Title 11 · Bankruptcy
BANKRUPTCY ·
UNITED STATES CODE
Chapter 1. General Provisions
Chapter 3. Case Administration
Subchapter I.
Commencement of a Case
Subchapter II.
Officers
Subchapter III.
Administration
Subchapter IV.
Administrative Powers
Chapter 5. Creditors, the Debtor, and the Estate
Subchapter I.
Creditors and Claims
Subchapter II.
Debtor's Duties and Benefits
Subchapter III.
The Estate
Chapter 7.
Liquidation
Subchapter I.
Officers and Administration
Subchapter II.
Collection, Liquidation, and Distribution of the Estate
Subchapter III.
Stockbroker Liquidation - Omitted
Subchapter IV.
Commodity Broker Liquidation - Omitted
Chapter 9.
Adjustment of Debts of a Municipality - Omitted
Chapter 11.
Reorganization - Omitted
Chapter 12.
Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income
- Omitted
Chapter 13.
Adjustment of Debts of an Individual with Regular Income
Subchapter I.
Officers, Administration, and the Estate
Subchapter II.
The Plan
Chapter 1: General
Provisions
§ 101.
Definitions
§ 102. Rules of
construction
§ 103.
Applicability of chapters
§ 104. Adjustment
of dollar amounts
§ 105. Power of
court
§ 106. Waiver of
sovereign immunity
§ 107. Public
access to papers
§ 108. Extension
of time
§ 109. Who may be
a debtor
§ 110. Penalty
for persons who negligently or fraudulently prepare bankruptcy petitions
§ 111. Nonprofit
budget and credit counseling agencies; financial management instructional
courses
§ 112.
Prohibition on disclosure of name of minor children
Definitions
In this title the
following definitions shall apply--
(1) The term
"accountant" means accountant authorized under applicable law to
practice public accounting, and includes professional accounting association,
corporation, or partnership, if so authorized.
(2) The term
"affiliate" means--
(A) entity that
directly or indirectly owns, controls, or holds with power to vote, 20 percent
or more of the outstanding voting securities of the debtor, other than an
entity that holds such securities--
(i) in a
fiduciary or agency capacity without sole discretionary power to vote such
securities; or
(ii) solely to
secure a debt, if such entity has not in fact exercised such power to vote;
(B) corporation
20 percent or more of whose outstanding voting securities are directly or
indirectly owned, controlled, or held with power to vote, by the debtor, or by
an entity that directly or indirectly owns, controls, or holds with power to
vote, 20 percent or more of the outstanding voting securities of the debtor,
other than an entity that holds such securities--
(i) in a
fiduciary or agency capacity without sole discretionary power to vote such
securities; or
(ii) solely to
secure a debt, if such entity has not in fact exercised such power to vote;
(C) person whose
business is operated under a lease or operating agreement by a debtor, or
person substantially all of whose property is operated under an operating
agreement with the debtor; or
(D) entity that
operates the business or substantially all of the property of the debtor under
a lease or operating agreement.
(3) The term
"assisted person" means any person whose debts consist primarily of
consumer debts and the value of whose non-exempt property is less than $150,000
[$150,000 (added by BAPCPA 10-17-05) effective 4-1-04. Adjusted every 3 years
by section 104.].
(4) The term
"attorney" means attorney, professional law association, corporation,
or partnership, authorized under applicable law to practice law.
(4A) The term
"bankruptcy assistance" means any goods or services sold or otherwise
provided to an assisted person with the express or implied purpose of providing
information, advice, counsel, document preparation, or filing, or attendance at
a creditors' meeting or appearing in a case or proceeding on behalf of another
or providing legal representation with respect to a case or proceeding under
this title.
(5) The term
"claim" means--
(A) right to
payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured; or
(B) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured,
or unsecured.
(6) The term
"commodity broker" means futures commission merchant, foreign futures
commission merchant, clearing organization, leverage transaction merchant, or
commodity options dealer, as defined in section 761 of this title, with respect
to which there is a customer, as defined in section 761 of this title.
(7) The term
"community claim" means claim that arose before the commencement of
the case concerning the debtor for which property of the kind specified in
section 541(a)(2) of this title is liable, whether or not there is any such
property at the time of the commencement of the case.
(7A) The term
"commercial fishing operation" means--
(A) the catching
or harvesting of fish, shrimp, lobsters, urchins, seaweed, shellfish, or other
aquatic species or products of such species; or
(B) for purposes
of section 109 and chapter 12, aquaculture activities consisting of raising for
market any species or product described in subparagraph (A).
(7B) The term
"commercial fishing vessel" means a vessel used by a fisherman to
carry out a commercial fishing operation.
(8) The term
"consumer debt" means debt incurred by an individual primarily for a
personal, family, or household purpose.
(9) The term
"corporation"--
(A) includes--
(i) association
having
(ii) partnership
association organized under a law that makes only the capital subscribed
responsible for the debts of such association;
(iii) joint-stock
company;
(iv)
unincorporated company or association; or
(v) business
trust; but
(B) does not
include limited partnership.
(10) The term
"creditor" means--
(A) entity that
has a claim against the debtor that arose at the time of or before the order
for relief concerning the debtor;
(B) entity that
has a claim against the estate of a kind specified in section 348(d), 502(f),
502(g), 502(h) or 502(i) of this title; or
(C) entity that
has a community claim.
(10A) The term
"current monthly income"--
(A) means the
average monthly income from all sources that the debtor receives (or in a joint
case the debtor and the debtor's spouse receive) without regard to whether such
income is taxable income, derived during the 6-month period ending on--
(i) the last day
of the calendar month immediately preceding the date of the commencement of the
case if the debtor files the schedule of current income required by section
521(a)(1)(B)(ii); or
(ii) the date on
which current income is determined by the court for purposes of this title if
the debtor does not file the schedule of current income required by section
521(a)(1)(B)(ii); and
(B) includes any
amount paid by any entity other than the debtor (or in a joint case the debtor
and the debtor's spouse), on a regular basis for the household expenses of the
debtor or the debtor's dependents (and in a joint case the debtor's spouse if
not otherwise a dependent), but excludes benefits received under the Social
Security Act, payments to victims of war crimes or crimes against humanity on
account of their status as victims of such crimes, and payments to victims of
international terrorism (as defined in section 2331 of title 18) or domestic
terrorism (as defined in section 2331 of title 18) on account of their status
as victims of such terrorism.
(11) The term
"custodian" means--
(A) receiver or
trustee of any of the property of the debtor, appointed in a case or proceeding
not under this title;
(B) assignee
under a general assignment for the benefit of the debtor's creditors; or
(C) trustee,
receiver, or agent under applicable law, or under a contract, that is appointed
or authorized to take charge of property of the debtor for the purpose of
enforcing a lien against such property, or for the purpose of general
administration of such property for the benefit of the debtor's creditors.
(12) The term
"debt" means liability on a claim.
(12A) The term
"debt relief agency" means any person who provides any bankruptcy
assistance to an assisted person in return for the payment of money or other
valuable consideration, or who is a bankruptcy petition preparer under section
110, but does not include--
(A) any person
who is an officer, director, employee, or agent of a person who provides such
assistance or of the bankruptcy petition preparer;
(B) a nonprofit
organization that is exempt from taxation under section 501(c)(3) of the
Internal Revenue Code of 1986;
(C) a creditor of
such assisted person, to the extent that the creditor is assisting such
assisted person to restructure any debt owed by such assisted person to the
creditor;
(D) a depository
institution (as defined in section 3 of the Federal Deposit Insurance Act) or
any Federal credit union or State credit union (as those terms are defined in
section 101 of the Federal Credit Union Act), or any affiliate or subsidiary of
such depository institution or credit union; or
(E) an author,
publisher, distributor, or seller of works subject to copyright protection
under title 17, when acting in such capacity.
(13) The term
"debtor" means person or municipality concerning which a case under
this title has been commenced.
(13A) The term
"debtor's principal residence"--
(A) means a
residential structure, including incidental property, without regard to whether
that structure is attached to real property; and
(B) includes an
individual condominium or cooperative unit, a mobile or manufactured home, or
trailer.
(14) The term
"disinterested person" means a person that--
(A) is not a
creditor, an equity security holder, or an insider;
(B) is not and
was not, within 2 years before the date of the filing of the petition, a
director, officer, or employee of the debtor; and
(C) does not have
an interest materially adverse to the interest of the estate or of any class of
creditors or equity security holders, by reason of any direct or indirect
relationship to, connection with, or interest in, the debtor, or for any other
reason.
(14A) The term
"domestic support obligation" means a debt that accrues before, on,
or after the date of the order for relief in a case under this title, including
interest that accrues on that debt as provided under applicable nonbankruptcy
law notwithstanding any other provision of this title, that is--
(A) owed to or
recoverable by--
(i) a spouse,
former spouse, or child of the debtor or such child's parent, legal guardian,
or responsible relative; or
(ii) a
governmental unit;
(B) in the nature
of alimony, maintenance, or support (including assistance provided by a
governmental unit) of such spouse, former spouse, or child of the debtor or
such child's parent, without regard to whether such debt is expressly so
designated;
(C) established
or subject to establishment before, on, or after the date of the order for
relief in a case under this title, by reason of applicable provisions of--
(i) a separation
agreement, divorce decree, or property settlement agreement;
(ii) an order of
(iii) a
determination made in accordance with applicable nonbankruptcy law by a governmental
unit; and
(D) not assigned
to a nongovernmental entity, unless that obligation is assigned voluntarily by
the spouse, former spouse, child of the debtor, or such child's parent, legal
guardian, or responsible relative for the purpose of collecting the debt.
(15) The term
"entity" includes person, estate, trust, governmental unit, and
United States trustee.
(16) The term
"equity security" means--
(A) share in a
corporation, whether or not transferable or denominated "stock", or
similar security;
(B) interest of a
limited partner in a limited partnership; or
(C) warrant or
right, other than a right to convert, to purchase, sell, or subscribe to a
share, security, or interest of a kind specified in subparagraph (A) or (B) of
this paragraph.
(17) The term
"equity security holder" means holder of an equity security of the
debtor.
(18) The term
"family farmer" means--
(A) individual or
individual and spouse engaged in a farming operation whose aggregate debts do
not exceed $3,237,000 [$3,237,000 (changed by BAPCPA 10-17-05) effective
4-1-04. Adjusted every 3 years by section 104.] and not less than 50 percent of
whose aggregate noncontingent, liquidated debts (excluding a debt for the
principal residence of such individual or such individual and spouse unless
such debt arises out of a farming operation), on the date the case is filed,
arise out of a farming operation owned or operated by such individual or such
individual and spouse, and such individual or such individual and spouse
receive from such farming operation more than 50 percent of such individual's
or such individual and spouse's gross income for--
(i) the taxable
year preceding; or
(ii) each of the
2d and 3d taxable years preceding;
the taxable year
in which the case concerning such individual or such individual and spouse was
filed; or
(B) corporation
or partnership in which more than 50 percent of the outstanding stock or equity
is held by one family, or by one family and the relatives of the members of
such family, and such family or such relatives conduct the farming operation,
and
(i) more than 80
percent of the value of its assets consists of assets related to the farming
operation;
(ii) its
aggregate debts do not exceed $3,237,000 [$3,237,000 (changed by BAPCPA
10-17-05) effective 4-1-04. Adjusted every 3 years by section 104.] and not
less than 50 percent of its aggregate noncontingent, liquidated debts
(excluding a debt for one dwelling which is owned by such corporation or
partnership and which a shareholder or partner maintains as a principal
residence, unless such debt arises out of a farming operation), on the date the
case is filed, arise out of the farming operation owned or operated by such
corporation or such partnership; and
(iii) if such
corporation issues stock, such stock is not publicly traded.
(19) The term
"family farmer with regular annual income" means family farmer whose
annual income is sufficiently stable and regular to enable such family farmer
to make payments under a plan under chapter 12 of this title.
(19A) The term
"family fisherman" means--
(A) an individual
or individual and spouse engaged in a commercial fishing operation--
(i) whose
aggregate debts do not exceed $1,500,000 [$1,500,000 (added by BAPCPA 10-17-05)
effective 4-1-04. Adjusted every 3 years by section 104.] and not less than 80
percent of whose aggregate noncontingent, liquidated debts (excluding a debt
for the principal residence of such individual or such individual and spouse,
unless such debt arises out of a commercial fishing operation), on the date the
case is filed, arise out of a commercial fishing operation owned or operated by
such individual or such individual and spouse; and
(ii) who receive
from such commercial fishing operation more than 50 percent of such
individual's or such individual's and spouse's gross income for the taxable
year preceding the taxable year in which the case concerning such individual or
such individual and spouse was filed; or
(B) a corporation
or partnership--
(i) in which more
than 50 percent of the outstanding stock or equity is held by--
(I) 1 family that
conducts the commercial fishing operation; or
(II) 1 family and
the relatives of the members of such family, and such family or such relatives
conduct the commercial fishing operation; and
(ii)
(I) more than 80
percent of the value of its assets consists of assets related to the commercial
fishing operation;
(II) its
aggregate debts do not exceed $1,500,000 [$1,500,000 (added by BAPCPA 10-17-05)
effective 4-1-04. Adjusted every 3 years by section 104.] and not less than 80
percent of its aggregate noncontingent, liquidated debts (excluding a debt for
1 dwelling which is owned by such corporation or partnership and which a
shareholder or partner maintains as a principal residence, unless such debt
arises out of a commercial fishing operation), on the date the case is filed,
arise out of a commercial fishing operation owned or operated by such
corporation or such partnership; and
(III) if such
corporation issues stock, such stock is not publicly traded.
(19B) The term
"family fisherman with regular annual income" means a family
fisherman whose annual income is sufficiently stable and regular to enable such
family fisherman to make payments under a plan under chapter 12 of this title.
(20) The term
"farmer" means (except when such term appears in the term
"family farmer") person that received more than 80 percent of such
person's gross income during the taxable year of such person immediately
preceding the taxable year of such person during which the case under this
title concerning such person was commenced from a farming operation owned or
operated by such person.
(21) The term
"farming operation" includes farming, tillage of the soil, dairy
farming, ranching, production or raising of crops, poultry, or livestock, and
production of poultry or livestock products in an unmanufactured state.
(21A) The term
"farmout agreement" means a written agreement in which--
(A) the owner of
a right to drill, produce, or operate liquid or gaseous hydrocarbons on
property agrees or has agreed to transfer or assign all or a part of such right
to another entity; and
(B) such other
entity (either directly or through its agents or its assigns), as
consideration, agrees to perform drilling, reworking, recompleting, testing, or
similar or related operations, to develop or produce liquid or gaseous
hydrocarbons on the property.
(21B) The term
"Federal depository institutions regulatory agency" means--
(A) with respect
to an insured depository institution (as defined in section 3(c)(2) of the
Federal Deposit Insurance Act) for which no conservator or receiver has been
appointed, the appropriate Federal banking agency (as defined in section 3(q)
of such Act);
(B) with respect
to an insured credit union (including an insured credit union for which the
National Credit Union Administration has been appointed conservator or
liquidating agent), the National Credit Union Administration;
(C) with respect
to any insured depository institution for which the Resolution Trust
Corporation has been appointed conservator or receiver, the Resolution Trust
Corporation; and
(D) with respect
to any insured depository institution for which the Federal Deposit Insurance
Corporation has been appointed conservator or receiver, the Federal Deposit
Insurance Corporation.
(22) The term
"financial institution" means--
(A)
(B) in connection
with a securities contract (as defined in section 741) an investment company
registered under the Investment Company Act of 1940.
(22A) The term
"financial participant" means--
(A) an entity
that, at the time it enters into a securities contract, commodity contract,
swap agreement, repurchase agreement, or forward contract, or at the time of
the date of the filing of the petition, has one or more agreements or
transactions described in paragraph (1), (2), (3), (4), (5), or (6) of section
561(a) with the debtor or any other entity (other than an affiliate) of a total
gross dollar value of not less than $1,000,000,000 in notional or actual
principal amount outstanding on any day during the previous 15-month period, or
has gross mark-to-market positions of not less than $100,000,000 (aggregated
across counterparties) in one or more such agreements or transactions with the
debtor or any other entity (other than an affiliate) on any day during the
previous 15-month period; or
(B) a clearing
organization (as defined in section 402 of the Federal Deposit Insurance
Corporation Improvement Act of 1991).
(23) The term
"foreign proceeding" means a collective judicial or administrative
proceeding in a foreign country, including an interim proceeding, under a law
relating to insolvency or adjustment of debt in which proceeding the assets and
affairs of the debtor are subject to control or supervision by a foreign court,
for the purpose of reorganization or liquidation.
(24) The term
"foreign representative" means a person or body, including a person
or body appointed on an interim basis, authorized in a foreign proceeding to
administer the reorganization or the liquidation of the debtor's assets or
affairs or to act as a representative of such foreign proceeding.
(25) The term
"forward contract" means--
(A) a contract
(other than a commodity contract) for the purchase, sale, or transfer of a
commodity, as defined in section 761(8) of this title, or any similar good,
article, service, right, or interest which is presently or in the future
becomes the subject of dealing in the forward contract trade, or product or
byproduct thereof, with a maturity date more than two days after the date the
contract is entered into, including, but not limited to, a repurchase
transaction, reverse repurchase transaction, consignment, lease, swap, hedge
transaction, deposit, loan, option, allocated transaction, unallocated
transaction, or any other similar agreement;
(B) any
combination of agreements or transactions referred to in subparagraphs (A) and
(C);
(C) any option to
enter into an agreement or transaction referred to in subparagraph (A) or (B);
(D) a master
agreement that provides for an agreement or transaction referred to in
subparagraph (A), (B), or (C), together with all supplements to any such master
agreement, without regard to whether such master agreement provides for an
agreement or transaction that is not a forward contract under this paragraph,
except that such master agreement shall be considered to be a forward contract
under this paragraph only with respect to each agreement or transaction under
such master agreement that is referred to in subparagraph (A), (B), or (C); or
(E) any security
agreement or arrangement, or other credit enhancement related to any agreement
or transaction referred to in subparagraph (A), (B), (C), or (D), including any
guarantee or reimbursement obligation by or to a forward contract merchant or
financial participant in connection with any agreement or transaction referred
to in any such subparagraph, but not to exceed the damages in connection with
any such agreement or transaction, measured in accordance with section 562.
(26) The term
"forward contract merchant" means
(27) The term
"governmental unit" means United States; State; Commonwealth;
District; Territory; municipality; foreign state; department, agency, or
instrumentality of the United States (but not a United States trustee while
serving as a trustee in a case under this title), a State, a Commonwealth, a
District, a Territory, a municipality, or a foreign state; or other foreign or
domestic government.
(27A) The term
"health care business"--
(A) means any
public or private entity (without regard to whether that entity is organized
for profit or not for profit) that is primarily engaged in offering to the general
public facilities and services for--
(i) the diagnosis
or treatment of injury, deformity, or disease; and
(ii) surgical,
drug treatment, psychiatric, or obstetric care; and
(B) includes--
(i) any--
(I) general or
specialized hospital;
(II) ancillary
ambulatory, emergency, or surgical treatment facility;
(III) hospice;
(IV) home health
agency; and
(V) other health
care institution that is similar to an entity referred to in subclause (I),
(II), (III), or (IV); and
(ii) any
long-term care facility, including any--
(I) skilled
nursing facility;
(II) intermediate
care facility;
(III) assisted
living facility;
(IV) home for the
aged;
(V) domiciliary
care facility; and
(VI) health care
institution that is related to a facility referred to in subclause (I), (II),
(III), (IV), or (V), if that institution is primarily engaged in offering room,
board, laundry, or personal assistance with activities of daily living and
incidentals to activities of daily living.
(27B) The term
"incidental property" means, with respect to a debtor's principal
residence--
(A) property
commonly conveyed with a principal residence in the area where the real
property is located;
(B) all
easements, rights, appurtenances, fixtures, rents, royalties, mineral rights,
oil or gas rights or profits, water rights, escrow funds, or insurance
proceeds; and
(C) all
replacements or additions.
(28) The term
"indenture" means mortgage, deed of trust, or indenture, under which
there is outstanding a security, other than a voting-trust certificate,
constituting a claim against the debtor, a claim secured by a lien on any of
the debtor's property, or an equity security of the debtor.
(29) The term
"indenture trustee" means trustee under an indenture.
(30) The term
"individual with regular income" means individual whose income is
sufficiently stable and regular to enable such individual to make payments
under a plan under chapter 13 of this title, other than a stockbroker or a
commodity broker.
(31) The term
"insider" includes--
(A) if the debtor
is an individual--
(i) relative of
the debtor or of a general partner of the debtor;
(ii) partnership
in which the debtor is a general partner;
(iii) general
partner of the debtor; or
(iv) corporation
of which the debtor is a director, officer, or person in control;
(B) if the debtor
is a corporation--
(i) director of
the debtor;
(ii) officer of
the debtor;
(iii) person in
control of the debtor;
(iv) partnership
in which the debtor is a general partner;
(v) general
partner of the debtor; or
(vi) relative of
a general partner, director, officer, or person in control of the debtor;
(C) if the debtor
is a partnership--
(i) general
partner in the debtor;
(ii) relative of
a general partner in, general partner of, or person in control of the debtor;
(iii) partnership
in which the debtor is a general partner;
(iv) general
partner of the debtor; or
(v) person in
control of the debtor;
(D) if the debtor
is a municipality, elected official of the debtor or relative of an elected
official of the debtor;
(E) affiliate, or
insider of an affiliate as if such affiliate were the debtor; and
(F) managing
agent of the debtor.
(32) The term
"insolvent" means--
(A) with
reference to an entity other than a partnership and a municipality, financial
condition such that the sum of such entity's debts is greater than all of such
entity's property, at a fair valuation, exclusive of--
(i) property
transferred, concealed, or removed with intent to hinder, delay, or defraud
such entity's creditors; and
(ii) property
that may be exempted from property of the estate under section 522 of this
title;
(B) with
reference to a partnership, financial condition such that the sum of such
partnership's debts is greater than the aggregate of, at a fair valuation--
(i) all of such
partnership's property, exclusive of property of the kind specified in
subparagraph (A)(i) of this paragraph; and
(ii) the sum of
the excess of the value of each general partner's nonpartnership property,
exclusive of property of the kind specified in subparagraph (A) of this
paragraph, over such partner's nonpartnership debts; and
(C) with
reference to a municipality, financial condition such that the municipality
is--
(i) generally not
paying its debts as they become due unless such debts are the subject of a bona
fide dispute; or
(ii) unable to
pay its debts as they become due.
(33) The term
"institution-affiliated party"--
(A) with respect
to an insured depository institution (as defined in section 3(c)(2) of the
Federal Deposit Insurance Act), has the meaning given it in section 3(u) of the
Federal Deposit Insurance Act; and
(B) with respect
to an insured credit union, has the meaning given it in section 206(r) of the
Federal Credit Union Act.
(34) The term
"insured credit union" has the meaning given it in section 101(7) of
the Federal Credit Union Act.
(35) The term
"insured depository institution"--
(A) has the
meaning given it in section 3(c)(2) of the Federal Deposit Insurance Act; and
(B) includes an
insured credit union (except in the case of paragraphs (23) and (35) of this
subsection).
(35A) The term
"intellectual property" means--
(A) trade secret;
(B) invention,
process, design, or plant protected under title 35;
(C) patent
application;
(D) plant
variety;
(E) work of
authorship protected under title 17; or
(F) mask work
protected under chapter 9 of title 17; to the extent protected by applicable
nonbankruptcy law.
(36) The term
"judicial lien" means lien obtained by judgment, levy, sequestration,
or other legal or equitable process or proceeding.
(37) The term
"lien" means charge against or interest in property to secure payment
of a debt or performance of an obligation.
(38) The term
"margin payment" means, for purposes of the forward contract
provisions of this title, payment or deposit of cash, a security or other
property, that is commonly known in the forward contract trade as original
margin, initial margin, maintenance margin, or variation margin, including
mark-to-market payments, or variation payments.
(38A) The term
"master netting agreement"--
(A) means an
agreement providing for the exercise of rights, including rights of netting,
setoff, liquidation, termination, acceleration, or close out, under or in
connection with one or more contracts that are described in any one or more of
paragraphs (1) through (5) of section 561(a), or any security agreement or
arrangement or other credit enhancement related to one or more of the
foregoing, including any guarantee or reimbursement obligation related to 1 or
more of the foregoing; and
(B) if the agreement
contains provisions relating to agreements or transactions that are not
contracts described in paragraphs (1) through (5) of section 561(a), shall be
deemed to be a master netting agreement only with respect to those agreements
or transactions that are described in any one or more of paragraphs (1) through
(5) of section 561(a).
(38B) The term
"master netting agreement participant" means an entity that, at any
time before the date of the filing of the petition, is a party to an
outstanding master netting agreement with the debtor.
(39) The term
"mask work" has the meaning given it in section 901(a)(2) of title
17.
(39A) The term
"median family income" means for any year--
(A) the median
family income both calculated and reported by the Bureau of the Census in the
then most recent year; and
(B) if not so
calculated and reported in the then current year, adjusted annually after such
most recent year until the next year in which median family income is both
calculated and reported by the Bureau of the Census, to reflect the percentage
change in the Consumer Price Index for All Urban Consumers during the period of
years occurring after such most recent year and before such current year.
(40) The term
"municipality" means political subdivision or public agency or
instrumentality of a State.
(40A) The term
"patient" means any individual who obtains or receives services from
a health care business.
(40B) The term
"patient records" means any written document relating to a patient or
a record recorded in a magnetic, optical, or other form of electronic medium.
(41) The term
"person" includes individual, partnership, and corporation, but does
not include governmental unit, except that a governmental unit that--
(A) acquires an
asset from a person--
(i) as a result
of the operation of a loan guarantee agreement; or
(ii) as receiver
or liquidating agent of a person;
(B) is a
guarantor of a pension benefit payable by or on behalf of the debtor or an
affiliate of the debtor; or
(C) is the legal
or beneficial owner of an asset of--
(i) an employee
pension benefit plan that is a governmental plan, as defined in section 414(d)
of the Internal Revenue Code of 1986; or
(ii) an eligible
deferred compensation plan, as defined in section 457(b) of the Internal
Revenue Code of 1986; shall be considered, for purposes of section 1102 of this
title, to be a person with respect to such asset or such benefit.
(41A) The term
"personally identifiable information" means--
(A) if provided
by an individual to the debtor in connection with obtaining a product or a
service from the debtor primarily for personal, family, or household purposes--
(i) the first
name (or initial) and last name of such individual, whether given at birth or
time of adoption, or resulting from a lawful change of name;
(ii) the
geographical address of a physical place of residence of such individual;
(iii) an
electronic address (including an e-mail address) of such individual;
(iv) a telephone
number dedicated to contacting such individual at such physical place of
residence;
(v) a social
security account number issued to such individual; or
(vi) the account
number of a credit card issued to such individual; or
(B) if identified
in connection with 1 or more of the items of information specified in
subparagraph (A)--
(i) a birth date,
the number of a certificate of birth or adoption, or a place of birth; or
(ii) any other
information concerning an identified individual that, if disclosed, will result
in contacting or identifying such individual physically or electronically.
(42) The term
"petition" means petition filed under section 301, 302, 303, or 304
of this title, as the case may be, commencing a case under this title.
(42A) The term
"production payment" means a term overriding royalty satisfiable in
cash or in kind--
(A) contingent on
the production of a liquid or gaseous hydrocarbon from particular real
property; and
(B) from a
specified volume, or a specified value, from the liquid or gaseous hydrocarbon
produced from such property, and determined without regard to production costs.
(43) The term
"purchaser" means transferee of a voluntary transfer, and includes
immediate or mediate transferee of such a transferee.
(44) The term
"railroad" means common carrier by railroad engaged in the
transportation of individuals or property or owner of trackage facilities
leased by such a common carrier.
(45) The term
"relative" means individual related by affinity or consanguinity
within the third degree as determined by the common law, or individual in a
step or adoptive relationship within such third degree.
(46) The term
"repo participant" means an entity that, at any time before the date
of the filing of the petition, has an outstanding repurchase agreement with the
debtor.
(47) The term
"repurchase agreement" (which definition also applies to a reverse
repurchase agreement)--
(A) means--
(i) an agreement,
including related terms, which provides for the transfer of one or more
certificates of deposit, mortgage related securities (as defined in section 3
of the Securities Exchange Act of 1934), mortgage loans, interests in mortgage
related securities or mortgage loans, eligible bankers' acceptances, qualified
foreign government securities (defined as a security that is a direct
obligation of, or that is fully guaranteed by, the central government of a member
of the Organization for Economic Cooperation and Development), or securities
that are direct obligations of, or that are fully guaranteed by, the United
States or any agency of the United States against the transfer of funds by the
transferee of such certificates of deposit, eligible bankers' acceptances,
securities, mortgage loans, or interests, with a simultaneous agreement by such
transferee to transfer to the transferor thereof certificates of deposit,
eligible bankers' acceptance, securities, mortgage loans, or interests of the
kind described in this clause, at a date certain not later than 1 year after
such transfer or on demand, against the transfer of funds;
(ii) any
combination of agreements or transactions referred to in clauses (i) and (iii);
(iii) an option
to enter into an agreement or transaction referred to in clause (i) or (ii);
(iv) a master
agreement that provides for an agreement or transaction referred to in clause
(i), (ii), or (iii), together with all supplements to any such master agreement,
without regard to whether such master agreement provides for an agreement or
transaction that is not a repurchase agreement under this paragraph, except
that such master agreement shall be considered to be a repurchase agreement
under this paragraph only with respect to each agreement or transaction under
the master agreement that is referred to in clause (i), (ii), or (iii); or
(v) any security
agreement or arrangement or other credit enhancement related to any agreement
or transaction referred to in clause (i), (ii), (iii), or (iv), including any
guarantee or reimbursement obligation by or to a repo participant or financial
participant in connection with any agreement or transaction referred to in any
such clause, but not to exceed the damages in connection with any such
agreement or transaction, measured in accordance with section 562 of this
title; and
(B) does not
include a repurchase obligation under a participation in a commercial mortgage
loan.
(48) The term
"securities clearing agency" means person that is registered as a
clearing agency under section 17A of the Securities Exchange Act of 1934, or
exempt from such registration under such section pursuant to an order of the
Securities and Exchange Commission, or whose business is confined to the
performance of functions of a clearing agency with respect to exempted
securities, as defined in section 3(a)(12) of such Act for the purposes of such
section 17A.
(48A) The term
"securities self regulatory organization" means either a securities association
registered with the Securities and Exchange Commission under section 15A of the
Securities Exchange Act of 1934 or a national securities exchange registered
with the Securities and Exchange Commission under section 6 of the Securities
Exchange Act of 1934.
