityofalien,revokeanorderconfirmingaplan,determinethedischargeabilityofadebt,obtainaninjunction,orsubordinateaclaimofanothercreditor.

Claims

TheBankruptcyCodedefinesaclaimas:(1)arighttopayment;(2)orarighttoanequitableremedyforafailureofperformanceifthebreachgivesrisetoarighttopayment.11U.S.C.§101(5).Generally,anycreditorwhoseclaimisnotscheduled(i.e.,listedbythedebtoronthedebtor'sschedules)orisscheduledasdisputed,contingent,orunliquidatedmustfileaproofofclaim(andattachevidencedocumentingtheclaim)inordertobetreatedasacreditorforpurposesofvotingontheplananddistributionunderit.Fed.R.Bankr.P.3003(c)(2).Butfilingaproofofclaimisnotnecessaryifthecreditor'sclaimisscheduled(butisnotlistedasdisputed,contingent,or

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unliquidatedbythedebtor)becausethedebtor'sschedulesaredeemedtoconstituteevidenceofthevalidityandamountofthoseclaims.11U.S.C.§1111.Ifascheduledcreditorchoosestofileaclaim,aproperlyfiledproofofclaimsupersedesanyschedulingofthatclaim.Fed.R.Bankr.P.3003(c)(4).Itistheresponsibilityofthecreditortodeterminewhethertheclaimisaccuratelylistedonthedebtor'sschedules.InotherchaptersoftheBankruptcyCodeacreditormustfileaclaiminanassetcase,thusifthechapter11convertstoanotherchapteracreditormustfileaclaimintheconvertedcase.Notethataclaimfiledinthechapter11caseretainsitsstatusasaclaimintheeventthatthecaseisconvertedtoanotherchapterundertheBankruptcyCode.Relyingonwhatacreditorislistedforintheschedulesappliesonlyinchapter11cases.

Thedebtormustprovidenotificationtothosecreditorswhosenamesareaddedandwhoseclaimsarelistedasaresultofanamendmenttotheschedules.Thenotificationalsoshouldadvisesuchcreditorsoftheirrighttofileproofsofclaimandthattheirfailuretodosomaypreventthemfromvotinguponthedebtor'splanofreorganizationorparticipatinginanydistributionunderthatplan.Whenadebtoramendsthescheduleofliabilitiestoaddacreditororchangethestatusofanyclaimstodisputed,contingent,orunliquidated,thedebtormustprovidenoticeoftheamendmenttoanyentityaffected.Fed.R.Bankr.P.1009(a).

EquitySecurityHolders

Anequitysecurityholderisaholderofanequitysecurityofthedebtor.Examplesof

anequitysecurityareashareinacorporation,aninterestofalimitedpartnerinalimitedpartnership,orarighttopurchase,sell,orsubscribetoashare,security,orinterestofashareinacorporationoraninterestinalimitedpartnership.11U.S.C.§101(16),(17).Anequitysecurityholdermayvoteontheplanofreorganizationandmayfileaproofofinterest,ratherthanaproofofclaim.Aproofofinterestisdeemedfiledforanyinterestthatappearsinthedebtor'sschedules,unlessitisscheduledasdisputed,contingent,orunliquidated.11U.S.C.§1111.Anequitysecurityholderwhoseinterestisnotscheduledorisscheduledasdisputed,contingent,orunliquidatedmustfileaproofofinterestinordertobetreatedasacreditorforpurposesofvotingontheplananddistributionunderit.Fed.R.Bankr.P.3003(c)(2).Aproperlyfiledproofofinterestsupersedesanyschedulingofthatinterest.Fed.R.Bankr.P.3003(c)(4).Generally,mostoftheprovisionsthatapplytoproofsofclaim,asdiscussedabove,arealsoapplicabletoproofsofinterest.

ConversionorDismissal

Adebtorinacaseunderchapter11hasaone‐timeabsoluterighttoconvertthechapter11casetoacaseunderchapter7unless:(1)thedebtorisnotadebtorinpossession;(2)thecaseoriginallywascommencedasaninvoluntarycaseunderchapter11;or(3)thecasewasconvertedtoacaseunderchapter11otherthanatthedebtor'srequest.11U.S.C.§1112(a).Adebtorinachapter11casedoesnothaveanabsoluterighttohavethecasedismisseduponrequest.

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Apartyininterestmayfileamotiontodismissorconvertachapter11casetoachapter7case"forcause."Generally,ifcauseisestablishedafternoticeandhearing,thecourtmustconvertordismissthecase(whicheverisinthebestinterestsofcreditorsandtheestate)unlessitspecificallyfindsthattherequestedconversionordismissalisnotinthebestinterestofcreditorsandtheestate.11U.S.C.§1112(b).Alternatively,thecourtmaydecidethatappointmentofachapter11trusteeoranexaminerisinthebestinterestsofcreditorsandtheestate.11U.S.C.§1104(a)(3).Section1112(b)(4)oftheBankruptcyCodesetsforthnumerousexamplesofcausethatwouldsupportdismissalorconversion.Forexample,themovingpartymayestablishcausebyshowingthatthereissubstantialorcontinuinglosstotheestateandtheabsenceofareasonablelikelihoodofrehabilitation;grossmismanagementoftheestate;failuretomaintaininsurancethatposesarisktotheestateorthepublic;orunauthorizeduseofcashcollateralthatissubstantiallyharmfultoacreditor.

Causefordismissalorconversionalsoincludesanunexcusedfailuretotimelycomplywithreportingandfilingrequirements;failuretoattendthemeetingofcreditorsorattendanexaminationwithoutgoodcause;failuretotimelyprovideinformationtotheU.S.trustee;andfailuretotimelypaypost‐petitiontaxesortimelyfilepost‐petitionreturnsFed.R.Bankr.P.2004.Additionally,failuretofileadisclosurestatementortofileandconfirmaplanwithinthetimefixedbytheBankruptcyCodeororderofthecourt;inabilitytoeffectuateaplan;denialorrevocationofconfirmation;inabilitytoconsummateaconfirmedplanrepresent"cause"for

dismissalunderthestatute.Inanindividualcase,failureofthedebtortopaypost‐petitiondomesticsupportobligationsconstitutes"cause"fordismissalorconversion.

Section1112(c)oftheBankruptcyCodeprovidesanimportantexceptiontotheconversionprocessinachapter11case.Underthisprovision,thecourtisprohibitedfromconvertingacaseinvolvingafarmerorcharitableinstitutiontoaliquidationcaseunderchapter7unlessthedebtorrequeststheconversion.

TheDisclosureStatement

Generally,thedebtor(oranyplanproponent)mustfileandgetcourtapprovalofawrittendisclosurestatementbeforetherecanbeavoteontheplanofreorganization.Thedisclosurestatementmustprovide"adequateinformation"concerningtheaffairsofthedebtortoenabletheholderofaclaimorinteresttomakeaninformedjudgmentabouttheplan.11U.S.C.§1125.Inasmallbusinesscase,however,thecourtmaydeterminethattheplanitselfcontainsadequateinformationandthataseparatedisclosurestatementisunnecessary.11U.S.C.§1125(f).Afterthedisclosurestatementisfiled,thecourtmustholdahearingtodeterminewhetherthedisclosurestatementshouldbeapproved.Acceptanceorrejectionofaplanusuallycannotbesoliciteduntilthecourthasfirstapprovedthewrittendisclosurestatement.11U.S.C.§1125(b).Anexceptiontothisruleexistsiftheinitialsolicitationofthepartyoccurredbeforethebankruptcyfiling,aswouldbethecaseinso‐called"prepackaged"

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bankruptcyplans(i.e.,wherethedebtornegotiatesaplanwithsignificantcreditorconstituenciesbeforefilingforbankruptcy).Continuedpost‐filingsolicitationofsuchpartiesisnotprohibited.Afterthecourtapprovesthedisclosurestatement,thedebtororproponentofaplancanbegintosolicitacceptancesoftheplan,andcreditorsmayalsosolicitrejectionsoftheplan.

Uponapprovalofadisclosurestatement,theplanproponentmustmailthefollowingtotheU.S.trusteeandallcreditorsandequitysecurityholders:(1)theplan,oracourtapprovedsummaryoftheplan;(2)thedisclosurestatementapprovedbythecourt;(3)noticeofthetimewithinwhichacceptancesandrejectionsoftheplanmaybefiled;and(4)suchotherinformationasthecourtmaydirect,includinganyopinionofthecourtapprovingthedisclosurestatementoracourt‐approvedsummaryoftheopinion.Fed.R.Bankr.P.3017(d).Inaddition,thedebtormustmailtothecreditorsandequitysecurityholdersentitledtovoteontheplanorplans:(1)noticeofthetimefixedforfilingobjections;(2)noticeofthedateandtimeforthehearingonconfirmationoftheplan;and(3)aballotforacceptingorrejectingtheplanand,ifappropriate,adesignationforthecreditorstoidentifytheirpreferenceamongcompetingplans.Id.Butinasmallbusinesscase,thecourtmayconditionallyapproveadisclosurestatementsubjecttofinalapprovalafternoticeandacombineddisclosurestatement/planconfirmationhearing.11U.S.C.§1125(f).

AcceptanceofthePlanofReorganization

Asnotedearlier,onlythedebtormayfileaplanofreorganizationduringthefirst120‐dayperiodafterthepetitionisfiled(orafterentryoftheorderforrelief,ifaninvoluntarypetitionwasfiled).Thecourtmaygrantanextensionofthisexclusiveperiodupto18monthsafterthepetitiondate.Inaddition,thedebtorhas180daysafterthepetitiondateorentryoftheorderforrelieftoobtainacceptancesofitsplan.11U.S.C.§1121.Thecourtmayextend(upto20months)orreducethisacceptanceexclusiveperiodforcause.11U.S.C.§1121(d).Inpractice,debtorstypicallyseekextensionsofboththeplanfilingandplanacceptancedeadlinesatthesametimesothatanyordersoughtfromthecourtallowsthedebtortwomonthstoseekacceptancesafterfilingaplanbeforeanycompetingplancanbefiled.

Iftheexclusiveperiodexpiresbeforethedebtorhasfiledandobtainedacceptanceofaplan,otherpartiesininterestinacase,suchasthecreditors'committeeoracreditor,mayfileaplan.Suchaplanmaycompetewithaplanfiledbyanotherpartyininterestorbythedebtor.Ifatrusteeisappointed,thetrusteemustfileaplan,areportexplainingwhythetrusteewillnotfileaplan,orarecommendationforconversionordismissalofthecase.11U.S.C.§1106(a)(5).Aproponentofaplanissubjecttothesamerequirementsasthedebtorwithrespecttodisclosureandsolicitation.

Inachapter11case,aliquidatingplanispermissible.Suchaplanoftenallowsthedebtorinpossessiontoliquidatethebusinessundermoreeconomically

51

advantageouscircumstancesthanachapter7liquidation.

Section1123(a)oftheBankruptcyCodeliststhemandatoryprovisionsofachapter11plan,andsection1123(b)liststhediscretionaryprovisions.Section1123(a)(1)providesthatachapter11planmustdesignateclassesofclaimsandinterestsfortreatmentunderthereorganization.Generally,aplanwillclassifyclaimholdersassecuredcreditors,unsecuredcreditorsentitledtopriority,generalunsecuredcreditors,andequitysecurityholders.

Undersection1126(c)oftheBankruptcyCode,anentireclassofclaimsisdeemedtoacceptaplaniftheplanisacceptedbycreditorsthatholdatleasttwo‐thirdsinamountandmorethanone‐halfinnumberoftheallowedclaimsintheclass.Undersection1129(a)(10),ifthereareimpairedclassesofclaims,thecourtcannotconfirmaplanunlessithasbeenacceptedbyatleastoneclassofnon‐insiderswhoholdimpairedclaims(i.e.,claimsthatarenotgoingtobepaidcompletelyorinwhichsomelegal,equitable,orcontractualrightisaltered).Moreover,undersection1126(f),holdersofunimpairedclaimsaredeemedtohaveacceptedtheplan.

Undersection1127(a)oftheBankruptcyCode,theplanproponentmaymodifytheplanatanytimebeforeconfirmation,buttheplanasmodifiedmustmeetalltherequirementsofchapter11.Whenthereisaproposedmodificationafterballotinghasbeenconducted,andthecourtfindsafterahearingthattheproposedmodificationdoesnotadverselyaffectthetreatmentofanycreditorwhohasnotacceptedthemodificationinwriting,themodificationisdeemedtohavebeenacceptedbyallcreditorswhopreviously

acceptedtheplan.Fed.R.Bankr.P.3019.Ifitisdeterminedthattheproposedmodificationdoeshaveanadverseeffectontheclaimsofnon‐consentingcreditors,thenanotherballotingmusttakeplace.

Becausemorethanoneplanmaybesubmittedtothecreditorsforapproval,everyproposedplanandmodificationmustbedatedandidentifiedwiththenameoftheentityorentitiessubmittingtheplanormodification.Fed.R.Bankr.P.3016(b).Whencompetingplansarepresentedthatmeettherequirementsforconfirmation,thecourtmustconsiderthepreferencesofthecreditorsandequitysecurityholdersindeterminingwhichplantoconfirm.