(49) The term
"security"--
(A) includes--
(i) note;
(ii) stock;
(iii) treasury
stock;
(iv) bond;
(v) debenture;
(vi) collateral
trust certificate;
(vii)
pre-organization certificate or subscription;
(viii)
transferable share;
(ix) voting-trust
certificate;
(x) certificate
of deposit;
(xi) certificate
of deposit for security;
(xii) investment
contract or certificate of interest or participation in a profit-sharing
agreement or in an oil, gas, or mineral royalty or lease, if such contract or
interest is required to be the subject of a registration statement filed with
the Securities and Exchange Commission under the provisions of the Securities
Act of 1933, or is exempt under section 3(b) of such Act from the requirement
to file such a statement;
(xiii) interest
of a limited partner in a limited partnership;
(xiv) other claim
or interest commonly known as "security"; and
(xv) certificate
of interest or participation in, temporary or interim certificate for, receipt
for, or warrant or right to subscribe to or purchase or sell, a security; but
(B) does not
include--
(i) currency,
check, draft, bill of exchange, or bank letter of credit;
(ii) leverage
transaction, as defined in section 761 of this title;
(iii) commodity
futures contract or forward contract;
(iv) option,
warrant, or right to subscribe to or purchase or sell a commodity futures
contract;
(v) option to
purchase or sell a commodity;
(vi) contract or
certificate of a kind specified in subparagraph (A)(xii) of this paragraph that
is not required to be the subject of a registration statement filed with the
Securities and Exchange Commission and is not exempt under section 3(b) of the
Securities Act of 1933 from the requirement to file such a statement; or
(vii) debt or
evidence of indebtedness for goods sold and delivered or services rendered.
(50) The term
"security agreement" means agreement that creates or provides for a
security interest.
(51) The term
"security interest" means lien created by an agreement.
(51A) The term
"settlement payment" means, for purposes of the forward contract
provisions of this title, a preliminary settlement payment, a partial
settlement payment, an interim settlement payment, a settlement payment on
account, a final settlement payment, a net settlement payment, or any other
similar payment commonly used in the forward contract trade.
(51B) The term
"single asset real estate" means real property constituting a single
property or project, other than residential real property with fewer than 4
residential units, which generates substantially all of the gross income of a
debtor who is not a family farmer and on which no substantial business is being
conducted by a debtor other than the business of operating the real property
and activities incidental.
(
(51D) The term
"small business debtor"--
(A) subject to
subparagraph (B), means a person engaged in commercial or business activities
(including any affiliate of such person that is also a debtor under this title
and excluding a person whose primary activity is the business of owning or
operating real property or activities incidental thereto) that has aggregate
noncontingent liquidated secured and unsecured debts as of the date of the
petition or the date of the order for relief in an amount not more than
$2,000,000 [$2,000,000 (added by BAPCPA 10-17-05) effective 4-1-04. Adjusted every
3 years by section 104.] (excluding debts owed to 1 or more affiliates or
insiders) for a case in which the United States trustee has not appointed under
section 1102(a)(1) a committee of unsecured creditors or where the court has
determined that the committee of unsecured creditors is not sufficiently active
and representative to provide effective oversight of the debtor; and
(B) does not
include any member of a group of affiliated debtors that has aggregate
noncontingent liquidated secured and unsecured debts in an amount greater than
$2,000,000 [$2,000,000 (added by BAPCPA 10-17-05) effective 4-1-04. Adjusted
every 3 years by section 104.] (excluding debt owed to 1 or more affiliates or
insiders).
(52) The term
"State" includes the District of Columbia and Puerto Rico, except for
the purpose of defining who may be a debtor under chapter 9 of this title.
(53) The term
"statutory lien" means lien arising solely by force of a statute on
specified circumstances or conditions, or lien of distress for rent, whether or
not statutory, but does not include security interest or judicial lien, whether
or not such interest or lien is provided by or is dependent on a statute and
whether or not such interest or lien is made fully effective by statute.
(53A) The term
"stockbroker" means person--
(A) with respect
to which there is a customer, as defined in section 741 of this title; and
(B) that is
engaged in the business of effecting transactions in securities--
(i) for the
account of others; or
(ii) with members
of the general public, from or for such person's own account.
(53B) The term
"swap agreement"--
(A) means--
(i) any
agreement, including the terms and conditions incorporated by reference in such
agreement, which is--
(I) an interest
rate swap, option, future, or forward agreement, including a rate floor, rate
cap, rate collar, cross-currency rate swap, and basis swap;
(II) a spot, same
day-tomorrow, tomorrow-next, forward, or other foreign exchange or precious
metals agreement;
(III) a currency
swap, option, future, or forward agreement;
(IV) an equity
index or equity swap, option, future, or forward agreement;
(V) a debt index
or debt swap, option, future, or forward agreement;
(VI) a total
return, credit spread or credit swap, option, future, or forward agreement;
(VII) a commodity
index or a commodity swap, option, future, or forward agreement; or
(VIII) a weather
swap, weather derivative, or weather option;
(ii) any agreement
or transaction that is similar to any other agreement or transaction referred
to in this paragraph and that--
(I) is of a type
that has been, is presently, or in the future becomes, the subject of recurrent
dealings in the swap markets (including terms and conditions incorporated by
reference therein); and
(II) is a
forward, swap, future, or option on one or more rates, currencies, commodities,
equity securities, or other equity instruments, debt securities or other debt
instruments, quantitative measures associated with an occurrence, extent of an
occurrence, or contingency associated with a financial, commercial, or economic
consequence, or economic or financial indices or measures of economic or
financial risk or value;
(iii) any
combination of agreements or transactions referred to in this subparagraph;
(iv) any option
to enter into an agreement or transaction referred to in this subparagraph;
(v) a master
agreement that provides for an agreement or transaction referred to in clause
(i), (ii), (iii), or (iv), together with all supplements to any such master
agreement, and without regard to whether the master agreement contains an
agreement or transaction that is not a swap agreement under this paragraph,
except that the master agreement shall be considered to be a swap agreement
under this paragraph only with respect to each agreement or transaction under
the master agreement that is referred to in clause (i), (ii), (iii), or (iv);
or
(vi) any security
agreement or arrangement or other credit enhancement related to any agreements
or transactions referred to in clause (i) through (v), including any guarantee
or reimbursement obligation by or to a swap participant or financial
participant in connection with any agreement or transaction referred to in any
such clause, but not to exceed the damages in connection with any such
agreement or transaction, measured in accordance with section 562; and
(B) is applicable
for purposes of this title only, and shall not be construed or applied so as to
challenge or affect the characterization, definition, or treatment of any swap
agreement under any other statute, regulation, or rule, including the
Securities Act of 1933, the Securities Exchange Act of 1934, the Public Utility
Holding Company Act of 1935, the Trust Indenture Act of 1939, the Investment
Company Act of 1940, the Investment Advisers Act of 1940, the Securities
Investor Protection Act of 1970, the Commodity Exchange Act, the
Gramm-Leach-Bliley Act, and the Legal Certainty for Bank Products Act of 2000.
(
(53D) The term
"timeshare plan" means and shall include that interest purchased in
any arrangement, plan, scheme, or similar device, but not including exchange
programs, whether by membership, agreement, tenancy in common, sale, lease,
deed, rental agreement, license, right to use agreement, or by any other means,
whereby a purchaser, in exchange for consideration, receives a right to use
accommodations, facilities, or recreational sites, whether improved or
unimproved, for a specific period of time less than a full year during any
given year, but not necessarily for consecutive years, and which extends for a
period of more than three years. A "timeshare interest" is that
interest purchased in a timeshare plan which grants the purchaser the right to
use and occupy accommodations, facilities, or recreational sites, whether
improved or unimproved, pursuant to a timeshare plan.
(54) The term
"transfer" means--
(A) the creation
of a lien;
(B) the retention
of title as a security interest;
(C) the
foreclosure of a debtor's equity of redemption; or
(D) each mode,
direct or indirect, absolute or conditional, voluntary or involuntary, of
disposing of or parting with--
(i) property; or
(ii) an interest
in property.
(54A) The term
"uninsured State member bank" means a State member bank (as defined
in section 3 of the Federal Deposit Insurance Act) the deposits of which are
not insured by the Federal Deposit Insurance Corporation.
(55) The term
"United States", when used in a geographical sense, includes all
locations where the judicial jurisdiction of the United States extends,
including territories and possessions of the United States.
[Rev. 4-29-05]
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11 USC § 102.
Rules of construction
In this title--
(1) "after
notice and a hearing", or a similar phrase--
(A) means after
such notice as is appropriate in the particular circumstances, and such
opportunity for a hearing as is appropriate in the particular circumstances;
but
(B) authorizes an
act without an actual hearing if such notice is given properly and if--
(i) such a
hearing is not requested timely by a party in interest; or
(ii) there is
insufficient time for a hearing to be commenced before such act must be done,
and the court authorizes such act;
(2) "claim
against the debtor" includes claim against property of the debtor;
(3)
"includes" and "including" are not limiting;
(4) "may
not" is prohibitive, and not permissive;
(5)
"or" is not exclusive;
(6) "order
for relief" means entry of an order for relief;
(7) the singular
includes the plural;
(8) a definition,
contained in a section of this title that refers to another section of this
title, does not, for the purpose of such reference, affect the meaning of a term
used in such other section; and
(9) "United
States trustee" includes a designee of the United States trustee.
[Rev. 4-29-05]
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11 USC § 103.
Applicability of chapters
(a) Except as
provided in section 1161 of this title, chapters 1, 3, and 5 of this title
apply in a case under chapter 7, 11, 12, or 13 of this title, and this chapter,
sections 307, 362(n), 555 through 557, and 559 through 562 apply in a case
under chapter 15.
(b) Subchapters I
and II of chapter 7 of this title apply only in a case under such chapter.
(c) Subchapter
III of chapter 7 of this title applies only in a case under such chapter
concerning a stockbroker.
(d) Subchapter IV
of chapter 7 of this title applies only in a case under such chapter concerning
a commodity broker.
(e) Scope of
Application.— Subchapter V of chapter 7 of this title shall apply only in a
case under such chapter concerning the liquidation of an uninsured State member
bank, or a corporation organized under section 25A of the Federal Reserve Act,
which operates, or operates as, a multilateral clearing organization pursuant
to section 409 of the Federal Deposit Insurance Corporation Improvement Act of
1991.
(f) Except as
provided in section 901 of this title, only chapters 1 and 9 of this title
apply in a case under such chapter 9.
(g) Except as
provided in section 901 of this title, subchapters I, II, and III of chapter 11
of this title apply only in a case under such chapter.
(h) Subchapter IV
of chapter 11 of this title applies only in a case under such chapter
concerning a railroad.
(i) Chapter 13 of
this title applies only in a case under such chapter.
(j) Chapter 12 of
this title applies only in a case under such chapter.
[Rev. 4-29-05]
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11 USC § 104.
Adjustment of dollar amounts
(a) The Judicial
Conference of the United States shall transmit to the Congress and to the
President before May 1, 1985, and before May 1 of every sixth year after May 1,
(b)
(1) On April 1, 1998, and at each 3-year
interval ending on April 1 thereafter, each dollar amount in effect under
sections 101(3), 101(18), 101(19A), 101(51D), 109(e), 303(b), 507(a), 522(d),
522(f)(3) and (f)(4), 522(n), 522(p), 522(q), 523(a)(2)(C), 541(b), 547(c)(9),
707(b), 1322(d), 1325(b), and 1326(b)(3) of this title and section 1409(b) of
title 28 immediately before such April 1 shall be adjusted—
(A) to reflect
the change in the Consumer Price Index for All Urban Consumers, published by
the Department of Labor, for the most recent 3-year period ending immediately
before January 1 preceding such April 1, and
(B) to round to
the nearest $25 the dollar amount that represents such change.
(2) Not later
than March 1, 1998, and at each 3-year interval ending on March 1 thereafter,
the Judicial Conference of the United States shall publish in the Federal
Register the dollar amounts that will become effective on such April 1 under
sections 101(3), 101(18), 101(19A), 101(51D), 109(e), 303(b), 507(a), 522(d),
522(f)(3) and (f)(4), 522(n), 522(p), 522(q), 523(a)(2)(C), 541(b), 547(c)(9),
707(b), 1322(d), 1325(b), and 1326(b)(3) of this title and section 1409(b) of
title 28.
(3) Adjustments
made in accordance with paragraph (1) shall not apply with respect to cases
commenced before the date of such adjustments.
[Rev. 4-29-05]
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11 USC § 105.
Power of court
(a) The court may
issue any order, process, or judgment that is necessary or appropriate to carry
out the provisions of this title. No provision of this title providing for the
raising of an issue by a party in interest shall be construed to preclude the
court from, sua sponte, taking any action or making any determination necessary
or appropriate to enforce or implement court orders or rules, or to prevent an
abuse of process.
(b)
Notwithstanding subsection (a) of this section,
(c) The ability
of any district judge or other officer or employee of a district court to
exercise any of the authority or responsibilities conferred upon the court
under this title shall be determined by reference to the provisions relating to
such judge, officer, or employee set forth in title 28. This subsection shall
not be interpreted to exclude bankruptcy judges and other officers or employees
appointed pursuant to chapter 6 of title 28 from its operation.
(d) The court, on
its own motion or on the request of a party in interest--
(1) shall hold
such status conferences as are necessary to further the expeditious and
economical resolution of the case; and
(2) unless
inconsistent with another provision of this title or with applicable Federal
Rules of Bankruptcy Procedure, issue an order at any such conference
prescribing such limitations and conditions as the court deems appropriate to
ensure that the case is handled expeditiously and economically, including an
order that—
(A) sets the date
by which the trustee must assume or reject an executory contract or unexpired
lease; or
(B) in a case
under chapter 11 of this title—
(i) sets a date
by which the debtor, or trustee if one has been appointed, shall file a
disclosure statement and plan;
(ii) sets a date
by which the debtor, or trustee if one has been appointed, shall solicit
acceptances of a plan;
(iii) sets the
date by which a party in interest other than a debtor may file a plan;
(iv) sets a date
by which a proponent of a plan, other than the debtor, shall solicit
acceptances of such plan;
(v) fixes the
scope and format of the notice to be provided regarding the hearing on approval
of the disclosure statement; or
(vi) provides
that the hearing on approval of the disclosure statement may be combined with
the hearing on confirmation of the plan.
[Rev. 4-29-05]
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11 USC § 106.
Waiver of sovereign immunity
(a)
Notwithstanding an assertion of sovereign immunity, sovereign immunity is
abrogated as to a governmental unit to the extent set forth in this section
with respect to the following:
(1) Sections 105,
106, 107, 108, 303, 346, 362, 363, 364, 365, 366, 502, 503, 505, 506, 510, 522,
523, 524, 525, 542, 543, 544, 545, 546, 547, 548, 549, 550, 551, 552, 553, 722,
724, 726, 728, 744, 749, 764, 901, 922, 926, 928, 929, 944, 1107, 1141, 1142,
1143, 1146, 1201, 1203, 1205, 1206, 1227, 1231, 1301, 1303, 1305, and 1327 of
this title.
(2) The court may
hear and determine any issue arising with respect to the application of such
sections to governmental units.
(3) The court may
issue against a governmental unit an order, process, or judgment under such
sections or the Federal Rules of Bankruptcy Procedure, including an order or
judgment awarding a money recovery, but not including an award of punitive
damages. Such order or judgment for costs or fees under this title or the
Federal Rules of Bankruptcy Procedure against any governmental unit shall be
consistent with the provisions and limitations of section 2412 (d)(2)(A) of
title 28.
(4) The
enforcement of any such order, process, or judgment against any governmental
unit shall be consistent with appropriate nonbankruptcy law applicable to such
governmental unit and, in the case of a money judgment against the United
States, shall be paid as if it is a judgment rendered by a district court of
the United States.
(5) Nothing in
this section shall create any substantive claim for relief or cause of action
not otherwise existing under this title, the Federal Rules of Bankruptcy
Procedure, or nonbankruptcy law.
(b) A
governmental unit that has filed a proof of claim in the case is deemed to have
waived sovereign immunity with respect to a claim against such governmental
unit that is property of the estate and that arose out of the same transaction
or occurrence out of which the claim of such governmental unit arose.
(c)
Notwithstanding any assertion of sovereign immunity by a governmental unit,
there shall be offset against a claim or interest of a governmental unit any
claim against such governmental unit that is property of the estate.
[Rev. 4-29-05]
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11 USC § 107.
Public access to papers
(a) Except as
provided in subsection (b) of this section, a paper filed in a case under this
title and the dockets of a bankruptcy court are public records and open to
examination by an entity at reasonable times without charge.
(b) On request of
a party in interest, the bankruptcy court shall, and on the bankruptcy court’s
own motion, the bankruptcy court may—
(1) protect an
entity with respect to a trade secret or confidential research, development, or
commercial information; or
(2) protect a
person with respect to scandalous or defamatory matter contained in a paper
filed in a case under this title.
(c)
(1) The
bankruptcy court, for cause, may protect an individual, with respect to the
following types of information to the extent the court finds that disclosure of
such information would create undue risk of identity theft or other unlawful
injury to the individual or the individual's property:
A) Any means of
identification (as defined in section 1028(d) of title 18) contained in a paper
filed, or to be filed, in a case under this title.
(B) Other
information contained in a paper described in subparagraph (A).
(2) Upon ex parte
application demonstrating cause, the court shall provide access to information
protected pursuant to paragraph (1) to an entity acting pursuant to the police
or regulatory power of a domestic governmental unit.
(3) The United
States trustee, bankruptcy administrator, trustee, and any auditor serving
under section 586(f) of title 28--
(A) shall have
full access to all information contained in any paper filed or submitted in a
case under this title; and
(B) shall not
disclose information specifically protected by the court under this title.
[Rev. 4-29-05]
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11 USC § 108.
Extension of time
(a) If applicable
nonbankruptcy law, an order entered in a nonbankruptcy proceeding, or an
agreement fixes a period within which the debtor may commence an action, and
such period has not expired before the date of the filing of the petition, the
trustee may commence such action only before the later of—
(1) the end of
such period, including any suspension of such period occurring on or after the
commencement of the case; or
(2) two years
after the order for relief.
(b) Except as
provided in subsection (a) of this section, if applicable nonbankruptcy law, an
order entered in a nonbankruptcy proceeding, or an agreement fixes a period
within which the debtor or an individual protected under section 1201 or 1301
of this title may file any pleading, demand, notice, or proof of claim or loss,
cure a default, or perform any other similar act, and such period has not
expired before the date of the filing of the petition, the trustee may only
file, cure, or perform, as the case may be, before the later of—
(1) the end of
such period, including any suspension of such period occurring on or after the
commencement of the case; or
(2) 60 days after
the order for relief.
(c) Except as
provided in section 524 of this title, if applicable nonbankruptcy law, an order
entered in a nonbankruptcy proceeding, or an agreement fixes a period for
commencing or continuing a civil action in
(1) the end of
such period, including any suspension of such period occurring on or after the
commencement of the case; or
(2) 30 days after
notice of the termination or expiration of the stay under section 362, 922,
1201, or 1301 of this title, as the case may be, with respect to such claim.
[Rev. 4-29-05]
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11 USC § 109. Who
may be a debtor
(a)
Notwithstanding any other provision of this section, only a person that resides
or has a domicile, a place of business, or property in the United States, or a
municipality, may be a debtor under this title.
(b) A person may
be a debtor under chapter 7 of this title only if such person is not—
(1) a railroad;
(2) a domestic
insurance company, bank, savings bank, cooperative bank, savings and loan association,
building and loan association, homestead association, a New Markets Venture
Capital company as defined in section 351 of the Small Business Investment Act
of
(3)
(A) a foreign
insurance company, engaged in such business in the United States; or
(B) a foreign
bank, savings bank, cooperative bank, savings and loan association, building
and loan association, or credit union, that has a branch or agency (as defined
in section 1(b) of the International Banking Act of
(c) An entity may
be a debtor under chapter 9 of this title if and only if such entity—
(1) is a
municipality;
(2) is
specifically authorized, in its capacity as a municipality or by name, to be a
debtor under such chapter by State law, or by a governmental officer or
organization empowered by State law to authorize such entity to be a debtor
under such chapter;
(3) is insolvent;
(4) desires to
effect a plan to adjust such debts; and
(5)
(A) has obtained
the agreement of creditors holding at least a majority in amount of the claims
of each class that such entity intends to impair under a plan in a case under
such chapter;
(B) has
negotiated in good faith with creditors and has failed to obtain the agreement
of creditors holding at least a majority in amount of the claims of each class
that such entity intends to impair under a plan in a case under such chapter;
(C) is unable to
negotiate with creditors because such negotiation is impracticable; or
(D) reasonably
believes that a creditor may attempt to obtain a transfer that is avoidable
under section 547 of this title.
(d) Only a
railroad, a person that may be a debtor under chapter 7 of this title (except a
stockbroker or a commodity broker), and an uninsured State member bank, or a
corporation organized under section 25A of the Federal Reserve Act, which
operates, or operates as, a multilateral clearing organization pursuant to
section 409 of the Federal Deposit Insurance Corporation Improvement Act of
1991 may be a debtor under chapter 11 of this title.
(e) Only an
individual with regular income that owes, on the date of the filing of the
petition, noncontingent, liquidated, unsecured debts of less than $250,000
[$307,675] and noncontingent, liquidated, secured debts of less than $750,000
[$922,975], or an individual with regular income and such individual’s spouse,
except a stockbroker or a commodity broker, that owe, on the date of the filing
of the petition, noncontingent, liquidated, unsecured debts that aggregate less
than $250,000 [$307,675] and noncontingent, liquidated, secured debts of less
than $750,000 [$922,975] may be a debtor under chapter 13 of this title.
[Dollar amounts
in this paragraph are adjusted on April 1 every 3 years by section 104.
Adjusted amounts for 4-1-04 are in brackets.]
(f) Only a family
farmer or family fisherman with regular annual income may be a debtor under
chapter 12 of this title.
(g)
Notwithstanding any other provision of this section, no individual or family
farmer may be a debtor under this title who has been a debtor in a case pending
under this title at any time in the preceding 180 days if—
(1) the case was
dismissed by the court for willful failure of the debtor to abide by orders of
the court, or to appear before the court in proper prosecution of the case; or
(2) the debtor
requested and obtained the voluntary dismissal of the case following the filing
of a request for relief from the automatic stay provided by section 362 of this
title.
(h)
(1) Subject to
paragraphs (2) and (3), and notwithstanding any other provision of this
section, an individual may not be a debtor under this title unless such
individual has, during the 180-day period preceding the date of filing of the
petition by such individual, received from an approved nonprofit budget and
credit counseling agency described in section 111(a) an individual or group
briefing (including a briefing conducted by telephone or on the Internet) that
outlined the opportunities for available credit counseling and assisted such
individual in performing a related budget analysis.
(2)
(A) Paragraph (1)
shall not apply with respect to a debtor who resides in a district for which
the United States trustee (or the bankruptcy administrator, if any) determines
that the approved nonprofit budget and credit counseling agencies for such
district are not reasonably able to provide adequate services to the additional
individuals who would otherwise seek credit counseling from such agencies by
reason of the requirements of paragraph (1).
(B) The United
States trustee (or the bankruptcy administrator, if any) who makes a
determination described in subparagraph (A) shall review such determination not
later than 1 year after the date of such determination, and not less frequently
than annually thereafter. Notwithstanding the preceding sentence, a nonprofit
budget and credit counseling agency may be disapproved by the United States
trustee (or the bankruptcy administrator, if any) at any time.
(3)
(A) Subject to
subparagraph (B), the requirements of paragraph (1) shall not apply with
respect to a debtor who submits to the court a certification that--
(i) describes
exigent circumstances that merit a waiver of the requirements of paragraph (1);
(ii) states that
the debtor requested credit counseling services from an approved nonprofit
budget and credit counseling agency, but was unable to obtain the services
referred to in paragraph (1) during the 5-day period beginning on the date on
which the debtor made that request; and
(iii) is
satisfactory to the court.
(B) With respect
to a debtor, an exemption under subparagraph (A) shall cease to apply to that
debtor on the date on which the debtor meets the requirements of paragraph (1),
but in no case may the exemption apply to that debtor after the date that is 30
days after the debtor files a petition, except that the court, for cause, may
order an additional 15 days.
(4) The
requirements of paragraph (1) shall not apply with respect to a debtor whom the
court determines, after notice and hearing, is unable to complete those
requirements because of incapacity, disability, or active military duty in a
military combat zone. For the purposes of this paragraph, incapacity means that
the debtor is impaired by reason of mental illness or mental deficiency so that
he is incapable of realizing and making rational decisions with respect to his
financial responsibilities; and "disability" means that the debtor is
so physically impaired as to be unable, after reasonable effort, to participate
in an in person, telephone, or Internet briefing required under paragraph (1).
[Rev. 4-29-05]
--------------------------------------------------------------------------------
11 USC § 110.
Penalty for persons who negligently or fraudulently prepare bankruptcy
petitions
(a) In this
section—
(1)
"bankruptcy petition preparer" means a person, other than an attorney
for the debtor or an employee of such attorney under the direct supervision of
such attorney, who prepares for compensation a document for filing; and
(2)
"document for filing" means a petition or any other document prepared
for filing by a debtor in a United States bankruptcy court or a United States
district court in connection with a case under this title.
(b)
(1) A bankruptcy
petition preparer who prepares a document for filing shall sign the document
and print on the document the preparer’s name and address. If a bankruptcy petition
preparer is not an individual, then an officer, principal, responsible person,
or partner of the bankruptcy petition preparer shall be required to--
(A) sign the
document for filing; and
(B) print on the
document the name and address of that officer, principal, responsible person,
or partner.
(2)
(A) Before
preparing any document for filing or accepting any fees from a debtor, the
bankruptcy petition preparer shall provide to the debtor a written notice which
shall be on an official form prescribed by the Judicial Conference of the
United States in accordance with rule 9009 of the Federal Rules of Bankruptcy
Procedure.
(B) The notice
under subparagraph (A)--
(i) shall inform
the debtor in simple language that a bankruptcy petition preparer is not an
attorney and may not practice law or give legal advice;
(ii) may contain
a description of examples of legal advice that a bankruptcy petition preparer
is not authorized to give, in addition to any advice that the preparer may not
give by reason of subsection (e)(2); and
(iii) shall--
(I) be signed by
the debtor and, under penalty of perjury, by the bankruptcy petition preparer;
and
(II) be filed
with any document for filing.
(c)
(1) A bankruptcy
petition preparer who prepares a document for filing shall place on the
document, after the preparer’s signature, an identifying number that identifies
individuals who prepared the document.
(2)
(A) Subject to
subparagraph (B), for purposes of this section, the identifying number of a
bankruptcy petition preparer shall be the Social Security account number of
each individual who prepared the document or assisted in its preparation.
(B) If a
bankruptcy petition preparer is not an individual, the identifying number of
the bankruptcy petition preparer shall be the Social Security account number of
the officer, principal, responsible person, or partner of the bankruptcy
petition preparer.
(d) A bankruptcy
petition preparer shall, not later than the time at which a document for filing
is presented for the debtor’s signature, furnish to the debtor a copy of the
document.
(e)
(1) A bankruptcy
petition preparer shall not execute any document on behalf of a debtor.
(2)
(A) A bankruptcy
petition preparer may not offer a potential bankruptcy debtor any legal advice,
including any legal advice described in subparagraph (B).
(B) The legal
advice referred to in subparagraph (A) includes advising the debtor--
(i) whether--
(I) to file a
petition under this title; or
(II) commencing a
case under chapter 7, 11, 12, or 13 is appropriate;
(ii) whether the
debtor's debts will be discharged in a case under this title;
(iii) whether the
debtor will be able to retain the debtor's home, car, or other property after
commencing a case under this title;
(iv) concerning--
(I) the tax
consequences of a case brought under this title; or
(II) the
dischargeability of tax claims;
(v) whether the
debtor may or should promise to repay debts to a creditor or enter into a
reaffirmation agreement with a creditor to reaffirm a debt;
(vi) concerning
how to characterize the nature of the debtor's interests in property or the
debtor's debts; or
(vii) concerning
bankruptcy procedures and rights.
(f) A bankruptcy
petition preparer shall not use the word "legal" or any similar term
in any advertisements, or advertise under any category that includes the word
"legal" or any similar term.
(g) A bankruptcy
petition preparer shall not collect or receive any payment from the debtor or
on behalf of the debtor for the court fees in connection with filing the
petition.
(h)
(1) The Supreme
Court may promulgate rules under section 2075 of title 28, or the Judicial
Conference of the United States may prescribe guidelines, for setting a maximum
allowable fee chargeable by a bankruptcy petition preparer. A bankruptcy
petition preparer shall notify the debtor of any such maximum amount before
preparing any document for filing for a debtor or accepting any fee from the
debtor.
(2) A declaration
under penalty of perjury by the bankruptcy petition preparer shall be filed
together with the petition, disclosing any fee received from or on behalf of
the debtor within 12 months immediately prior to the filing of the case, and
any unpaid fee charged to the debtor. If rules or guidelines setting a maximum
fee for services have been promulgated or prescribed under paragraph (1), the
declaration under this paragraph shall include a certification that the
bankruptcy petition preparer complied with the notification requirement under
paragraph (1).
(3)
(A) The court
shall disallow and order the immediate turnover to the bankruptcy trustee any
fee referred to in paragraph (2) found to be in excess of the value of any
services--
(i) rendered by
the bankruptcy petition preparer during the 12-month period immediately
preceding the date of the filing of the petition; or
(ii) found to be
in violation of any rule or guideline promulgated or prescribed under paragraph
(1).
(B) All fees
charged by a bankruptcy petition preparer may be forfeited in any case in which
the bankruptcy petition preparer fails to comply with this subsection or
subsection (b), (c), (d), (e), (f), or (g).
(C) An individual
may exempt any funds recovered under this paragraph under section 522(b).
(4) The debtor,
the trustee, a creditor, the United States trustee (or the bankruptcy
administrator, if any) or the court, on the initiative of the court, may file a
motion for an order under paragraph (2).
(5) A bankruptcy
petition preparer shall be fined not more than $500 for each failure to comply
with
(i)
(1) If a
bankruptcy petition preparer violates this section or commits any act that the
court finds to be fraudulent, unfair, or deceptive, on the motion of the
debtor, trustee, United States trustee (or the bankruptcy administrator, if
any), and after notice and a hearing, the court shall order the bankruptcy
petition preparer to pay to the debtor--
(A) the debtor’s
actual damages;
(B) the greater
of--
(i) $2,000; or
(ii) twice the
amount paid by the debtor to the bankruptcy petition preparer for the
preparer’s services; and
(C) reasonable
attorneys’ fees and costs in moving for damages under this subsection.