Anypartyininterestmayfileanobjectiontoconfirmationofaplan.TheBankruptcyCoderequiresthecourt,afternotice,toholdahearingonconfirmationofaplan.Ifnoobjectiontoconfirmationhasbeentimelyfiled,theBankruptcyCodeallowsthecourttodeterminewhethertheplanhasbeenproposedingoodfaithandaccordingtolaw.Fed.R.Bankr.P.3020(b)(2).Beforeconfirmationcanbegranted,thecourtmustbesatisfiedthattherehasbeencompliancewithalltheotherrequirementsofconfirmationsetforthinsection1129oftheBankruptcyCode,evenintheabsenceofanyobjections.Inordertoconfirmtheplan,thecourtmustfind,amongotherthings,that:(1)theplanisfeasible;(2)itisproposedingoodfaith;and(3)theplanandtheproponentoftheplanareincompliancewiththeBankruptcyCode.Inordertosatisfythefeasibilityrequirement,thecourtmustfindthatconfirmationoftheplanisnotlikelytobefollowedbyliquidation(unlesstheplanisaliquidatingplan)ortheneedforfurtherfinancialreorganization.

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TheDischarge

Section1141(d)(1)generallyprovidesthatconfirmationofaplandischargesadebtorfromanydebtthatarosebeforethedateofconfirmation.Aftertheplanisconfirmed,thedebtorisrequiredtomakeplanpaymentsandisboundbytheprovisionsoftheplanofreorganization.Theconfirmedplancreatesnewcontractualrights,replacingorsupersedingpre‐bankruptcycontracts.

Thereare,ofcourse,exceptionstothegeneralrulethatanorderconfirmingaplanoperatesasadischarge.Confirmationofaplanofreorganizationdischargesanytypeofdebtor–corporation,partnership,orindividual–frommosttypesofprepetitiondebts.Itdoesnot,however,dischargeanindividualdebtorfromanydebtmadenondischargeablebysection523oftheBankruptcyCode.4Moreover,exceptinlimitedcircumstances,adischargeisnotavailabletoanindividualdebtorunless

4Debtsnotdischargedincludedebtsforalimonyandchildsupport,certaintaxes,debtsforcertaineducationalbenefitoverpaymentsorloansmadeorguaranteedbyagovernmentalunit,debtsforwillfulandmaliciousinjurybythedebtortoanotherentityortothepropertyofanotherentity,debtsfordeathorpersonalinjurycausedbythedebtor'soperationofamotorvehiclewhilethedebtorwasintoxicatedfromalcoholorothersubstances,anddebtsforcertaincriminalrestitutionorders.11U.S.C.§523(a).Thedebtorwillcontinuetobefinanciallyresponsibleforthesetypesofdebtstotheextentthattheyarenotpaidinthechapter11case.Debtsformoneyorpropertyobtainedbyfalsepretenses,debtsforfraudordefalcationwhileactinginafiduciarycapacity,anddebtsforwillfulandmaliciousinjurybythedebtortoanotherentityortothepropertyofanotherentitywillbedischargedunlessacreditortimelyfilesandprevailsinanactiontohavesuchdebtsdeclarednondischargeable.11U.S.C.§523(c);Fed.R.Bankr.P.4007(c).

anduntilallpaymentshavebeenmadeundertheplan.11U.S.C.§1141(d)(5).Confirmationdoesnotdischargethedebtoriftheplanisaliquidationplan,asopposedtooneofreorganization,unlessthedebtorisanindividual.Whenthedebtorisanindividual,confirmationofaliquidationplanwillresultinadischarge(afterplanpaymentsaremade)unlessgroundswouldexistfordenyingthedebtoradischargeifthecasewereproceedingunderchapter7insteadofchapter11.11U.S.C.§§727(a),1141(d).

PostconfirmationModificationofthePlan

Atanytimeafterconfirmationandbefore"substantialconsummation"ofaplan,theproponentofaplanmaymodifytheplanifthemodifiedplanwouldmeetcertainBankruptcyCoderequirements.11U.S.C.§ 1127(b).Thisshouldbedistinguishedfrompreconfirmationmodificationoftheplan.Amodifiedpostconfirmationplandoesnotautomaticallybecometheplan.Amodifiedpostconfirmationplaninachapter11casebecomestheplanonly"ifcircumstanceswarrantsuchmodification"andthecourt,afternoticeandhearing,confirmstheplanasmodified.Ifthedebtorisanindividual,theplanmaybemodifiedpostconfirmationupontherequestofthedebtor,thetrustee,theU.S.trustee,ortheholderofanallowedunsecuredclaimtomakeadjustmentstopaymentsdueundertheplan.11U.S.C.§1127(e).

PostconfirmationAdministration

Notwithstandingtheentryoftheconfirmationorder,thecourthastheauthoritytoissueanyotherorder

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necessarytoadministertheestate.Fed.R.Bankr.P.3020(d).Thisauthoritywouldincludethepostconfirmationdeterminationofobjectionstoclaimsoradversaryproceedings,whichmustberesolvedbeforeaplancanbefullyconsummated.Sections1106(a)(7)and1107(a)oftheBankruptcyCoderequireadebtorinpossessionoratrusteetoreportontheprogressmadeinimplementingaplanafterconfirmation.Achapter11trusteeordebtorinpossessionhasanumberofresponsibilitiestoperformafterconfirmation,includingconsummatingtheplan,reportingonthestatusofconsummation,andapplyingforafinaldecree.

RevocationofConfirmationOrder

Revocationoftheconfirmationorderisanundoingorcancellationoftheconfirmationofaplan.Arequestforrevocationofconfirmation,ifmadeatall,mustbemadebyapartyininterestwithin180daysofconfirmation.Thecourt,afternoticeandhearing,may

revokeaconfirmationorder"ifandonlyifthe[confirmation]orderwasprocuredbyfraud."11U.S.C.§1144.

TheFinalDecree

Afinaldecreeclosingthecasemustbeenteredaftertheestatehasbeen"fullyadministered."Fed.R.Bankr.P.3022.Localbankruptcycourtpoliciesgenerallydeterminewhenthefinaldecreeisenteredandthecaseclosed.

ProseDebtors

Whileeverycaseisuniqueandeverydebtorhastheirowncircumstancesthatcausesthemtoseekreliefinthebankruptcycourt,Chapter11isverycomplicated.Inadditiontofinancialprofessionalssuchasaccountantsandtaxpreparers,thebenefitsofhavingcompetentlegalcounselcannotbeunderstated.

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WhatDebtorsShouldKnowAboutChapter12:FamilyFarmeror

FamilyFishermanBankruptcy

ThechapteroftheBankruptcyCodeprovidingforadjustmentofdebtsofa"familyfarmer,"ora"familyfisherman"asthosetermsaredefinedintheBankruptcyCode.BackgroundChapter12isdesignedfor"familyfarmers"or"familyfishermen"with"regularannualincome."Itenablesfinanciallydistressedfamilyfarmersandfishermentoproposeandcarryoutaplantorepayallorpartoftheirdebts.Underchapter12,debtorsproposearepaymentplantomakeinstallmentstocreditorsoverthreetofiveyears.Generally,theplanmustprovideforpaymentsoverthreeyearsunlessthecourtapprovesalongerperiod"forcause."Butunlesstheplanproposestopay100%ofdomesticsupportclaims(i.e.,childsupportandalimony)ifanyexist,itmustbeforfiveyearsandmustincludeallofthedebtor'sdisposableincome.Innocasemayaplanprovideforpaymentsoveraperiodlongerthanfiveyears.11U.S.C.§1222(b)‐(c).Intailoringbankruptcylawtomeettheeconomicrealitiesoffamilyfarmingandthefamilyfisherman,chapter12eliminatesmanyofthebarrierssuchdebtorswouldfaceifseekingtoreorganizeundereitherchapter11or13oftheBankruptcyCode.Forexample,chapter12ismorestreamlined,lesscomplicated,andlessexpensivethanchapter11,whichisbettersuitedtolargecorporatereorganizations.Inaddition,

fewfamilyfarmersorfishermenfindchapter13tobeadvantageousbecauseitisdesignedforwageearnerswhohavesmallerdebtsthanthosefacingfamilyfarmers.Inchapter12,CongresssoughttocombinethefeaturesoftheBankruptcyCodewhichcanprovideaframeworkforsuccessfulfamilyfarmerandfishermanreorganizations.TheBankruptcyCodeprovidesthatonlyafamilyfarmerorfamilyfishermanwith"regularannualincome"mayfileapetitionforreliefunderchapter12.See11U.S.C.§§101(18),101(19A),109(f).Thepurposeofthisrequirementistoensurethatthedebtor'sannualincomeissufficientlystableandregulartopermitthedebtortomakepaymentsunderachapter12plan.Butchapter12makesallowanceforsituationsinwhichfamilyfarmersorfishermenhaveincomethatisseasonalinnature.Reliefunderchapter12isvoluntary,andonlythedebtormayfileapetitionunderthechapter.UndertheBankruptcyCode,"familyfarmers"and"familyfishermen"fallintotwocategories:(1)anindividualorindividualandspouseand(2)acorporationorpartnership.Farmersorfishermenfallingintothefirstcategorymustmeeteachofthefollowingfourcriteriaasofthedatethepetitionisfiledinordertoqualifyforreliefunderchapter12:

Inajointcase,individualspousesmustbeengagedinafarmingoperationoracommercialfishingoperation.

Thetotaldebts(securedandunsecured)oftheoperationmustnotexceed$4,153,150(ifafarmingoperation)or

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$1,924,550(ifacommercialfishingoperation).1

Ifafamilyfarmer,atleast50%,andiffamilyfishermanatleast80%,ofthetotaldebtsthatarefixedinamount(exclusiveofdebtforthedebtor'shome)mustberelatedtothefarmingorcommercialfishingoperation.

Morethan50%ofthegrossincomeoftheindividualorthemarrieddebtorsfortheprecedingtaxyear(or,forfamilyfarmersonly,foreachofthe2ndand3rdpriortaxyears)musthavecomefromthefarmingorcommercialfishingoperation.

Inorderforacorporationorpartnershiptofallwithinthesecondcategoryofdebtorseligibletofileasfamilyfarmersorfamilyfishermen,thecorporationorpartnershipmustmeeteachofthefollowingcriteriaasofthedateofthefilingofthepetition:

Morethanone‐halftheoutstandingstockorequityinthecorporationorpartnershipmustbeownedbyonefamilyorbyonefamilyanditsrelatives.

Thefamilyorthefamilyanditsrelativesmustconductthefarmingorcommercialfishingoperation.

Morethan80%ofthevalueofthecorporateorpartnershipassetsmustberelatedtothefarmingorfishingoperation.

Thetotalindebtednessofthecorporationorpartnershipmustnotexceed$4,153,150(ifafarmingoperation)or$1,924,550

1 Thesedollaramountsareadjustedeverythreeyears.ThenextscheduleadjustmentdateisApril1,2019.

(ifacommercialfishingoperation).

Atleast50%forafarmingoperationor80%forafishingoperationofthecorporation'sorpartnership’stotaldebtswhicharefixedinamount(exclusiveofdebtforonehomeoccupiedbyashareholder)mustberelatedtothefarmingorfishingoperation.

Ifthecorporationissuesstock,thestockcannotbepubliclytraded.

Adebtorcannotfileunderchapter12(oranyotherchapter)ifduringthepreceding180daysapriorbankruptcypetitionwasdismissedduetothedebtor'swillfulfailuretoappearbeforethecourtorcomplywithordersofthecourtorwasvoluntarilydismissedaftercreditorssoughtrelieffromthebankruptcycourttorecoverpropertyuponwhichtheyholdliens.11U.S.C.§§109(g),362(d)and(e).Inaddition,noindividualmaybeadebtorunderchapter12oranychapteroftheBankruptcyCodeunlessheorshehas,within180daysbeforefiling,receivedcreditcounselingfromanapprovedcreditcounselingagencyeitherinanindividualorgroupbriefing.11U.S.C.§§109,111.ThereareexceptionsinemergencysituationsorwheretheU.S.trusteehasdeterminedthatthereareinsufficientapprovedagenciestoprovidetherequiredcounseling.Ifadebtmanagementplanisdevelopedduringrequiredcreditcounseling,itmustbefiledwiththecourt.

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HowChapter12WorksAchapter12casebeginsbyfilingapetitionwiththebankruptcycourtservingtheareawheretheindividuallivesorwherethecorporationorpartnershipdebtorhasitsprincipalplaceofbusinessorprincipalassets.Unlessthecourtordersotherwise,thedebtoralsoshallfilewiththecourt(1)schedulesofassetsandliabilities,(2)ascheduleofcurrentincomeandexpenditures,(3)ascheduleofexecutorycontractsandunexpiredleases,and(4)astatementoffinancialaffairs.Fed.R.Bankr.P.1007(b).Anindividualpetitionmaybefiled,ormarrieddebtorsmayfileajointpetition.11U.S.C.§302(a).(TheOfficialFormsmaybedownloadedfromthecourt’swebsiteatwww.mab.uscourts.gov.)Thecourtsmustchargeafilingfee.Normallythefeesshouldbepaidtotheclerkofthecourtuponfiling.Withthecourt'spermission,however,individualdebtorsmaypaythefeeininstallments.28U.S.C.§1930(a);Fed.R.Bankr.P.1006(b);BankruptcyCourtMiscellaneousFeeSchedule,Item8(availableatwww.mab.uscourts.gov).Thenumberofsuchinstallmentsislimitedtofourandthedebtormustmakethefinalinstallmentnolaterthan120daysafterfilingthepetition.Fed.R.Bankr.P.1006(b).Forcauseshown,thecourtmayextendthetimeofanyinstallment,providedthatthelastinstallmentispaidnotlaterthan180daysafterthefilingofthepetition.Id.2Ifajointpetitionisfiled,onlyonefilingfeeischarged.Debtorsshouldbeawarethatfailuretopaythesefeesmayresultindismissalofthecase.11U.S.C.§1208(c)(2).

2 Onlyindividualdebtorsareentitledtorequestthefilingfeesbepaidininstallments.

InordertocompletetheOfficialBankruptcyFormswhichmakeupthepetition,statementoffinancialaffairs,andschedules,thedebtorwillneedtocompilethefollowinginformation:

Alistofallcreditorsandtheamountsandnatureoftheirclaims;



Adetailedlistofthedebtor'smonthlyfarmingandlivingexpenses,i.e.,food,shelter,utilities,taxes,transportation,medicine,feed,fertilizer,etc.

Marriedindividualsmustgatherthisinformationforeachspouseregardlessofwhethertheyarefilingajointpetition,separateindividualpetitions,orevenifonlyonespouseisfiling.Inasituationwhereonlyonespousefiles,theincomeandexpensesofthenon‐filingspousearerequiredsothatthecourt,thetrustee,andthecreditorscanevaluatethehousehold'sfinancialposition.Whenachapter12petitionisfiled,animpartialtrusteeisappointedtoadministerthecase.11U.S.C.§1202.Insomedistricts,theU.S.trusteeappointsastandingtrusteetoserveinallchapter12cases.28U.S.C.§586(b).Asinchapter13,thetrusteebothevaluatesthecaseandservesasadisbursingagent,collectingpaymentsfromthedebtorandmakingdistributionstocreditors.11U.S.C.§1202.

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Filingthepetitionunderchapter12"automaticallystays"(stops)mostcollectionactionsagainstthedebtororthedebtor'sproperty.11U.S.C.§362.Filingthepetitiondoesnot,however,staycertaintypesofactionslistedunder11U.S.C.§362(b).Undercertaincircumstances,thestaymaybelimited,ormaynottakeeffectatall.11U.S.C.§362(c).Thestayarisesbyoperationoflawandrequiresnojudicialaction.Aslongasthestayisineffect,creditorsgenerallycannotinitiateorcontinueanylawsuits,wagegarnishments,oreventelephonecallsdemandingpayments.Thebankruptcyclerkgivesnoticeofthebankruptcycasetoallcreditorswhosenamesandaddressesareprovidedbythedebtor.Chapter12alsocontainsaspecialautomaticstayprovisionthatprotectscodebtors.Unlessthebankruptcycourtauthorizesotherwise,acreditormaynotseektocollecta"consumerdebt"fromanyindividualwhoisliablewiththedebtor.11U.S.C.§1201(a).Consumerdebtsarethoseincurredbyanindividualprimarilyforapersonal,family,orhouseholdpurpose.11U.S.C.§101(8).Between20to35daysafterthepetitionisfiled,thechapter12trusteewillholda"meetingofcreditors."IftheU.S.trusteeorbankruptcyadministratorschedulesthemeetingataplacethatdoesnothaveregularU.S.trusteeorbankruptcyadministratorstaffing,themeetingmaybeheldnomorethan60daysafterthedebtorfilesthepetition.Duringthemeetingthetrusteeputsthedebtorunderoathandboththetrusteeandcreditorsmayaskquestions.Thedebtormustattendthemeetingandanswerquestionsregardingthedebtor'sfinancialaffairs

andtheproposedtermsofthedebtor'srepaymentplan.11U.S.C.§343;Fed.R.Bankr.P.4002.Ifajointpetitionhasbeenfiled,bothdebtorsmustattendthecreditors'meeting.Inordertopreservetheirindependentjudgment,bankruptcyjudgesareprohibitedfromattending.11U.S.C.§341(c).Thepartiestypicallyresolveproblemswiththeplaneitherduringorshortlyafterthecreditors'meeting.Generally,thedebtorcanavoidproblemsbymakingsurethatthepetitionandplanarecompleteandaccurate,andbyconsultingwiththetrusteepriortothemeeting.Inachapter12case,toparticipateindistributionsfromthebankruptcyestate,unsecuredcreditorsmustfiletheirclaimswiththecourtwithin90daysafterthefirstdatesetforthemeetingofcreditors.Fed.R.Bankr.P.3002(c).Agovernmentalunit,however,has180daysfromthedatethecaseisfiledtofileaproofofclaim.11U.S.C.§502(b)(9).Afterthemeetingofcreditors,thedebtor,thechapter12trustee,andinterestedcreditorswillattendahearingonconfirmationofthedebtor'schapter12repaymentplan.TheChapter12PlanandConfirmationHearingUnlessthecourtgrantsanextension,thedebtormustfileaplanofrepaymentwiththepetitionorwithin90daysafterfilingthepetition.11U.S.C.§1221.Theplan,whichmustbesubmittedtothecourtforapproval,providesforpaymentsoffixedamountstothetrusteeonaregularbasis.Thetrusteethendistributesthefundstocreditorsaccordingtothetermsofthe

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plan,whichtypicallyofferscreditorslessthanfullpaymentontheirclaims.Therearethreetypesofclaims:priority,secured,andunsecured.Priorityclaimsarethosegrantedspecialstatusbythebankruptcylaw,suchasmosttaxesandthecostsofbankruptcyproceeding.3Securedclaimsarethoseforwhichthecreditorhastherighttoliquidatecertainpropertyifthedebtordoesnotpaytheunderlyingdebt,forexample,amortgageonahouseoraloanonacar.Incontrasttosecuredclaims,unsecuredclaimsaregenerallythoseforwhichthecreditorhasnospecialrightstocollectagainstparticularpropertyownedbythedebtor.Achapter12planusuallylaststhreetofiveyears.Itmustprovideforfullpaymentofallpriorityclaims,unlessaprioritycreditoragreestodifferenttreatmentoftheclaimor,inthecaseofadomesticsupportobligation,unlessthedebtorcontributesall"disposableincome"‐discussedbelow‐toafive‐yearplan.11U.S.C.§1222(a)(2),(4).Securedcreditorsmustbepaidatleastasmuchasthevalueofthecollateralpledgedforthedebt.OneofthefeaturesofChapter12isthatpaymentstosecuredcreditorscansometimescontinuelongerthanthethree‐to‐five‐yearperiodoftheplan.Forexample,ifthedebtor'sunderlyingdebtobligationwasscheduledtobepaidovermorethanfiveyears(i.e.,anequipmentloanoramortgage),thedebtormaybeabletopaytheloanoffovertheoriginalloanrepaymentscheduleaslongasanyarrearageismadeupduringtheplan.

3 Section507setsforth10categoriesofunsecuredclaimswhichCongresshas,forpublicpolicy

Theplandoesnothavetopayunsecuredclaimsinfull,aslongasitcommitsallofthedebtor'sprojected"disposableincome"(orpropertyofequivalentvalue)toplanpaymentsovera3to5yearperiod,andaslongastheunsecuredcreditorsaretoreceiveatleastasmuchastheywouldreceiveifthedebtor'snonexemptassetswereliquidatedunderchapter7.11U.S.C.§1225."Disposableincome"isdefinedasincomenotreasonablynecessaryforthemaintenanceorsupportofthedebtorordependentsorformakingpaymentsneededtocontinue,preserve,andoperatethedebtor'sbusiness.11U.S.C.§1225(b)(2).Within45daysafterfilingtheplan,thepresidingbankruptcyjudgedecidesata"confirmationhearing"whethertheplanisfeasibleandmeetsthestandardsforconfirmationundertheBankruptcyCode.11U.S.C.§§1224,1225.Creditors,whoreceive20days'notice,mayappearatthehearingandobjecttoconfirmation.Fed.R.Bankr.P.2002(a)(8).Whileavarietyofobjectionsmaybemade,thetypicalargumentsarethatpaymentsofferedundertheplanarelessthancreditorswouldreceiveifthedebtor'sassetswereliquidated,orthattheplandoesnotcommitallofthedebtor'sdisposableincomeforthethree‐to‐five‐yearperiodoftheplan.Ifthecourtconfirmstheplan,thechapter12trusteewilldistributefundsreceivedinaccordancewiththetermsoftheplan.11U.S.C.§1226(a).Ifthecourtdoesnotconfirmtheplan,thedebtormayfileamodifiedplan.11U.S.C.§1223.The

reasons,givenpriorityofdistributionoverotherunsecuredclaims.

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debtormayalsoconvertthecasetoaliquidationunderchapter7.411U.S.C.§1208(a).Ifthedebtorfailstoconfirmaplanandthecaseisdismissed,thecourtmayauthorizethetrusteetokeepsomeofthefundsforcosts,butthetrusteemustreturnallremainingfundstothedebtor(otherthanfundsalreadydisbursedtocreditors).11U.S.C.§1226(a).Onoccasion,changedcircumstanceswillaffectthedebtor'sabilitytomakeplanpayments.Acreditormayobjectorthreatentoobjecttoaplan,orthedebtormayinadvertentlyhavefailedtolistallcreditors.Insuchinstances,theplanmaybemodifiedeitherbeforeorafterconfirmation.11U.S.C.§§1223,1229.Modificationafterconfirmationisnotlimitedtoaninitiativebythedebtor,butmayalsobemadeattherequestofthetrusteeoranunsecuredcreditor.11U.S.C.§1229(a).MakingthePlanWorkTheprovisionsofaconfirmedplanbindthedebtorandeachcreditor.11U.S.C.§1227.Oncethecourtconfirmstheplan,thedebtormustmaketheplansucceed.Thedebtormustmakeregularpaymentstothetrustee,whichwillrequireadjustmenttolivingonafixedbudgetforaprolongedperiod.Furthermore,whileconfirmationoftheplanentitlesthedebtortoretainpropertyaslongaspaymentsaremade,thedebtormaynotincuranysignificantnewdebtwithoutconsultingthetrustee,becauseadditional

4Afeeischargedforconvertingacasetoacaseunderchapter7.Foradditionalinformationonfees,pleasevisitwww.mab.uscourts.gov.

debtmaycompromisethedebtor'sabilitytocompletetheplan.11U.S.C.§§1222(a)(1),1227.Inanyevent,failuretomaketheplanpaymentsmayresultindismissalofthecase.11U.S.C.§1208(c).Inaddition,thecourtmaydismissthecaseorconvertthecasetoaliquidationcaseunderchapter7oftheBankruptcyCodeuponashowingthatthedebtorhascommittedfraudinconnectionwiththecase.11U.S.C.§1208(d).TheChapter12DischargeThecourtmaygranta"hardshipdischarge"toachapter12debtoreventhoughthedebtorhasfailedtocompleteplanpayments.11U.S.C.§1228(b).Generally,ahardshipdischargeisavailableonlytoadebtorwhosefailuretocompleteplanpaymentsisduetocircumstancesbeyondthedebtor'scontrolandthroughnofaultofthedebtor.Creditorsmusthavereceivedatleastasmuchastheywouldhavereceivedinachapter7liquidationcase,andthedebtormustbeunabletomodifytheplan.Forexample,injuryorillnessthatprecludesemploymentsufficienttofundevenamodifiedplanmayserveasthebasisforahardshipdischarge.Thehardshipdischargedoesnotapplytoanydebtsthatarenondischargeableinachapter7case.See11U.S.C.§523

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WhatDebtorsShouldKnowAboutChapter13:

IndividualDebtAdjustment

ThechapteroftheBankruptcyCodeprovidingforadjustmentofdebtsofanindividualwithregularincome.(Chapter13allowsadebtortokeeppropertyandpaydebtsovertime,usuallythreetofiveyears.)

Background

Achapter13bankruptcyisalsocalledawageearner'splan.Itenablesindividualswithregularincometodevelopaplantorepayallorpartoftheirdebts.Underthischapter,debtorsproposearepaymentplantomakeinstallmentpaymentstocreditorsoverthreetofiveyears.Ifthedebtor'scurrentmonthlyincomeislessthantheapplicablestatemedian,theplanwillbeforthreeyearsunlessthecourtapprovesalongerperiod"forcause."1Ifthedebtor'scurrentmonthlyincomeisgreaterthantheapplicablestatemedian,theplangenerallymustbeforfiveyears.Innocasemayaplanprovideforpaymentsoveraperiodlongerthanfiveyears.11U.S.C.§1322(d).Duringthistimethelawforbidscreditorsfromstartingorcontinuingcollectionefforts.

Thissectiondiscussessixaspectsofachapter13proceeding:theadvantagesof

1 The"currentmonthlyincome"receivedbythedebtorisadefinedtermintheBankruptcyCodeandmeanstheaveragemonthlyincomereceivedoverthesixcalendarmonthsbeforecommencementofthebankruptcycase,includingregular

choosingchapter13;thechapter13eligibilityrequirements;howachapter13proceedingworks;makingtheplanwork;andthespecialchapter13discharge.

AdvantagesofChapter13

Chapter13offersindividualsanumberofadvantagesoverliquidationunderchapter7.Perhapsmostsignificantly,chapter13offerssomeindividualsanopportunitytosavetheirhomesfromforeclosure.Byfilingunderthischapter,individualscanstopforeclosureproceedingsandmaycuredelinquentmortgagepaymentsovertime.Inaddition,debtorsmuststillmakeallmortgagepaymentsthatcomedueduringthechapter13plan.Anotheradvantageofchapter13isthatitallowsindividualstoreschedulepaymentsofsecureddebts(otherthanamortgagefortheirprimaryresidence)andextendthemoverthelifeofthechapter13plan.Doingthismaylowerthepayments.Chapter13alsohasaspecialprovisionthatprotectsthirdpartieswhoareliablewiththedebtoron"consumerdebts."Thisprovisionmayprotectco‐signers.Finally,chapter13actslikeaconsolidationloan(butitisnotaloan)underwhichtheindividualmakestheplanpaymentstoachapter13trusteewhothendistributespaymentstocreditors.Individualswillhavenodirectcontactwithcreditorswhileunderchapter13protection.

contributionstohouseholdexpensesfromnondebtorsandincludingincomefromthedebtor'sspouseifthepetitionisajointpetition,butnotincludingsocialsecurityincomeorcertainpaymentsmadebecausethedebtoristhevictimofcertaincrimes.See11U.S.C.§101(10A).