(2) If the
trustee or creditor moves for damages on behalf of the debtor under this
subsection, the bankruptcy petition preparer shall be ordered to pay the movant
the additional amount of $1,000 plus reasonable attorneys’ fees and costs
incurred.
(j)
(1) A debtor for
whom a bankruptcy petition preparer has prepared a document for filing, the
trustee, a creditor, or the United States trustee in the district in which the
bankruptcy petition preparer resides, has conducted business, or the United
States trustee in any other district in which the debtor resides may bring a
civil action to enjoin a bankruptcy petition preparer from engaging in any
conduct in violation of this section or from further acting as a bankruptcy
petition preparer.
(2)
(A) In an action
under paragraph (1), if the court finds that—
(i) a bankruptcy
petition preparer has—
(I) engaged in
conduct in violation of this section or of any provision of this title;
(II)
misrepresented the preparer’s experience or education as a bankruptcy petition
preparer; or
(III) engaged in
any other fraudulent, unfair, or deceptive conduct; and
(ii) injunctive
relief is appropriate to prevent the recurrence of such conduct,
the court may
enjoin the bankruptcy petition preparer from engaging in such conduct.
(B) If the court
finds that a bankruptcy petition preparer has continually engaged in conduct
described in subclause (I), (II), or (III) of clause (i) and that an injunction
prohibiting such conduct would not be sufficient to prevent such person’s
interference with the proper administration of this title, has not paid a
penalty imposed under this section, or failed to disgorge all fees ordered by
the court the court may enjoin the person from acting as a bankruptcy petition
preparer.
(3) The court, as
part of its contempt power, may enjoin a bankruptcy petition preparer that has
failed to comply with a previous order issued under this section. The
injunction under this paragraph may be issued on the motion of the court, the
trustee, or the United States trustee (or the bankruptcy administrator, if
any).
(4) The court
shall award to a debtor, trustee, or creditor that brings a successful action
under this subsection reasonable attorneys' fees and costs of the action, to be
paid by the bankruptcy petition preparer.
(k) Nothing in
this section shall be construed to permit activities that are otherwise
prohibited by law, including rules and laws that prohibit the unauthorized
practice of law.
(l)
(1) A bankruptcy
petition preparer who fails to comply with any provision of subsection (b), (c), (d), (e), (f), (g), or
(h) may be fined not more than $500 for each such failure.
(2) The court
shall triple the amount of a fine assessed under paragraph (1) in any case in
which the court finds that a bankruptcy petition preparer--
(A) advised the
debtor to exclude assets or income that should have been included on applicable
schedules;
(B) advised the
debtor to use a false Social Security account number;
(C) failed to
inform the debtor that the debtor was filing for relief under this title; or
(D) prepared a
document for filing in a manner that failed to disclose the identity of the
bankruptcy petition preparer.
(3) A debtor,
trustee, creditor, or United States trustee (or the bankruptcy administrator,
if any) may file a motion for an order imposing a fine on the bankruptcy
petition preparer for any violation of this section.
(4)
(A) Fines imposed
under this subsection in judicial districts served by United States trustees
shall be paid to the United States trustee, who shall deposit an amount equal
to such fines in a special account of the United States Trustee System Fund
referred to in section 586(e)(2) of title 28. Amounts deposited under this
subparagraph shall be available to fund the enforcement of this section on a
national basis.
(B) Fines imposed
under this subsection in judicial districts served by bankruptcy administrators
shall be deposited as offsetting receipts to the fund established under section
1931 of title 28, and shall remain available until expended to reimburse any
appropriation for the amount paid out of such appropriation for expenses of the
operation and maintenance of the courts of the United States.
[Rev. 4-29-05]
--------------------------------------------------------------------------------
11 USC § 111.
Nonprofit budget and credit counseling agencies; financial management
instructional courses
(a) The clerk
shall maintain a publicly available list of--
(1) nonprofit
budget and credit counseling agencies that provide 1 or more services described
in section 109(h) currently approved by the United States trustee (or the
bankruptcy administrator, if any); and
(2) instructional
courses concerning personal financial management currently approved by the
United States trustee (or the bankruptcy administrator, if any), as applicable.
(b) The United
States trustee (or bankruptcy administrator, if any) shall only approve a
nonprofit budget and credit counseling agency or an instructional course
concerning personal financial management as follows:
(1) The United
States trustee (or bankruptcy administrator, if any) shall have thoroughly
reviewed the qualifications of the nonprofit budget and credit counseling
agency or of the provider of the instructional course under the standards set
forth in this section, and the services or instructional courses that will be
offered by such agency or such provider, and may require such agency or such
provider that has sought approval to provide information with respect to such
review.
(2) The United
States trustee (or bankruptcy administrator, if any) shall have determined that
such agency or such instructional course fully satisfies the applicable
standards set forth in this section.
(3) If a
nonprofit budget and credit counseling agency or instructional course did not
appear on the approved list for the district under subsection (a) immediately
before approval under this section, approval under this subsection of such
agency or such instructional course shall be for a probationary period not to
exceed 6 months.
(4) At the
conclusion of the applicable probationary period under paragraph (3), the
United States trustee (or bankruptcy administrator, if any) may only approve
for an additional 1-year period, and for successive 1-year periods thereafter,
an agency or instructional course that has demonstrated during the probationary
or applicable subsequent period of approval that such agency or instructional
course--
(A) has met the
standards set forth under this section during such period; and
(B) can satisfy
such standards in the future.
(5) Not later
than 30 days after any final decision under paragraph (4), an interested person
may seek judicial review of such decision in the appropriate district court of
the United States.
(c)
(1) The United
States trustee (or the bankruptcy administrator, if any) shall only approve a
nonprofit budget and credit counseling agency that demonstrates that it will
provide qualified counselors, maintain adequate provision for safekeeping and
payment of client funds, provide adequate counseling with respect to client
credit problems, and deal responsibly and effectively with other matters
relating to the quality, effectiveness, and financial security of the services
it provides.
(2) To be
approved by the United States trustee (or the bankruptcy administrator, if
any), a nonprofit budget and credit counseling agency shall, at a minimum--
(A) have a board
of directors the majority of which--
(i) are not
employed by such agency; and
(ii) will not
directly or indirectly benefit financially from the outcome of the counseling
services provided by such agency;
(B) if a fee is
charged for counseling services, charge a reasonable fee, and provide services
without regard to ability to pay the fee;
(C) provide for
safekeeping and payment of client funds, including an annual audit of the trust
accounts and appropriate employee bonding;
(D) provide full
disclosures to a client, including funding sources, counselor qualifications,
possible impact on credit reports, and any costs of such program that will be
paid by such client and how such costs will be paid;
(E) provide
adequate counseling with respect to a client's credit problems that includes an
analysis of such client's current financial condition, factors that caused such
financial condition, and how such client can develop a plan to respond to the
problems without incurring negative amortization of debt;
(F) provide
trained counselors who receive no commissions or bonuses based on the outcome
of the counseling services provided by such agency, and who have adequate
experience, and have been adequately trained to provide counseling services to
individuals in financial difficulty, including the matters described in
subparagraph (E);
(G) demonstrate
adequate experience and background in providing credit counseling; and
(H) have adequate
financial resources to provide continuing support services for budgeting plans
over the life of any repayment plan.
(d) The United
States trustee (or the bankruptcy administrator, if any) shall only approve an
instructional course concerning personal financial management--
(1) for an
initial probationary period under subsection (b)(3) if the course will provide
at a minimum--
(A) trained
personnel with adequate experience and training in providing effective
instruction and services;
(B) learning
materials and teaching methodologies designed to assist debtors in
understanding personal financial management and that are consistent with stated
objectives directly related to the goals of such instructional course;
(C) adequate
facilities situated in reasonably convenient locations at which such
instructional course is offered, except that such facilities may include the
provision of such instructional course by telephone or through the Internet, if
such instructional course is effective;
(D) the
preparation and retention of reasonable records (which shall include the
debtor's bankruptcy case number) to permit evaluation of the effectiveness of
such instructional course, including any evaluation of satisfaction of
instructional course requirements for each debtor attending such instructional
course, which shall be available for inspection and evaluation by the
(E) if a fee is
charged for the instructional course, charge a reasonable fee, and provide
services without regard to ability to pay the fee.
(2) for any
1-year period if the provider thereof has demonstrated that the course meets
the standards of paragraph (1) and, in addition--
(A) has been
effective in assisting a substantial number of debtors to understand personal
financial management; and
(B) is otherwise
likely to increase substantially the debtor's understanding of personal
financial management.
(e) The district
court may, at any time, investigate the qualifications of a nonprofit budget
and credit counseling agency referred to in subsection (a), and request
production of documents to ensure the integrity and effectiveness of such
agency. The district court may, at any time, remove from the approved list under
subsection (a) a nonprofit budget and credit counseling agency upon finding
such agency does not meet the qualifications of subsection (b).
(f) The United
States trustee (or the bankruptcy administrator, if any) shall notify the clerk
that a nonprofit budget and credit counseling agency or an instructional course
is no longer approved, in which case the clerk shall remove it from the list
maintained under subsection (a).
(g)
(1) No nonprofit
budget and credit counseling agency may provide to a credit reporting agency
information concerning whether a debtor has received or sought instruction
concerning personal financial management from such agency.
(2) A nonprofit
budget and credit counseling agency that willfully or negligently fails to
comply with any requirement under this title with respect to a debtor shall be
liable for damages in an amount equal to the sum of--
(A) any actual
damages sustained by the debtor as a result of the violation; and
(B) any court
costs or reasonable attorneys' fees (as determined by the court) incurred in an
action to recover those damages.
[Rev. 4-29-05]
--------------------------------------------------------------------------------
11 USC § 112.
Prohibition on disclosure of name of minor children
The debtor may be
required to provide information regarding a minor child involved in matters
under this title but may not be required to disclose in the public records in
the case the name of such minor child. The debtor may be required to disclose
the name of such minor child in a nonpublic record that is maintained by the
court and made available by the court for examination by the United States
trustee, the trustee, and the auditor (if any) serving under section 586(f) of
title
[Rev. 4-29-05]
--------------------------------------------------------------------------------
Chapter 3. Case Administration
Subchapter
I. Commencement of a Case
§ 301. Voluntary
cases
§ 302. Joint
cases
§ 303.
Involuntary cases
§ 304. [Deleted]
§ 305. Abstention
§ 306. Limited
appearance
§ 307. United
States trustee
§ 308. Debtor
reporting requirements
Subchapter
II. Officers
§ 321.
Eligibility to serve as trustee
§ 322.
Qualification of trustee
§ 323. Role and
capacity of trustee
§ 324. Removal of
trustee or examiner
§ 325. Effect of
vacancy
§ 326. Limitation
on compensation of trustee
§ 327. Employment
of professional persons
§ 328. Limitation
on compensation of professional persons
§ 329. Debtor's
transactions with attorneys
§ 330.
Compensation of officers
§ 331. Interim
compensation
§ 332. Consumer
privacy ombudsman
§ 333.
Appointment of patient care ombudsman
Subchapter
III. Administration
§ 341. Meetings
of creditors and equity security holders
§ 342. Notice
§ 343.
Examination of the debtor
§ 344.
Self-incrimination; immunity
§ 345. Money of
estate
§ 346. Special
provisions related to the treatment of State and local taxes
§ 347. Unclaimed
property
§ 348. Effect of
conversion
§ 349. Effect of
dismissal
§ 350. Closing
and reopening cases
§ 351. Disposal
of patient records
Subchapter
IV. Administrative Powers
§ 361. Adequate
protection
§ 362. Automatic
stay
§ 363. Use, sale,
or lease of property
§ 364. Obtaining
credit
§ 365. Executory
contracts and unexpired leases
§ 366. Utility service
--------------------------------------------------------------------------------
Subchapter
I. Commencement of a Case
11 USC §
301. Voluntary cases
(a) A voluntary
case under a chapter of this title is commenced by the filing with the bankruptcy
court of a petition under such chapter by an entity that may be a debtor under
such chapter.
(b) The
commencement of a voluntary case under a chapter of this title constitutes an
order for relief under such chapter.
[Rev. 4-29-05]
--------------------------------------------------------------------------------
11 USC §
302. Joint cases
(a) A joint case
under a chapter of this title is commenced by the filing with the bankruptcy
court of a single petition under such chapter by an individual that may be a
debtor under such chapter and such individual’s spouse. The commencement of a
joint case under a chapter of this title constitutes an order for relief under
such chapter.
(b) After the
commencement of a joint case, the court shall determine the extent, if any, to
which the debtors’ estates shall be consolidated.
[Rev. 4-29-05]
--------------------------------------------------------------------------------
11 USC §
303. Involuntary cases
(a) An
involuntary case may be commenced only under chapter 7 or 11 of this title, and
only against a person, except a farmer, family farmer, or a corporation that is
not a moneyed, business, or commercial corporation, that may be a debtor under
the chapter under which such case is commenced.
(b) An
involuntary case against a person is commenced by the filing with the
bankruptcy court of a petition under chapter 7 or 11 of this title—
(1) by three or
more entities, each of which is either a holder of a claim against such person
that is not contingent as to liability or the subject of a bona fide dispute as
to liability or amount, or an indenture trustee representing such a holder, if
such noncontingent, undisputed claims aggregate at least $10,000 [$12,300
effective 4-1-04. Adjusted every 3 years by section 104.] more than the value
of any lien on property of the debtor securing such claims held by the holders
of such claims;
(2) if there are
fewer than 12 such holders, excluding any employee or insider of such person
and any transferee of a transfer that is voidable under section 544, 545, 547,
548, 549, or 724(a) of this title, by one or more of such holders that hold in
the aggregate at least $10,000 [$12,300 effective 4-1-04. Adjusted every 3
years by section 104.] of such claims;
(3) if such
person is a partnership—
(A) by fewer than
all of the general partners in such partnership; or
(B) if relief has
been ordered under this title with respect to all of the general partners in
such partnership, by a general partner in such partnership, the trustee of such
a general partner, or a holder of a claim against such partnership; or
(4) by a foreign
representative of the estate in a foreign proceeding concerning such person.
(c) After the
filing of a petition under this section but before the case is dismissed or
relief is ordered, a creditor holding an unsecured claim that is not
contingent, other than a creditor filing under subsection (b) of this section,
may join in the petition with the same effect as if such joining creditor were
a petitioning creditor under subsection (b) of this section.
(d) The debtor,
or a general partner in a partnership debtor that did not join in the petition,
may file an answer to a petition under this section.
(e) After notice
and a hearing, and for cause, the court may require the petitioners under this
section to file a bond to indemnify the debtor for such amounts as the court
may later allow under subsection (i) of this section.
(f)
Notwithstanding section 363 of this title, except to the extent that the court
orders otherwise, and until an order for relief in the case, any business of
the debtor may continue to operate, and the debtor may continue to use,
acquire, or dispose of property as if an involuntary case concerning the debtor
had not been commenced.
(g) At any time
after the commencement of an involuntary case under chapter 7 of this title but
before an order for relief in the case, the court, on request of a party in
interest, after notice to the debtor and a hearing, and if necessary to
preserve the property of the estate or to prevent loss to the estate, may order
the United States trustee to appoint an interim trustee under section 701 of
this title to take possession of the property of the estate and to operate any
business of the debtor. Before an order for relief, the debtor may regain
possession of property in the possession of a trustee ordered appointed under
this subsection if the debtor files such bond as the court requires,
conditioned on the debtor’s accounting for and delivering to the trustee, if
there is an order for relief in the case, such property, or the value, as of
the date the debtor regains possession, of such property.
(h) If the
petition is not timely controverted, the court shall order relief against the
debtor in an involuntary case under the chapter under which the petition was
filed. Otherwise, after trial, the court shall order relief against the debtor
in an involuntary case under the chapter under which the petition was filed,
only if—
(1) the debtor is
generally not paying such debtor’s debts as such debts become due unless such
debts are the subject of a bona fide dispute; or
(1) the debtor is
generally not paying such debtor's debts as such debts become due unless such
debts are the subject of a bona fide dispute as to liability or amount; or
(2) within 120
days before the date of the filing of the petition, a custodian, other than a
trustee, receiver, or agent appointed or authorized to take charge of less than
substantially all of the property of the debtor for the purpose of enforcing a
lien against such property, was appointed or took possession.
(i) If the court
dismisses a petition under this section other than on consent of all
petitioners and the debtor, and if the debtor does not waive the right to
judgment under this subsection, the court may grant judgment—
(1) against the
petitioners and in favor of the debtor for—
(A) costs; or
(B) a reasonable
attorney’s fee; or
(2) against any
petitioner that filed the petition in bad faith, for—
(A) any damages
proximately caused by such filing; or
(B) punitive
damages.
(j) Only after
notice to all creditors and a hearing may the court dismiss a petition filed
under this section—
(1) on the motion
of a petitioner;
(2) on consent of
all petitioners and the debtor; or
(3) for want of
prosecution.
[Rev. 4-29-05]
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11 USC §
304. [Deleted]
[Rev. 4-29-05]
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11 USC §
305. Abstention
(a) The court,
after notice and a hearing, may dismiss a case under this title, or may suspend
all proceedings in a case under this title, at any time if—
(1) the interests
of creditors and the debtor would be better served by such dismissal or
suspension; or
(2)
(A) a petition
under section 1515 for recognition of a foreign proceeding has been granted;
and
(B) the purposes
of chapter 15 of this title would be best served by such dismissal or
suspension.
(b) A foreign
representative may seek dismissal or suspension under subsection (a)(2) of this
section.
(c) An order
under subsection (a) of this section dismissing a case or suspending all
proceedings in a case, or a decision not so to dismiss or suspend, is not
reviewable by appeal or otherwise by the court of appeals under section 158(d),
1291, or 1292 of title 28 or by the Supreme Court of the United States under
section 1254 of title 28.
[Rev. 4-29-05]
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11 USC § 306. Limited appearance
An appearance in
a bankruptcy court by a foreign representative in connection with a petition or
request under section 303 or 305 of this title does not submit such foreign
representative to the jurisdiction of any court in the United States for any
other purpose, but the bankruptcy court may condition any order under section
303 or 305 of this title on compliance by such foreign representative with the
orders of such bankruptcy court.
[Rev. 4-29-05]
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11 USC §
307. United States trustee
The United States
trustee may raise and may appear and be heard on any issue in any case or
proceeding under this title but may not file a plan pursuant to section 1121(c)
of this title.
[Rev. 4-29-05]
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11 USC §
308. Debtor reporting requirements
(a) For purposes
of this section, the term "profitability" means, with respect to a
debtor, the amount of money that the debtor has earned or lost during current
and recent fiscal periods.
(b) A small
business debtor shall file periodic financial and other reports containing
information including--
(1) the debtor's
profitability;
(2) reasonable
approximations of the debtor's projected cash receipts and cash disbursements
over a reasonable period;
(3) comparisons
of actual cash receipts and disbursements with projections in prior reports;
(4)
(A) whether the debtor
is--
(i) in compliance
in all material respects with postpetition requirements imposed by this title
and the Federal Rules of Bankruptcy Procedure; and
(ii) timely
filing tax returns and other required government filings and paying taxes and
other administrative expenses when due;
(B) if the debtor
is not in compliance with the requirements referred to in subparagraph (A)(i)
or filing tax returns and other required government filings and making the
payments referred to in subparagraph (A)(ii), what the failures are and how, at
what cost, and when the debtor intends to remedy such failures; and
(C) such other
matters as are in the best interests of the debtor and creditors, and in the
public interest in fair and efficient procedures under chapter 11 of this
title.
[Rev. 4-29-05]
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Subchapter
II. Officers
11 USC §
321. Eligibility to serve as trustee
(a) A person may
serve as trustee in a case under this title only if such person is—
(1) an individual
that is competent to perform the duties of trustee and, in a case under chapter
7, 12, or 13 of this title, resides or has an office in the judicial district
within which the case is pending, or in any judicial district adjacent to such
district; or
(2) a corporation
authorized by such corporation’s charter or bylaws to act as trustee, and, in a
case under chapter 7, 12, or 13 of this title, having an office in at least one
of such districts.
(b) A person that
has served as an examiner in the case may not serve as trustee in the case.
(c) The United
States trustee for the judicial district in which the case is pending is eligible
to serve as trustee in the case if necessary.
[Rev. 4-30-05]
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11 USC §
322. Qualification of trustee
(a) Except as
provided in subsection (b)(1), a person selected under section 701, 702, 703,
1104, 1163, 1202, or 1302 of this title to serve as trustee in a case under
this title qualifies if before five days after such selection, and before
beginning official duties, such person has filed with the court a bond in favor
of the United States conditioned on the faithful performance of such official
duties.
(b)
(1) The United
States trustee qualifies wherever such trustee serves as trustee in a case
under this title.
(2) The United
States trustee shall determine—
(A) the amount of
a bond required to be filed under subsection (a) of this section; and
(B) the
sufficiency of the surety on such bond.
(c) A trustee is
not liable personally or on such trustee’s bond in favor of the United States
for any penalty or forfeiture incurred by the debtor.
(d) A proceeding
on a trustee’s bond may not be commenced after two years after the date on
which such trustee was discharged.
[Rev. 4-30-05]
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11 USC §
323. Role and capacity of trustee
(a) The trustee
in a case under this title is the representative of the estate.
(b) The trustee
in a case under this title has capacity to sue and be sued.
[Rev. 4-30-05]
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11 USC §
324. Removal of trustee or examiner
(a) The court,
after notice and a hearing, may remove a trustee, other than the United States
trustee, or an examiner, for cause.
(b) Whenever the
court removes a trustee or examiner under subsection (a) in a case under this
title, such trustee or examiner shall thereby be removed in all other cases
under this title in which such trustee or examiner is then serving unless the
court orders otherwise.
[Rev. 4-30-05]
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11 USC §
325. Effect of vacancy
A vacancy in the
office of trustee during a case does not abate any pending action or
proceeding, and the successor trustee shall be substituted as a party in such
action or proceeding.
[Rev. 4-30-05]
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11 USC §
326. Limitation on compensation of
trustee
(a) In a case
under chapter 7 or 11, the court may allow reasonable compensation under
section 330 of this title of the trustee for the trustee’s services, payable
after the trustee renders such services, not to exceed 25 percent on the first
$5,000 or less, 10 percent on any amount in excess of $5,000 but not in excess
of $50,000, 5 percent on any amount in excess of $50,000 but not in excess of $1,000,000,
and reasonable compensation not to exceed 3 percent of such moneys in excess of
$1,000,000, upon all moneys disbursed or turned over in the case by the trustee
to parties in interest, excluding the debtor, but including holders of secured
claims.
(b) In a case
under chapter 12 or 13 of this title, the court may not allow compensation for
services or reimbursement of expenses of the United States trustee or of a
standing trustee appointed under section 586(b) of title 28, but may allow
reasonable compensation under section 330 of this title of a trustee appointed
under section 1202(a) or 1302(a) of this title for the trustee’s services,
payable after the trustee renders such services, not to exceed five percent
upon all payments under the plan.
(c) If more than
one person serves as trustee in the case, the aggregate compensation of such
persons for such service may not exceed the maximum compensation prescribed for
a single trustee by subsection (a) or (b) of this section, as the case may be.
(d) The court may
deny allowance of compensation for services or reimbursement of expenses of the
trustee if the trustee failed to make diligent inquiry into facts that would
permit denial of allowance under section 328(c) of this title or, with
knowledge of such facts, employed a professional person under section 327 of
this title.
[Rev. 4-30-05]
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11 USC §
327. Employment of professional persons
(a) Except as
otherwise provided in this section, the trustee, with the court’s approval, may
employ one or more attorneys, accountants, appraisers, auctioneers, or other
professional persons, that do not hold or represent an interest adverse to the
estate, and that are disinterested persons, to represent or assist the trustee
in carrying out the trustee’s duties under this title.
(b) If the
trustee is authorized to operate the business of the debtor under section 721,
1202, or 1108 of this title, and if the debtor has regularly employed
attorneys, accountants, or other professional persons on salary, the trustee
may retain or replace such professional persons if necessary in the operation
of such business.
(c) In a case
under chapter 7, 12, or 11 of this title, a person is not disqualified for
employment under this section solely because of such person’s employment by or
representation of a creditor, unless there is objection by another creditor or
the United States trustee, in which case the court shall disapprove such
employment if there is an actual conflict of interest.
(d) The court may
authorize the trustee to act as attorney or accountant for the estate if such
authorization is in the best interest of the estate.
(e) The trustee,
with the court’s approval, may employ, for a specified special purpose, other
than to represent the trustee in conducting the case, an attorney that has
represented the debtor, if in the best interest of the estate, and if such
attorney does not represent or hold any interest adverse to the debtor or to the
estate with respect to the matter on which such attorney is to be employed.
(f) The trustee
may not employ a person that has served as an examiner in the case.
[Rev. 4-30-05]
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11 USC §
328. Limitation on compensation of
professional persons
(a) The trustee,
or a committee appointed under section 1102 of this title, with the court’s
approval, may employ or authorize the employment of a professional person under
section 327 or 1103 of this title, as the case may be, on any reasonable terms
and conditions of employment, including on a retainer, on an hourly basis, on a
fixed or percentage fee basis, or on a contingent fee basis. Notwithstanding
such terms and conditions, the court may allow compensation different from the
compensation provided under such terms and conditions after the conclusion of
such employment, if such terms and conditions prove to have been improvident in
light of developments not capable of being anticipated at the time of the
fixing of such terms and conditions.
(b) If the court
has authorized a trustee to serve as an attorney or accountant for the estate
under section 327(d) of this title, the court may allow compensation for the
trustee’s services as such attorney or accountant only to the extent that the
trustee performed services as attorney or accountant for the estate and not for
performance of any of the trustee’s duties that are generally performed by a
trustee without the assistance of an attorney or accountant for the estate.
(c) Except as
provided in section 327(c), 327(e), or 1107(b) of this title, the court may
deny allowance of compensation for services and reimbursement of expenses of a
professional person employed under section 327 or 1103 of this title if, at any
time during such professional person’s employment under section 327 or 1103>
of this title, such professional person is not a disinterested person, or represents
or holds an interest adverse to the interest of the estate with respect to the
matter on which such professional person is employed.
[Rev. 4-30-05]
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11 USC § 329. Debtor’s transactions with attorneys
(a) Any attorney
representing a debtor in a case under this title, or in connection with such a
case, whether or not such attorney applies for compensation under this title,
shall file with the court a statement of the compensation paid or agreed to be
paid, if such payment or agreement was made after one year before the date of
the filing of the petition, for services rendered or to be rendered in
contemplation of or in connection with the case by such attorney, and the
source of such compensation.
(b) If such
compensation exceeds the reasonable value of any such services, the court may
cancel any such agreement, or order the return of any such payment, to the
extent excessive, to—
(1) the estate,
if the property transferred—
(A) would have
been property of the estate; or
(B) was to be
paid by or on behalf of the debtor under a plan under chapter 11, 12, or 13 of
this title; or
(2) the entity
that made such payment.
[Rev. 4-30-05]
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11 USC §
330. Compensation of officers
(a)
(1) After notice
to the parties in interest and the United States Trustee and a hearing, and
subject to sections 326, 328, and 329, the court may award to a trustee, a
consumer privacy ombudsman appointed under section 332, an examiner, an
ombudsman appointed under section 333, or a professional person employed under
section 327 or 1103--
(A) reasonable
compensation for actual, necessary services rendered by the trustee, examiner,
professional person, or attorney and by any paraprofessional person employed by
any such person; and
(B) reimbursement
for actual, necessary expenses.
(2) The court
may, on its own motion or on the motion of the United States Trustee, the
United States Trustee for the District or Region, the trustee for the estate,
or any other party in interest, award compensation that is less than the amount
of compensation that is requested.
(3) In
determining the amount of reasonable compensation to be awarded to an examiner,
trustee under chapter 11, or professional person, the court shall consider the
nature, the extent, and the value of such services, taking into account all
relevant factors, including--
(A) the time
spent on such services;
(B) the rates
charged for such services;
(C) whether the
services were necessary to the administration of, or beneficial at the time at
which the service was rendered toward the completion of, a case under this
title;
(D) whether the
services were performed within a reasonable amount of time commensurate with
the complexity, importance, and nature of the problem, issue, or task
addressed; and
(E) with respect
to a professional person, whether the person is board certified or otherwise
has demonstrated skill and experience in the bankruptcy field; and
(F) whether the
compensation is reasonable based on the customary compensation charged by
comparably skilled practitioners in cases other than cases under this title.
(4)
(A) Except as
provided in subparagraph (B), the court shall not allow compensation for—
(i) unnecessary
duplication of services; or
(ii) services
that were not—
(I) reasonably
likely to benefit the debtor’s estate; or
(II) necessary to
the administration of the case.
(B) In a chapter
12 or chapter 13 case in which the debtor is an individual, the court may allow
reasonable compensation to the debtor’s attorney for representing the interests
of the debtor in connection with the bankruptcy case based on a consideration
of the benefit and necessity of such services to the debtor and the other
factors set forth in this section.
(5) The court
shall reduce the amount of compensation awarded under this section by the
amount of any interim compensation awarded under section 331, and, if the
amount of such interim compensation exceeds the amount of compensation awarded
under this section, may order the return of the excess to the estate.
(6) Any
compensation awarded for the preparation of a fee application shall be based on
the level and skill reasonably required to prepare the application.
(7) In
determining the amount of reasonable compensation to be awarded to a trustee,
the court shall treat such compensation as a commission, based on section 326.
(b)
(1) There shall
be paid from the filing fee in a case under chapter 7 of this title $45 to the
trustee serving in such case, after such trustee’s services are rendered.
(2) The Judicial
Conference of the United States—
(A) shall
prescribe additional fees of the same kind as prescribed under section 1914(b)
of title 28; and
(B) may prescribe
notice of appearance fees and fees charged against distributions in cases under
this title;
to pay $15 to
trustees serving in cases after such trustees’ services are rendered. Beginning
1 year after the date of the enactment of the Bankruptcy Reform Act of 1994,
such $15 shall be paid in addition to the amount paid under paragraph (1).
(c) Unless the
court orders otherwise, in a case under chapter 12 or 13 of this title the
compensation paid to the trustee serving in the case shall not be less than $5
per month from any distribution under the plan during the administration of the
plan.
(d) In a case in
which the United States trustee serves as trustee, the compensation of the
trustee under this section shall be paid to the clerk of the bankruptcy court
and deposited by the clerk into the United States Trustee System Fund
established by section 589a of title 28.
[Rev. 4-30-05]
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11 USC §
331. Interim compensation
A trustee, an
examiner, a debtor’s attorney, or any professional person employed under
section 327 or 1103 of this title may apply to the court not more than once
every 120 days after an order for relief in a case under this title, or more
often if the court permits, for such compensation for services rendered before
the date of such an application or reimbursement for expenses incurred before
such date as is provided under section 330 of this title. After notice and a
hearing, the court may allow and disburse to such applicant such compensation
or reimbursement.