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Chapter13Eligibility

Anyindividual,evenifself‐employedoroperatinganunincorporatedbusiness,iseligibleforchapter13reliefaslongastheindividual'sunsecureddebtsarelessthan$394,725andsecureddebtsarelessthan$1,184,200.11U.S.C.§109(e).2Theseamountsareadjustedperiodicallytoreflectchangesintheconsumerpriceindex.Acorporationorpartnershipmaynotbeachapter13debtor.Id.

Anindividualcannotfileunderchapter13oranyotherchapterif,duringthepreceding180days,apriorbankruptcypetitionwasdismissedduetothedebtor'swillfulfailuretoappearbeforethecourtorcomplywithordersofthecourtorwasvoluntarilydismissedaftercreditorssoughtrelieffromthebankruptcycourttorecoverpropertyuponwhichtheyholdliens.11U.S.C.§§109(g),362(d)and(e).

Inaddition,noindividualmaybeadebtorunderchapter13oranychapteroftheBankruptcyCodeunlessheorshehas,within180daysbeforefiling,receivedcreditcounselingfromanapprovedcreditcounselingagencyeitherinanindividualorgroupbriefing.11U.S.C.§§109,111.ThereareexceptionsinemergencysituationsorwheretheU.S.trusteehasdeterminedthatthereareinsufficientapprovedagenciestoprovidetherequiredcounseling.Ifadebt

2 ThesedollaramountsareeffectiveforcasesfiledafterApril1,2016.TheserateschangeonApril1ofeverythirdyear;theyareduetochangeagainonApril1,2019.

managementplanisdevelopedduringrequiredcreditcounseling,itmustbefiledwiththecourt.

HowChapter13Works

Achapter13casebeginsbyfilingapetitionwiththebankruptcycourtservingtheareawherethedebtorhasadomicileorresidence.Unlessthecourtordersotherwise,thedebtormustalsofilewiththecourt:(1)schedulesofassetsandliabilities;(2)ascheduleofcurrentincomeandexpenditures;(3)ascheduleofexecutorycontractsandunexpiredleases;and(4)astatementoffinancialaffairs.Fed.R.Bankr.P.1007(b).

Thedebtormustalsofileacertificateofcreditcounselingandacopyofanydebtrepaymentplandevelopedthroughcreditcounseling;evidenceofpaymentfromemployers,ifany,received60daysbeforefiling;astatementofmonthlynetincomeandanyanticipatedincreaseinincomeorexpensesafterfiling;andarecordofanyinterestthedebtorhasinfederalorstatequalifiededucationortuitionaccounts.11U.S.C.§521.Thedebtormustfileevidenceofcurrentandsufficientliabilityandpropertyinsurancewithrespecttoanyrealestateormotorvehiclethatthedebtorhasaninterestin.3Thisdoesnotincludeinsurancethatmayhavebeenobtainedbyapartyholdingasecurityinterestintheproperty(sometimesreferredtoasforce‐placedinsurance).

3 SeeLocalRules,Appendix1,Chapter13Rule13‐2.

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Thedebtormustprovidethechapter13trusteewithacopyofthetaxreturnortranscriptsforthemostrecenttaxyearaswellastaxreturnsfiledduringthecase(includingtaxreturnsforprioryearsthathadnotbeenfiledwhenthecasebegan).Id.Creditorsmayalsorequestthisinformationfromthedebtor.11U.S.C.§521(e)(2)(A).Individualsmayfileapetition;marriedcouplesmayfileajointpetition.11U.S.C.§302(a).(TheOfficialFormsmaybedownloadedfromtheInternetatwww.mab.uscourts.gov.Theyarealsoavailablefromthecourtsubjecttoprintingcosts.)

Thecourtsmustchargeafilingfee.Normallythefeesmustbepaidtotheclerkofthecourtuponfiling.Withthecourt'spermission,however,theymaybepaidininstallments.28U.S.C.§1930(a);Fed.R.Bankr.P.1006(b);BankruptcyCourtMiscellaneousFeeSchedule,Item8.Thenumberofinstallmentsislimitedtofour,andthedebtormustmakethefinalinstallmentnolaterthan120daysafterfilingthepetition.Fed.R.Bankr.P.1006(b);seealso,MLBR1006‐1,1006‐2.Forcauseshown,thecourtmayextendthetimeofanyinstallment,aslongasthelastinstallmentispaidnolaterthan180daysafterfilingthepetition.Id.Debtorsshouldbeawarethatfailuretopaythefilingfeemayresultindismissalofthecase.11U.S.C.§1307(c)(2).

InordertocompletetheOfficialBankruptcyFormsthatmakeupthepetition,statementoffinancialaffairs,andschedules,thedebtormustcompilethefollowinginformation:

Alistofallcreditorsandtheamountsandnatureoftheirclaims;



Adetailedlistofthedebtor'smonthlylivingexpenses,i.e.,food,clothing,shelter,utilities,taxes,transportation,medicine,etc.

Marriedindividualsmustgatherinformationfortheirspouseiftheyarefilingajointpetition,separateindividualpetitions,orifonlyonespouseisfiling.Inasituationwhereonlyonespousefiles,theincomeandexpensesofthenon‐filingspouseisrequiredsothatthecourt,thetrusteeandcreditorscanevaluatethehousehold'sfinancialposition.

Whenanindividualfilesachapter13petition,animpartialtrusteeisappointedtoadministerthecase.11U.S.C.§1302.Insomedistricts,theU.S.trusteeappointsastandingtrusteetoserveinallchapter13cases.28U.S.C.§586(b).Thechapter13trusteebothevaluatesthecaseandservesasadisbursingagent,collectingpaymentsfromthedebtorandmakingdistributionstocreditors.11U.S.C.§1302(b).

Filingthepetitionunderchapter13"automaticallystays"(stops)mostcollectionactionsagainstthedebtororthedebtor'sproperty.11U.S.C.§362.Filingthepetitiondoesnot,however,staycertaintypesofactionslistedunder11U.S.C.§362(b),andthestaymaybeeffectiveonlyforashorttimeinsomesituations.Seee.g.,11U.S.C.§362(c).Thestayarisesbyoperationoflawandrequiresnojudicialaction.Aslongasthestayisineffect,creditorsgenerallymaynotinitiateorcontinuelawsuits,wagegarnishments,orevenmaketelephonecallsdemandingpayments.Thebankruptcyclerkgivesnoticeofthe

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bankruptcycasetoallcreditorswhosenamesandaddressesareprovidedbythedebtor.

Chapter13alsocontainsaspecialautomaticstayprovisionthatprotectsco‐debtors.Unlessthebankruptcycourtauthorizesotherwise,acreditormaynotseektocollecta"consumerdebt"fromanyindividualwhoisliableforthedebtalongwiththedebtor.11U.S.C.§1301(a).Consumerdebtsarethoseincurredbyanindividualprimarilyforapersonal,family,orhouseholdpurpose.11U.S.C.§101(8).

Individualsmayuseachapter13proceedingtosavetheirhomefromforeclosure.Theautomaticstaystopstheforeclosureproceedingassoonastheindividualfilesthechapter13petition.Theindividualmaythenbringthepast‐duepaymentscurrentoverareasonableperiodoftime.Nevertheless,thedebtormaystilllosethehomeifthemortgagecompanycompletestheforeclosuresaleunderstatelawbeforethedebtorfilesthepetition.11U.S.C.§1322(c).Thedebtormayalsolosethehomeifheorshefailstomaketheregularmortgagepaymentsthatcomedueafterthechapter13filing.

Between20and50daysafterthedebtorfilesthechapter13petition,thechapter13trusteewillholdameetingofcreditors.Duringthismeeting,thetrusteeplacesthedebtorunderoath,andboththetrusteeandcreditorsmayaskquestions.Thedebtormustattendthemeetingandanswerquestionsregardinghisorherfinancialaffairsandtheproposedtermsoftheplan.11U.S.C.§343.Ifamarriedcouplefilesajointpetition,bothdebtorsmustattendthecreditors'meetingandanswerquestions.Inordertopreservetheirindependentjudgment,bankruptcyjudgesare

prohibitedfromattendingthecreditors'meeting.11U.S.C.§341(c).Thepartiestypicallyresolveproblemswiththeplaneitherduringorshortlyafterthecreditors'meeting.Generally,thedebtorcanavoidproblemsbymakingsurethatthepetitionandplanarecompleteandaccuratebyconsultingwiththetrusteepriortothemeetingandbymakingsurethatthechapter13trusteehasalldocumentsrequiredbeforethemeeting.

Inachapter13case,toparticipateindistributionsfromthebankruptcyestate,allcreditorsmustfiletheirclaimswiththecourtwithin90daysafterthefirstdatesetforthemeetingofcreditors.Fed.R.Bankr.P.3002(c).Agovernmentalunit,however,has180daysfromthedatethecaseisfiledtofileaproofofclaim.11U.S.C.§502(b)(9).Seee.g.,Fed.R.Bankr.P.3001,etseq.;MLBR,Appendix1,Chapter13Rule13‐13.

Ifacreditorhasnotfiledaclaim,adebtorortrusteemayfileaclaimonbehalfofthatcreditor.Ifasecuredcreditorhasnotfiledaclaim,andtheplanprovidesfortreatmentofthatsecuredclaim,thedebtororthetrusteemustfileaclaimonbehalfofthatcreditor.SeeFed.R.Bank.P.3004;MLBR,Appendix1,Chapter13Rule13‐13.

Chapter13PlanandConfirmationHearing

Unlessthecourtgrantsanextension,thedebtormustfilearepaymentplanwiththepetitionorwithin14daysafterthepetitionisfiled.Fed.R.Bankr.P.3015.Aplanmustbesubmittedforcourtapproval(or“confirmation”)andmustprovideforpaymentsoffixedamountsto

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thetrusteeonaregularbasis,typicallymonthly.

Afteraplanisconfirmedthetrusteedistributesthefundstocreditorsaccordingtothetermsoftheconfirmedplan,whichmayoffercreditorslessthanfullpaymentontheirclaims.

Therearethreetypesofclaims:priority,secured,andunsecured.Priorityclaimsarethosegrantedspecialstatusbythebankruptcylaw,suchasmosttaxesandthecostsofbankruptcyproceeding.4Securedclaimsarethoseforwhichthecreditorhastherighttakebackcertainproperty(i.e.,thecollateral,suchasahouseorautomobile)ifthedebtordoesnotpaytheunderlyingdebt.Incontrasttosecuredclaims,unsecuredclaimsaregenerallythoseforwhichthecreditorhasnospecialrightstocollectagainstparticularpropertyownedbythedebtor.

Theplanmustpaypriorityclaimsinfullunlessaparticularprioritycreditoragreestodifferenttreatmentoftheclaimor,inthecaseofadomesticsupportobligation,unlessthedebtorcontributesall"disposableincome"‐discussedbelow‐toafive‐yearplan.11U.S.C.§1322(a).

Ifthedebtorwantstokeepthecollateralsecuringaparticularclaim,theplanmustprovidethattheholderofthesecuredclaimreceiveatleastthevalueofthecollateral.Iftheobligationunderlyingthesecuredclaimwasusedtobuythecollateral(e.g.,acarloan),andthedebtwasincurredwithincertaintimeframesbeforethebankruptcyfiling,theplanmustprovideforfullpaymentofthedebt,notjustthevalueofthecollateral(whichmaybelessduetodepreciation).Paymentstocertainsecuredcreditors

4 Section507setsforth10categoriesofunsecuredclaimswhichCongresshas,for

(i.e.,thehomemortgagelender),maybemadeovertheoriginalloanrepaymentschedule(whichmaybelongerthantheplan)solongasanyarrearageismadeupduringtheplan.Thedebtorshouldconsultanattorneytodeterminethepropertreatmentofsecuredclaimsintheplan.

Theplanneednotpayunsecuredclaimsinfullaslongitprovidesthatthedebtorwillpayallprojected"disposableincome"overan"applicablecommitmentperiod,"andaslongasunsecuredcreditorsreceiveatleastasmuchundertheplanastheywouldreceiveifthedebtor'sassetswereliquidatedunderchapter7.11U.S.C.§ 1325.Inchapter13,"disposableincome"isincome(otherthanchildsupportpaymentsreceivedbythedebtor)lessamountsreasonablynecessaryforthemaintenanceorsupportofthedebtorordependentsandlesscharitablecontributionsupto15%ofthedebtor'sgrossincome.Ifthedebtoroperatesabusiness,thedefinitionofdisposableincomeexcludesthoseamountswhicharenecessaryforordinaryoperatingexpenses.11U.S.C.§1325(b)(2)(A)and(B).

The"applicablecommitmentperiod"dependsonthedebtor'scurrentmonthlyincome.Theapplicablecommitmentperiodmustbethreeyearsifcurrentmonthlyincomeislessthanthestatemedianincomeforafamilyofthesamesize‐andfiveyearsifthecurrentmonthlyincomeisgreaterthanthestatemedianincomeforafamilyofthesamesize.11U.S.C.§1325(d).Theplanmaybelessthantheapplicablecommitmentperiod

publicpolicyreasons,givenpriorityofdistributionoverotherunsecuredclaims.

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(threeorfiveyears)onlyifunsecureddebtispaidinfulloverashorterperiod.

Within30daysafterfilingthebankruptcycase,eveniftheplanhasnotyetbeenapprovedbythecourt,thedebtormuststartmakingplanpaymentstothechapter13trustee.11U.S.C.§1326(a)(1).Ifanysecuredloanpaymentsorleasepaymentscomeduebeforethedebtor'splanisconfirmed(typicallythehomemortgageandautomobilepayments),thedebtormustmakeadequateprotectionpaymentsdirectlytothesecuredlenderorlessor‐deductingtheamountpaidfromtheamountthatwouldotherwisebepaidtothetrustee.Id.