[Rev. 4-30-05]
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11 USC §
332. Consumer privacy ombudsman
(a) If a hearing
is required under section 363(b)(1)(B), the court shall order the United States
trustee to appoint, not later than 5 days before the commencement of the
hearing, 1 disinterested person (other than the United States trustee) to serve
as the consumer privacy ombudsman in the case and shall require that notice of
such hearing be timely given to such ombudsman.
(b) The consumer
privacy ombudsman may appear and be heard at such hearing and shall provide to
the court information to assist the court in its consideration of the facts,
circumstances, and conditions of the proposed sale or lease of personally
identifiable information under section 363(b)(1)(B). Such information may
include presentation of--
(1) the debtor's
privacy policy;
(2) the potential
losses or gains of privacy to consumers if such sale or such lease is approved
by the court;
(3) the potential
costs or benefits to consumers if such sale or such lease is approved by the
court; and
(4) the potential
alternatives that would mitigate potential privacy losses or potential costs to
consumers.
(c) A consumer
privacy ombudsman shall not disclose any personally identifiable information
obtained by the ombudsman under this title.
[Rev. 4-30-05]
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11 USC §
333. Appointment of patient care
ombudsman
(a)
(1) If the debtor
in a case under chapter 7, 9, or 11 is a health care business, the court shall
order, not later than 30 days after the commencement of the case, the
appointment of an ombudsman to monitor the quality of patient care and to
represent the interests of the patients of the health care business unless the
court finds that the appointment of such ombudsman is not necessary for the
protection of patients under the specific facts of the case.
(2)
(A) If the court
orders the appointment of an ombudsman under paragraph (1), the United States
trustee shall appoint 1 disinterested person (other than the United States
trustee) to serve as such ombudsman.
(B) If the debtor
is a health care business that provides long-term care, then the United States
trustee may appoint the State Long-Term Care Ombudsman appointed under the
Older Americans Act of 1965 for the State in which the case is pending to serve
as the ombudsman required by paragraph (1).
(C) If the United
States trustee does not appoint a State Long-Term Care Ombudsman under
subparagraph (B), the court shall notify the State Long-Term Care Ombudsman
appointed under the Older Americans Act of 1965 for the State in which the case
is pending, of the name and address of the person who is appointed under
subparagraph (A).
(b) An ombudsman
appointed under subsection (a) shall--
(1) monitor the
quality of patient care provided to patients of the debtor, to the extent
necessary under the circumstances, including interviewing patients and
physicians;
(2) not later
than 60 days after the date of appointment, and not less frequently than at
60-day intervals thereafter, report to the court after notice to the parties in
interest, at a hearing or in writing, regarding the quality of patient care
provided to patients of the debtor; and
(3) if such
ombudsman determines that the quality of patient care provided to patients of
the debtor is declining significantly or is otherwise being materially
compromised, file with the court a motion or a written report, with notice to
the parties in interest immediately upon making such determination.
(c)
(1) An ombudsman
appointed under subsection (a) shall maintain any information obtained by such
ombudsman under this section that relates to patients (including information
relating to patient records) as confidential information. Such ombudsman may
not review confidential patient records unless the court approves such review
in advance and imposes restrictions on such ombudsman to protect the
confidentiality of such records.
(2) An ombudsman
appointed under subsection (a)(2)(B) shall have access to patient records
consistent with authority of such ombudsman under the Older Americans Act of
1965 and under non-Federal laws governing the State Long-Term Care Ombudsman
program.
[Rev. 4-30-05]
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Subchapter
III. Administration
11 USC §
341. Meetings of creditors and equity
security holders
(a) Within a
reasonable time after the order for relief in a case under this title, the
United States trustee shall convene and preside at a meeting of creditors.
(b) The United
States trustee may convene a meeting of any equity security holders.
(c) The court may
not preside at, and may not attend, any meeting under this section including
any final meeting of creditors. Notwithstanding any local court rule, provision
of a State constitution, any otherwise applicable nonbankruptcy law, or any
other requirement that representation at the meeting of creditors under
subsection (a) be by an attorney, a creditor holding a consumer debt or any
representative of the creditor (which may include an entity or an employee of
an entity and may be a representative for more than 1 creditor) shall be
permitted to appear at and participate in the meeting of creditors in a case
under chapter 7 or 13, either alone or in conjunction with an attorney for the
creditor. Nothing in this subsection shall be construed to require any creditor
to be represented by an attorney at any meeting of creditors.
(d) Prior to the
conclusion of the meeting of creditors or equity security holders, the trustee
shall orally examine the debtor to ensure that the debtor in a case under
chapter 7 of this title is aware of—
(1) the potential
consequences of seeking a discharge in bankruptcy, including the effects on
credit history;
(2) the debtor’s
ability to file a petition under a different chapter of this title;
(3) the effect of
receiving a discharge of debts under this title; and
(4) the effect of
reaffirming a debt, including the debtor’s knowledge of the provisions of
section 524(d) of this title.
(e)
Notwithstanding subsections (a) and (b), the court, on the request of a party
in interest and after notice and a hearing, for cause may order that the United
States trustee not convene a meeting of creditors or equity security holders if
the debtor has filed a plan as to which the debtor solicited acceptances prior
to the commencement of the case.
[Rev. 4-30-05]
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11 USC §
342. Notice
[Sample notice
given by
(a) There shall
be given such notice as is appropriate, including notice to any holder of a
community claim, of an order for relief in a case under this title.
(b) Before the
commencement of a case under this title by an individual whose debts are
primarily consumer debts, the clerk shall give to such individual written
notice containing--
(1) a brief
description of--
(A) chapters 7,
11, 12, and 13 and the general purpose, benefits, and costs of proceeding under
each of those chapters; and
(B) the types of
services available from credit counseling agencies; and
(2) statements
specifying that--
(A) a person who
knowingly and fraudulently conceals assets or makes a false oath or statement
under penalty of perjury in connection with a case under this title shall be
subject to fine, imprisonment, or both; and
(B) all
information supplied by a debtor in connection with a case under this title is
subject to examination by the Attorney General.
(c)
(1) If notice is
required to be given by the debtor to a creditor under this title, any rule,
any applicable law, or any order of the court, such notice shall contain the
name, address, and last 4 digits of the taxpayer identification number of the
debtor. If the notice concerns an amendment that adds a creditor to the
schedules of assets and liabilities, the debtor shall include the full taxpayer
identification number in the notice sent to that creditor, but the debtor shall
include only the last 4 digits of the taxpayer identification number in the
copy of the notice filed with the court.
(2)
(A) If, within
the 90 days before the commencement of a voluntary case, a creditor supplies
the debtor in at least 2 communications sent to the debtor with the current
account number of the debtor and the address at which such creditor requests to
receive correspondence, then any notice required by this title to be sent by
the debtor to such creditor shall be sent to such address and shall include
such account number.
(B) If a creditor
would be in violation of applicable nonbankruptcy law by sending any such
communication within such 90-day period and if such creditor supplies the
debtor in the last 2 communications with the current account number of the
debtor and the address at which such creditor requests to receive
correspondence, then any notice required by this title to be sent by the debtor
to such creditor shall be sent to such address and shall include such account
number.
(d) In a case
under chapter 7 of this title in which the debtor is an individual and in which
the presumption of abuse arises under section 707(b), the clerk shall give
written notice to all creditors not later than 10 days after the date of the
filing of the petition that the presumption of abuse has arisen.
(e)
(1) In a case
under chapter 7 or 13 of this title of a debtor who is an individual, a
creditor at any time may both file with the court and serve on the debtor a
notice of address to be used to provide notice in such case to such creditor.
(2) Any notice in
such case required to be provided to such creditor by the debtor or the court
later than 5 days after the court and the debtor receive such creditor's notice
of address, shall be provided to such address.
(f)
(1) An entity may
file with any bankruptcy court a notice of address to be used by all the
bankruptcy courts or by particular bankruptcy courts, as so specified by such
entity at the time such notice is filed, to provide notice to such entity in
all cases under chapters 7 and 13 pending in the courts with respect to which
such notice is filed, in which such entity is a creditor.
(2) In any case
filed under chapter 7 or 13, any notice required to be provided by
(3) A notice
filed under paragraph (1) may be withdrawn by such entity.
(g)
(1) Notice
provided to a creditor by the debtor or the court other than in accordance with
this section (excluding this subsection) shall not be effective notice until
such notice is brought to the attention of such creditor. If such creditor
designates a person or an organizational subdivision of such creditor to be
responsible for receiving notices under this title and establishes reasonable
procedures so that such notices receivable by such creditor are to be delivered
to such person or such subdivision, then a notice provided to such creditor
other than in accordance with this section (excluding this subsection) shall
not be considered to have been brought to the attention of such creditor until
such notice is received by such person or such subdivision.
(2) A monetary
penalty may not be imposed on a creditor for a violation of a stay in effect
under section 362(a) (including a monetary penalty imposed under section
362(k)) or for failure to comply with section 542 or 543 unless the conduct
that is the basis of such violation or of such failure occurs after such
creditor receives notice effective under this section of the order for relief.
[Rev. 4-30-05]
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11 USC §
343. Examination of the debtor
The debtor shall
appear and submit to examination under oath at the meeting of creditors under
section 341(a) of this title. Creditors, any indenture trustee, any trustee or
examiner in the case, or the United States trustee may examine the debtor. The United
States trustee may administer the oath required under this section.
[Rev. 4-30-05]
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11 USC §
344. Self-incrimination; immunity
Immunity for
persons required to submit to examination, to testify, or to provide
information in a case under this title may be granted under part V of title 18.
[Rev. 4-30-05]
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11 USC §
345. Money of estates
(a) A trustee in
a case under this title may make such deposit or investment of the money of the
estate for which such trustee serves as will yield the maximum reasonable net
return on such money, taking into account the safety of such deposit or
investment.
(b) Except with
respect to a deposit or investment that is insured or guaranteed by the United
States or by a department, agency, or instrumentality of the United States or
backed by the full faith and credit of the United States, the trustee shall
require from an entity with which such money is deposited or invested—
(1) a bond—
(A) in favor of
the United States;
(B) secured by
the undertaking of a corporate surety approved by the United States trustee for
the district in which the case is pending; and
(C) conditioned
on—
(i) a proper
accounting for all money so deposited or invested and for any return on such
money;
(ii) prompt
repayment of such money and return; and
(iii) faithful
performance of duties as a depository; or
(2) the deposit
of securities of the kind specified in section 9303 of title 31;
unless the court
for cause orders otherwise.
(c) An entity
with which such moneys are deposited or invested is authorized to deposit or
invest such moneys as may be required under this section.
[Rev. 4-30-05]
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11 USC §
346. Special provisions related to the
treatment of State and local taxes
(a) Whenever the
Internal Revenue Code of 1986 provides that a separate taxable estate or entity
is created in a case concerning a debtor under this title, and the income,
gain, loss, deductions, and credits of such estate shall be taxed to or claimed
by the estate, a separate taxable estate is also created for purposes of any
State and local law imposing a tax on or measured by income and such income,
gain, loss, deductions, and credits shall be taxed to or claimed by the estate
and may not be taxed to or claimed by the debtor. The preceding sentence shall
not apply if the case is dismissed. The trustee shall make tax returns of
income required under any such State or local law.
(b) Whenever the
Internal Revenue Code of 1986 provides that no separate taxable estate shall be
created in a case concerning a debtor under this title, and the income, gain,
loss, deductions, and credits of an estate shall be taxed to or claimed by the
debtor, such income, gain, loss, deductions, and credits shall be taxed to or claimed
by the debtor under a State or local law imposing a tax on or measured by
income and may not be taxed to or claimed by the estate. The trustee shall make
such tax returns of income of corporations and of partnerships as are required
under any State or local law, but with respect to partnerships, shall make such
returns only to the extent such returns are also required to be made under such
Code. The estate shall be liable for any tax imposed on such corporation or
partnership, but not for any tax imposed on partners or members.
(c) With respect
to a partnership or any entity treated as a partnership under a State or local
law imposing a tax on or measured by income that is a debtor in a case under
this title, any gain or loss resulting from a distribution of property from
such partnership, or any distributive share of any income, gain, loss,
deduction, or credit of a partner or member that is distributed, or considered
distributed, from such partnership, after the commencement of the case, is
gain, loss, income, deduction, or credit, as the case may be, of the partner or
member, and if such partner or member is a debtor in a case under this title,
shall be subject to tax in accordance with subsection (a) or (b).
(d) For purposes
of any State or local law imposing a tax on or measured by income, the taxable
period of a debtor in a case under this title shall terminate only if and to
the extent that the taxable period of such debtor terminates under the Internal
Revenue Code of 1986.
(e) The estate in
any case described in subsection (a) shall use the same accounting method as
the debtor used immediately before the commencement of the case, if such method
of accounting complies with applicable nonbankruptcy tax law.
(f) For purposes
of any State or local law imposing a tax on or measured by income, a transfer
of property from the debtor to the estate or from the estate to the debtor
shall not be treated as a disposition for purposes of any provision assigning
tax consequences to a disposition, except to the extent that such transfer is
treated as a disposition under the Internal Revenue Code of 1986.
(g) Whenever a
tax is imposed pursuant to a State or local law imposing a tax on or measured
by income pursuant to subsection (a) or (b), such tax shall be imposed at rates
generally applicable to the same types of entities under such State or local
law.
(h) The trustee
shall withhold from any payment of claims for wages, salaries, commissions,
dividends, interest, or other payments, or collect, any amount required to be
withheld or collected under applicable State or local tax law, and shall pay
such withheld or collected amount to the appropriate governmental unit at the
time and in the manner required by such tax law, and with the same priority as
the claim from which such amount was withheld or collected was paid.
(i)
(1) To the extent
that any State or local law imposing a tax on or measured by income provides
for the carryover of any tax attribute from one taxable period to a subsequent
taxable period, the estate shall succeed to such tax attribute in any case in
which such estate is subject to tax under subsection (a).
(2) After such a
case is closed or dismissed, the debtor shall succeed to any tax attribute to
which the estate succeeded under paragraph (1) to the extent consistent with
the Internal Revenue Code of 1986.
(3) The estate
may carry back any loss or tax attribute to a taxable period of the debtor that
ended before the date of the order for relief under this title to the extent
that--
(A) applicable
State or local tax law provides for a carryback in the case of the debtor; and
(B) the same or a
similar tax attribute may be carried back by the estate to such a taxable
period of the debtor under the Internal Revenue Code of 1986.
(j)
(1) For purposes
of any State or local law imposing a tax on or measured by income, income is
not realized by the estate, the debtor, or a successor to the debtor by reason
of discharge of indebtedness in a case under this title, except to the extent,
if any, that such income is subject to tax under the Internal Revenue Code of
1986.
(2) Whenever the
Internal Revenue Code of 1986 provides that the amount excluded from gross
income in respect of the discharge of indebtedness in a case under this title
shall be applied to reduce the tax attributes of the debtor or the estate, a
similar reduction shall be made under any State or local law imposing a tax on
or measured by income to the extent such State or local law recognizes such
attributes. Such State or local law may also provide for the reduction of other
attributes to the extent that the full amount of income from the discharge of
indebtedness has not been applied.
(k)
(1) Except as
provided in this section and section 505, the time and manner of filing tax
returns and the items of income, gain, loss, deduction, and credit of any
taxpayer shall be determined under applicable nonbankruptcy law.
(2) For Federal
tax purposes, the provisions of this section are subject to the Internal
Revenue Code of 1986 and other applicable Federal nonbankruptcy law.
[Rev. 4-30-05]
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11 USC §
347. Unclaimed property
(a) Ninety days
after the final distribution under section 726, 1226, or 1326 of this title in
a case under chapter 7, 12, or 13 of this title, as the case may be, the
trustee shall stop payment on any check remaining unpaid, and any remaining
property of the estate shall be paid into the court and disposed of under
chapter 129 of title 28.
(b) Any security,
money, or other property remaining unclaimed at the expiration of the time
allowed in a case under chapter 9, 11, or 12 of this title for the presentation
of a security or the performance of any other act as a condition to participation
in the distribution under any plan confirmed under section 943(b), 1129, 1173,
or 1225 of this title, as the case may be, becomes the property of the debtor
or of the entity acquiring the assets of the debtor under the plan, as the case
may be.
[Rev. 4-30-05]
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11 USC §
348. Effect of conversion
(a) Conversion of
a case from a case under one chapter of this title to a case under another
chapter of this title constitutes an order for relief under the chapter to
which the case is converted, but, except as provided in subsections (b) and (c)
of this section, does not effect a change in the date of the filing of the
petition, the commencement of the case, or the order for relief.
(b) Unless the
court for cause orders otherwise, in sections 701(a), 727(a)(10), 727(b),
728(a), 728(b), 1102(a), 1110(a)(1), 1121(b), 1121(c), 1141(d)(4), 1146(a),
1146(b), 1201(a), 1221, 1228(a), 1301(a), and 1305(a) of this title, "the
order for relief under this chapter" in a chapter to which a case has been
converted under section 706, 1112, 1208, or 1307 of this title means the
conversion of such case to such chapter.
(c) Sections 342
and 365(d) of this title apply in a case that has been converted under section
706, 1112, 1208, or 1307 of this title, as if the conversion order were the
order for relief.
(d) A claim against
the estate or the debtor that arises after the order for relief but before
conversion in a case that is converted under section 1112, 1208, or 1307 of
this title, other than a claim specified in section 503(b) of this title, shall
be treated for all purposes as if such claim had arisen immediately before the
date of the filing of the petition.
(e) Conversion of
a case under section 706, 1112, 1208, or 1307 of this title terminates the
service of any trustee or examiner that is serving in the case before such
conversion.
(f)
(1) Except as
provided in paragraph (2), when a case under chapter 13 of this title is
converted to a case under another chapter under this title--
(A) property of
the estate in the converted case shall consist of property of the estate, as of
the date of filing of the petition, that remains in the possession of or is
under the control of the debtor on the date of conversion;
(B) valuations of
property and of allowed secured claims in the chapter 13 case shall apply only
in a case converted to a case under chapter 11 or 12, but not in a case
converted to a case under chapter 7, with allowed secured claims in cases under
chapters 11 and 12 reduced to the extent that they have been paid in accordance
with the chapter 13 plan; and
(C) with respect
to cases converted from chapter 13--
(i) the claim of
any creditor holding security as of the date of the petition shall continue to
be secured by that security unless the full amount of such claim determined
under applicable nonbankruptcy law has been paid in full as of the date of
conversion, notwithstanding any valuation or determination of the amount of an
allowed secured claim made for the purposes of the case under chapter 13; and
(ii) unless a
prebankruptcy default has been fully cured under the plan at the time of
conversion, in any proceeding under this title or otherwise, the default shall
have the effect given under applicable nonbankruptcy law.
(2) If the debtor
converts a case under chapter 13 of this title to a case under another chapter
under this title in bad faith, the property of the estate in the converted case
shall consist of the property of the estate as of the date of conversion.
[Rev. 4-30-05]
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Chapter 3. Case Administration
Subchapter
I. Commencement of a Case
§ 301. Voluntary
cases
§ 302. Joint
cases
§ 303.
Involuntary cases
§ 304. [Deleted]
§ 305. Abstention
§ 306. Limited
appearance
§ 307. United
States trustee
§ 308. Debtor
reporting requirements
Subchapter
II. Officers
§ 321.
Eligibility to serve as trustee
§ 322.
Qualification of trustee
§ 323. Role and
capacity of trustee
§ 324. Removal of
trustee or examiner
§ 325. Effect of
vacancy
§ 326. Limitation
on compensation of trustee
§ 327. Employment
of professional persons
§ 328. Limitation
on compensation of professional persons
§ 329. Debtor's
transactions with attorneys
§ 330.
Compensation of officers
§ 331. Interim
compensation
§ 332. Consumer
privacy ombudsman
§ 333.
Appointment of patient care ombudsman
Subchapter
III. Administration
§ 341. Meetings
of creditors and equity security holders
§ 342. Notice
§ 343.
Examination of the debtor
§ 344.
Self-incrimination; immunity
§ 345. Money of
estate
§ 346. Special
provisions related to the treatment of State and local taxes
§ 347. Unclaimed
property
§ 348. Effect of
conversion
§ 349. Effect of
dismissal
§ 350. Closing
and reopening cases
§ 351. Disposal
of patient records
Subchapter
IV. Administrative Powers
§ 361. Adequate
protection
§ 362. Automatic
stay
§ 363. Use, sale,
or lease of property
§ 364. Obtaining
credit
§ 365. Executory
contracts and unexpired leases
§ 366. Utility
service
--------------------------------------------------------------------------------
Subchapter
I. Commencement of a Case
11 USC §
301. Voluntary cases
(a) A voluntary
case under a chapter of this title is commenced by the filing with the
bankruptcy court of a petition under such chapter by an entity that may be a
debtor under such chapter.
(b) The
commencement of a voluntary case under a chapter of this title constitutes an
order for relief under such chapter.
[Rev. 4-29-05]
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11 USC §
302. Joint cases
(a) A joint case
under a chapter of this title is commenced by the filing with the bankruptcy
court of a single petition under such chapter by an individual that may be a
debtor under such chapter and such individual’s spouse. The commencement of a
joint case under a chapter of this title constitutes an order for relief under
such chapter.
(b) After the
commencement of a joint case, the court shall determine the extent, if any, to
which the debtors’ estates shall be consolidated.
[Rev. 4-29-05]
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11 USC §
303. Involuntary cases
(a) An
involuntary case may be commenced only under chapter 7 or 11 of this title, and
only against a person, except a farmer, family farmer, or a corporation that is
not a moneyed, business, or commercial corporation, that may be a debtor under
the chapter under which such case is commenced.
(b) An
involuntary case against a person is commenced by the filing with the
bankruptcy court of a petition under chapter 7 or 11 of this title—
(1) by three or
more entities, each of which is either a holder of a claim against such person
that is not contingent as to liability or the subject of a bona fide dispute as
to liability or amount, or an indenture trustee representing such a holder, if
such noncontingent, undisputed claims aggregate at least $10,000 [$12,300
effective 4-1-04. Adjusted every 3 years by section 104.] more than the value
of any lien on property of the debtor securing such claims held by the holders
of such claims;
(2) if there are
fewer than 12 such holders, excluding any employee or insider of such person
and any transferee of a transfer that is voidable under section 544, 545, 547,
548, 549, or 724(a) of this title, by one or more of such holders that hold in
the aggregate at least $10,000 [$12,300 effective 4-1-04. Adjusted every 3
years by section 104.] of such claims;
(3) if such
person is a partnership—
(A) by fewer than
all of the general partners in such partnership; or
(B) if relief has
been ordered under this title with respect to all of the general partners in
such partnership, by a general partner in such partnership, the trustee of such
a general partner, or a holder of a claim against such partnership; or
(4) by a foreign representative
of the estate in a foreign proceeding concerning such person.
(c) After the
filing of a petition under this section but before the case is dismissed or
relief is ordered, a creditor holding an unsecured claim that is not
contingent, other than a creditor filing under subsection (b) of this section,
may join in the petition with the same effect as if such joining creditor were
a petitioning creditor under subsection (b) of this section.
(d) The debtor,
or a general partner in a partnership debtor that did not join in the petition,
may file an answer to a petition under this section.
(e) After notice
and a hearing, and for cause, the court may require the petitioners under this
section to file a bond to indemnify the debtor for such amounts as the court
may later allow under subsection (i) of this section.
(f)
Notwithstanding section 363 of this title, except to the extent that the court
orders otherwise, and until an order for relief in the case, any business of
the debtor may continue to operate, and the debtor may continue to use,
acquire, or dispose of property as if an involuntary case concerning the debtor
had not been commenced.
(g) At any time
after the commencement of an involuntary case under chapter 7 of this title but
before an order for relief in the case, the court, on request of a party in
interest, after notice to the debtor and a hearing, and if necessary to
preserve the property of the estate or to prevent loss to the estate, may order
the United States trustee to appoint an interim trustee under section 701 of
this title to take possession of the property of the estate and to operate any
business of the debtor. Before an order for relief, the debtor may regain
possession of property in the possession of a trustee ordered appointed under
this subsection if the debtor files such bond as the court requires,
conditioned on the debtor’s accounting for and delivering to the trustee, if
there is an order for relief in the case, such property, or the value, as of
the date the debtor regains possession, of such property.
(h) If the
petition is not timely controverted, the court shall order relief against the
debtor in an involuntary case under the chapter under which the petition was
filed. Otherwise, after trial, the court shall order relief against the debtor
in an involuntary case under the chapter under which the petition was filed,
only if—
(1) the debtor is
generally not paying such debtor’s debts as such debts become due unless such
debts are the subject of a bona fide dispute; or
(1) the debtor is
generally not paying such debtor's debts as such debts become due unless such
debts are the subject of a bona fide dispute as to liability or amount; or
(2) within 120
days before the date of the filing of the petition, a custodian, other than a
trustee, receiver, or agent appointed or authorized to take charge of less than
substantially all of the property of the debtor for the purpose of enforcing a
lien against such property, was appointed or took possession.
(i) If the court
dismisses a petition under this section other than on consent of all
petitioners and the debtor, and if the debtor does not waive the right to
judgment under this subsection, the court may grant judgment—
(1) against the
petitioners and in favor of the debtor for—
(A) costs; or
(B) a reasonable
attorney’s fee; or
(2) against any
petitioner that filed the petition in bad faith, for—
(A) any damages
proximately caused by such filing; or
(B) punitive
damages.
(j) Only after
notice to all creditors and a hearing may the court dismiss a petition filed
under this section—
(1) on the motion
of a petitioner;
(2) on consent of
all petitioners and the debtor; or
(3) for want of
prosecution.
[Rev. 4-29-05]
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11 USC §
304. [Deleted]
[Rev. 4-29-05]
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11 USC §
305. Abstention
(a) The court,
after notice and a hearing, may dismiss a case under this title, or may suspend
all proceedings in a case under this title, at any time if—
(1) the interests
of creditors and the debtor would be better served by such dismissal or
suspension; or
(2)
(A) a petition
under section 1515 for recognition of a foreign proceeding has been granted;
and
(B) the purposes
of chapter 15 of this title would be best served by such dismissal or
suspension.
(b) A foreign
representative may seek dismissal or suspension under subsection (a)(2) of this
section.
(c) An order
under subsection (a) of this section dismissing a case or suspending all
proceedings in a case, or a decision not so to dismiss or suspend, is not
reviewable by appeal or otherwise by the court of appeals under section 158(d),
1291, or 1292 of title 28 or by the Supreme Court of the United States under
section 1254 of title 28.
[Rev. 4-29-05]
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11 USC §
306. Limited appearance
An appearance in
a bankruptcy court by a foreign representative in connection with a petition or
request under section 303 or 305 of this title does not submit such foreign
representative to the jurisdiction of any court in the United States for any
other purpose, but the bankruptcy court may condition any order under section
303 or 305 of this title on compliance by such foreign representative with the
orders of such bankruptcy court.
[Rev. 4-29-05]
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11 USC §
307. United States trustee
The United States
trustee may raise and may appear and be heard on any issue in any case or
proceeding under this title but may not file a plan pursuant to section 1121(c)
of this title.
[Rev. 4-29-05]
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11 USC §
308. Debtor reporting requirements
(a) For purposes
of this section, the term "profitability" means, with respect to a
debtor, the amount of money that the debtor has earned or lost during current
and recent fiscal periods.
(b) A small
business debtor shall file periodic financial and other reports containing
information including--
(1) the debtor's
profitability;
(2) reasonable
approximations of the debtor's projected cash receipts and cash disbursements
over a reasonable period;
(3) comparisons
of actual cash receipts and disbursements with projections in prior reports;
(4)
(A) whether the
debtor is--
(i) in compliance
in all material respects with postpetition requirements imposed by this title
and the Federal Rules of Bankruptcy Procedure; and
(ii) timely
filing tax returns and other required government filings and paying taxes and
other administrative expenses when due;
(B) if the debtor
is not in compliance with the requirements referred to in subparagraph (A)(i)
or filing tax returns and other required government filings and making the
payments referred to in subparagraph (A)(ii), what the failures are and how, at
what cost, and when the debtor intends to remedy such failures; and
(C) such other
matters as are in the best interests of the debtor and creditors, and in the
public interest in fair and efficient procedures under chapter 11 of this
title.
[Rev. 4-29-05]
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Subchapter
II. Officers
11 USC §
321. Eligibility to serve as trustee
(a) A person may
serve as trustee in a case under this title only if such person is—
(1) an individual
that is competent to perform the duties of trustee and, in a case under chapter
7, 12, or 13 of this title, resides or has an office in the judicial district
within which the case is pending, or in any judicial district adjacent to such
district; or
(2) a corporation
authorized by such corporation’s charter or bylaws to act as trustee, and, in a
case under chapter 7, 12, or 13 of this title, having an office in at least one
of such districts.
(b) A person that
has served as an examiner in the case may not serve as trustee in the case.
(c) The United
States trustee for the judicial district in which the case is pending is
eligible to serve as trustee in the case if necessary.
[Rev. 4-30-05]
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11 USC §
322. Qualification of trustee
(a) Except as
provided in subsection (b)(1), a person selected under section 701, 702, 703,
1104, 1163, 1202, or 1302 of this title to serve as trustee in a case under
this title qualifies if before five days after such selection, and before
beginning official duties, such person has filed with the court a bond in favor
of the United States conditioned on the faithful performance of such official
duties.
(b)
(1) The United
States trustee qualifies wherever such trustee serves as trustee in a case
under this title.
(2) The United
States trustee shall determine—
(A) the amount of
a bond required to be filed under subsection (a) of this section; and
(B) the
sufficiency of the surety on such bond.
(c) A trustee is
not liable personally or on such trustee’s bond in favor of the United States
for any penalty or forfeiture incurred by the debtor.
(d) A proceeding
on a trustee’s bond may not be commenced after two years after the date on
which such trustee was discharged.
[Rev. 4-30-05]
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11 USC §
323. Role and capacity of trustee
(a) The trustee
in a case under this title is the representative of the estate.
(b) The trustee
in a case under this title has capacity to sue and be sued.
[Rev. 4-30-05]
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11 USC §
324. Removal of trustee or examiner
(a) The court,
after notice and a hearing, may remove a trustee, other than the United States
trustee, or an examiner, for cause.
(b) Whenever the
court removes a trustee or examiner under subsection (a) in a case under this
title, such trustee or examiner shall thereby be removed in all other cases
under this title in which such trustee or examiner is then serving unless the
court orders otherwise.
[Rev. 4-30-05]
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11 USC §
325. Effect of vacancy
A vacancy in the
office of trustee during a case does not abate any pending action or
proceeding, and the successor trustee shall be substituted as a party in such
action or proceeding.
[Rev. 4-30-05]
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11 USC §
326. Limitation on compensation of
trustee
(a) In a case
under chapter 7 or 11, the court may allow reasonable compensation under
section 330 of this title of the trustee for the trustee’s services, payable
after the trustee renders such services, not to exceed 25 percent on the first
$5,000 or less, 10 percent on any amount in excess of $5,000 but not in excess
of $50,000, 5 percent on any amount in excess of $50,000 but not in excess of
$1,000,000, and reasonable compensation not to exceed 3 percent of such moneys
in excess of $1,000,000, upon all moneys disbursed or turned over in the case
by the trustee to parties in interest, excluding the debtor, but including
holders of secured claims.
(b) In a case
under chapter 12 or 13 of this title, the court may not allow compensation for
services or reimbursement of expenses of the United States trustee or of a
standing trustee appointed under section 586(b) of title 28, but may allow
reasonable compensation under section 330 of this title of a trustee appointed
under section 1202(a) or 1302(a) of this title for the trustee’s services,
payable after the trustee renders such services, not to exceed five percent
upon all payments under the plan.
(c) If more than
one person serves as trustee in the case, the aggregate compensation of such
persons for such service may not exceed the maximum compensation prescribed for
a single trustee by subsection (a) or (b) of this section, as the case may be.
(d) The court may
deny allowance of compensation for services or reimbursement of expenses of the
trustee if the trustee failed to make diligent inquiry into facts that would
permit denial of allowance under section 328(c) of this title or, with
knowledge of such facts, employed a professional person under section 327 of
this title.
[Rev. 4-30-05]
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11 USC §
327. Employment of professional persons
(a) Except as
otherwise provided in this section, the trustee, with the court’s approval, may
employ one or more attorneys, accountants, appraisers, auctioneers, or other
professional persons, that do not hold or represent an interest adverse to the
estate, and that are disinterested persons, to represent or assist the trustee
in carrying out the trustee’s duties under this title.
(b) If the
trustee is authorized to operate the business of the debtor under section 721,
1202, or 1108 of this title, and if the debtor has regularly employed
attorneys, accountants, or other professional persons on salary, the trustee
may retain or replace such professional persons if necessary in the operation
of such business.
(c) In a case
under chapter 7, 12, or 11 of this title, a person is not disqualified for
employment under this section solely because of such person’s employment by or
representation of a creditor, unless there is objection by another creditor or
the United States trustee, in which case the court shall disapprove such
employment if there is an actual conflict of interest.
(d) The court may
authorize the trustee to act as attorney or accountant for the estate if such
authorization is in the best interest of the estate.
(e) The trustee,
with the court’s approval, may employ, for a specified special purpose, other
than to represent the trustee in conducting the case, an attorney that has
represented the debtor, if in the best interest of the estate, and if such
attorney does not represent or hold any interest adverse to the debtor or to
the estate with respect to the matter on which such attorney is to be employed.
(f) The trustee
may not employ a person that has served as an examiner in the case.
[Rev. 4-30-05]
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11 USC §
328. Limitation on compensation of
professional persons
(a) The trustee,
or a committee appointed under section 1102 of this title, with the court’s
approval, may employ or authorize the employment of a professional person under
section 327 or 1103 of this title, as the case may be, on any reasonable terms
and conditions of employment, including on a retainer, on an hourly basis, on a
fixed or percentage fee basis, or on a contingent fee basis. Notwithstanding
such terms and conditions, the court may allow compensation different from the
compensation provided under such terms and conditions after the conclusion of
such employment, if such terms and conditions prove to have been improvident in
light of developments not capable of being anticipated at the time of the
fixing of such terms and conditions.
(b) If the court
has authorized a trustee to serve as an attorney or accountant for the estate
under section 327(d) of this title, the court may allow compensation for the
trustee’s services as such attorney or accountant only to the extent that the
trustee performed services as attorney or accountant for the estate and not for
performance of any of the trustee’s duties that are generally performed by a
trustee without the assistance of an attorney or accountant for the estate.
(c) Except as
provided in section 327(c), 327(e), or 1107(b) of this title, the court may
deny allowance of compensation for services and reimbursement of expenses of a
professional person employed under section 327 or 1103 of this title if, at any
time during such professional person’s employment under section 327 or 1103>
of this title, such professional person is not a disinterested person, or
represents or holds an interest adverse to the interest of the estate with
respect to the matter on which such professional person is employed.
[Rev. 4-30-05]
--------------------------------------------------------------------------------
11 USC §
329. Debtor’s transactions with
attorneys
(a) Any attorney
representing a debtor in a case under this title, or in connection with such a
case, whether or not such attorney applies for compensation under this title,
shall file with the court a statement of the compensation paid or agreed to be
paid, if such payment or agreement was made after one year before the date of
the filing of the petition, for services rendered or to be rendered in
contemplation of or in connection with the case by such attorney, and the
source of such compensation.
(b) If such
compensation exceeds the reasonable value of any such services, the court may
cancel any such agreement, or order the return of any such payment, to the
extent excessive, to—
(1) the estate,
if the property transferred—
(A) would have
been property of the estate; or
(B) was to be
paid by or on behalf of the debtor under a plan under chapter 11, 12, or 13 of
this title; or
(2) the entity
that made such payment.
[Rev. 4-30-05]
--------------------------------------------------------------------------------
11 USC §
330. Compensation of officers
(a)
(1) After notice
to the parties in interest and the United States Trustee and a hearing, and
subject to sections 326, 328, and 329, the court may award to a trustee, a
consumer privacy ombudsman appointed under section 332, an examiner, an
ombudsman appointed under section 333, or a professional person employed under
section 327 or 1103--
(A) reasonable
compensation for actual, necessary services rendered by the trustee, examiner,
professional person, or attorney and by any paraprofessional person employed by
any such person; and
(B) reimbursement
for actual, necessary expenses.
(2) The court
may, on its own motion or on the motion of the United States Trustee, the
United States Trustee for the District or Region, the trustee for the estate,
or any other party in interest, award compensation that is less than the amount
of compensation that is requested.
(3) In
determining the amount of reasonable compensation to be awarded to an examiner,
trustee under chapter 11, or professional person, the court shall consider the
nature, the extent, and the value of such services, taking into account all
relevant factors, including--
(A) the time
spent on such services;
(B) the rates
charged for such services;
(C) whether the
services were necessary to the administration of, or beneficial at the time at
which the service was rendered toward the completion of, a case under this
title;
(D) whether the
services were performed within a reasonable amount of time commensurate with
the complexity, importance, and nature of the problem, issue, or task
addressed; and
(E) with respect
to a professional person, whether the person is board certified or otherwise
has demonstrated skill and experience in the bankruptcy field; and
(F) whether the
compensation is reasonable based on the customary compensation charged by
comparably skilled practitioners in cases other than cases under this title.
(4)
(A) Except as
provided in subparagraph (B), the court shall not allow compensation for—
(i) unnecessary
duplication of services; or
(ii) services
that were not—
(I) reasonably
likely to benefit the debtor’s estate; or
(II) necessary to
the administration of the case.
(B) In a chapter
12 or chapter 13 case in which the debtor is an individual, the court may allow
reasonable compensation to the debtor’s attorney for representing the interests
of the debtor in connection with the bankruptcy case based on a consideration of
the benefit and necessity of such services to the debtor and the other factors
set forth in this section.
(5) The court
shall reduce the amount of compensation awarded under this section by the
amount of any interim compensation awarded under section 331, and, if the
amount of such interim compensation exceeds the amount of compensation awarded
under this section, may order the return of the excess to the estate.
(6) Any
compensation awarded for the preparation of a fee application shall be based on
the level and skill reasonably required to prepare the application.
(7) In
determining the amount of reasonable compensation to be awarded to a trustee,
the court shall treat such compensation as a commission, based on section 326.
(b)
(1) There shall
be paid from the filing fee in a case under chapter 7 of this title $45 to the
trustee serving in such case, after such trustee’s services are rendered.
(2) The Judicial
Conference of the United States—
(A) shall
prescribe additional fees of the same kind as prescribed under section 1914(b)
of title 28; and
(B) may prescribe
notice of appearance fees and fees charged against distributions in cases under
this title;
to pay $15 to
trustees serving in cases after such trustees’ services are rendered. Beginning
1 year after the date of the enactment of the Bankruptcy Reform Act of 1994,
such $15 shall be paid in addition to the amount paid under paragraph (1).
(c) Unless the
court orders otherwise, in a case under chapter 12 or 13 of this title the
compensation paid to the trustee serving in the case shall not be less than $5
per month from any distribution under the plan during the administration of the
plan.
(d) In a case in
which the United States trustee serves as trustee, the compensation of the
trustee under this section shall be paid to the clerk of the bankruptcy court
and deposited by the clerk into the United States Trustee System Fund
established by section 589a of title 28.
[Rev. 4-30-05]
--------------------------------------------------------------------------------
11 USC §
331. Interim compensation
A trustee, an
examiner, a debtor’s attorney, or any professional person employed under
section 327 or 1103 of this title may apply to the court not more than once
every 120 days after an order for relief in a case under this title, or more
often if the court permits, for such compensation for services rendered before
the date of such an application or reimbursement for expenses incurred before
such date as is provided under section 330 of this title. After notice and a
hearing, the court may allow and disburse to such applicant such compensation
or reimbursement.
[Rev. 4-30-05]
--------------------------------------------------------------------------------
11 USC §
332. Consumer privacy ombudsman
(a) If a hearing
is required under section 363(b)(1)(B), the court shall order the United States
trustee to appoint, not later than 5 days before the commencement of the
hearing, 1 disinterested person (other than the United States trustee) to serve
as the consumer privacy ombudsman in the case and shall require that notice of
such hearing be timely given to such ombudsman.
(b) The consumer
privacy ombudsman may appear and be heard at such hearing and shall provide to
the court information to assist the court in its consideration of the facts,
circumstances, and conditions of the proposed sale or lease of personally
identifiable information under section 363(b)(1)(B). Such information may include
presentation of--
(1) the debtor's
privacy policy;
(2) the potential
losses or gains of privacy to consumers if such sale or such lease is approved
by the court;
(3) the potential
costs or benefits to consumers if such sale or such lease is approved by the
court; and
(4) the potential
alternatives that would mitigate potential privacy losses or potential costs to
consumers.
(c) A consumer
privacy ombudsman shall not disclose any personally identifiable information
obtained by the ombudsman under this title.
[Rev. 4-30-05]
--------------------------------------------------------------------------------
11 USC §
333. Appointment of patient care
ombudsman
(a)
(1) If the debtor
in a case under chapter 7, 9, or 11 is a health care business, the court shall
order, not later than 30 days after the commencement of the case, the
appointment of an ombudsman to monitor the quality of patient care and to
represent the interests of the patients of the health care business unless the
court finds that the appointment of such ombudsman is not necessary for the
protection of patients under the specific facts of the case.
(2)
(A) If the court
orders the appointment of an ombudsman under paragraph (1), the United States
trustee shall appoint 1 disinterested person (other than the United States
trustee) to serve as such ombudsman.
(B) If the debtor
is a health care business that provides long-term care, then the United States trustee
may appoint the State Long-Term Care Ombudsman appointed under the Older
Americans Act of 1965 for the State in which the case is pending to serve as
the ombudsman required by paragraph (1).
(C) If the United
States trustee does not appoint a State Long-Term Care Ombudsman under
subparagraph (B), the court shall notify the State Long-Term Care Ombudsman
appointed under the Older Americans Act of 1965 for the State in which the case
is pending, of the name and address of the person who is appointed under
subparagraph (A).
(b) An ombudsman
appointed under subsection (a) shall--
(1) monitor the
quality of patient care provided to patients of the debtor, to the extent
necessary under the circumstances, including interviewing patients and
physicians;
(2) not later
than 60 days after the date of appointment, and not less frequently than at
60-day intervals thereafter, report to the court after notice to the parties in
interest, at a hearing or in writing, regarding the quality of patient care
provided to patients of the debtor; and
(3) if such
ombudsman determines that the quality of patient care provided to patients of
the debtor is declining significantly or is otherwise being materially
compromised, file with the court a motion or a written report, with notice to
the parties in interest immediately upon making such determination.
(c)
(1) An ombudsman
appointed under subsection (a) shall maintain any information obtained by such
ombudsman under this section that relates to patients (including information
relating to patient records) as confidential information. Such ombudsman may
not review confidential patient records unless the court approves such review
in advance and imposes restrictions on such ombudsman to protect the
confidentiality of such records.
(2) An ombudsman
appointed under subsection (a)(2)(B) shall have access to patient records
consistent with authority of such ombudsman under the Older Americans Act of
1965 and under non-Federal laws governing the State Long-Term Care Ombudsman
program.
[Rev. 4-30-05]
--------------------------------------------------------------------------------
Subchapter
III. Administration
11 USC §
341. Meetings of creditors and equity
security holders
(a) Within a
reasonable time after the order for relief in a case under this title, the
United States trustee shall convene and preside at a meeting of creditors.
(b) The United
States trustee may convene a meeting of any equity security holders.
(c) The court may
not preside at, and may not attend, any meeting under this section including
any final meeting of creditors. Notwithstanding any local court rule, provision
of a State constitution, any otherwise applicable nonbankruptcy law, or any
other requirement that representation at the meeting of creditors under
subsection (a) be by an attorney, a creditor holding a consumer debt or any representative
of the creditor (which may include an entity or an employee of an entity and
may be a representative for more than 1 creditor) shall be permitted to appear
at and participate in the meeting of creditors in a case under chapter 7 or 13,
either alone or in conjunction with an attorney for the creditor. Nothing in
this subsection shall be construed to require any creditor to be represented by
an attorney at any meeting of creditors.
(d) Prior to the
conclusion of the meeting of creditors or equity security holders, the trustee
shall orally examine the debtor to ensure that the debtor in a case under
chapter 7 of this title is aware of—
(1) the potential
consequences of seeking a discharge in bankruptcy, including the effects on
credit history;
(2) the debtor’s
ability to file a petition under a different chapter of this title;
(3) the effect of
receiving a discharge of debts under this title; and
(4) the effect of
reaffirming a debt, including the debtor’s knowledge of the provisions of
section 524(d) of this title.
(e)
Notwithstanding subsections (a) and (b), the court, on the request of a party
in interest and after notice and a hearing, for cause may order that the United
States trustee not convene a meeting of creditors or equity security holders if
the debtor has filed a plan as to which the debtor solicited acceptances prior
to the commencement of the case.
[Rev. 4-30-05]
--------------------------------------------------------------------------------
11 USC §
342. Notice
[Sample notice
given by
(a) There shall
be given such notice as is appropriate, including notice to any holder of a
community claim, of an order for relief in a case under this title.
(b) Before the
commencement of a case under this title by an individual whose debts are
primarily consumer debts, the clerk shall give to such individual written
notice containing--
(1) a brief
description of--
(A) chapters 7,
11, 12, and 13 and the general purpose, benefits, and costs of proceeding under
each of those chapters; and
(B) the types of
services available from credit counseling agencies; and
(2) statements
specifying that--
(A) a person who
knowingly and fraudulently conceals assets or makes a false oath or statement
under penalty of perjury in connection with a case under this title shall be
subject to fine, imprisonment, or both; and
(B) all
information supplied by a debtor in connection with a case under this title is
subject to examination by the Attorney General.
(c)
(1) If notice is
required to be given by the debtor to a creditor under this title, any rule,
any applicable law, or any order of the court, such notice shall contain the
name, address, and last 4 digits of the taxpayer identification number of the
debtor. If the notice concerns an amendment that adds a creditor to the
schedules of assets and liabilities, the debtor shall include the full taxpayer
identification number in the notice sent to that creditor, but the debtor shall
include only the last 4 digits of the taxpayer identification number in the
copy of the notice filed with the court.
(2)
(A) If, within
the 90 days before the commencement of a voluntary case, a creditor supplies
the debtor in at least 2 communications sent to the debtor with the current
account number of the debtor and the address at which such creditor requests to
receive correspondence, then any notice required by this title to be sent by
the debtor to such creditor shall be sent to such address and shall include
such account number.
(B) If a creditor
would be in violation of applicable nonbankruptcy law by sending any such
communication within such 90-day period and if such creditor supplies the
debtor in the last 2 communications with the current account number of the
debtor and the address at which such creditor requests to receive
correspondence, then any notice required by this title to be sent by the debtor
to such creditor shall be sent to such address and shall include such account
number.
(d) In a case
under chapter 7 of this title in which the debtor is an individual and in which
the presumption of abuse arises under section 707(b), the clerk shall give
written notice to all creditors not later than 10 days after the date of the
filing of the petition that the presumption of abuse has arisen.
(e)
(1) In a case
under chapter 7 or 13 of this title of a debtor who is an individual, a
creditor at any time may both file with the court and serve on the debtor a
notice of address to be used to provide notice in such case to such creditor.
(2) Any notice in
such case required to be provided to such creditor by the debtor or the court
later than 5 days after the court and the debtor receive such creditor's notice
of address, shall be provided to such address.
(f)
(1) An entity may
file with any bankruptcy court a notice of address to be used by all the
bankruptcy courts or by particular bankruptcy courts, as so specified by such
entity at the time such notice is filed, to provide notice to such entity in
all cases under chapters 7 and 13 pending in the courts with respect to which
such notice is filed, in which such entity is a creditor.
(2) In any case
filed under chapter 7 or 13, any notice required to be provided by
(3) A notice
filed under paragraph (1) may be withdrawn by such entity.
(g)
(1) Notice
provided to a creditor by the debtor or the court other than in accordance with
this section (excluding this subsection) shall not be effective notice until such
notice is brought to the attention of such creditor. If such creditor
designates a person or an organizational subdivision of such creditor to be
responsible for receiving notices under this title and establishes reasonable
procedures so that such notices receivable by such creditor are to be delivered
to such person or such subdivision, then a notice provided to such creditor
other than in accordance with this section (excluding this subsection) shall
not be considered to have been brought to the attention of such creditor until
such notice is received by such person or such subdivision.
(2) A monetary
penalty may not be imposed on a creditor for a violation of a stay in effect
under section 362(a) (including a monetary penalty imposed under section
362(k)) or for failure to comply with section 542 or 543 unless the conduct
that is the basis of such violation or of such failure occurs after such
creditor receives notice effective under this section of the order for relief.
[Rev. 4-30-05]
--------------------------------------------------------------------------------
11 USC §
346. Special provisions related to the
treatment of State and local taxes
(a) Whenever the
Internal Revenue Code of 1986 provides that a separate taxable estate or entity
is created in a case concerning a debtor under this title, and the income,
gain, loss, deductions, and credits of such estate shall be taxed to or claimed
by the estate, a separate taxable estate is also created for purposes of any
State and local law imposing a tax on or measured by income and such income,
gain, loss, deductions, and credits shall be taxed to or claimed by the estate
and may not be taxed to or claimed by the debtor. The preceding sentence shall
not apply if the case is dismissed. The trustee shall make tax returns of
income required under any such State or local law.
(b) Whenever the
Internal Revenue Code of 1986 provides that no separate taxable estate shall be
created in a case concerning a debtor under this title, and the income, gain,
loss, deductions, and credits of an estate shall be taxed to or claimed by the
debtor, such income, gain, loss, deductions, and credits shall be taxed to or
claimed by the debtor under a State or local law imposing a tax on or measured
by income and may not be taxed to or claimed by the estate. The trustee shall
make such tax returns of income of corporations and of partnerships as are
required under any State or local law, but with respect to partnerships, shall
make such returns only to the extent such returns are also required to be made
under such Code. The estate shall be liable for any tax imposed on such
corporation or partnership, but not for any tax imposed on partners or members.
(c) With respect
to a partnership or any entity treated as a partnership under a State or local
law imposing a tax on or measured by income that is a debtor in a case under
this title, any gain or loss resulting from a distribution of property from
such partnership, or any distributive share of any income, gain, loss,
deduction, or credit of a partner or member that is distributed, or considered
distributed, from such partnership, after the commencement of the case, is
gain, loss, income, deduction, or credit, as the case may be, of the partner or
member, and if such partner or member is a debtor in a case under this title,
shall be subject to tax in accordance with subsection (a) or (b).
(d) For purposes
of any State or local law imposing a tax on or measured by income, the taxable
period of a debtor in a case under this title shall terminate only if and to
the extent that the taxable period of such debtor terminates under the Internal
Revenue Code of 1986.
(e) The estate in
any case described in subsection (a) shall use the same accounting method as
the debtor used immediately before the commencement of the case, if such method
of accounting complies with applicable nonbankruptcy tax law.
(f) For purposes
of any State or local law imposing a tax on or measured by income, a transfer
of property from the debtor to the estate or from the estate to the debtor
shall not be treated as a disposition for purposes of any provision assigning
tax consequences to a disposition, except to the extent that such transfer is
treated as a disposition under the Internal Revenue Code of 1986.
(g) Whenever a
tax is imposed pursuant to a State or local law imposing a tax on or measured
by income pursuant to subsection (a) or (b), such tax shall be imposed at rates
generally applicable to the same types of entities under such State or local
law.
(h) The trustee
shall withhold from any payment of claims for wages, salaries, commissions,
dividends, interest, or other payments, or collect, any amount required to be
withheld or collected under applicable State or local tax law, and shall pay
such withheld or collected amount to the appropriate governmental unit at the
time and in the manner required by such tax law, and with the same priority as
the claim from which such amount was withheld or collected was paid.
(i)
(1) To the extent
that any State or local law imposing a tax on or measured by income provides
for the carryover of any tax attribute from one taxable period to a subsequent
taxable period, the estate shall succeed to such tax attribute in any case in
which such estate is subject to tax under subsection (a).
(2) After such a
case is closed or dismissed, the debtor shall succeed to any tax attribute to
which the estate succeeded under paragraph (1) to the extent consistent with
the Internal Revenue Code of 1986.
(3) The estate
may carry back any loss or tax attribute to a taxable period of the debtor that
ended before the date of the order for relief under this title to the extent
that--
(A) applicable
State or local tax law provides for a carryback in the case of the debtor; and
(B) the same or a
similar tax attribute may be carried back by the estate to such a taxable
period of the debtor under the Internal Revenue Code of 1986.
(j)
(1) For purposes
of any State or local law imposing a tax on or measured by income, income is
not realized by the estate, the debtor, or a successor to the debtor by reason
of discharge of indebtedness in a case under this title, except to the extent,
if any, that such income is subject to tax under the Internal Revenue Code of
1986.
(2) Whenever the
Internal Revenue Code of 1986 provides that the amount excluded from gross
income in respect of the discharge of indebtedness in a case under this title
shall be applied to reduce the tax attributes of the debtor or the estate, a
similar reduction shall be made under any State or local law imposing a tax on
or measured by income to the extent such State or local law recognizes such
attributes. Such State or local law may also provide for the reduction of other
attributes to the extent that the full amount of income from the discharge of
indebtedness has not been applied.
(k)
(1) Except as
provided in this section and section 505, the time and manner of filing tax
returns and the items of income, gain, loss, deduction, and credit of any
taxpayer shall be determined under applicable nonbankruptcy law.
(2) For Federal
tax purposes, the provisions of this section are subject to the Internal
Revenue Code of 1986 and other applicable Federal nonbankruptcy law.
[Rev. 4-30-05]
--------------------------------------------------------------------------------
11 USC §
366. Utility service
(a) Except as
provided in subsections (b) and (c) of this section, a utility may not alter,
refuse, or discontinue service to, or discriminate against, the trustee or the
debtor solely on the basis of the commencement of a case under this title or
that a debt owed by the debtor to such utility for service rendered before the
order for relief was not paid when due.
(b) Such utility
may alter, refuse, or discontinue service if neither the trustee nor the
debtor, within 20 days after the date of the order for relief, furnishes
adequate assurance of payment, in the form of a deposit or other security, for
service after such date. On request of a party in interest and after notice and
a hearing, the court may order reasonable modification of the amount of the
deposit or other security necessary to provide adequate assurance of payment.
(c)
(1)
(A) For purposes
of this subsection, the term `assurance of payment' means--
(i) a cash
deposit;
(ii) a letter of
credit;
(iii) a
certificate of deposit;
(iv) a surety
bond;
(v) a prepayment
of utility consumption; or
(vi) another form
of security that is mutually agreed on between the utility and the debtor or
the trustee.
(B) For purposes
of this subsection an administrative expense priority shall not constitute an
assurance of payment.
(2) Subject to
paragraphs (3) and (4), with respect to a case filed under chapter
(3)
(A) On request of
a party in interest and after notice and a hearing, the court may order
modification of the amount of an assurance of payment under paragraph (2).
(B) In making a
determination under this paragraph whether an assurance of payment is adequate,
the court may not consider--
(i) the absence
of security before the date of the filing of the petition;
(ii) the payment
by the debtor of charges for utility service in a timely manner before the date
of the filing of the petition; or
(iii) the
availability of an administrative expense priority.
(4)
Notwithstanding any other provision of law, with respect to a case subject to
this subsection, a utility may recover or set off against a security deposit
provided to the utility by the debtor before the date of the filing of the
petition without notice or order of the court.
[Rev. 5-5-05]
--------------------------------------------------------------------------------
Chapter 5. Creditors, the Debtor, and the Estate
Subchapter
I. Creditors and Claims
§ 501. Filing of
proofs of claims or interests
§ 502. Allowance
of claims or interests
§ 503. Allowance
of administrative expenses
§ 504. Sharing of
compensation
§ 505.
Determination of tax liability
§ 506.
Determination of secured status
§ 507. Priorities
§ 508. Effect of
distribution other than under this title
§ 509. Claims of
codebtors
§ 510.
Subordination
§ 511. Rate of
interest on tax claims
Subchapter
II. Debtor's Duties and Benefits
§ 521. Debtor's
duties
§ 522. Exemptions
§ 523. Exceptions
to discharge
§ 524. Effect of
discharge
§ 525. Protection
against discriminatory treatment
§ 526.
Restrictions on debt relief agencies
§ 527.
Disclosures
§ 528.
Requirements for debt relief agencies
Subchapter
III. The Estate
§ 541. Property
of the estate
§ 542. Turnover
of property to the estate
§ 543. Turnover
of property by a custodian
§ 544. Trustee as
lien creditor and as successor to certain creditors and purchasers
§ 545. Statutory
liens
§ 546.
Limitations on avoiding powers
§ 547.
Preferences
§ 548. Fraudulent
transfers and obligations
§ 549.
Postpetition transactions
§ 550. Liability
of transferee of avoided transfer
§ 551. Automatic
preservation of avoided transfer
§ 552.
Postpetition effect of security interest
§ 553. Setoff
§ 554.
Abandonment of property of the estate
§ 555.
Contractual right to liquidate, terminate, or accelerate a securities contract
§ 556.
Contractual right to liquidate, terminate, or accelerate a commodities contract
or forward contract
§ 557. Expedited
determination of interests in, and abandonment or other disposition of grain
assets
§ 558. Defenses
of the estate
§ 559.
Contractual right to liquidate, terminate, or accelerate a repurchase agreement
§ 560.
Contractual right to liquidate, terminate, or accelerate a swap agreement
§ 561. Contractual
right to terminate, liquidate, accelerate, or offset under a master netting
agreement and across contracts; proceedings under chapter 15
§ 562. Timing of
damage measurement in connection with swap agreements, securities contracts,
forward contracts, commodity contracts, repurchase agreements, and master
netting agreements
--------------------------------------------------------------------------------
Subchapter
I. Creditors and Claims
11 USC §
501. Filing of proofs of claims or
interests
(a) A creditor or
an indenture trustee may file a proof of claim. An equity security holder may
file a proof of interest.
(b) If a creditor
does not timely file a proof of such creditor’s claim, an entity that is liable
to such creditor with the debtor, or that has secured such creditor, may file a
proof of such claim.
(c) If a creditor
does not timely file a proof of such creditor’s claim, the debtor or the
trustee may file a proof of such claim.
(d) A claim of a
kind specified in section 502(e)(2), 502(f), 502(g), 502(h) or 502(i) of this
title may be filed under subsection (a), (b), or (c) of this section the same
as if such claim were a claim against the debtor and had arisen before the date
of the filing of the petition.
(e) A claim
arising from the liability of a debtor for fuel use tax assessed consistent
with the requirements of section 31705 of title 49 may be filed by the base
jurisdiction designated pursuant to the International Fuel Tax Agreement (as
defined in section 31701 of title 49) and, if so filed, shall be allowed as a
single claim.
[Rev. 5-6-05]
--------------------------------------------------------------------------------
11 USC §
502. Allowance of claims or interests
(a) A claim or
interest, proof of which is filed under section 501 of this title, is deemed
allowed, unless a party in interest, including a creditor of a general partner
in a partnership that is a debtor in a case under chapter 7 of this title,
objects.
(b) Except as
provided in subsections (e)(2), (f), (g), (h) and (i) of this section, if such
objection to a claim is made, the court, after notice and a hearing, shall
determine the amount of such claim in lawful currency of the United States as
of the date of the filing of the petition, and shall allow such claim in such
amount, except to the extent that--
(1) such claim is
unenforceable against the debtor and property of the debtor, under any
agreement or applicable law for a reason other than because such claim is
contingent or unmatured;
(2) such claim is
for unmatured interest;
(3) if such claim
is for a tax assessed against property of the estate, such claim exceeds the
value of the interest of the estate in such property;
(4) if such claim
is for services of an insider or attorney of the debtor, such claim exceeds the
reasonable value of such services;
(5) such claim is
for a debt that is unmatured on the date of the filing of the petition and that
is excepted from discharge under section 523(a)(5) of this title;
(6) if such claim
is the claim of a lessor for damages resulting from the termination of a lease
of real property, such claim exceeds--
(A) the rent
reserved by such lease, without acceleration, for the greater of one year, or
15 percent, not to exceed three years, of the remaining term of such lease,
following the earlier of--
(i) the date of
the filing of the petition; and
(ii) the date on
which such lessor repossessed, or the lessee surrendered, the leased property;
plus
(B) any unpaid
rent due under such lease, without acceleration, on the earlier of such dates;
(7) if such claim
is the claim of an employee for damages resulting from the termination of an
employment contract, such claim exceeds--
(A) the
compensation provided by such contract, without acceleration, for one year
following the earlier of--
(i) the date of
the filing of the petition; or
(ii) the date on
which the employer directed the employee to terminate, or such employee
terminated, performance under such contract; plus
(B) any unpaid
compensation due under such contract, without acceleration, on the earlier of
such dates;
(8) such claim
results from a reduction, due to late payment, in the amount of an otherwise
applicable credit available to the debtor in connection with an employment tax
on wages, salaries, or commissions earned from the debtor; or
(9) proof of such
claim is not timely filed, except to the extent tardily filed as permitted
under paragraph (1), (2), or (3) of section 726(a) of this title or under the
Federal Rules of Bankruptcy Procedure, except that a claim of a governmental
unit shall be timely filed if it is filed before 180 days after the date of the
order for relief or such later time as the Federal Rules of Bankruptcy
Procedure may provide, and except that in a case under chapter
(c) There shall
be estimated for purpose of allowance under this section--
(1) any
contingent or unliquidated claim, the fixing or liquidation of which, as the
case may be, would unduly delay the administration of the case; or
(2) any right to
payment arising from a right to an equitable remedy for breach of performance.