ObjectionstoConfirmationandModifications

Creditorsmayobjecttoconfirmationoftheplaneither30daysafterthefirstdatesetofthefirstmeetingofcreditors,or30daysafterthereceiptofanamendedplan.TheprocedureisfoundintheLocalRules,Appendix1,Chapter13Rule13‐8.Fed.R.Bankr.P.2002(b).Whileavarietyofobjectionsmaybemade,themostfrequentonesarethatpaymentsofferedundertheplanarelessthancreditorswouldreceiveifthedebtor'sassetswereliquidatedorthatthedebtor'splandoesnotcommitallofthedebtor'sprojecteddisposableincomeforthethreeorfiveyearapplicablecommitmentperiod.Ifthecourtconfirmstheplan,thechapter13trusteewilldistributefundsreceivedundertheplan"assoonasispracticable."11U.S.C.§1326(a)(2).Ifthecourtdeclinestoconfirmtheplan,thedebtormayfileamodifiedplan.11U.S.C.§1323.Thedebtormayalsoconvertthecasetoa

5 Thereisafeechargedforconvertingacaseunderchapter13toacaseunderchapter7.

liquidationcaseunderchapter7.511U.S.C.§1307(a).Ifthecourtdeclinestoconfirmtheplanorthemodifiedplanandinsteaddismissesthecaseorconvertthecasetochapter7,thecourtmayauthorizethetrusteetokeepsomefundsforcosts,butthetrusteemustreturnallremainingfundstothedebtor(otherthanfundsalreadydisbursedorduetocreditors).See11U.S.C.§1326(a)(2).Ifthecaseisconverted,thechapter13trustee’sdutiesend,andanewtrusteeisappointedunderthechapter7case.

Occasionally,achangeincircumstancesmaycompromisethedebtor'sabilitytomakeplanpayments.Forexample,acreditormayobjectorthreatentoobjecttoaplan,orthedebtormayinadvertentlyhavefailedtolistallcreditors.Insuchinstances,theplanmaybemodifiedeitherbeforeorafterconfirmation.11U.S.C.§§1323,1329.Modificationafterconfirmationisnotlimitedtoaninitiativebythedebtor,butmaybeattherequestofthetrusteeoranunsecuredcreditor.11U.S.C.§1329(a).

TheDebtorMakingthePlanWork

Theprovisionsofaconfirmedplanbindthedebtorandeachcreditor.11U.S.C.§1327.Oncethecourtconfirmstheplan,thedebtormustmaketheplansucceed.Thedebtormustmakeregularpaymentstothetrustee,whichwillrequireadjustmenttolivingonafixedbudgetforaprolongedperiod.

Furthermore,whileconfirmationoftheplanentitlesthedebtortoretainpropertyaslongaspaymentsaremade,thedebtormaynotincurnewdebtwithout

Forinformationaboutfees,visitwww.mab.uscourts.gov.

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consultingthetrustee(andlikelyobtainingcourtapproval),becauseadditionaldebtmaycompromisethedebtor'sabilitytocompletetheplan.11U.S.C.§§1305(c),1322(a)(1),1327.

Ifthedebtorfailstomakethepaymentsdueundertheconfirmedplan,thecourtmaydismissthecaseorconvertittoaliquidationcaseunderchapter7oftheBankruptcyCode.11U.S.C.§1307(c).Thecourtmayalsodismissorconvertthedebtor'scaseifthedebtorfailstopayanypost‐filingdomesticsupportobligations(i.e.,childsupport,alimony),orfailstomakerequiredtaxfilingsduringthecase.11U.S.C.§§1307(c)and(e),1308,521.

PaymentstoCreditors

Planpaymentsaremadetothetrustee,andthetrusteedistributestheplanpaymentspursuanttothetermsoftheconfirmedchapter13plan.Unlessthecourtordersotherwise,thetrusteedoesnotmakedisbursementsuntilthecourtconfirmstheplan.

TheCourthasnoroleinthedisbursementofpayments.TheCourtdoesnotacceptplanpaymentsanddoesnotdisbursefunds.QuestionsaboutpaymentsshouldbemadedirectlytotheofficeoftheChapter13Trusteeassignedtothecase.

TheChapter13Discharge

Thebankruptcylawregardingthescopeofthechapter13dischargeiscomplexandcontinuestoevolve.Therefore,debtorsshouldconsultcompetentlegalcounselpriortofilingregardingthescopeofthechapter13discharge.

Achapter13debtorisentitledtoadischargeuponcompletionofallpaymentsunderthechapter13plansolongasthedebtor:(1)certifies(ifapplicable)thatalldomesticsupportobligationsthatcameduepriortomakingsuchcertificationhavebeenpaid;(2)hasnotreceivedadischargeinapriorcasefiledwithinacertaintimeframe(twoyearsforpriorchapter13casesandfouryearsforpriorchapter7,11and12cases);and(3)hascompletedanapprovedcourseinfinancialmanagement(iftheU.S.trusteeforthedebtor'sdistricthasdeterminedthatsuchcoursesareavailabletothedebtor).11U.S.C.§1328.Thecourtwillnotenterthedischarge,however,untilitdetermines,afternoticeandahearing,thatthereisnoreasontobelievethereisanypendingproceedingthatmightgiverisetoalimitationonthedebtor'shomesteadexemption.11U.S.C.§ 1328(h).

Thedischargereleasesthedebtorfromalldebtsprovidedforbytheplanordisallowed(undersection502),withlimitedexceptions.Creditorsprovidedforinfullorinpartunderthechapter13planmaynolongerinitiateorcontinueanylegalorotheractionagainstthedebtortocollectthedischargedobligations.

Asageneralrule,thedischargereleasesthedebtorfromalldebtsprovidedforbytheplanordisallowed,withtheexceptionofcertaindebtsdescribedin11U.S.C.§1328.Debtsnotdischargedinchapter13includecertainlongtermobligations(suchasahomemortgage);debtsforalimonyorchildsupport;certaintaxes;debtsformostgovernmentfundedorguaranteededucationalloansorbenefitoverpayments;debtsarisingfromdeathorpersonalinjurycausedbydrivingwhileintoxicatedorundertheinfluence

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ofdrugs;anddebtsforrestitutionoracriminalfineincludedinasentenceonthedebtor'sconvictionofacrime.Totheextentthattheyarenotfullypaidunderthechapter13plan,thedebtorwillstillberesponsibleforthesedebtsafterthebankruptcycasehasconcluded.Debtsformoneyorpropertyobtainedbyfalsepretenses,debtsforfraudordefalcationwhileactinginafiduciarycapacity,anddebtsforrestitutionordamagesawardedinacivilcaseforwillfulormaliciousactionsbythedebtorthatcausepersonalinjuryordeathtoapersonwillbedischargedunlessacreditortimelyfilesandprevailsinanactiontohavesuchdebtsdeclarednondischargeable.11U.S.C.§§1328,523(c);Fed.R.Bankr.P.4007(c).

Thedischargeinachapter13caseissomewhatbroaderthaninachapter7case.Debtsdischargeableinachapter13,butnotinchapter7,includedebtsforwillfulandmaliciousinjurytoproperty(asopposedtoaperson),debtsincurredtopaynondischargeabletaxobligations,anddebtsarisingfrompropertysettlementsindivorceorseparationproceedings.11U.S.C.§1328(a).

TheChapter13HardshipDischarge

Afterconfirmationofaplan,circumstancesmayarisethatpreventthedebtorfromcompletingtheplan.Insuchsituations,thedebtormayaskthecourttogranta"hardshipdischarge."11U.S.C.§ 1328(b).Generally,suchadischargeisavailableonlyif:(1)thedebtor'sfailuretocompleteplanpaymentsisduetocircumstancesbeyondthedebtor'scontrolandthroughnofaultofthedebtor;(2)creditorshavereceivedatleastasmuchastheywouldhave

receivedinachapter7liquidationcase;and(3)modificationoftheplanisnotpossible.Injuryorillnessthatprecludesemploymentsufficienttofundevenamodifiedplanmayserveasthebasisforahardshipdischarge.Thehardshipdischargeismorelimitedthanthedischargedescribedaboveanddoesnotapplytoanydebtsthatarenondischargeableinachapter7case.11U.S.C.§523.

ProSeDebtors

Chapter13isacomplexmechanismavailabletopeoplewhohavethemeanstopaysomeoralloftheirdebts,butrequiretheprotectionsaffordedundertheU.S.BankruptcyCode.However,thevastmajorityofthosewhofileunderthischapterdonotsucceed.Individualsconsideringchapter13arestronglyurgedtoretainacompetentandexperiencedbankruptcyattorney.Thejoboftheattorneyistoknowthelawandtocounselthedebtor.Thejobofthedebtoristomaketheplanwork.Thischaptermakesitdifficultforonepersontoperformthesetwojobs.

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DischargeinBankruptcy

Whatisadischargeinbankruptcy?

Abankruptcydischargereleasesthedebtorfrompersonalliabilityforcertainspecifiedtypesofdebts.Inotherwords,thedebtorisnolongerlegallyrequiredtopayanydebtsthataredischarged.

Thedischargeisapermanentorderprohibitingthecreditorsofthedebtorfromtakinganyformofcollectionactionondischargeddebts,includinglegalactionandcommunicationswiththedebtor,suchastelephonecalls,letters,andpersonalcontacts.

Althoughadebtorisnotpersonallyliablefordischargeddebts,avalidlien(i.e.,achargeuponspecificpropertytosecurepaymentofadebt)thathasnotbeenavoided(i.e.,madeunenforceable)inthebankruptcycasewillremainafterthebankruptcycase.Therefore,asecuredcreditormayenforcethelientorecoverthepropertysecuredbythelien.

Whendoesthedischargeoccur?

Thetimingofthedischargevaries,dependingonthechapterunderwhichthecaseisfiled.Inachapter7(liquidation)case,forexample,thecourtusuallygrantsthedischargepromptlyonexpirationofthetimefixedforfilingacomplaintobjectingtodischargeandthetimefixedforfilingamotiontodismissthecaseforsubstantialabuse(60daysfollowingthefirstdatesetforthe341meeting).Typically,thisoccursaboutfourmonthsafterthedatethedebtorfilesthepetitionwiththeclerkofthebankruptcycourt.Inindividualchapter11cases,and

incasesunderchapter12(adjustmentofdebtsofafamilyfarmerorfisherman)and13(adjustmentofdebtsofanindividualwithregularincome),thecourtgenerallygrantsthedischargeassoonaspracticableafterthedebtorcompletesallpaymentsundertheplan.Sinceachapter12orchapter13planmayprovideforpaymentstobemadeoverthreetofiveyears,thedischargetypicallyoccursaboutfouryearsafterthedateoffiling.Thecourtmaydenyanindividualdebtor'sdischargeinachapter7or13caseifthedebtorfailstocomplete"aninstructionalcourseconcerningfinancialmanagement."

TheBankruptcyCodeprovideslimitedexceptionstothe"financialmanagement"requirement:iftheU.S.trusteedeterminesthereareinadequateeducationalprogramsavailable,orifthedebtorisdisabledorincapacitatedoronactivemilitarydutyinacombatzone.

Howdoesthedebtorobtainadischarge?

Unlessthereislitigationinvolvingobjectionstothedischarge,thedebtorwillusuallyautomaticallyreceiveadischarge.TheFederalRulesofBankruptcyProcedureprovidefortheclerkofthebankruptcycourttomailacopyoftheorderofdischargetoallcreditors,theU.S.trustee,thetrusteeinthecase,andthetrustee'sattorney,ifany.Thedebtorandthedebtor'sattorneyalsoreceivecopiesofthedischargeorder.Thenotice,whichissimplyacopyofthefinalorderofdischarge,doesnotspecificallyidentifythosedebtsdeterminedtobedischargeable,i.e.,coveredbythedischarge.Thenoticeinformscreditorsgenerallythatthedebtsowedtothem

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havebeendischargedandthattheyshouldnotattemptanyfurthercollection.Theyarecautionedinthenoticethatcontinuingcollectioneffortscouldsubjectthemtopunishmentforcontempt.Anyinadvertentfailureonthepartoftheclerktosendthedebtororanycreditoracopyofthedischargeorderpromptlywithinthetimerequiredbytherulesdoesnotaffectthevalidityoftheordergrantingthedischarge.

Areallofthedebtor’sdebtsdischargedoronlysome?

Notalldebtsaredischarged.ThedebtsdischargedvaryundereachchapteroftheBankruptcyCode.Section523(a)oftheCodespecificallyexceptsvariouscategoriesofdebtsfromthedischargegrantedtoindividualdebtors.Congresshasdeterminedthatthesetypesofdebtsarenotdischargeableforpublicpolicyreasons(basedeitheronthenatureofthedebtorthefactthatthedebtswereincurredduetoimproperbehaviorofthedebtor,suchasthedebtordrivingundertheinfluenceofdrugsoralcohol).

Thereare19categoriesofdebtexceptedfromdischargeunderchapters7,11,and12. Amorelimitedlistofexceptionsappliestocasesunderchapter13.

Generallyspeaking,theexceptionstodischargeapplyautomaticallyifthelanguageprescribedbysection523(a)applies.Themostcommontypesofnondischargeabledebtsarecertaintypesoftaxclaims;debtsnotsetforthbythedebtoronthelistsandschedulesthedebtormustfilewiththecourt;debtsforspousalorchildsupportoralimony;debtsforwillfulandmaliciousinjuriestopersonorproperty;debtstogovernmentalunitsforfinesand

penalties;debtsformostgovernmentfundedorguaranteededucationalloansorbenefitoverpayments;debtsforpersonalinjurycausedbythedebtor'soperationofamotorvehiclewhileintoxicated;debtsowedtocertaintax‐advantagedretirementplans,anddebtsforcertaincondominiumorcooperativehousingfees.

Thetypesofdebtsdescribedinsections523(a)(2),(4),and(6)(obligationsaffectedbyfraudormaliciousness)arenotautomaticallyexceptedfromdischarge.Creditorsmustaskthecourttodeterminethatthesedebtsareexceptedfromdischarge.Intheabsenceofanaffirmativerequestbythecreditorandthegrantingoftherequestbythecourt,thetypesofdebtssetoutinsections523(a)(2),(4),and(6)willbedischarged.

Aslightlybroaderdischargeofdebtsisavailabletoadebtorinachapter13casethaninachapter7case.Debtsdischargeableinachapter13,butnotinchapter7,includedebtsforwillfulandmaliciousinjurytoproperty,debtsincurredtopaynon‐dischargeabletaxobligations,anddebtsarisingfrompropertysettlementsindivorceorseparationproceedings.

Althoughachapter13debtorgenerallyreceivesadischargeonlyaftercompletingallpaymentsrequiredbythecourt‐approved(i.e.,"confirmed")repaymentplan,therearesomelimitedcircumstancesunderwhichthechapter13debtormayrequestthecourttogranta"hardshipdischarge"eventhoughthedebtorhasfailedtocompleteplanpayments.Suchadischargeisavailableonlytoadebtorwhosefailuretocompleteplanpaymentsisduetocircumstancesbeyondthedebtor'scontrolandcreditorshavereceivedat

70

leastwhattheywouldhaveinachapter7(liquidation).Thescopeofachapter13"hardshipdischarge"issimilartothatinachapter7casewithregardtothetypesofdebtsthatareexceptedfromthedischarge.

Ahardshipdischargealsoisavailableinchapter12ifthefailuretocompleteplanpaymentsisdueto"circumstancesforwhichthedebtorshouldnotjustlybeheldaccountable."

Doesthedebtorhavetherighttoadischargeorcancreditorsobjecttothedischarge?

Inchapter7cases,thedebtordoesnothaveanabsoluterighttoadischarge.Anobjectiontothedebtor'sdischargemaybefiledbyacreditor,bythetrusteeinthecase,orbytheU.S.trustee.Creditorsreceiveanoticeshortlyafterthecaseisfiledthatsetsforthmuchimportantinformation,includingthedeadlineforobjectingtothedischarge.Toobjecttothedebtor'sdischarge,acreditormustfileacomplaintinthebankruptcycourtbeforethedeadlinesetoutinthenotice.Filingacomplaintstartsalawsuitreferredtoinbankruptcyasan"adversaryproceeding."

Thecourtmaydenyachapter7dischargeforanyofthereasonsdescribedinsection727(a)oftheBankruptcyCode,includingfailuretoproviderequestedtaxdocuments;failuretocompleteacourseonpersonalfinancialmanagement;transferorconcealmentofpropertywithintenttohinder,delay,ordefraudcreditors;destructionorconcealmentofbooksorrecords;perjuryandotherfraudulentacts;failuretoaccountforthelossofassets;violationofacourtorderorreceivingadischargeinanearliercase

commencedwithincertaintimeframes(discussedbelow)beforethedatethepetitionwasfiled.Iftheissueofthedebtor'srighttoadischargegoestotrial,theobjectingpartyhastheburdenofprovingallthefactsessentialtotheobjection.

Inchapter12andchapter13cases,thedebtorisusuallyentitledtoadischargeuponcompletionofallpaymentsundertheplan.Asinchapter7,however,dischargemaynotoccurinchapter13ifthedebtorfailstocompletearequiredcourseonpersonalfinancialmanagement.Adebtorisalsoineligibleforadischargeinchapter13ifheorshereceivedapriordischargeinanothercasecommencedwithintimeframesdiscussedinthenextparagraph.Unlikechapter7,creditorsdonothavestandingtoobjecttothedischargeofachapter12orchapter13debtor.Creditorscanobjecttoconfirmationoftherepaymentplan,butcannotobjecttothedischargeifthedebtorhascompletedmakingplanpayments.

Canadebtorreceiveaseconddischargeinalaterchapter7case?

Thecourtwilldenyadischargeinalaterchapter7caseifthedebtorreceivedadischargeunderchapter7orchapter11inacasefiledwithineightyearsbeforethesecondpetitionisfiled.Thecourtwillalsodenyachapter7dischargeifthedebtorpreviouslyreceivedadischargeinachapter12orchapter13casefiledwithinsixyearsbeforethedateofthefilingofthesecondcaseunless(1)thedebtorpaidall"allowedunsecured"claimsintheearliercaseinfull,or(2)thedebtormadepaymentsundertheplanintheearliercasetotalingatleast70

71

percentoftheallowedunsecuredclaimsandthedebtor'splanwasproposedingoodfaithandthepaymentsrepresentedthedebtor'sbesteffort.

Adebtorisineligiblefordischargeunderchapter13ifheorshereceivedapriordischargeinachapter7,11,or12casefiledfouryearsbeforethecurrentcaseorinachapter13casefiledtwoyearsbeforethecurrentcase.

Canthedischargeberevoked?

Thecourtmayrevokeadischargeundercertaincircumstances.Forexample,atrustee,creditor,ortheU.S.trusteemayrequestthatthecourtrevokethedebtor'sdischargeinachapter7casebasedonallegationsthatthedebtor:obtainedthedischargefraudulently;failedtodisclosethefactthatheorsheacquiredorbecameentitledtoacquirepropertythatwouldconstitutepropertyofthebankruptcyestate;committedoneofseveralactsofimproprietydescribedinsection727(a)(6)oftheBankruptcyCode;orfailedtoexplainanymisstatementsdiscoveredinanauditofthecaseorfailstoprovidedocumentsorinformationrequestedinanauditofthecase.Typically,arequesttorevokethedebtor'sdischargemustbefiledwithinoneyearofthedischargeor,insomecases,beforethedatethatthecaseisclosed.Thecourtwilldecidewhethersuchallegationsaretrueand,ifso,whethertorevokethedischarge.

Inchapter11,12,and13cases,ifconfirmationofaplanorthedischargeisobtainedthroughfraud,thecourtcanrevoketheorderofconfirmationordischarge.

Maythedebtorpayadischargeddebtafterthebankruptcycasehasbeenconcluded?

Adebtorwhohasreceivedadischargemayvoluntarilyrepayanydischargeddebt.Adebtormayrepayadischargeddebteventhoughitcannolongerbelegallyenforced.

Whatcanthedebtordoifacreditorattemptstocollectadischargeddebtafterthecaseisconcluded?

Ifacreditorattemptscollectioneffortsonadischargeddebt,thedebtorcanfileamotionwiththecourt,reportingtheactionandaskingthatthecasebereopenedtoaddressthematter.Acreditorcanbesanctionedbythecourtforviolatingthedischargeinjunction.Thenormalsanctionforviolatingthedischargeinjunctioniscivilcontempt,whichisoftenpunishablebyafine.

Mayanemployerterminateadebtor'semploymentsolelybecausethepersonwasadebtororfailedtopayadischargeddebt?

Thelawprohibitsdiscriminatorytreatmentofdebtorsbybothgovernmentalunitsandprivateemployers.Agovernmentalunitorprivateemployermaynotdiscriminateagainstapersonsolelybecausethepersonwasadebtor,wasinsolventbeforeorduringthecase,orhasnotpaidadebtthatwasdischargedinthecase.Thelawprohibitsthefollowingformsofgovernmentaldiscrimination:terminatinganemployee;discriminatingwithrespecttohiring;ordenying,revoking,suspending,ordecliningtorenewalicense,franchise,orsimilarprivilege.Aprivateemployermaynotdiscriminate

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withrespecttoemploymentifthediscriminationisbasedsolelyuponthebankruptcyfiling.

Howcanthedebtorobtainanothercopyofthedischargeorder?

Ifthedebtorlosesormisplacesthedischargeorder,anothercopycanbeobtainedbycontactingtheclerkofthebankruptcycourtthatenteredtheorder.Theclerkwillchargeafeeforsearchingthecourtrecordsandtherewillbeadditionalfeesformakingandcertifyingcopies,ifacertifiedorderisrequired.If

thecasehasbeenclosedandarchivedtherewillalsobearetrievalfee,andobtainingthecopywilltakelonger.

Thedischargeordermaybeavailableelectronically.ThePACERsystemprovidesthepublicwithelectronicaccesstoselectedcaseinformationthroughapersonalcomputerlocatedinmanyclerk'soffices.UsersmustsetupanaccounttoacquireaccesstoPACER,andmustpayaper‐pagefeetodownloadandcopydocumentsfiledelectronically.

AdditionalinformationaboutPACERisfoundatwww.pacer.gov.

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These Required Lists, Schedules, Statements and Fees are current as of April 2016.

To be sure you have the most up‐to‐date information,

Visit www.mab.uscourts.gov

Go to Forms

Go to Official Forms (this will bring you to the United States Courts website)

Download Form Number B 2000

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B2000 (Form 2000) (04/16)

UNITED STATES BANKRUPTCY COURT

REQUIRED LISTS, SCHEDULES, STATEMENTS, AND FEES

Voluntary Chapter 7 Case

☐ Filing Fee of $245. If the fee is to be paid in installments or the debtor requests a waiver of the fee, the debtor must be an individual and must

file a signed application for court approval. Official Form 103A or 103B and Fed.R.Bankr.P. 1006(b), (c).

☐ Administrative fee of $75 and trustee surcharge of $15. If the debtor is an individual and the court grants the debtor’s request, these fees are

payable in installments or may be waived.

☐ Voluntary Petition for Individuals Filing for Bankruptcy (Official Form 101) or Voluntary Petition for Non-Individuals Filing for

Bankruptcy (Official Form 201); Names and addresses of all creditors of the debtor. Must be filed WITH the petition. Fed.R.Bankr.P. 1007(a)(1).

☐ Notice to Individual Debtor with Primarily Consumer Debts under 11 U.S.C. § 342(b) (Director’s Form 2010), if applicable. Required if

the debtor is an individual with primarily consumer debts. The notice must be GIVEN to the debtor before the petition is filed. Certification that the

notice has been given must be FILED with the petition or within 15 days. 11 U.S.C. §§ 342(b), 521(a)(1)(B)(iii), 707(a)(3). Official Form 101 contains spaces for the certification.

☐ Bankruptcy Petition Preparer’s Notice, Declaration, and Signature (Official Form 119). Required if a “bankruptcy petition preparer”

prepares the petition. Must be submitted WITH the petition. 11 U.S.C. § 110(b)(2).

☐ Statement About Your Social Security Numbers (Official Form 121). Required if the debtor is an individual. Must be submitted WITH the

petition. Fed.R.Bankr.P. 1007(f).

☐ Credit Counseling Requirement (Official Form 101); Certificate of Credit Counseling and Debt Repayment Plan, if applicable; Section

109(h)(3) certification or § 109(h)(4) request, if applicable. If applicable, the Certificate of Credit Counseling and Debt Repayment Plan must be filed with the petition or within 14 days. If applicable, the § 109(h)(3) certification or the § 109(h)(4) request must be filed WITH the petition. Fed.R.Bankr.P.

1007(b)(3), (c).

☐ Statement disclosing compensation paid or to be paid to a “bankruptcy petition preparer” (Director’s Form 2800). Required if a

“bankruptcy petition preparer” prepares the petition. Must be submitted WITH the petition. 11 U.S.C. §110(h)(2).

☐ Statement of Your Current Monthly Income (Official Form 122A). Required if the debtor is an individual. Must be filed with the petition

or within 14 days. Fed.R.Bankr.P. 1007(b), (c).

☐ Schedules of assets and liabilities (Official Forms 106 or 206). Must be filed with the petition or within 14 days. Fed.R.Bankr.P. 1007(b),(c).

☐ Schedule of Executory Contracts and Unexpired Leases (Schedule G of Official Form 106 or 206). Must be filed with the petition or within

14 days. Fed.R.Bankr.P. 1007(b), (c).

☐ Schedules of Your Income and Your Expenses (Schedules I and J of Official Form 106). If the debtor is an individual, Schedules I and J of

Official Form 106 must be filed with the petition or within 14 days. 11 U.S.C. § 521(1) and Fed.R.Bankr.P. 1007(b), (c).

☐ Statement of financial affairs (Official Form 107 or 207). Must be filed with the petition or within 14 days. Fed.R.Bankr.P. 1007(b), (c).

☐ Copies of all payment advices or other evidence of payment received by the debtor from any employer within 60 days before the filing of

the petition. Required if the debtor is an individual. Must be filed with the petition or within 14 days. Fed.R.Bankr.P. 1007(b), (c).

☐ Statement of Intention for Individuals Filing Under Chapter 7 (Official Form 108). Required ONLY if the debtor is an individual and the

schedules of assets and liabilities contain debts secured by property of the estate or personal property subject to an unexpired lease. Must be filed within

30 days or by the date set for the Section 341 meeting of creditors, whichever is earlier. 11 U.S.C. §§ 362(h) and 521(a)(2).

☐ Statement disclosing compensation paid or to be paid to the attorney for the debtor (Director's Form 2030). Required if the debtor is

represented by an attorney. Must be filed within 14 days or any other date set by the court. 11 U.S.C. § 329 and Fed.R.Bankr.P. 2016(b).

☐ Certification About a Financial Management Course (Official Form 423), if applicable. Required if the debtor is an individual, unless the

course provider has notified the court that the debtor has completed the course. Must be filed within 60 days of the first date set for the meeting of

creditors. 11 U.S.C. § 727(a)(11) and Fed.R.Bankr.P. 1007(b)(7), (c).