(d)
Notwithstanding subsections (a) and (b) of this section, the court shall
disallow any claim of any entity from which property is recoverable under
section 542, 543, 550, or 553 of this title or that is a transferee of a
transfer avoidable under section 522(f), 522(h), 544, 545, 547, 548, 549, or
724(a) of this title, unless such entity or transferee has paid the amount, or
turned over any such property, for which such entity or transferee is liable
under section 522(i), 542, 543, 550, or
553 of this title.
(e)
(1)
Notwithstanding subsections (a), (b), and (c) of this section and paragraph (2)
of this subsection, the court shall disallow any claim for reimbursement or
contribution of an entity that is liable with the debtor on or has secured the
claim of a creditor, to the extent that--
(A) such
creditor’s claim against the estate is disallowed;
(B) such claim
for reimbursement or contribution is contingent as of the time of allowance or
disallowance of such claim for reimbursement or contribution; or
(C) such entity
asserts a right of subrogation to the rights of such creditor under section 509
of this title.
(2) A claim for
reimbursement or contribution of such an entity that becomes fixed after the
commencement of the case shall be determined, and shall be allowed under
subsection (a), (b) or (c) of this section, or disallowed under subsection (d)
of this section, the same as if such claim had become fixed before the date of
the filing of the petition.
(f) In an
involuntary case, a claim arising in the ordinary course of the debtor’s
business or financial affairs after the commencement of the case but before the
earlier of the appointment of a trustee and the order for relief shall be
determined as of the date such claim arises, and shall be allowed under
subsection (a), (b) or (c) of this section or disallowed under subsection (d)
or (e) of this section, the same as if such claim had arisen before the date of
the filing of the petition.
(g)
(1) A claim
arising from the rejection, under section 365 of this title or under a plan
under chapter 9, 11, 12, or 13 of this title, of an executory contract or
unexpired lease of the debtor that has not been assumed shall be determined,
and shall be allowed under subsection
(a), (b) or (c) of this section or disallowed under subsection (d) or (e) of
this section, the same as if such claim had arisen before the date of the
filing of the petition.
(2) A claim for
damages calculated in accordance with section 562 shall be allowed under
subsection (a), (b), or (c), or disallowed under subsection (d) or (e), as if
such claim had arisen before the date of the filing of the petition.
(h) A claim
arising from the recovery of property under section 522, 550, or 553 of this
title shall be determined, and shall be allowed under subsection (a), (b) or
(c) of this section, or disallowed under
subsection (d) or (e) of this section, the same as if such claim had
arisen before the date of the filing of the petition.
(i) A claim that
does not arise until after the commencement of the case for a tax entitled to
priority under section 507(a)(8) of this title shall be determined, and shall
be allowed under subsection (a), (b) or (c) of this section, or disallowed
under subsection (d) or (e) of this section, the same as if such claim had
arisen before the date of the filing of the petition.
(j) A claim that
has been allowed or disallowed may be reconsidered for cause. A reconsidered
claim may be allowed or disallowed according to the equities of the case.
Reconsideration of a claim under this subsection does not affect the validity
of any payment or transfer from the estate made to a holder of an allowed claim
on account of such allowed claim that is not reconsidered, but if a
reconsidered claim is allowed and is of the same class as such holder’s claim,
such holder may not receive any additional payment or transfer from the estate
on account of such holder’s allowed claim until the holder of such reconsidered
and allowed claim receives payment on account of such claim proportionate in
value to that already received by such other holder. This subsection does not
alter or modify the trustee’s right to recover from a creditor any excess
payment or transfer made to such creditor.
(k)
(1) The court, on
the motion of the debtor and after a hearing, may reduce a claim filed under
this section based in whole on an unsecured consumer debt by not more than 20
percent of the claim, if--
(A) the claim was
filed by a creditor who unreasonably refused to negotiate a reasonable
alternative repayment schedule proposed on behalf of the debtor by an approved
nonprofit budget and credit counseling agency described in section 111;
(B) the offer of
the debtor under subparagraph (A)--
(i) was made at least
60 days before the date of the filing of the petition; and
(ii) provided for
payment of at least 60 percent of the amount of the debt over a period not to
exceed the repayment period of the loan, or a reasonable extension thereof; and
(C) no part of
the debt under the alternative repayment schedule is nondischargeable.
(2) The debtor
shall have the burden of proving, by clear and convincing evidence, that--
(A) the creditor
unreasonably refused to consider the debtor's proposal; and
(B) the proposed
alternative repayment schedule was made prior to expiration of the 60-day
period specified in paragraph (1)(B)(i).
[Rev. 5-6-05]
--------------------------------------------------------------------------------
11 USC §
503. Allowance of administrative
expenses
(a) An entity may
timely file a request for payment of an administrative expense, or may tardily
file such request if permitted by the court for cause.
(b) After notice
and a hearing, there shall be allowed administrative expenses, other than
claims allowed under section 502(f) of this title, including--
(1)
(A) the actual,
necessary costs and expenses of preserving the estate including--
(i) wages, salaries,
and commissions for services rendered after the commencement of the case; and
(ii) wages and
benefits awarded pursuant to a judicial proceeding or a proceeding of the
National Labor Relations Board as back pay attributable to any period of time
occurring after commencement of the case under this title, as a result of a
violation of Federal or State law by the debtor, without regard to the time of
the occurrence of unlawful conduct on which such award is based or to whether
any services were rendered, if the court determines that payment of wages and
benefits by reason of the operation of this clause will not substantially
increase the probability of layoff or termination of current employees, or of
nonpayment of domestic support obligations, during the case under this title;
(B) any tax--
(i) incurred by
the estate, whether secured or unsecured, including property taxes for which
liability is in rem, in personam, or both, except a tax of a kind specified in
section 507(a)(8) of this title; or
(ii) attributable
to an excessive allowance of a tentative carryback adjustment that the estate
received, whether the taxable year to which such adjustment relates ended
before or after the commencement of the case;
(C) any fine,
penalty, or reduction in credit relating to a tax of a kind specified in
subparagraph (B) of this paragraph; and
(D)
notwithstanding the requirements of subsection (a), a governmental unit shall
not be required to file a request for the payment of an expense described in
subparagraph (B) or (C), as a condition of its being an allowed administrative
expense;
(2) compensation
and reimbursement awarded under section 330(a) of this title;
(3) the actual,
necessary expenses, other than compensation and reimbursement specified in
paragraph (4) of this subsection, incurred by--
(A) a creditor
that files a petition under section 303 of this title;
(B) a creditor
that recovers, after the court’s approval, for the benefit of the estate any
property transferred or concealed by the debtor;
(C) a creditor in
connection with the prosecution of a criminal offense relating to the case or
to the business or property of the debtor;
(D) a creditor,
an indenture trustee, an equity security holder, or a committee representing
creditors or equity security holders other than a committee appointed under
section 1102 of this title, in making a substantial contribution in a case
under chapter 9 or 11 of this title;
(E) a custodian
superseded under section 543 of this title, and compensation for the services
of such custodian; or
(F) a member of a
committee appointed under section 1102 of this title, if such expenses are
incurred in the performance of the duties of such committee;
(4) reasonable
compensation for professional services rendered by an attorney or an accountant
of an entity whose expense is allowable under subparagraph (A), (B), (C), (D),
or (E) of paragraph (3) of this subsection, based on the time, the nature, the
extent, and the value of such services, and the cost of comparable services other
than in a case under this title, and reimbursement for actual, necessary
expenses incurred by such attorney or accountant;
(5) reasonable
compensation for services rendered by an indenture trustee in making a
substantial contribution in a case under chapter 9 or 11 of this title, based
on the time, the nature, the extent, and the value of such services, and the
cost of comparable services other than in a case under this title;
(6) the fees and
mileage payable under chapter 119 of title 28;
(7) with respect
to a nonresidential real property lease previously assumed under section 365,
and subsequently rejected, a sum equal to all monetary obligations due,
excluding those arising from or relating to a failure to operate or a penalty
provision, for the period of 2 years following the later of the rejection date
or the date of actual turnover of the premises, without reduction or setoff for
any reason whatsoever except for sums actually received or to be received from
an entity other than the debtor, and the claim for remaining sums due for the
balance of the term of the lease shall be a claim under section 502(b)(6);
(8) the actual,
necessary costs and expenses of closing a health care business incurred by a
trustee or by
(A) in disposing
of patient records in accordance with section 351; or
(B) in connection
with transferring patients from the health care business that is in the process
of being closed to another health care business; and
(9) the value of
any goods received by the debtor within 20 days before the date of commencement
of a case under this title in which the goods have been sold to the debtor in
the ordinary course of such debtor's business.
(c)
Notwithstanding subsection (b), there shall neither be allowed, nor paid--
(1) a transfer
made to, or an obligation incurred for the benefit of, an insider of the debtor
for the purpose of inducing such person to remain with the debtor's business,
absent a finding by the court based on evidence in the record that--
(A) the transfer
or obligation is essential to retention of the person because the individual
has a bona fide job offer from another business at the same or greater rate of
compensation;
(B) the services
provided by the person are essential to the survival of the business; and
(C) either--
(i) the amount of
the transfer made to, or obligation incurred for the benefit of, the person is
not greater than an amount equal to 10 times the amount of the mean transfer or
obligation of a similar kind given to nonmanagement employees for any purpose during
the calendar year in which the transfer is made or the obligation is incurred;
or
(ii) if no such
similar transfers were made to, or obligations were incurred for the benefit
of, such nonmanagement employees during such calendar year, the amount of the
transfer or obligation is not greater than an amount equal to 25 percent of the
amount of any similar transfer or obligation made to or incurred for the
benefit of such insider for any purpose during the calendar year before the
year in which such transfer is made or obligation is incurred;
(2) a severance
payment to an insider of the debtor, unless--
(A) the payment
is part of a program that is generally applicable to all full-time employees;
and
(B) the amount of
the payment is not greater than 10 times the amount of the mean severance pay
given to nonmanagement employees during the calendar year in which the payment
is made; or
(3) other
transfers or obligations that are outside the ordinary course of business and
not justified by the facts and circumstances of the case, including transfers
made to, or obligations incurred for the benefit of, officers, managers, or
consultants hired after the date of the filing of the petition.
[Rev. 5-6-05]
--------------------------------------------------------------------------------
11 USC §
504. Sharing of compensation
(a) Except as
provided in subsection (b) of this section, a person receiving compensation or
reimbursement under section 503(b)(2) or 503(b)(4) of this title may not share
or agree to share--
(1) any such
compensation or reimbursement with another person; or
(2) any
compensation or reimbursement received by another person under such sections.
(b)
(1) A member,
partner, or regular associate in a professional association, corporation, or
partnership may share compensation or reimbursement received under section
503(b)(2) or of this title with another member, partner, or regular associate
in such association, corporation, or partnership, and may share in any
compensation or reimbursement received under such sections by another member,
partner, or regular associate in such association, corporation, or partnership.
(2) An attorney
for a creditor that files a petition under section 303 of this title may share
compensation and reimbursement received under section 503(b)(4) of this title
with any other attorney contributing to the services rendered or expenses
incurred by such creditor’s attorney.
(c) This section
shall not apply with respect to sharing, or agreeing to share, compensation
with a bona fide public service attorney referral program that operates in
accordance with non-Federal law regulating attorney referral services and with
rules of professional responsibility applicable to attorney acceptance of
referrals.
[Rev. 5-6-05]
--------------------------------------------------------------------------------
11 USC §
505. Determination of tax liability
(a)
(1) Except as
provided in paragraph (2) of this subsection, the court may determine the
amount or legality of any tax, any fine or penalty relating to a tax, or any
addition to tax, whether or not previously assessed, whether or not paid, and
whether or not contested before and adjudicated by a judicial or administrative
tribunal of competent jurisdiction.
(2) The court may
not so determine--
(A) the amount or
legality of a tax, fine, penalty, or addition to tax if such amount or legality
was contested before and adjudicated by a judicial or administrative tribunal
of competent jurisdiction before the commencement of the case under this title;
(B) any right of
the estate to a tax refund, before the earlier of--
(i) 120 days
after the trustee properly requests such refund from the governmental unit from
which such refund is claimed; or
(ii) a
determination by such governmental unit of such request
(C) the amount or
legality of any amount arising in connection with an ad valorem tax on real or
personal property of the estate, if the applicable period for contesting or
redetermining that amount under any law (other than a bankruptcy law) has
expired.
(b)
(1)
(A) The clerk
shall maintain a list under which
(i) designate an
address for service of requests under this subsection; and
(ii) describe
where further information concerning additional requirements for filing such
requests may be found.
(B) If such
governmental unit does not designate an address and provide such address to the
clerk under subparagraph (A), any request made under this subsection may be
served at the address for the filing of a tax return or protest with the
appropriate taxing authority of such governmental unit.
(2) A trustee may
request a determination of any unpaid liability of the estate for any tax
incurred during the administration of the case by submitting a tax return for
such tax and a request for such a determination to the governmental unit
charged with responsibility for collection or determination of such tax at the
address and in the manner designated in paragraph (1). Unless such return is
fraudulent, or contains a material misrepresentation, the estate, the trustee,
the debtor, and any successor to the debtor are discharged from any liability
for such tax--
(A) upon payment
of the tax shown on such return, if--
(i) such
governmental unit does not notify the trustee, within 60 days after such
request, that such return has been selected for examination; or
(ii) such
governmental unit does not complete such an examination and notify the trustee
of any tax due, within 180 days after such request or within such additional
time as the court, for cause, permits;
(B) upon payment
of the tax determined by the court, after notice and a hearing, after
completion by such governmental unit of such examination; or
(C) upon payment
of the tax determined by such governmental unit to be due.
(c)
Notwithstanding section 362 of this title, after determination by the court of
a tax under this section, the governmental unit charged with responsibility for
collection of such tax may assess such tax against the estate, the debtor, or a
successor to the debtor, as the case may be, subject to any otherwise
applicable law.
[Rev. 5-7-05]
--------------------------------------------------------------------------------
11 USC §
506. Determination of secured status
(a)
(1) An allowed
claim of a creditor secured by a lien on property in which the estate has an
interest, or that is subject to setoff under section 553 of this title, is a
secured claim to the extent of the value of such creditor’s interest in the
estate’s interest in such property, or to the extent of the amount subject to
setoff, as the case may be, and is an unsecured claim to the extent that the
value of such creditor’s interest or the amount so subject to setoff is less
than the amount of such allowed claim. Such value shall be determined in light
of the purpose of the valuation and of the proposed disposition or use of such
property, and in conjunction with any hearing on such disposition or use or on
a plan affecting such creditor’s interest.
(2) If the debtor
is an individual in a case under chapter 7 or 13, such value with respect to
personal property securing an allowed claim shall be determined based on the
replacement value of such property as of the date of the filing of the petition
without deduction for costs of sale or marketing. With respect to property
acquired for personal, family, or household purposes, replacement value shall
mean the price a retail merchant would charge for property of that kind
considering the age and condition of the property at the time value is
determined.
(b) To the extent
that an allowed secured claim is secured by property the value of which, after
any recovery under subsection (c) of this section, is greater than the amount
of such claim, there shall be allowed to the holder of such claim, interest on
such claim, and any reasonable fees, costs, or charges provided for under the
agreement or State statute under which such claim arose.
(c) The trustee
may recover from property securing an allowed secured claim the reasonable,
necessary costs and expenses of preserving, or disposing of, such property to
the extent of any benefit to the holder of such claim, including the payment of
all ad valorem property taxes with respect to the property.
(d) To the extent
that a lien secures a claim against the debtor that is not an allowed secured
claim, such lien is void, unless--
(1) such claim
was disallowed only under section 502(b)(5) or 502(e) of this title; or
(2) such claim is
not an allowed secured claim due only to the failure of any entity to file a
proof of such claim under section 501 of this title.
[Rev. 5-7-05]
--------------------------------------------------------------------------------
11 USC §
507. Priorities
(a) The following
expenses and claims have priority in the following order:
(1) First:
(A) Allowed
unsecured claims for domestic support obligations that, as of the date of the
filing of the petition in a case under this title, are owed to or recoverable
by a spouse, former spouse, or child of the debtor, or such child's parent,
legal guardian, or responsible relative, without regard to whether the claim is
filed by such person or is filed by a governmental unit on behalf of such
person, on the condition that funds received under this paragraph by a
governmental unit under this title after the date of the filing of the petition
shall be applied and distributed in accordance with applicable nonbankruptcy
law.
(B) Subject to
claims under subparagraph (A), allowed unsecured claims for domestic support
obligations that, as of the date of the filing of the petition, are assigned by
a spouse, former spouse, child of the debtor, or such child's parent, legal
guardian, or responsible relative to a governmental unit (unless such
obligation is assigned voluntarily by the spouse, former spouse, child, parent,
legal guardian, or responsible relative of the child for the purpose of
collecting the debt) or are owed directly to or recoverable by a governmental
unit under applicable nonbankruptcy law, on the condition that funds received
under this paragraph by a governmental unit under this title after the date of
the filing of the petition be applied and distributed in accordance with
applicable nonbankruptcy law.
(C) If a trustee
is appointed or elected under section 701, 702, 703, 1104, 1202, or 1302, the administrative
expenses of the trustee allowed under paragraphs (1)(A), (2), and (6) of
section 503(b) shall be paid before payment of claims under subparagraphs (A)
and (B), to the extent that the trustee administers assets that are otherwise
available for the payment of such claims.
(2) Second,
administrative expenses allowed under section 503(b) of this title, and any
fees and charges assessed against the estate under chapter 123 of title 28.
(3) Third,
unsecured claims allowed under section 502(f) of this title.
(4) Fourth,
allowed unsecured claims, but only to the extent of $10,000 [$10,000 (changed
by BAPCPA 10-17-05) effective 4-1-04. Adjusted every 3 years by section 104.]
for each individual or corporation, as the case may be, earned within 180 days
before the date of the filing of the petition or the date of the cessation of
the debtor's business, whichever occurs first, for--
(A) wages,
salaries, or commissions, including vacation, severance, and sick leave pay
earned by an individual; or
(B) sales
commissions earned by an individual or by a corporation with only 1 employee,
acting as an independent contractor in the sale of goods or services for the
debtor in the ordinary course of the debtor's business if, and only if, during
the 12 months preceding that date, at least 75 percent of the amount that the
individual or corporation earned by acting as an independent contractor in the
sale of goods or services was earned from the debtor.
(5) Fifth,
allowed unsecured claims for contributions to an employee benefit plan--
(A) arising from
services rendered within 180 days before the date of the filing of the petition
or the date of the cessation of the debtor’s business, whichever occurs first;
but only
(B) for each such
plan, to the extent of--
(i) the number of
employees covered by each such plan multiplied by $10,000[$10,000 (changed by
BAPCPA 10-17-05) effective 4-1-04. Adjusted every 3 years by section 104.];
less
(ii) the
aggregate amount paid to such employees under paragraph (4) of this subsection,
plus the aggregate amount paid by the estate on behalf of such employees to any
other employee benefit plan.
(6) Sixth,
allowed unsecured claims of persons--
(A) engaged in
the production or raising of grain, as defined in section 557(b) of this title,
against a debtor who owns or operates a grain storage facility, as defined in
section 557(b) of this title, for grain or the proceeds of grain, or
(B) engaged as a
United States fisherman against a debtor who has acquired fish or fish produce
from a fisherman through a sale or conversion, and who is engaged in operating
a fish produce storage or processing facility--
but only to the
extent of $4,000 [$4,925 effective 4-1-04. Adjusted every 3 years by section
104.] for each such individual.
(7) Seventh,
allowed unsecured claims of individuals, to the extent of $1,800 [$2,225
effective 4-1-04. Adjusted every 3 years by section 104.] for each such
individual, arising from the deposit, before the commencement of the case, of
money in connection with the purchase, lease, or rental of property, or the
purchase of services, for the personal, family, or household use of such
individuals, that were not delivered or provided.
(8) Eighth,
allowed unsecured claims of governmental units, only to the extent that such
claims are for--
(A) a tax on or
measured by income or gross receipts for a taxable year ending on or before the
date of the filing of the petition--
(i) for which a return,
if required, is last due, including extensions, after three years before the
date of the filing of the petition;
(ii) assessed
within 240 days before the date of the filing of the petition, exclusive of--
(I) any time
during which an offer in compromise with respect to that tax was pending or in
effect during that 240-day period, plus 30 days; and
(II) any time
during which a stay of proceedings against collections was in effect in a prior
case under this title during that 240-day period, plus 90 days.
(iii) other than
a tax of a kind specified in section 523(a)(1)(B) or 523(a)(1)(C) of this
title, not assessed before, but assessable, under applicable law or by
agreement, after, the commencement of the case;
(B) a property
tax incurred before the commencement of the case and last payable without
penalty after one year before the date of the filing of the petition;
(C) a tax
required to be collected or withheld and for which the debtor is liable in
whatever capacity;
(D) an employment
tax on a wage, salary, or commission of a kind specified in paragraph (4) of
this subsection earned from the debtor before the date of the filing of the
petition, whether or not actually paid before such date, for which a return is
last due, under applicable law or under any extension, after three years before
the date of the filing of the petition;
(E) an excise tax
on--
(i) a transaction
occurring before the date of the filing of the petition for which a return, if
required, is last due, under applicable law or under any extension, after three
years before the date of the filing of the petition; or
(ii) if a return
is not required, a transaction occurring during the three years immediately
preceding the date of the filing of the petition;
(F) a customs
duty arising out of the importation of merchandise--
(i) entered for
consumption within one year before the date of the filing of the petition;
(ii) covered by
an entry liquidated or reliquidated within one year before the date of the filing
of the petition; or
(iii) entered for
consumption within four years before the date of the filing of the petition but
unliquidated on such date, if the Secretary of the Treasury certifies that
failure to liquidate such entry was due to an investigation pending on such
date into assessment of antidumping or countervailing duties or fraud, or if
information needed for the proper appraisement or classification of such
merchandise was not available to the appropriate customs officer before such
date; or
(G) a penalty
related to a claim of a kind specified in this paragraph and in compensation
for actual pecuniary loss.
An otherwise
applicable time period specified in this paragraph shall be suspended for any
period during which a governmental unit is prohibited under applicable
nonbankruptcy law from collecting a tax as a result of a request by the debtor
for a hearing and an appeal of any collection action taken or proposed against
the debtor, plus 90 days; plus any time during which the stay of proceedings
was in effect in a prior case under this title or during which collection was
precluded by the existence of 1 or more confirmed plans under this title, plus
90 days.
(9) Ninth,
allowed unsecured claims based upon any commitment by the debtor to
(10) Tenth,
allowed claims for death or personal injury resulting from the operation of a
motor vehicle or vessel if such operation was unlawful because the debtor was
intoxicated from using alcohol, a drug, or another substance.
(b) If the
trustee, under section 362, 363, or 364 of this title, provides adequate
protection of the interest of a holder of a claim secured by a lien on property
of the debtor and if, notwithstanding such protection, such creditor has a
claim allowable under subsection (a)(2) of this section arising from the stay
of action against such property under section 362 of this title, from the use,
sale, or lease of such property under section 363 of this title, or from the
granting of a lien under section 364(d) of this title, then such creditor's
claim under such subsection shall have priority over every other claim
allowable under such subsection.
(c) For the
purpose of subsection (a) of this section, a claim of a governmental unit
arising from an erroneous refund or credit of a tax has the same priority as a
claim for the tax to which such refund or credit relates.
(d) An entity
that is subrogated to the rights of a holder of a claim of a kind specified in
subsection (a)(1), (a)(4), (a)(5), (a)(6), (a)(7), (a)(8), or (a)(9) of this
section is not subrogated to the right of the holder of such claim to priority
under such subsection.
[Rev. 5-7-05]
--------------------------------------------------------------------------------
11 USC §
508. Effect of distribution other than
under this title
If a creditor of
a partnership debtor receives, from a general partner that is not a debtor in a
case under chapter 7 of this title, payment of, or a transfer of property on
account of, a claim that is allowed under this title and that is not secured by
a lien on property of such partner, such creditor may not receive any payment
under this title on account of such claim until each of the other holders of
claims on account of which such holders are entitled to share equally with such
creditor under this title has received payment under this title equal in value
to the consideration received by such creditor from such general partner.
[Rev. 5-7-05]
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11 USC §
509. Claims of codebtors
(a) Except as
provided in subsection (b) or (c) of this section, an entity that is liable
with the debtor on, or that has secured, a claim of a creditor against the
debtor, and that pays such claim, is subrogated to the rights of such creditor
to the extent of such payment.
(b) Such entity
is not subrogated to the rights of such creditor to the extent that--
(1) a claim of
such entity for reimbursement or contribution on account of such payment of
such creditor’s claim is--
(A) allowed under
section 502 of this title;
(B) disallowed
other than under section 502(e) of this title; or
(C) subordinated
under section 510 of this title; or
(2) as between
the debtor and such entity, such entity received the consideration for the
claim held by such creditor.
(c) The court
shall subordinate to the claim of a creditor and for the benefit of such
creditor an allowed claim, by way of subrogation under this section, or for
reimbursement or contribution, of an entity that is liable with the debtor on,
or that has secured, such creditor’s claim, until such creditor’s claim is paid
in full, either through payments under this title or otherwise.
[Rev. 5-7-05]
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11 USC §
510. Subordination
(a) A
subordination agreement is enforceable in a case under this title to the same
extent that such agreement is enforceable under applicable nonbankruptcy law.
(b) For the
purpose of distribution under this title, a claim arising from rescission of a
purchase or sale of a security of the debtor or of an affiliate of the debtor,
for damages arising from the purchase or sale of such a security, or for
reimbursement or contribution allowed under section 502 on account of such a
claim, shall be subordinated to all claims or interests that are senior to or
equal the claim or interest represented by such security, except that if such
security is common stock, such claim has the same priority as common stock.
(c)
Notwithstanding subsections (a) and (b) of this section, after notice and a
hearing, the court may--
(1) under
principles of equitable subordination, subordinate for purposes of distribution
all or part of an allowed claim to all or part of another allowed claim or all
or part of an allowed interest to all or part of another allowed interest; or
(2) order that
any lien securing such a subordinated claim be transferred to the estate.
[Rev. 5-7-05]
--------------------------------------------------------------------------------
11 USC §
511. Rate of interest on tax claims
(a) If any
provision of this title requires the payment of interest on a tax claim or on
an administrative expense tax, or the payment of interest to enable a creditor
to receive the present value of the allowed amount of a tax claim, the rate of
interest shall be the rate determined under applicable nonbankruptcy law.
(b) In the case
of taxes paid under a confirmed plan under this title, the rate of interest
shall be determined as of the calendar month in which the plan is confirmed.
[Rev. 5-7-05]
--------------------------------------------------------------------------------
Subchapter
II. Debtor's Duties and Benefits
11 USC §
521. Debtor’s duties
(a)The debtor
shall--
(1) file--
(A) a list of
creditors; and
(B) unless the
court orders otherwise--
(i) a schedule of
assets and liabilities;
(ii) a schedule
of current income and current expenditures;
(iii) a statement
of the debtor's financial affairs and, if section 342(b) applies, a
certificate--
(I) of an
attorney whose name is indicated on the petition as the attorney for the
debtor, or a bankruptcy petition preparer signing the petition under section
110(b)(1), indicating that such attorney or the bankruptcy petition preparer
delivered to the debtor the notice required by section 342(b); or
(II) if no
attorney is so indicated, and no bankruptcy petition preparer signed the
petition, of the debtor that such notice was received and read by the debtor;
(iv) copies of
all payment advices or other evidence of payment received within 60 days before
the date of the filing of the petition, by the debtor from any employer of the
debtor;
(v) a statement
of the amount of monthly net income, itemized to show how the amount is
calculated; and
(vi) a statement
disclosing any reasonably anticipated increase in income or expenditures over
the 12-month period following the date of the filing of the petition;
(2) if an
individual debtor's schedule of assets and liabilities includes debts which are
secured by property of the estate--
(A) within thirty
days after the date of the filing of a petition under chapter 7 of this title
or on or before the date of the meeting of creditors, whichever is earlier, or
within such additional time as the court, for cause, within such period fixes,
the debtor shall file with the clerk a statement of his intention with respect
to the retention or surrender of such property and, if applicable, specifying
that such property is claimed as exempt, that the debtor intends to redeem such
property, or that the debtor intends to reaffirm debts secured by such
property;
(B) within 30
days after the first date set for the meeting of creditors under section
341(a), or within such additional time as the court, for cause, within such
30-day period fixes, the debtor shall perform his intention with respect to
such property, as specified by subparagraph (A) of this paragraph; and
(C) nothing in
subparagraphs (A) and (B) of this paragraph shall alter the debtor's or the
trustee's rights with regard to such property under this title, except as
provided in section 362(h);
(3) if a trustee
is serving in the case or an auditor serving under section 586(f) of title 28,
cooperate with the trustee as necessary to enable the trustee to perform the
trustee's duties under this title;
(4) if a trustee
is serving in the case or an auditor serving under section 586(f) of title 28,
surrender to the trustee all property of the estate and any recorded
information, including books, documents, records, and papers, relating to
property of the estate, whether or not immunity is granted under section 344 of
this title;
(5) appear at the
hearing required under section 524(d) of this title;
(6) in a case
under chapter 7 of this title in which the debtor is an individual, not retain
possession of personal property as to which a creditor has an allowed claim for
the purchase price secured in whole or in part by an interest in such personal
property unless the debtor, not later than 45 days after the first meeting of
creditors under section 341(a), either--
(A) enters into
an agreement with the creditor pursuant to section 524(c) with respect to the
claim secured by such property; or
(B) redeems such
property from the security interest pursuant to section 722.
(7) unless a
trustee is serving in the case, continue to perform the obligations required of
the administrator (as defined in section 3 of the Employee Retirement Income
Security Act of 1974) of an employee benefit plan if at the time of the
commencement of the case the debtor (or any entity designated by the debtor)
served as such administrator.
If the debtor
fails to so act within the 45-day period referred to in paragraph (6), the stay
under section 362(a) is terminated with respect to the personal property of the
estate or of the debtor which is affected, such property shall no longer be
property of the estate, and the creditor may take whatever action as to such
property as is permitted by applicable nonbankruptcy law, unless the court
determines on the motion of the trustee filed before the expiration of such
45-day period, and after notice and a hearing, that such property is of
consequential value or benefit to the estate, orders appropriate adequate
protection of the creditor's interest, and orders the debtor to deliver any
collateral in the debtor's possession to the trustee.
(b) In addition
to the requirements under subsection (a), a debtor who is an individual shall
file with the court--
(1) a certificate
from the approved nonprofit budget and credit counseling agency that provided
the debtor services under section 109(h) describing the services provided to
the debtor; and
(2) a copy of the
debt repayment plan, if any, developed under section 109(h) through the
approved nonprofit budget and credit counseling agency referred to in paragraph
(1).
(c) In addition
to meeting the requirements under subsection (a), a debtor shall file with the
court a record of any interest that a debtor has in an education individual
retirement account (as defined in section 530(b)(1) of the Internal Revenue
Code of 1986) or under a qualified State tuition program (as defined in section
529(b)(1) of such Code).
(d) If the debtor
fails timely to take the action specified in subsection (a)(6) of this section,
or in paragraphs (1) and (2) of section 362(h), with respect to property which
a lessor or bailor owns and has leased, rented, or bailed to the debtor or as
to which a creditor holds a security interest not otherwise voidable under
section 522(f), 544, 545, 547, 548, or 549, nothing in this title shall prevent
or limit the operation of a provision in the underlying lease or agreement that
has the effect of placing the debtor in default under such lease or agreement
by reason of the occurrence, pendency, or existence of a proceeding under this
title or the insolvency of the debtor. Nothing in this subsection shall be
deemed to justify limiting such a provision in any other circumstance.
(e)
(1) If the debtor
in a case under chapter 7 or 13 is an individual and if a creditor files with
the court at any time a request to receive a copy of the petition, schedules,
and statement of financial affairs filed by the debtor, then the court shall
make such petition, such schedules, and such statement available to such creditor.
(2)
(A) The debtor
shall provide--
(i) not later
than 7 days before the date first set for the first meeting of creditors, to
the trustee a copy of the Federal income tax return required under applicable
law (or at the election of the debtor, a transcript of such return) for the
most recent tax year ending immediately before the commencement of the case and
for which
(ii) at the same
time the debtor complies with clause (i), a copy of such return (or if elected
under clause (i), such transcript) to any creditor that timely requests such
copy.
(B) If the debtor
fails to comply with clause (i) or (ii) of subparagraph (A), the court shall
dismiss the case unless the debtor demonstrates that the failure to so comply
is due to circumstances beyond the control of the debtor.
(C) If a creditor
requests a copy of such tax return or such transcript and if the debtor fails
to provide a copy of such tax return or such transcript to such creditor at the
time the debtor provides such tax return or such transcript to the trustee,
then the court shall dismiss the case unless the debtor demonstrates that the
failure to provide a copy of such tax return or such transcript is due to
circumstances beyond the control of the debtor.
(3) If a creditor
in a case under chapter 13 files with the court at any time a request to
receive a copy of the plan filed by the debtor, then the court shall make
available to such creditor a copy of the plan--
(A) at a
reasonable cost; and
(B) not later
than 5 days after such request is filed.
(f) At the
request of the court, the United States trustee, or any party in interest in a
case under chapter 7, 11, or
(1) at the same
time filed with the taxing authority, a copy of each Federal income tax return
required under applicable law (or at the election of the debtor, a transcript
of such tax return) with respect to each tax year of the debtor ending while
the case is pending under such chapter;
(2) at the same
time filed with the taxing authority, each Federal income tax return required
under applicable law (or at the election of the debtor, a transcript of such
tax return) that had not been filed with such authority as of the date of the
commencement of the case and that was subsequently filed for any tax year of
the debtor ending in the 3-year period ending on the date of the commencement
of the case;
(3) a copy of
each amendment to any Federal income tax return or transcript filed with the
court under paragraph (1) or (2); and
(4) in a case
under chapter 13--
(A) on the date
that is either 90 days after the end of such tax year or 1 year after the date
of the commencement of the case, whichever is later, if a plan is not confirmed
before such later date; and
(B) annually
after the plan is confirmed and until the case is closed, not later than the
date that is 45 days before the anniversary of the confirmation of the plan;
a statement,
under penalty of perjury, of the income and expenditures of the debtor during
the tax year of the debtor most recently concluded before such statement is
filed under this paragraph, and of the monthly income of the debtor, that shows
how income, expenditures, and monthly income are calculated.
(g)
(1) A statement
referred to in subsection (f)(4) shall disclose--
(A) the amount
and sources of the income of the debtor;
(B) the identity
of any person responsible with the debtor for the support of any dependent of
the debtor; and
(C) the identity
of any person who contributed, and the amount contributed, to the household in
which the debtor resides.
(2) The tax
returns, amendments, and statement of income and expenditures described in
subsections (e)(2)(A) and (f) shall be available to the United States trustee
(or the bankruptcy administrator, if any), the trustee, and any party in
interest for inspection and copying, subject to the requirements of section
315(c) of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
(h) If requested
by the United States trustee or by the trustee, the debtor shall provide--
(1) a document
that establishes the identity of the debtor, including a driver's license,
passport, or other document that contains a photograph of the debtor; or
(2) such other
personal identifying information relating to the debtor that establishes the
identity of the debtor.
(i)
(1) Subject to
paragraphs (2) and (4) and notwithstanding section 707(a), if an individual
debtor in a voluntary case under chapter 7 or 13 fails to file all of the
information required under subsection (a)(1) within 45 days after the date of
the filing of the petition, the case shall be automatically dismissed effective
on the 46th day after the date of the filing of the petition.
(2) Subject to
paragraph (4) and with respect to a case described in paragraph (1), any party
in interest may request the court to enter an order dismissing the case. If
requested, the court shall enter an order of dismissal not later than 5 days
after such request.
(3) Subject to
paragraph (4) and upon request of the debtor made within 45 days after the date
of the filing of the petition described in paragraph (1), the court may allow
the debtor an additional period of not to exceed 45 days to file the information
required under subsection (a)(1) if the court finds justification for extending
the period for the filing.
(4)
Notwithstanding any other provision of this subsection, on the motion of the
trustee filed before the expiration of the applicable period of time specified
in paragraph (1), (2), or (3), and after notice and a hearing, the court may
decline to dismiss the case if the court finds that the debtor attempted in
good faith to file all the information required by subsection (a)(1)(B)(iv) and
that the best interests of creditors would be served by administration of the
case.
(j)
(1)
Notwithstanding any other provision of this title, if the debtor fails to file
a tax return that becomes due after the commencement of the case or to properly
obtain an extension of the due date for filing such return, the taxing
authority may request that the court enter an order converting or dismissing
the case.
(2) If the debtor
does not file the required return or obtain the extension referred to in
paragraph (1) within 90 days after a request is filed by the taxing authority
under that paragraph, the court shall convert or dismiss the case, whichever is
in the best interests of creditors and the estate.
[Rev. 5-8-05]
--------------------------------------------------------------------------------
11 USC § 522.
Exemptions
(a) In this
section--
(1)
"dependent" includes spouse, whether or not actually dependent; and
(2)
"value" means fair market value as of the date of the filing of the
petition or, with respect to property that becomes property of the estate after
such date, as of the date such property becomes property of the estate.
(b)
(1)
Notwithstanding section 541 of this title, an individual debtor may exempt from
property of the estate the property listed in either paragraph (2) or, in the
alternative, paragraph (3) of this subsection. In joint cases filed under
section 302 of this title and individual cases filed under section 301 or 303
of this title by or against debtors who are husband and wife, and whose estates
are ordered to be jointly administered under Rule 1015(b) of the Federal Rules
of Bankruptcy Procedure, one debtor may not elect to exempt property listed in
paragraph (2) and the other debtor elect to exempt property listed in paragraph
(3) of this subsection. If the parties cannot agree on the alternative to be
elected, they shall be deemed to elect paragraph (2), where such election is
permitted under the law of the jurisdiction where the case is filed.
(2) Property
listed in this paragraph is property that is specified under subsection (d),
unless the State law that is applicable to the debtor under paragraph (3)(A)
specifically does not so authorize.
(3) Property
listed in this paragraph is--
(A) subject to
subsections (o) and (p), any property that is exempt under Federal law, other
than subsection (d) of this section, or State or local law that is applicable
on the date of the filing of the petition at the place in which the debtor's
domicile has been located for the 730 days immediately preceding the date of
the filing of the petition or if the debtor's domicile has not been located at
a single State for such 730-day period, the place in which the debtor's
domicile was located for 180 days immediately preceding the 730-day period or
for a longer portion of such 180-day period than in any other place;
(B) any interest
in property in which the debtor had, immediately before the commencement of the
case, an interest as a tenant by the entirety or joint tenant to the extent
that such interest as a tenant by the entirety or joint tenant is exempt from
process under applicable nonbankruptcy law; and
(C) retirement
funds to the extent that those funds are in a fund or account that is exempt
from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the
Internal Revenue Code of 1986.
If the effect of
the domiciliary requirement under subparagraph (A) is to render the debtor
ineligible for any exemption, the debtor may elect to exempt property that is
specified under subsection (d).
(4) For purposes
of paragraph (3)(C) and subsection (d)(12), the following shall apply:
(A) If the
retirement funds are in a retirement fund that has received a favorable
determination under section 7805 of the Internal Revenue Code of 1986, and that
determination is in effect as of the date of the filing of the petition in a
case under this title, those funds shall be presumed to be exempt from the
estate.
(B) If the
retirement funds are in a retirement fund that has not received a favorable
determination under such section 7805, those funds are exempt from the estate
if the debtor demonstrates that--
(i) no prior
determination to the contrary has been made by
(ii)
(I) the
retirement fund is in substantial compliance with the applicable requirements
of the Internal Revenue Code of 1986; or
(II) the
retirement fund fails to be in substantial compliance with the applicable
requirements of the Internal Revenue Code of 1986 and the debtor is not
materially responsible for that failure.
(C) A direct
transfer of retirement funds from 1 fund or account that is exempt from
taxation under section 401, 403, 408, 408A, 414, 457, or 501(a)of the Internal
Revenue Code of 1986, under section 401(a)(31) of the Internal Revenue Code of
1986, or otherwise, shall not cease to qualify for exemption under paragraph
(3)(C) or subsection (d)(12) by reason of such direct transfer.
(D)
(i) Any
distribution that qualifies as an eligible rollover distribution within the
meaning of section 402(c) of the Internal Revenue Code of 1986 or that is
described in clause (ii) shall not cease to qualify for exemption under
paragraph (3)(C) or subsection (d)(12) by reason of such distribution.
(ii) A
distribution described in this clause is an amount that--
(I) has been
distributed from a fund or account that is exempt from taxation under section
401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986;
and
(II) to the
extent allowed by law, is deposited in such a fund or account not later than 60
days after the distribution of such amount.
(c) Unless the case
is dismissed, property exempted under this section is not liable during or
after the case for any debt of the debtor that arose, or that is determined
under section 502 of this title as if such debt had arisen, before the
commencement of the case, except--
(1) a debt of a
kind specified in paragraph (1) or (5) of section 523(a) (in which case,
notwithstanding any provision of applicable nonbankruptcy law to the contrary,
such property shall be liable for a debt of a kind specified in section
523(a)(5));
(2) a debt
secured by a lien that is--
(A)
(i) not avoided
under subsection (f) or (g) of this section or under section 544, 545, 547,
548, 549, or 724(a) of this title; and
(ii) not void
under section 506(d) of this title;
(B) a tax lien,
notice of which is properly filed; or
(3) a debt of a
kind specified in section 523(a)(4) or 523(a)(6) of this title owed by an
institution-affiliated party of an insured depository institution to
(4) a debt in
connection with fraud in the obtaining or providing of any scholarship, grant,
loan, tuition, discount, award, or other financial assistance for purposes of
financing an education at an institution of higher education (as that term is
defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001)).
(d) The following
property may be exempted under subsection (b)(2) of this section:
(1) The debtor's
aggregate interest, not to exceed $15,000 [$18,450 effective 4-1-04. Adjusted
every 3 years by section 104.] in value, in real property or personal property
that the debtor or a dependent of the debtor uses as a residence, in a cooperative
that owns property that the debtor or a dependent of the debtor uses as a
residence, or in a burial plot for the debtor or a dependent of the debtor.
(2) The debtor's
interest, not to exceed $2,400 [$2,950 effective 4-1-04. Adjusted every 3 years
by section 104.] in value, in one motor vehicle.
(3) The debtor's
interest, not to exceed $400 [$475 effective 4-1-04. Adjusted every 3 years by
section 104.] in value in any particular item or $8,000 [$9,850 effective
4-1-04. Adjusted every 3 years by section 104.] in aggregate value, in
household furnishings, household goods, wearing apparel, appliances, books,
animals, crops, or musical instruments, that are held primarily for the
personal, family, or household use of the debtor or a dependent of the debtor.
(4) The debtor's
aggregate interest, not to exceed $1,000 [$1,225 effective 4-1-04. Adjusted
every 3 years by section 104.] in value, in jewelry held primarily for the
personal, family, or household use of the debtor or a dependent of the debtor.
(5) The debtor's
aggregate interest in any property, not to exceed in value $800 [$975 effective
4-1-04. Adjusted every 3 years by section 104.] plus up to $7,500 [$9,250
effective 4-1-04. Adjusted every 3 years by section 104.] of any unused amount
of the exemption provided under paragraph (1) of this subsection.
(6) The debtor's
aggregate interest, not to exceed $1,500 [$1,850 effective 4-1-04. Adjusted
every 3 years by section 104.] in value, in any implements, professional books,
or tools, of the trade of the debtor or the trade of a dependent of the debtor.
(7) Any unmatured
life insurance contract owned by the debtor, other than a credit life insurance
contract.
(8) The debtor's
aggregate interest, not to exceed in value $8,000 [$9,850 effective 4-1-04.
Adjusted every 3 years by section 104.] less any amount of property of the
estate transferred in the manner specified in section 542(d) of this title, in
any accrued dividend or interest under, or loan value of, any unmatured life
insurance contract owned by the debtor under which the insured is the debtor or
an individual of whom the debtor is a dependent.
(9)
Professionally prescribed health aids for the debtor or a dependent of the
debtor.
(10) The debtor's
right to receive--
(A) a social
security benefit, unemployment compensation, or a local public assistance
benefit;
(B) a veterans'
benefit;
(C) a disability,
illness, or unemployment benefit;
(D) alimony,
support, or separate maintenance, to the extent reasonably necessary for the
support of the debtor and any dependent of the debtor;
(E) a payment
under a stock bonus, pension, profitsharing, annuity, or similar plan or
contract on account of illness, disability, death, age, or length of service,
to the extent reasonably necessary for the support of the debtor and any
dependent of the debtor, unless--
(i) such plan or
contract was established by or under the auspices of an insider that employed
the debtor at the time the debtor's rights under such plan or contract arose;
(ii) such payment
is on account of age or length of service; and
(iii) such plan
or contract does not qualify under section 401(a), 403(a), 403(b), or 408 of
the Internal Revenue Code of 1986.
(11) The debtor's
right to receive, or property that is traceable to--
(A) an award
under a crime victim's reparation law;
(B) a payment on
account of the wrongful death of an individual of whom the debtor was a
dependent, to the extent reasonably necessary for the support of the debtor and
any dependent of the debtor;
(C) a payment
under a life insurance contract that insured the life of an individual of whom
the debtor was a dependent on the date of such individual's death, to the
extent reasonably necessary for the support of the debtor and any dependent of
the debtor;
(D) a payment,
not to exceed $15,000 [$18,450 effective 4-1-04. Adjusted every 3 years by
section 104.] on account of personal bodily injury, not including pain and
suffering or compensation for actual pecuniary loss, of the debtor or an
individual of whom the debtor is a dependent; or
(E) a payment in
compensation of loss of future earnings of the debtor or an individual of whom
the debtor is or was a dependent, to the extent reasonably necessary for the
support of the debtor and any dependent of the debtor.
(12) Retirement
funds to the extent that those funds are in a fund or account that is exempt
from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the
Internal Revenue Code of 1986.
(e) A waiver of
an exemption executed in favor of a creditor that holds an unsecured claim
against the debtor is unenforceable in a case under this title with respect to
such claim against property that the debtor may exempt under subsection (b) of
this section. A waiver by the debtor of
(f)
(1)
Notwithstanding any waiver of exemptions but subject to paragraph (3), the
debtor may avoid the fixing of a lien on an interest of the debtor in property
to the extent that such lien impairs an exemption to which the debtor would
have been entitled under subsection (b) of this section, if such lien is--
(A) a judicial
lien, other than a judicial lien that secures a debt of a kind that is
specified in section 523(a)(5); or
(B) a
nonpossessory, nonpurchase-money security interest in any--
(i) household
furnishings, household goods, wearing apparel, appliances, books, animals,
crops, musical instruments, or jewelry that are held primarily for the
personal, family, or household use of the debtor or a dependent of the debtor;
(ii) implements,
professional books, or tools, of the trade of the debtor or the trade of a
dependent of the debtor; or
(iii)
professionally prescribed health aids for the debtor or a dependent of the
debtor.
(2)
(A) For the
purposes of this subsection, a lien shall be considered to impair an exemption
to the extent that the sum of--
(i) the lien;
(ii) all other
liens on the property; and
(iii) the amount
of the exemption that the debtor could claim if there were no liens on the
property;
exceeds the value
that the debtor's interest in the property would have in the absence of any
liens.
(B) In the case
of a property subject to more than 1 lien, a lien that has been avoided shall
not be considered in making the calculation under subparagraph (A) with respect
to other liens.
(C) This
paragraph shall not apply with respect to a judgment arising out of a mortgage
foreclosure.
(3) In a case in
which State law that is applicable to the debtor--
(A) permits a
person to voluntarily waive a right to claim exemptions under subsection (d) or
prohibits a debtor from claiming exemptions under subsection (d); and
(B) either
permits the debtor to claim exemptions under State law without limitation in
amount, except to the extent that the debtor has permitted the fixing of a
consensual lien on any property or prohibits avoidance of a consensual lien on
property otherwise eligible to be claimed as exempt property;
the debtor may
not avoid the fixing of a lien on an interest of the debtor or a dependent of
the debtor in property if the lien is a nonpossessory, nonpurchase-money
security interest in implements, professional books, or tools of the trade of
the debtor or a dependent of the debtor or farm animals or crops of the debtor
or a dependent of the debtor to the extent the value of such implements,
professional books, tools of the trade, animals, and crops exceeds $5,000
[$5,000 (adjustment added by BAPCPA 10-17-05) effective 4-1-04. Adjusted every
3 years by section 104.].
(4)
(A) Subject to
subparagraph (B), for purposes of paragraph (1)(B), the term "household
goods" means--
(i) clothing;
(ii) furniture;
(iii) appliances;
(iv) 1 radio;
(v) 1 television;
(vi) 1 VCR;
(vii) linens;
(viii) china;
(ix) crockery;
(x) kitchenware;
(xi) educational
materials and educational equipment primarily for the use of minor dependent
children of the debtor;
(xii) medical
equipment and supplies;
(xiii) furniture
exclusively for the use of minor children, or elderly or disabled dependents of
the debtor;
(xiv) personal
effects (including the toys and hobby equipment of minor dependent children and
wedding rings) of the debtor and the dependents of the debtor; and
(xv) 1 personal
computer and related equipment.
(B) The term
"household goods" does not include--
(i) works of art
(unless by or of the debtor, or any relative of the debtor);
(ii) electronic
entertainment equipment with a fair market value of more than $500 [$500 (added
by BAPCPA 10-17-05) effective 4-1-04. Adjusted every 3 years by section 104.]
in the aggregate (except 1 television, 1 radio, and 1 VCR);
(iii) items
acquired as antiques with a fair market value of more than $500 [$500 (added by
BAPCPA 10-17-05) effective 4-1-04. Adjusted every 3 years by section 104.] in
the aggregate;
(iv) jewelry with
a fair market value of more than $500 in the aggregate (except wedding rings);
and
(v) a computer
(except as otherwise provided for in this section), motor vehicle (including a
tractor or lawn tractor), boat, or a motorized recreational device, conveyance,
vehicle, watercraft, or aircraft.
(g) Notwithstanding
sections 550 and 551 of this title, the debtor may exempt under subsection (b)
of this section property that the trustee recovers under section 510(c)(2),
542, 543, 550, 551, or 553 of this title, to the extent that the debtor could
have exempted such property under subsection (b) of this section if such
property had not been transferred, if--
(1)
(A) such transfer
was not a voluntary transfer of such property by the debtor; and
(B) the debtor
did not conceal such property; or
(2) the debtor
could have avoided such transfer under subsection (f)(1)(B) of this section.
(h) The debtor
may avoid a transfer of property of the debtor or recover a setoff to the
extent that the debtor could have exempted such property under subsection
(g)(1) of this section if the trustee had avoided such transfer, if--
(1) such transfer
is avoidable by the trustee under section 544, 545, 547, 548, 549, or 724(a) of
this title or recoverable by the trustee under section 553 of this title; and
(2) the trustee
does not attempt to avoid such transfer.
(i)
(1) If the debtor
avoids a transfer or recovers a setoff under subsection (f) or (h) of this
section, the debtor may recover in the manner prescribed by, and subject to the
limitations of, section 550 of this title, the same as if the trustee had
avoided such transfer, and may exempt any property so recovered under
subsection (b) of this section.
(2)
Notwithstanding section 551 of this title, a transfer avoided under section
544, 545, 547, 548, 549, or 724(a) of this title, under subsection (f) or
(h) of this section, or property
recovered under section 553 of this title, may be preserved for the benefit of
the debtor to the extent that the debtor may exempt such property under subsection
(g) of this section or paragraph (1) of this subsection.
(j)
Notwithstanding subsections (g) and (i) of this section, the debtor may exempt
a particular kind of property under subsections (g) and (i) of this section
only to the extent that the debtor has exempted less property in value of such
kind than that to which the debtor is entitled under subsection (b) of this
section.
(k) Property that
the debtor exempts under this section is not liable for payment of any
administrative expense except--
(1) the aliquot
share of the costs and expenses of avoiding a transfer of property that the
debtor exempts under subsection (g) of this section, or of recovery of such
property, that is attributable to the value of the portion of such property
exempted in relation to the value of the property recovered; and
(2) any costs and
expenses of avoiding a transfer under subsection (f) or (h) of this section, or
of recovery of property under subsection (i)(1) of this section, that the
debtor has not paid.
(l) The debtor
shall file a list of property that the debtor claims as exempt under subsection
(b) of this section. If the debtor does not file such a list, a dependent of
the debtor may file such a list, or may claim property as exempt from property
of the estate on behalf of the debtor. Unless a party in interest objects, the property
claimed as exempt on such list is exempt.
(m) Subject to
the limitation in subsection (b), this section shall apply separately with
respect to each debtor in a joint case.
(n) For assets in
individual retirement accounts described in section 408 or 408A of the Internal
Revenue Code of 1986, other than a simplified employee pension under section
408(k) of such Code or a simple retirement account under section 408(p) of such
Code, the aggregate value of such assets exempted under this section, without
regard to amounts attributable to rollover contributions under section 402(c),
402(e)(6), 403(a)(4), 403(a)(5), and 403(b)(8) of the Internal Revenue Code of
1986, and earnings thereon, shall not exceed $1,000,000 [$1,000,000 (added by
BAPCPA 10-17-05) effective 4-1-04. Adjusted every 3 years by section 104.] in a
case filed by a debtor who is an individual, except that such amount may be
increased if the interests of justice so require.
(o) For purposes
of subsection (b)(3)(A), and notwithstanding subsection (a), the value of an
interest in--
(1) real or
personal property that the debtor or a dependent of the debtor uses as a
residence;
(2) a cooperative
that owns property that the debtor or a dependent of the debtor uses as a
residence;
(3) a burial plot
for the debtor or a dependent of the debtor; or
(4) real or
personal property that the debtor or a dependent of the debtor claims as a
homestead;
shall be reduced
to the extent that such value is attributable to any portion of any property
that the debtor disposed of in the 10-year period ending on the date of the
filing of the petition with the intent to hinder, delay, or defraud a creditor
and that the debtor could not exempt, or that portion that the debtor could not
exempt, under subsection (b), if on such date the debtor had held the property
so disposed of.
(p)
(1) Except as
provided in paragraph (2) of this subsection and sections 544 and 548, as a
result of electing under subsection (b)(3)(A) to exempt property under State or
local law, a debtor may not exempt any amount of interest that was acquired by
the debtor during the 1215-day period preceding the date of the filing of the
petition that exceeds in the aggregate $125,000 [$125,000 (added by BAPCPA
10-17-05) effective 4-1-04. Adjusted every 3 years by section 104.] in value
in--
(A) real or
personal property that the debtor or a dependent of the debtor uses as a
residence;
(B) a cooperative
that owns property that the debtor or a dependent of the debtor uses as a
residence;
(C) a burial plot
for the debtor or a dependent of the debtor; or
(D) real or
personal property that the debtor or dependent of the debtor claims as a
homestead.
(2)
(A) The
limitation under paragraph (1) shall not apply to an exemption claimed under subsection
(b)(3)(A) by a family farmer for the principal residence of such farmer.
(B) For purposes
of paragraph (1), any amount of such interest does not include any interest
transferred from a debtor's previous principal residence (which was acquired
prior to the beginning of such 1215-day period) into the debtor's current
principal residence, if the debtor's previous and current residences are
located in the same State.
(q)
(1) As a result
of electing under subsection (b)(3)(A) to exempt property under State or local
law, a debtor may not exempt any amount of an interest in property described in
subparagraphs (A), (B), (C), and (D) of subsection (p)(1) which exceeds in the
aggregate $125,000 [$125,000 (added by BAPCPA 10-17-05) effective 4-1-04. Adjusted
every 3 years by section 104.] if--
(A) the court
determines, after notice and a hearing, that the debtor has been convicted of a
felony (as defined in section 3156 of title 18), which under the circumstances,
demonstrates that the filing of the case was an abuse of the provisions of this
title; or
(B) the debtor
owes a debt arising from--
(i) any violation
of the Federal securities laws (as defined in section 3(a)(47) of the
Securities Exchange Act of 1934), any State securities laws, or any regulation
or order issued under Federal securities laws or State securities laws;
(ii) fraud,
deceit, or manipulation in a fiduciary capacity or in connection with the
purchase or sale of any security registered under section 12 or 15(d) of the
Securities Exchange Act of 1934 or under section 6 of the Securities Act of
1933;
(iii) any civil
remedy under section 1964 of title 18; or
(iv) any criminal
act, intentional tort, or willful or reckless misconduct that caused serious
physical injury or death to another individual in the preceding 5 years.
(2) Paragraph (1)
shall not apply to the extent the amount of an interest in property described
in subparagraphs (A), (B), (C), and (D) of subsection (p)(1) is reasonably
necessary for the support of the debtor and any dependent of the debtor.
[Rev. 4-29-05]
--------------------------------------------------------------------------------
11 USC §
523. Exceptions to discharge
(a) A discharge
under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not
discharge an individual debtor from any debt--
(1) for a tax or
a customs duty--
(A) of the kind
and for the periods specified in section 507(a)(3) or 507(a)(8) of this title,
whether or not a claim for such tax was filed or allowed;
(B) with respect
to which a return, or equivalent report or notice, if required--
(i) was not filed
or given; or
(ii) was filed or
given after the date on which such return, report, or notice was last due,
under applicable law or under any extension, and after two years before the
date of the filing of the petition; or
(C) with respect
to which the debtor made a fraudulent return or willfully attempted in any
manner to evade or defeat such tax;
(2) for money,
property, services, or an extension, renewal, or refinancing of credit, to the
extent obtained by--
(A) false
pretenses, a false representation, or actual fraud, other than a statement
respecting the debtor’s or an insider’s financial condition;
(B) use of a
statement in writing--
(i) that is
materially false;
(ii) respecting
the debtor’s or an insider’s financial condition;
(iii) on which
the creditor to whom the debtor is liable for such money, property, services,
or credit reasonably relied; and
(iv) that the
debtor caused to be made or published with intent to deceive; or
(C)
(i) for purposes
of subparagraph (A)--
(I) consumer
debts owed to a single creditor and aggregating more than $500 [$500 (added by
BAPCPA 10-17-05)] for luxury goods or services incurred by an individual debtor
on or within 90 days before the order for relief under this title are presumed
to be nondischargeable; and
(II) cash
advances aggregating more than $750 [$750 (added by BAPCPA 10-17-05)] that are
extensions of consumer credit under an open end credit plan obtained by an
individual debtor on or within 70 days before the order for relief under this
title, are presumed to be nondischargeable; and
[Dollar amounts
in subsections 523(a)(2)(C)(i) and (ii) are adjusted on April 1 every 3 years
by section 104. Adjusted amounts effective 4-1-04 are in brackets.]
(ii) for purposes
of this subparagraph--
(I) the terms
"consumer", "credit", and "open end credit plan"
have the same meanings as in section 103 of the Truth in Lending Act; and
(II) the term
"luxury goods or services" does not include goods or services
reasonably necessary for the support or maintenance of the debtor or a
dependent of the debtor.