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wmcleod

Underline

wmcleod

Underline

B2000 (Form 2000) (04/16)

* Amount subject to adjustment on 4/01/19, and every three years thereafter with respect to cases commenced on or after the date of adjustment.


Voluntary Chapter 11 Case ☐ Filing fee of $1,167. If the fee is to be paid in installments, the debtor must be an individual and must file a signed application for court

approval. Official Form 103A and Fed.R.Bankr.P. 1006(b).

☐ Administrative fee of $550. If the debtor is an individual and the court grants the debtor’s request, this fee is payable in installments.

☐ United States Trustee quarterly fee. The debtor, or trustee if one is appointed, is required also to pay a fee to the United States trustee at the

conclusion of each calendar quarter until the case is dismissed or converted to another chapter. The calculation of the amount to be paid is set out in 28

U.S.C. § 1930(a)(6). As authorized by 28 U.S.C. § 1930(a)(7), the quarterly fee is paid to the clerk of court in chapter 11 cases in Alabama and North

Carolina.


Bankruptcy (Official Form 201); Names and addresses of all creditors of the debtor. Must be filed WITH the petition. Fed.R.Bankr.P. 1007(a)(1).

☐ Notice to Individual Debtor with Primarily Consumer Debts under 11 U.S.C. § 342(b) (Director's Form 2010), if applicable. Required if


notice has been given must be FILED with the petition or within 15 days. 11 U.S.C. §§ 342(b), 521(a)(1)(B)(iii), 1112(e). Official Form 101 contains

spaces for the certification.



☐ Statement About Your Social Security Numbers (Official Form 121). Required if the debtor is an individual. Must be submitted WITH the



109(h)(3) certification or § 109(h)(4) request, if applicable. If applicable, the Certificate of Credit Counseling and Debt Repayment Plan must be filed

with the petition or within 14 days. If applicable, the § 109(h)(3) certification or the § 109(h)(4) request must be filed WITH the petition. Fed.R.Bankr.P. 1007(b)(3), (c).



☐ Statement of Your Current Monthly Income (Official Form 122B). Required if the debtor is an individual. Must be filed with the petition

or within 14 days. Fed.R.Bankr.P. 1007(b), (c).

☐ For Individual Chapter 11 Cases: List of Creditors Who Have the 20 Largest Unsecured Claims Against You and Are Not Insiders

(Official Form 104) or Chapter 11 or Chapter 9 Cases: List of Creditors Who Have the 20 Largest Unsecured Claims and Are Not Insiders (Official Form 204). Must be filed WITH the petition. Fed.R.Bankr.P. 1007(d).

☐ Names and addresses of equity security holders of the debtor. Must be filed with the petition or within 14 days, unless the court orders

otherwise. Fed.R.Bankr.P. 1007(a)(3).

☐ Schedules of Assets and Liabilities (Official Form 106 or 206). Must be filed with the petition or within 14 days. Fed.R.Bankr.P. 1007(b),

(c).



☐ Schedules of Current Income and Expenditures. If the debtor is an individual, Schedules I and J of Official Form 106 must be used for this

purpose. Must be filed with the petition or within 14 days. 11 U.S.C. § 521(1) and Fed.R.Bankr.P. 1007(b), (c).

☐ Statement of Financial Affairs (Official Form 107 or 207). Must be filed with the petition or within 14 days. Fed.R.Bankr.P. 1007(b), (c).

☐ Copies of all payment advices or other evidence of payment received by debtor from any employer within 60 days before the filing of the

petition. Required if the debtor is an individual. Must be filed WITH the petition or within 14 days. Fed.R.Bankr.P. 1007(b), (c).

☐ Statement disclosing compensation paid or to be paid to the attorney for the debtor (Director’s Form 2030), if applicable. Required if the

debtor is represented by an attorney. Must be filed within 14 days or any other date set by the court. 11 U.S.C. § 329 and Fed.R.Bankr.P. 2016(b).

☐ Certification About a Financial Management Course (Official Form 423), if applicable. Required if the debtor is an individual and §

1141(d)(3) applies, unless the course provider has notified the court that the debtor has completed the course. Must be filed no later than the date of the

last payment under the plan or the filing of a motion for a discharge under § 1141(d)(5)(B). 11 U.S.C. § 1141(d)(3) and Fed.R.Bankr.P. 1007(b)(7), (c).

☐ Statement concerning pending proceedings of the kind described in § 522(q)(1), if applicable. Required if the debtor is an individual and

has claimed exemptions under state or local law as described in § 522(b)(3) in excess of $160,375*. Must be filed no later than the date of the last payment made under the plan or the date of the filing of a motion for a discharge under § 1141(d)(5)(B). 11 U.S.C. § 1141(d)(5)(C) and Fed.R.Bankr.P.

1007(b)(8), (c).

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B2000 (Form 2000) (04/16)



Chapter 12 Case

☐ Filing Fee of $200. If the fee is to be paid in installments, the debtor must be an individual and must file a signed application for court

approval. Official Form 103A and Fed.R.Bankr.P. 1006(b).

☐ Administrative fee of $75. If the debtor is an individual and the court grants the debtor's request, this fee is payable in installments.


Bankruptcy (Official Form 201). Names and addresses of all creditors of the debtor. Must be filed WITH the petition. Fed.R.Bankr.P. 1007(a)(1).

☐ Notice to Individual Debtor with Primarily Consumer Debts under 11 U.S.C. § 342(b) (Director's Form 2010), if applicable. Required if


notice has been given must be FILED with the court in a timely manner. 11 U.S.C. §§ 342(b), 521(a)(1)(B)(iii). Official Form 101 contains spaces for the certification.



☐ Statement of Your Social Security Numbers (Official Form 121). Required if the debtor is an individual. Must be submitted WITH the



109(h)(3) certification or § 109(h)(4) request, if applicable. If applicable, the Certificate of Credit Counseling and Debt Repayment Plan must be filed with the petition or within 14 days. If applicable, the § 109(h)(3) certification or the § 109(h)(4) request must be filed WITH the petition. Fed.R.Bankr.P.

1007(b)(3), (c).



☐ Schedules of Assets and Liabilities (Official Form 106 or 206). Must be filed with the petition or within 14 days. Fed.R.Bankr.P. 1007(b),

(c).



☐ Schedules of Current Income and Expenditures. If the debtor is an individual, Schedule I and J of Official Form 106 must be used for this

purpose. Must be filed with the petition or within 14 days. 11 U.S.C. § 521(1) and Fed.R.Bankr.P. 1007(b), (c).

☐ Statement of Financial Affairs (Official Form 107 or 207). Must be filed with the petition or within 14 days. Fed.R.Bankr.P. 1007(b), (c).

☐ Copies of all payment advices or other evidence of payment received by the debtor from any employer within 60 days before the filing of the

petition if the debtor is an individual. Must be filed with the petition or within 14 days. Fed.R.Bankr.P. 1007(b), (c).

☐ Statement disclosing compensation paid or to be paid to the attorney for the debtor (Director’s Form 2030), if applicable. Must be filed

within 14 days or any other date set by the court. 11 U.S.C. § 329 and Fed.R.Bankr.P. 2016(b).

☐ Chapter 12 Plan. Must be filed within 90 days. 11 U.S.C. § 1221.

☐ Statement concerning pending proceedings of the kind described in § 522(q)(1), if applicable. Required if the debtor is an individual and

has claimed exemptions under state or local law as described in §522(b)(3) in excess of $160,375*. Must be filed no later than the date of the last payment made under the plan or the date of the filing of a motion for a discharge under § 1228(b). 11 U.S.C. § 1228(f) and Fed.R.Bankr.P. 1007(b)(8), (c).

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B2000 (Form 2000) (04/16)



Chapter 13 Case

☐ Filing fee of $235. If the fee is to be paid in installments, the debtor must file a signed application for court approval. Official Form 103A and

Fed.R.Bankr.P. 1006(b).

☐ Administrative fee of $75. If the court grants the debtor’s request, this fee is payable in installments.

☐ Voluntary Petition for Individuals Filing for Bankruptcy (Official Form 101). Names and addresses of all creditors of the debtor. Must

be filed WITH the petition. Fed.R.Bankr.P. 1007(a)(1).

☐ Notice to Individual Debtor with Primarily Consumer Debts under 11 U.S.C. § 342(b) (Director’s Form 2010), if applicable. Required if


notice has been given must be FILED with the petition or within 15 days. 11 U.S.C. §§ 342(b), 521(a)(1)(B)(iii), 1307(c)(9). Official Form 101 contains spaces for the certification.



☐ Statement of Social Security Number (Official Form 121). Must be submitted WITH the petition. Fed.R.Bankr.P. 1007(f).


109(h)(3) certification or § 109(h)(4) request, if applicable. If applicable, the Certificate of Credit Counseling and Debt Repayment Plan must be filed

with the petition or within 14 days. If applicable, the § 109(h)(3) certification or the § 109(h)(4) request must be filed WITH the petition. Fed.R.Bankr.P. 1007(b)(3), (c).

☐ Statement disclosing compensation paid or to be paid to a “bankruptcy petition preparer” (Director's Form 2800). Required if a


☐ Statement of Your Current Monthly Income (Official Form 122C). Must be filed with the petition or within 14 days. Fed.R.Bankr.P. 1007.

☐ Schedules of Assets and Liabilities (Official Form 106). Must be filed with the petition or within 14 days. Fed.R.Bankr.P. 1007(b), (c).

☐ Schedule of Executory Contracts and Unexpired Leases (Schedule G of Official Form 106). Must be filed with the petition or within 14

days. Fed.R.Bankr.P. 1007(b), (c).

☐ Schedules of Current Income and Expenditures (Schedules I and J of Official Form 106). Must be filed with the petition or within 14 days.

11 U.S.C. § 521(1) and Fed.R.Bankr.P. 1007(b), (c).

☐ Statement of Financial Affairs (Official Form 107). Must be filed with the petition or within 14 days. Fed.R.Bankr.P. 1007(b), (c).

☐ Copies of all payment advices or other evidence of payment received by the debtor from any employer within 60 days before the filing of

the petition. Must be filed with the petition or within 14 days. Fed.R.Bankr.P. 1007(b), (c).

☐ Chapter 13 Plan. Must be filed with the petition or within 14 days. Fed.R.Bankr.P. 3015.

☐ Statement disclosing compensation paid or to be paid to the attorney for the debtor (Director’s Form 2030), if applicable. Must be filed

within 14 days or any other date set by the court. 11 U.S.C. § 329 and Fed.R.Bankr.P. 2016(b).

☐ Certification About a Financial Management Course (Official Form 423), if applicable. Must be filed no later than the date of the last

payment made under the plan or the date of the filing of a motion for a discharge under § 1328(b), unless the course provider has notified the court that the debtor has completed the course. 11 U.S.C. § 1328(g)(1) and Fed.R.Bankr.P. 1007(b)(7), (c).

☐ Statement concerning pending proceedings of the kind described in § 522(q)(1), if applicable. Required if the debtor has claimed

exemptions under state or local law as described in §522(b)(3) in excess of $160,375*. Must be filed no later than the date of the last payment made under

the plan or the date of the filing of a motion for a discharge under § 1328(b). 11 U.S.C. § 1328(h) and Fed.R.Bankr.P. 1007(b)(8), (c).

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GLOSSARY

Thesedefinitionsarefortermsusedfrequentlythroughoutthismanualandareincludedonlyforguidance.Itisnotasubstituteforlegaladvice.ForadditionaldefinitionsoftermsusedinbankruptcyandintheU.S.BankruptcyCode.,pleasereferto11U.S.C.§101.

ADVERSARYPROCEEDING

AlawsuitarisinginabankruptcycasethatiscommencedbythefilingofacomplaintintheBankruptcyCourt.SeeFed.R.Bankr.P.7001,etseq.

AFFIDAVIT

Awrittenstatementoffacts,confirmedbytheoathtakenbeforeanofficerhavingauthoritytoadministersuchoath(suchasanotarypublic)oraffirmationofthepartyingmakingit.SeealsoVERIFICATION.

ANNUITY

Acontractthatprovidesforperiodicpaymentsofmoney,eitherforlifeorforanumberofyears.

ANSWER

Adefendant’sresponsetoacomplaintfiledinanadversaryproceeding.Sincethedefendantmaybeaplaintiff,butalsoadefendantincounterclaim,theresponseisalsocalledanAnswer.

APPELLANT

Thepartywhofilesandseeksanappealofajudge’sdecision.

APPELLEE

Thepartyagainstwhomtheappealhasbeentaken.Theappelleeisthepartywhohasnointerestinobjectingtothecourt’sjudgment,decisionororder.

APPLICATION

Aformalrequest,usuallyinwriting,tothecourttograntcertainrelief.Seealso,MOTION.

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BANKRUPTCYPETITIONPREPARER

Apersonorbusiness,otherthanalawyeradmittedtopracticeintheUSBankruptcyCourtfortheDistrictofMassachusettsandotherthansomeonewhoworksforandissupervisedbythatlawyerthatchargesafeetopreparebankruptcydocuments.Underadebtor’sdirectionandcontrol,thebankruptcypetitionpreparertypesthebankruptcyformsforthedebtortofile.Becausetheyarenotattorneys,theycannotgivelegaladviceorrepresentthedebtorinbankruptcycourt.Alsocalledtypingservices.Seealso§110.

BARDATE

Traditionallythelastdatesettotakeaspecificaction.

BUSINESSDEBT

Adebtthatyouincurredtoobtainmoneyforabusinessorinvestmentorincurredthroughtheoperationofthebusinessorinvestment.

CERTIFICATEOFSERVICE

Astatementfiledwithapleading,motion,noticeorotherdocumentthatdescribesthedateandmannerinwhichacopyofthatdocumentwasservedonpartiesentitledtoreceiveit.Theinformationmustincludethemethodofservice,thedateandthenameandaddressoftheindividualorentityserved.SeeMLBR9013‐3.

CLAIM

Acreditor’srighttopayment,evenifcontingent,disputed,unliquidated,orunmatured.Seealso,§101(5)

CODEBTOR

Apersonorentitythatmayalsoberesponsibleforpayingaclaimagainstthedebtor.Thecodebtorisnotapartytothedebtor’scase.SeeJOINTDEBTOR.

COLLATERAL

Specificpropertysubjecttoalienfromwhichacreditormaybepaidaheadofothercreditorswithoutliensonthatproperty.Includesamortgage,securityinterest,judgmentlien,statutorylien,orotherlien.

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CONFIRMATION

Approvalofaplanforadebtortopaycreditorsprovidedthatthespecificcriteriaaremet.

CONSUMERDEBT

Adebtprimarilyforapersonal,family,orhouseholdpurpose.Seealso§101(8).

CONTINGENTCLAIM

Aclaimthatmaybeowedbythedebtorundercertaincircumstances,forexample,wherethedebtorisacosigneronanotherperson’sloanandthatpersonfailstopay.

CREDITOR

Apersonthathasaclaimagainstthedebtorand/ortheestate.Seealso§101(10).

CURRENTVALUE

Theamountpropertyisworth,whichmaybemoreorlessthanwhenthepropertywaspurchasedand/oracquired.Seetheinstructionsforspecificformsregardingwhetherthevaluerequestedisasofthedateofthefilingofthepetition,thedateyoucompletetheform,orsomeotherdate.AlsoreferredtoasValueorFairMarketValue.

DEBTOR1

Adebtorfilingaloneoronepersoninamarriedcouplewhoisfilingabankruptcycasewithaspouse.Thesamepersonretainsthisdesignationinalloftheforms.Seealso§101(13).

DEBTOR2

The second person in a married couple who is filing a bankruptcy case with a spouse. Seealso,§101(13).

DEPENDENT

Apersonwhoiseconomicallydependentonanother(suchasthedebtor)regardlessofwhetherthepersoncanbeclaimedasadependentonafederaltaxreturn.However,Chapter7MeansTestCalculation(OfficialForm122A‐2)andChapter13CalculationofYourDisposableIncome(OfficialForm122C‐2)usetheterminamorelimitedway.Seetheinstructionsonthoseforms.

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DISCOVERY

Theprocessbywhichpartiesexchangeandobtaininformationabouttheirrespectivepositions.SeeFed.R.Bankr.P.7026,etseq.

DISMISSAL

Anorderorjudgmentterminatingamotion,adversaryproceedingorbankruptcycase.

DISMISSALWITHPREJUDICE

Anorderorjudgmentterminatingamotion,adversaryproceedingorbankruptcycasethatprohibitsthepartyfrombringingthesamecase,claimorcauseofactionagainorforaspecificperiodoftime(seee.g.§109(g)).

DISPUTEDCLAIM

Adebtthatthedebtorcontestsorbelievesisnotowed,inwholeorinpart.

EVICTIONJUDGMENT

Ajudgmentforpossessionthatyourlandlordhasobtainedinaneviction,unlawfuldetaineraction,orsimilarproceeding.AlsoreferredtoasaJudgmentforPossession.

EXECUTORYCONTRACTORLEASE

Contractsorleasesunderwhichbothpartiestotheagreementhavedutiesremainingtobeperformedorhavenotbeenfullycompletedatthetimeofthebankruptcyfiling.Ifacontractorleaseisexecutory,adebtormaycontinuetofulfillthetermsofthecontractorlease(“assume”it)orchoosetocancelthecontractorlease(“reject”it).Examplesofanexecutorycontractare:aleaseforaresidence,carorequipment;anemploymentagreement;ahomeimprovementcontract;aservicecontract;oracontractfordeliveryofgoodsinthefuture.

EXEMPTPROPERTY

Property,orthevalueofaportionofit,thatthelawallowsadebtortoretainratherthansurrenderittoatrusteeforliquidationorprovideforvalueinaplan.

FRAUDULENTCONVEYANCE

Atransferofdebtor’spropertymadewithintenttodefraudorforwhichthedebtorreceiveslessthanthetransferredproperty’svalue.

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GARNISHMENT

Aprocedurebywhichacreditorcanreachadebtor’sfundsinthecustodyorcontrolofathirdpartytosatisfyadebt.Garnishmentsaresometimesusedbycreditorstoobtainmoneyfromadebtor’swagesorbankaccount.

INDIVIDUALDEBTOR

Apersonwhoisfilingforbankruptcyeitheraloneorwithaspouse,whetherornottheindividualownsabusiness.

INSIDER

Arelative,friend,co‐workerorotherpersonofcloserelationofanindividualdebtororapersonwithacloserelationshiptothedebtor.Seealso§101(31)

JOINTCASE

Asinglecasefiledbyamarriedcouple.

JOINTDEBTOR

OneofthetwodebtorsinaJOINTCASE.Seealso,DEBTOR1,DEBTOR2.

JUDGMENTLIEN

Alienonpropertythatarisesasaresultofajudgement,levyorotherlegalproceeding.Seealso§101(36)

JURISDICTION

ThelegalauthoritytheCourthastohearanddecideacase.

LEGALEQUIVALENTOFASPOUSE

Apersonrecognizedbyapplicablenonfederallawashavingarelationshipwiththedebtorthatgrantslegalrightsandresponsibilitiesequivalent,inwholeorinpart,tothosegrantedtoaspouse.

LEGALOREQUITABLEINTEREST

Abroadtermthatincludesallkindsofpropertyinterestsinbothtangibleandintangibleproperty,whetherornotanyoneelsehasaninterestinthatproperty.

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LIEN

Achargeuponspecificpropertydesignedtosecurepaymentfromadebtororperformanceofanobligation.Seealso§101(37).

LIQUIDATE

Toconvertassetsintocash.

LIQUIDATEDCLAIM

Acreditor’sclaimforafixedamountofmoney.

MATRIX

Alistofthenamesandaddressofallcreditorsandpartiesprovidedbythedebtor.Thematrixisthecourt’smailinglist,andthoseappearingonthecreditormatrixwillreceivenoticesfromthecourt.SeeOfficialLocalForm1;Fed.R.Bank.P.2002.AlsoreferredtoasCreditorMatrixorMailingMatrix.

MOTION

AnapplicationforrelieforrequestforanorderoftheCourtpresentedtotheCourt.Certainmotionshavearesponsedeadlinebywhichanotherpartyshallrespondorobjecttothereliefrequestedinthemotion.

MOTIONFORRELIEFFROMSTAY

Arequestbyacreditorforanorderterminatingand/orlimitingtheautomaticstaytoenablethecreditortotakeanactionthatwouldotherwisebeprohibitedbytheautomaticstay.

NEGOTIABLEINSTRUMENT

Afinancialinstrumentthatonecantransfertoanotherbysigningordeliveringit,includingbutnotlimitedtopersonalchecks,cashiers’checks,promissorynotes,andmoneyorders.

NONDISCHARGEABLEDEBT

Adebtthatwillnotbesubjecttothedischarge.See11U.S.C.§§523(a),1328(a).

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NON‐INDIVIDUALDEBTOR

Adebtorthatisnotahumanbeing–forexample,anylegalentitysuchasacorporation,partnership,orlimitedliabilitycompany(LLC).

NON‐NEGOTIABLEINSTRUMENT

Afinancialinstrumentthatcannotbetransferredtoanotherbysigningordeliveringit.

NONPRIORITYUNSECUREDCLAIM

Adebtthatgenerallywillbepaidafterpriorityunsecuredclaimsarepaid.Themostcommonexamplesarecreditcardbills,medicalbills,andeducationalorstudentloans.

OBJECTIONTODISCHARGE

Anobjection,filedbyapartyininterest,tothedebtorbeingreleasedfrompersonalliabilityforanyoralldebts.ThisiscommencedbyfilinganADVERSARYPROCEEDING.

OBJECTIONTOEXEMPTION

Atrustee’sorcreditor’sobjectiontoadebtor’sattempttoclaimcertainpropertyasexempt.SeeEXEMPTPROPERTY.

ORDER

AnorderisajudicialdecreeresolvinganissueorquestionraisedbeforetheCourtthatgrantsrelief,deniesrelief,ordirectsapartytoperformanactionortorefrainfromtakinganaction.

ORDERFORRELIEF

Aninjunctionthatstopsallproceedingsagainstthedebtorandthedebtor’sproperty.Theorderforrelief,orautomaticstay,iseffectiveimmediatelyuponthefilingofavoluntarypetition,subjecttothelimitationssetforthin§362.

PARTYININTEREST

Apartywhoisactuallyandsubstantiallyinterestedinthesubjectmatter,asdistinguishedfromonewhohasonlyanominalortechnicalinterestinit.

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PAYMENTADVICE

Adocumentsuchasapaystuborearningsstatementfromanemployerthatshowsallearningsanddeductionsfromadebtor’spay.

PLEADING

Awrittendocumentwhereapartyallegesand/orcounterallegesfactsgivingrisetoalegalactionorrequestforrelief.

PREFERENCE

Certainpaymentsortransfersofadebtor’spropertytoacreditorwithin90daysbeforethefilingofthebankruptcycasemaybeconsideredpreferential,andatrusteemayseektorecoverthosepaymentsonbehalfoftheestate.See§547.

PRESUMPTIONOFABUSE

Arebuttablelegalpresumptionthatyouhavetoomuchincomeafterallowedexpensestobegrantedreliefunderchapter7.

PRIORITYCLAIM

Aclaimthatisentitledtobepaidbeforegeneralunsecuredclaims.See§507. Themostcommonexamplesarecertainincometaxdebtsandpastduealimonyorchildsupport.

PROOFOFCLAIM

Awrittenstatementidentifyingtheamountandreasonadebtorowesacreditormoney.SeeOfficialForm410.Seealso,CLAIM.

REAFFIRMATIONAGREEMENT

Anagreementbetweenadebtorandacreditorinwhichthedebtoragreestopayalloraportionofadebtthatwouldbeotherwisedischargeable.

REDEMPTION

Wherethedebtorpaysthecreditorthefullcurrentor“marketvalue”ofpropertythatissecuredbyapurchasemoneysecurityagreement.Inexchange,thelienonthepropertyisextinguished.

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SECUREDCLAIM

Aclaimthatmaybesatisfiedinwholeorinparteitherbyachargeagainstoraninterestinspecificpropertyofthedebtor;or,byrightofasetoff.

SETOFF

Aclaimbyadebtorthatthecreditorowesthedebtormoneywhichshouldbesubtractedfromtheamountclaimedbycreditor.Byclaimingasetoffthedebtordoesnotnecessarilydisputethecreditor’sclaim,buthe/sheclaimstherighttoprovethatthecreditoroweshim/heranamountofmoneyfromsomeothertransactionandthattheamountshouldbedeductedfromthecreditor’sclaim.

SOLEPROPRIETORSHIP

Abusinessyouownedasanindividualthatisnotaseparatelegalentitysuchasacorporation,partnership,orLLC.

STATUTORYLIEN

Alienthatarisesasaresultofastatute.Seealso§101(53).

STIPULATION

Avoluntaryagreementbetweenopposingparties.

SUMMONS

Anofficialcourtdocumentinformingthepartyservedthatanactionhasbeenfiledagainstthem,thecourtwherethesummonsoriginatedandthatthepartyisrequiredtoappear,onthedateindicatedonthesummons,andanswerthecomplaintinsuchaction.

TRANSCRIPT

AwrittenrecordpreparedbythecourtreporteroftheproceedingsthatoccurredinCourt.

UNITEDSTATESTRUSTEE

AnofficeroftheDepartmentofJusticewhosupervisestrusteesandtheadministrationofbankruptcyestates.TheU.S.Trusteeappointstrustees,andmonitorsplans,disclosurestatements,creditors’committees,applicationsfor

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compensation,andtheprocessofbankruptcycases,inadditiontoperformingotherstatutoryduties(see28U.S.C.§586).

UNDERSECUREDCLAIM

Aclaimsecuredbypropertythathasavaluelessthantheamountowed.

UNEXPIREDLEASE

Aleasethatisineffectasofthepetitiondate.

UNLIQUIDATEDCLAIM

Adebtwithanamountthatcannotbereadilydetermined,suchasbyreferringtoanagreementorbyasimplecomputation.Anunliquidatedclaimisoneforwhichtheremaybeadefiniteliability,butwherethevaluehasnotbeenset.

UNSCHEDULEDDEBT

AdebtthatshouldhavebeenlistedintheschedulesfiledwiththeCourtbutwasnot.

UNSECUREDCLAIM

Aclaimwithrespecttoadebt,thepaymentofwhichisnotbackedupbycollateraloralienonpropertyofthedebtor.

UNSECUREDDEBT

Afinancialobligationthatisnotbackedbyasecurityagreementoralienonpropertyofthedebtor.

VACATE

Tocancel,annulorrenderofnoeffect.Ifajudgmentororderisvacated,itisasiftheorderorjudgmentwasneverentered.

VENUE

Theproperlocalityofalegalproceeding.

VERIFICATION

Confirmationofthecorrectness,truth,orauthenticityofacomplaint,statementordocument.FederalRulesofBankruptcyProcedure1008requiresthatbankruptcypetitions,lists,schedules,statements,andamendmentstobeverifiedasprovidedin28U.S.C.§1746.

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A Guide for the Self-Represented Debtor in a Bankruptcy Case · united states bankruptcy court for...

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