(3) neither
listed nor scheduled under section 521(1) of this title, with the name, if
known to the debtor, of the creditor to whom such debt is owed, in time to
permit--
(A) if such debt
is not of a kind specified in paragraph (2), (4), or (6) of this subsection,
timely filing of a proof of claim, unless such creditor had notice or actual
knowledge of the case in time for such timely filing; or
(B) if such debt
is of a kind specified in paragraph (2), (4), or (6) of this subsection, timely
filing of a proof of claim and timely request for a determination of
dischargeability of such debt under one of such paragraphs, unless such
creditor had notice or actual knowledge of the case in time for such timely
filing and request;
(4) for fraud or
defalcation while acting in a fiduciary capacity, embezzlement, or larceny;
(5) for a
domestic support obligation;
(6) for willful
and malicious injury by the debtor to another entity or to the property of
another entity;
(7) to the extent
such debt is for a fine, penalty, or forfeiture payable to and for the benefit
of a governmental unit, and is not compensation for actual pecuniary loss,
other than a tax penalty--
(A) relating to a
tax of a kind not specified in paragraph (1) of this subsection; or
(B) imposed with
respect to a transaction or event that occurred before three years before the
date of the filing of the petition;
(8) unless
excepting such debt from discharge under this paragraph would impose an undue
hardship on the debtor and the debtor's dependents, for--
(A)
(i) an
educational benefit overpayment or loan made, insured, or guaranteed by a
governmental unit, or made under any program funded in whole or in part by a
governmental unit or nonprofit institution; or
(ii) an
obligation to repay funds received as an educational benefit, scholarship, or
stipend; or
(B) any other
educational loan that is a qualified education loan, as defined in section
221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an
individual;
(9) for death or
personal injury caused by the debtor's operation of a motor vehicle, vessel, or
aircraft if such operation was unlawful because the debtor was intoxicated from
using alcohol, a drug, or another substance;
(10) that was or
could have been listed or scheduled by the debtor in a prior case concerning
the debtor under this title or under the Bankruptcy Act in which the debtor
waived discharge, or was denied a discharge under section 727(a)(2), (3), (4),
(5), (6), or (7) of this title, or under section 14c(1), (2), (3), (4), (6), or
(7) of such Act;
(11) provided in
any final judgment, unreviewable order, or consent order or decree entered in
any court of the United States or of any State, issued by
(12) for
malicious or reckless failure to fulfill any commitment by the debtor to
(13) for any
payment of an order of restitution issued under title 18, United States Code;
(14) incurred to
pay a tax to the United States that would be nondischargeable pursuant to
paragraph (1);
(14A) incurred to
pay a tax to a governmental unit, other than the United States, that would be
nondischargeable under paragraph (1);
(14B) incurred to
pay fines or penalties imposed under Federal election law;
(15) to a spouse,
former spouse, or child of the debtor and not of the kind described in
paragraph (5) that is incurred by the debtor in the course of a divorce or
separation or in connection with a separation agreement, divorce decree or
other order of
(16) for a fee or
assessment that becomes due and payable after the order for relief to a
membership association with respect to the debtor's interest in a unit that has
condominium ownership , in a share of a cooperative corporation, or a lot in a
homeowners association, for as long as the debtor or the trustee has
(17) for a fee
imposed on a prisoner by any court for the filing of a case, motion, complaint,
or appeal, or for other costs and expenses assessed with respect to such
filing, regardless of an assertion of poverty by the debtor under subsection
(b) or (f)(2) of section 1915 of title 28 (or a similar non-Federal law), or
the debtor's status as a prisoner, as defined in section 1915(h) of title 28
(or a similar non-Federal law);
(18) owed to a
pension, profit-sharing, stock bonus, or other plan established under section
401, 403, 408, 408A, 414, 457, or 501(c) of the Internal Revenue Code of 1986,
under--
(A) a loan permitted
under section 408(b)(1) of the Employee Retirement Income Security Act of 1974,
or subject to section 72(p) of the Internal Revenue Code of 1986; or
(B) a loan from a
thrift savings plan permitted under subchapter III of chapter 84 of title 5,
that satisfies the requirements of section 8433(g) of such title;
but nothing in
this paragraph may be construed to provide that any loan made under a
governmental plan under section 414(d), or a contract or account under section
403(b), of the Internal Revenue Code of 1986 constitutes a claim or a debt
under this title; or
(19) that--
(A) is for--
(i) the violation
of any of the Federal securities laws (as that term is defined in section
3(a)(47) of the Securities Exchange Act of 1934), any of the State securities
laws, or any regulation or order issued under such Federal or State securities
laws; or
(ii) common law
fraud, deceit, or manipulation in connection with the purchase or sale of any
security; and
(B) results,
before, on, or after the date on which the petition was filed, from--
(i) any judgment,
order, consent order, or decree entered in any Federal or State judicial or
administrative proceeding;
(ii) any
settlement agreement entered into by the debtor; or
(iii) any court
or administrative order for any damages, fine, penalty, citation,
restitutionary payment, disgorgement payment, attorney fee, cost, or other
payment owed by the debtor.
For purposes of
this subsection, the term "return" means a return that satisfies the
requirements of applicable nonbankruptcy law (including applicable filing
requirements). Such term includes a return prepared pursuant to section 6020(a)
of the Internal Revenue Code of 1986, or similar State or local law, or a
written stipulation to a judgment or a final order entered by a nonbankruptcy
tribunal, but does not include a return made pursuant to section 6020(b) of the
Internal Revenue Code of 1986, or a similar State or local law.
(b)
Notwithstanding subsection (a) of this section, a debt that was excepted from
discharge under subsection (a)(1), (a)(3), or (a)(8) of this section, under
section 17a(1), 17a(3), or 17a(5) of the Bankruptcy Act, under section 439A of
the Higher Education Act of 1965, or under section 733(g) of the Public Health
Service Act in a prior case concerning the debtor under this title, or under
the Bankruptcy Act, is dischargeable in a case under this title unless, by the
terms of subsection (a) of this section, such debt is not dischargeable in the
case under this title.
(c)
(1) Except as
provided in subsection (a)(3)(B) of this section, the debtor shall be
discharged from a debt of a kind specified in paragraph (2), (4), or (6) of
subsection (a) of this section, unless, on request of the creditor to whom such
debt is owed, and after notice and a hearing, the court determines such debt to
be excepted from discharge under paragraph (2), (4), or (6) , as the case may
be, of subsection (a) of this section.
(2) Paragraph (1)
shall not apply in the case of
(d) If a creditor
requests a determination of dischargeability of a consumer debt under
subsection (a)(2) of this section, and such debt is discharged, the court shall
grant judgment in favor of the debtor for the costs of, and a reasonable
attorney’s fee for, the proceeding if the court finds that the position of the
creditor was not substantially justified, except that the court shall not award
such costs and fees if special circumstances would make the award unjust.
(e) Any
institution-affiliated party of an insured depository institution shall be
considered to be acting in a fiduciary capacity with respect to the purposes of
subsection (a)(4) or (11).
[Rev. 5-8-05]
--------------------------------------------------------------------------------
11 USC §
524. Effect of discharge
(a) A discharge
in a case under this title--
(1) voids any
judgment at any time obtained, to the extent that such judgment is a determination
of the personal liability of the debtor with respect to any debt discharged
under section 727, 944, 1141, 1228, or 1328 of this title, whether or not
discharge of such debt is waived;
(2) operates as
an injunction against the commencement or continuation of an action, the
employment of process, or an act, to collect, recover or offset any such debt
as a personal liability of the debtor, whether or not discharge of such debt is
waived; and
(3) operates as
an injunction against the commencement or continuation of an action, the
employment of process, or an act, to collect or recover from, or offset
against, property of the debtor of the kind specified in section 541(a)(2) of
this title that is acquired after the commencement of the case, on account of any
allowable community claim, except a community claim that is excepted from
discharge under section 523, 1228(a)(1), or 1328(a)(1), or that would be so
excepted, determined in accordance with the provisions of sections 523(c) and
523(d) of this title, in a case concerning the debtor's spouse commenced on the
date of the filing of the petition in the case concerning the debtor, whether
or not discharge of the debt based on such community claim is waived.
(b) Subsection
(a)(3) of this section does not apply if--
(1)
(A) the debtor’s
spouse is a debtor in a case under this title, or a bankrupt or a debtor in a
case under the Bankruptcy Act, commenced within six years of the date of the
filing of the petition in the case concerning the debtor; and
(B) the court
does not grant the debtor’s spouse a discharge in such case concerning the
debtor’s spouse; or
(2)
(A) the court
would not grant the debtor’s spouse a discharge in a case under chapter 7 of
this title concerning such spouse commenced on the date of the filing of the
petition in the case concerning the debtor; and
(B) a
determination that the court would not so grant such discharge is made by the
bankruptcy court within the time and in the manner provided for a determination
under section 727 of this title of whether a debtor is granted a discharge.
(c) An agreement
between a holder of a claim and the debtor, the consideration for which, in
whole or in part, is based on a debt that is dischargeable in a case under this
title is enforceable only to any extent enforceable under applicable
nonbankruptcy law, whether or not discharge of such debt is waived, only if--
(1) such
agreement was made before the granting of the discharge under section 727,
1141, 1228, or 1328 of this title;
(2) the debtor
received the disclosures described in subsection (k) at or before the time at
which the debtor signed the agreement;
(3) such
agreement has been filed with the court and, if applicable, accompanied by a
declaration or an affidavit of the attorney that represented the debtor during
the course of negotiating an agreement under this subsection, which states
that--
(A) such
agreement represents a fully informed and voluntary agreement by the debtor;
(B) such
agreement does not impose an undue hardship on the debtor or a dependent of the
debtor; and
(C) the attorney
fully advised the debtor of the legal effect and consequences of--
(i) an agreement
of the kind specified in this subsection; and
(ii) any default
under such an agreement;
(4) the debtor
has not rescinded such agreement at any time prior to discharge or within sixty
days after such agreement is filed with the court, whichever occurs later, by
giving notice of rescission to the holder of such claim;
(5) the
provisions of subsection (d) of this section have been complied with; and
(6)
(A) in a case
concerning an individual who was not represented by an attorney during the
course of negotiating an agreement under this subsection, the court approves
such agreement as--
(i) not imposing
an undue hardship on the debtor or a dependent of the debtor; and
(ii) in the best
interest of the debtor.
(B) Subparagraph
(A) shall not apply to the extent that such debt is a consumer debt secured by
real property.
(d) In a case
concerning an individual, when the court has determined whether to grant or not
to grant a discharge under section 727, 1141, 1228, or 1328 of this title, the
court may hold a hearing at which the debtor shall appear in person. At any
such hearing, the court shall inform the debtor that a discharge has been
granted or the reason why a discharge has not been granted. If a discharge has
been granted and if the debtor desires to make an agreement of the kind
specified in subsection (c) of this section and was not represented by an
attorney during the course of negotiating such agreement, then the court shall
hold a hearing at which the debtor shall appear in person and at such hearing
the court shall--
(1) inform the
debtor--
(A) that such an
agreement is not required under this title, under nonbankruptcy law, or under
any agreement not made in accordance with the provisions of subsection (c) of
this section; and
(B) of the legal
effect and consequences of--
(i) an agreement
of the kind specified in subsection (c) of this section; and
(ii) a default
under such an agreement; and
(2) determine
whether the agreement that the debtor desires to make complies with the
requirements of subsection (c)(6) of this section, if the consideration for
such agreement is based in whole or in part on a consumer debt that is not
secured by real property of the debtor.
(e) Except as
provided in subsection (a)(3) of this section, discharge of a debt of the
debtor does not affect the liability of any other entity on, or the property of
any other entity for, such debt.
(f) Nothing
contained in subsection (c) or (d) of
this section prevents a debtor from voluntarily repaying any debt.
(g)
(1)
(A) After notice
and hearing,
(B) An injunction
may be issued under subparagraph (A) to enjoin entities from taking legal
action for the purpose of directly or indirectly collecting, recovering, or
receiving payment or recovery with respect to any claim or demand that, under a
plan of reorganization, is to be paid in whole or in part by a trust described
in paragraph (2)(B)(i), except such legal actions as are expressly allowed by
the injunction, the confirmation order, or the plan of reorganization.
(2)
(A) Subject to
subsection (h), if the requirements of subparagraph (B) are met at the time an
injunction described in paragraph (1) is entered, then after entry of such
injunction, any proceeding that involves the validity, application,
construction, or modification of such injunction, or of this subsection with
respect to such injunction, may be commenced only in the district court in
which such injunction was entered, and such court shall have exclusive
jurisdiction over any such proceeding without regard to the amount in
controversy.
(B) The
requirements of this subparagraph are that--
(i) the
injunction is to be implemented in connection with a trust that, pursuant to
the plan of reorganization--
(I) is to assume
the liabilities of a debtor which at the time of entry of the order for relief
has been named as a defendant in personal injury, wrongful death, or
property-damage actions seeking recovery for damages allegedly caused by the
presence of, or exposure to, asbestos or asbestos-containing products;
(II) is to be
funded in whole or in part by the securities of 1 or more debtors involved in
such plan and by the obligation of such debtor or debtors to make future
payments, including dividends;
(III) is to own,
or by the exercise of rights granted under such plan would be entitled to own
if specified contingencies occur, a majority of the voting shares of--
(aa) each such
debtor;
(bb) the parent
corporation of each such debtor; or
(cc) a subsidiary
of each such debtor that is also a debtor; and
(IV) is to use
its assets or income to pay claims and demands; and
(ii) subject to
subsection (h), the court determines that--
(I) the debtor is
likely to be subject to substantial future demands for payment arising out of
the same or similar conduct or events that gave rise to the claims that are
addressed by the injunction;
(II) the actual
amounts, numbers, and timing of such future demands cannot be determined;
(III) pursuit of
such demands outside the procedures prescribed by such plan is likely to threaten
the plan’s purpose to deal equitably with claims and future demands;
(IV) as part of
the process of seeking confirmation of such plan--
(aa) the terms of
the injunction proposed to be issued under paragraph (1)(A), including any
provisions barring actions against third parties pursuant to paragraph (4)(A),
are set out in such plan and in any disclosure statement supporting the plan;
and
(bb) a separate
class or classes of the claimants whose claims are to be addressed by a trust
described in clause (i) is established and votes, by at least 75 percent of
those voting, in favor of the plan; and
(V) subject to
subsection (h), pursuant to court orders or otherwise, the trust will operate
through mechanisms such as structured, periodic, or supplemental payments, pro
rata distributions, matrices, or periodic review of estimates of the numbers
and values of present claims and future demands, or other comparable
mechanisms, that provide reasonable assurance that the trust will value, and be
in a financial position to pay, present claims and future demands that involve
similar claims in substantially the same manner.
(3)
(A) If the
requirements of paragraph (2)(B) are met and the order confirming the plan of
reorganization was issued or affirmed by the district court that has
jurisdiction over the reorganization case, then after the time for appeal of
the order that issues or affirms the plan—
(i) the
injunction shall be valid and enforceable and may not be revoked or modified by
any court except through appeal in accordance with paragraph (6);
(ii) no entity
that pursuant to such plan or thereafter becomes a direct or indirect
transferee of, or successor to any assets of, a debtor or trust that is the
subject of the injunction shall be liable with respect to any claim or demand
made against such entity by reason of its becoming such a transferee or
successor; and
(iii) no entity
that pursuant to such plan or thereafter makes a loan to such a debtor or trust
or to such a successor or transferee shall, by reason of making the loan, be
liable with respect to any claim or demand made against such entity, nor shall
any pledge of assets made in connection with such a loan be upset or impaired
for that reason;
(B) Subparagraph
(A) shall not be construed to--
(i) imply that an
entity described in subparagraph (A)(ii) or (iii) would, if this paragraph were
not applicable, necessarily be liable to any entity by reason of any of the
acts described in subparagraph (A);
(ii) relieve any
such entity of the duty to comply with, or of liability under, any Federal or
State law regarding the making of a fraudulent conveyance in a transaction
described in subparagraph (A)(ii) or (iii); or
(iii) relieve a
debtor of the debtor’s obligation to comply with the terms of the plan of
reorganization, or affect the power of the court to exercise its authority
under sections 1141 and 1142 to compel the debtor to do so.
(4)
(A)
(i) Subject to
subparagraph (B), an injunction described in paragraph (1) shall be valid and
enforceable against all entities that it addresses.
(ii)
Notwithstanding the provisions of section 524(e), such an injunction may bar
any action directed against a third party who is identifiable from the terms of
such injunction (by name or as part of an identifiable group) and is alleged to
be directly or indirectly liable for the conduct of, claims against, or demands
on the debtor to the extent such alleged liability of such third party arises
by reason of--
(I) the third
party’s ownership of a financial interest in the debtor, a past or present
affiliate of the debtor, or a predecessor in interest of the debtor;
(II) the third
party’s involvement in the management of the debtor or a predecessor in
interest of the debtor, or service as an officer, director or employee of the
debtor or a related party;
(III) the third
party’s provision of insurance to the debtor or a related party; or
(IV) the third
party’s involvement in a transaction changing the corporate structure, or in a
loan or other financial transaction affecting the financial condition, of the
debtor or a related party, including but not limited to--
(aa) involvement
in providing financing (debt or equity), or advice to an entity involved in
such a transaction; or
(bb) acquiring or
selling a financial interest in an entity as part of such a transaction.
(iii) As used in
this subparagraph, the term “related party” means--
(I) a past or
present affiliate of the debtor;
(II) a
predecessor in interest of the debtor; or
(III) any entity
that owned a financial interest in--
(aa) the debtor;
(bb) a past or
present affiliate of the debtor; or
(cc) a
predecessor in interest of the debtor.
(B) Subject to
subsection (h), if, under a plan of reorganization, a kind of demand described
in such plan is to be paid in whole or in part by a trust described in
paragraph (2)(B)(i) in connection with which an injunction described in
paragraph (1) is to be implemented, then such injunction shall be valid and
enforceable with respect to a demand of such kind made, after such plan is
confirmed, against the debtor or debtors involved, or against a third party
described in subparagraph (A)(ii), if--
(i) as part of
the proceedings leading to issuance of such injunction, the court appoints a
legal representative for the purpose of protecting the rights of persons that
might subsequently assert demands of such kind, and
(ii) the court
determines, before entering the order confirming such plan, that identifying
such debtor or debtors, or such third party (by name or as part of an
identifiable group), in such injunction with respect to such demands for
purposes of this subparagraph is fair and equitable with respect to the persons
that might subsequently assert such demands, in light of the benefits provided,
or to be provided, to such trust on behalf of such debtor or debtors or such
third party.
(5) In this
subsection, the term “demand” means a demand for payment, present or future,
that--
(A) was not a
claim during the proceedings leading to the confirmation of a plan of
reorganization;
(B) arises out of
the same or similar conduct or events that gave rise to the claims addressed by
the injunction issued under paragraph (1); and
(C) pursuant to
the plan, is to be paid by a trust described in paragraph (2)(B)(i).
(6) Paragraph
(3)(A)(i) does not bar an action taken by or at the direction of an appellate
court on appeal of an injunction issued under paragraph (1) or of the order of
confirmation that relates to the injunction.
(7) This
subsection does not affect the operation of section 1144 or the power of the
district court to refer a proceeding under section 157 of title 28 or any
reference of a proceeding made prior to the date of the enactment of this
subsection.
(h) Application
to Existing Injunctions.-- For purposes of subsection (g)--
(1) subject to
paragraph (2), if an injunction of the kind described in subsection (g)(1)(B)
was issued before the date of the enactment of this Act, as part of a plan of
reorganization confirmed by an order entered before such date, then the
injunction shall be considered to meet the requirements of subsection (g)(2)(B)
for purposes of subsection (g)(2)(A), and to satisfy subsection (g)(4)(A)(ii),
if--
(A) the court
determined at the time the plan was confirmed that the plan was fair and
equitable in accordance with the requirements of section 1129 (b);
(B) as part of
the proceedings leading to issuance of such injunction and confirmation of such
plan, the court had appointed a legal representative for the purpose of
protecting the rights of persons that might subsequently assert demands
described in subsection (g)(4)(B) with respect to such plan; and
(C) such legal
representative did not object to confirmation of such plan or issuance of such
injunction; and
(2) for purposes
of paragraph (1), if a trust described in subsection (g)(2)(B)(i) is subject to
a court order on the date of the enactment of this Act staying such trust from
settling or paying further claims--
(A) the
requirements of subsection (g)(2)(B)(ii)(V) shall not apply with respect to
such trust until such stay is lifted or dissolved; and
(B) if such trust
meets such requirements on the date such stay is lifted or dissolved, such
trust shall be considered to have met such requirements continuously from the
date of the enactment of this Act.
(i) The willful
failure of a creditor to credit payments received under a plan confirmed under
this title, unless the order confirming the plan is revoked, the plan is in
default, or the creditor has not received payments required to be made under
the plan in the manner required by the plan (including crediting the amounts
required under the plan), shall constitute a violation of an injunction under
subsection (a)(2) if the act of the creditor to collect and failure to credit
payments in the manner required by the plan caused material injury to the
debtor.
(j) Subsection
(a)(2) does not operate as an injunction against an act by a creditor that is
the holder of a secured claim, if--
(1) such creditor
retains a security interest in real property that is the principal residence of
the debtor;
(2) such act is
in the ordinary course of business between the creditor and the debtor; and
(3) such act is
limited to seeking or obtaining periodic payments associated with a valid
security interest in lieu of pursuit of in rem relief to enforce the lien.
(k)
(1) The
disclosures required under subsection (c)(2) shall consist of the disclosure
statement described in paragraph (3), completed as required in that paragraph,
together with the agreement specified in subsection (c), statement,
declaration, motion and order described, respectively, in paragraphs (4)
through (8), and shall be the only disclosures required in connection with
entering into such agreement.
(2) Disclosures
made under paragraph (1) shall be made clearly and conspicuously and in
writing. The terms "Amount Reaffirmed" and "Annual Percentage
Rate" shall be disclosed more conspicuously than other terms, data or
information provided in connection with this disclosure, except that the
phrases "Before agreeing to reaffirm a debt, review these important
disclosures" and "Summary of Reaffirmation Agreement" may be
equally conspicuous. Disclosures may be made in a different order and may use
terminology different from that set forth in paragraphs (2) through (8), except
that the terms "Amount Reaffirmed" and "Annual Percentage
Rate" must be used where indicated.
(3) The
disclosure statement required under this paragraph shall consist of the
following:
(A) The statement:
"Part A: Before agreeing to reaffirm a debt, review these important
disclosures:";
(B) Under the
heading "Summary of Reaffirmation Agreement", the statement:
"This Summary is made pursuant to the requirements of the Bankruptcy
Code";
(C) The "Amount
Reaffirmed", using that term, which shall be--
(i) the total
amount of debt that the debtor agrees to reaffirm by entering into an agreement
of the kind specified in subsection (c), and
(ii) the total of
any fees and costs accrued as of the date of the disclosure statement, related
to such total amount.
(D) In
conjunction with the disclosure of the "Amount Reaffirmed", the
statements--
(i) "The
amount of debt you have agreed to reaffirm"; and
(ii) "Your
credit agreement may obligate you to pay additional amounts which may come due
after the date of this disclosure. Consult your credit agreement.".
(E) The
"Annual Percentage Rate", using that term, which shall be disclosed
as--
(i) if, at the
time the petition is filed, the debt is an extension of credit under an open
end credit plan, as the terms "credit" and "open end credit
plan" are defined in section 103 of the Truth in Lending Act, then--
(I) the annual
percentage rate determined under paragraphs (5) and (6) of section 127(b) of
the Truth in Lending Act, as applicable, as disclosed to the debtor in the most
recent periodic statement prior to entering into an agreement of the kind
specified in subsection (c) or, if no such periodic statement has been given to
the debtor during the prior 6 months, the annual percentage rate as it would
have been so disclosed at the time the disclosure statement is given to the
debtor, or to the extent this annual percentage rate is not readily available
or not applicable, then
(II) the simple
interest rate applicable to the amount reaffirmed as of the date the disclosure
statement is given to the debtor, or if different simple interest rates apply
to different balances, the simple interest rate applicable to each such
balance, identifying the amount of each such balance included in the amount
reaffirmed, or
(III) if the
entity making the disclosure elects, to disclose the annual percentage rate
under subclause (I) and the simple interest rate under subclause (II); or
(ii) if, at the
time the petition is filed, the debt is an extension of credit other than under
an open end credit plan, as the terms "credit" and "open end
credit plan" are defined in section 103 of the Truth in Lending Act,
then--
(I) the annual
percentage rate under section 128(a)(4) of the Truth in Lending Act, as
disclosed to the debtor in the most recent disclosure statement given to the
debtor prior to the entering into an agreement of the kind specified in
subsection (c) with respect to the debt, or, if no such disclosure statement
was given to the debtor, the annual percentage rate as it would have been so
disclosed at the time the disclosure statement is given to the debtor, or to
the extent this annual percentage rate is not readily available or not
applicable, then
(II) the simple
interest rate applicable to the amount reaffirmed as of the date the disclosure
statement is given to the debtor, or if different simple interest rates apply
to different balances, the simple interest rate applicable to each such
balance, identifying the amount of such balance included in the amount
reaffirmed, or
(III) if the
entity making the disclosure elects, to disclose the annual percentage rate
under (I) and the simple interest rate under (II).
(F) If the
underlying debt transaction was disclosed as a variable rate transaction on the
most recent disclosure given under the Truth in Lending Act, by stating
"The interest rate on your loan may be a variable interest rate which
changes from time to time, so that the annual percentage rate disclosed here
may be higher or lower.".
(G) If the debt
is secured by a security interest which has not been waived in whole or in part
or determined to be void by a final order of the court at the time of the disclosure,
by disclosing that a security interest or lien in goods or property is asserted
over some or all of the debts the debtor is reaffirming and listing the items
and their original purchase price that are subject to the asserted security
interest, or if not a purchase-money security interest then listing by items or
types and the original amount of the loan.
(H) At the
election of the creditor, a statement of the repayment schedule using 1 or a
combination of the following--
(i) by making the
statement: "Your first payment in the amount of $XXX is due on XXX but the
future payment amount may be different. Consult your reaffirmation agreement or
credit agreement, as applicable.", and stating the amount of the first
payment and the due date of that payment in the places provided;
(ii) by making
the statement: "Your payment schedule will be:", and describing the
repayment schedule with the number, amount, and due dates or period of payments
scheduled to repay the debts reaffirmed to the extent then known by the
disclosing party; or
(iii) by
describing the debtor's repayment obligations with reasonable specificity to
the extent then known by the disclosing party.
(I) The following
statement: "Note: When this disclosure refers to what a creditor 'may' do,
it does not use the word 'may' to give the creditor specific permission. The
word 'may' is used to tell you what might occur if the law permits the creditor
to take the action. If you have questions about your reaffirming a debt or what
the law requires, consult with the attorney who helped you negotiate this
agreement reaffirming a debt. If you don't have an attorney helping you, the
judge will explain the effect of your reaffirming a debt when the hearing on
the reaffirmation agreement is held.".
(J)
(i) The following
additional statements:
"Reaffirming
a debt is a serious financial decision. The law requires you to take certain
steps to make sure the decision is in your best interest. If these steps are
not completed, the reaffirmation agreement is not effective, even though you
have signed it.
"1. Read the
disclosures in this Part A carefully. Consider the decision to reaffirm
carefully. Then, if you want to reaffirm, sign the reaffirmation agreement in
Part B (or you may use a separate agreement you and your creditor agree on).
"2. Complete
and sign Part D and be sure you can afford to make the payments you are
agreeing to make and have received a copy of the disclosure statement and a
completed and signed reaffirmation agreement.
"3. If you
were represented by an attorney during the negotiation of your reaffirmation
agreement, the attorney must have signed the certification in Part C.
"4. If you
were not represented by an attorney during the negotiation of your
reaffirmation agreement, you must have completed and signed Part E.
"5. The
original of this disclosure must be filed with the court by you or your
creditor. If a separate reaffirmation agreement (other than the one in Part B)
has been signed, it must be attached.
"6. If you
were represented by an attorney during the negotiation of your reaffirmation
agreement, your reaffirmation agreement becomes effective upon filing with the
court unless the reaffirmation is presumed to be an undue hardship as explained
in Part D.
"7. If you
were not represented by an attorney during the negotiation of your
reaffirmation agreement, it will not be effective unless the court approves it.
The court will notify you of the hearing on your reaffirmation agreement. You
must attend this hearing in bankruptcy court where the judge will review your
reaffirmation agreement. The bankruptcy court must approve your reaffirmation
agreement as consistent with your best interests, except that no court approval
is required if your reaffirmation agreement is for a consumer debt secured by a
mortgage, deed of trust, security deed, or other lien on your real property,
like your home.
"Your right
to rescind (cancel) your reaffirmation agreement. You may rescind (cancel) your
reaffirmation agreement at any time before the bankruptcy court enters a
discharge order, or before the expiration of the 60-day period that begins on
the date your reaffirmation agreement is filed with the court, whichever occurs
later. To rescind (cancel) your reaffirmation agreement, you must notify the
creditor that your reaffirmation agreement is rescinded (or canceled).
"What are
your obligations if you reaffirm the debt? A reaffirmed debt remains your
personal legal obligation. It is not discharged in your bankruptcy case. That
means that if you default on your reaffirmed debt after your bankruptcy case is
over, your creditor may be able to take your property or your wages. Otherwise,
your obligations will be determined by the reaffirmation agreement which may
have changed the terms of the original agreement. For example, if you are
reaffirming an open end credit agreement, the creditor may be permitted by that
agreement or applicable law to change the terms of that agreement in the future
under certain conditions.
"Are you required
to enter into a reaffirmation agreement by any law? No, you are not required to
reaffirm a debt by any law. Only agree to reaffirm a debt if it is in your best
interest. Be sure you can afford the payments you agree to make.
"What if
your creditor has a security interest or lien? Your bankruptcy discharge does
not eliminate any lien on your property. A "lien" is often referred
to as a security interest, deed of trust, mortgage or security deed. Even if
you do not reaffirm and your personal liability on the debt is discharged,
because of the lien your creditor may still have the right to take the security
property if you do not pay the debt or default on it. If the lien is on an item
of personal property that is exempt under your State's law or that the trustee
has abandoned, you may be able to redeem the item rather than reaffirm the
debt. To redeem, you make a single payment to the creditor equal to the current
value of the security property, as agreed by the parties or determined by the
court.".
(ii) In the case
of a reaffirmation under subsection (m)(2), numbered paragraph 6 in the
disclosures required by clause (i) of this subparagraph shall read as follows:
"6. If you
were represented by an attorney during the negotiation of your reaffirmation agreement,
your reaffirmation agreement becomes effective upon filing with the
court.".
(4) The form of
such agreement required under this paragraph shall consist of the following:
"Part B:
Reaffirmation Agreement. I (we) agree to reaffirm the debts arising under the
credit agreement described below.
"Brief
description of credit agreement:
"Description
of any changes to the credit agreement made as part of this reaffirmation
agreement:
"Signature:
Date:
"Borrower:
"Co-borrower,
if also reaffirming these debts:
"Accepted by
creditor:
"Date of
creditor acceptance:".
(5) The
declaration shall consist of the following:
(A) The following
certification:
"Part C:
Certification by Debtor's Attorney (If Any).
"I hereby
certify that (1) this agreement represents a fully informed and voluntary
agreement by the debtor; (2) this agreement does not impose an undue hardship
on the debtor or any dependent of the debtor; and (3) I have fully advised the
debtor of the legal effect and consequences of this agreement and any default
under this agreement.
"Signature
of Debtor's Attorney: Date:".
(B) If a
presumption of undue hardship has been established with respect to such
agreement, such certification shall state that in the opinion of the attorney,
the debtor is able to make the payment.
(C) In the case
of a reaffirmation agreement under subsection (m)(2), subparagraph (B) is not
applicable.
(6)
(A) The statement
in support of such agreement, which the debtor shall sign and date prior to
filing with the court, shall consist of the following:
"Part D:
Debtor's Statement in Support of Reaffirmation Agreement.
"1. I
believe this reaffirmation agreement will not impose an undue hardship on my
dependents or me. I can afford to make the payments on the reaffirmed debt
because my monthly income (take home pay plus any other income received) is
$XXX, and my actual current monthly expenses including monthly payments on
post-bankruptcy debt and other reaffirmation agreements total $XXX, leaving
$XXX to make the required payments on this reaffirmed debt. I understand that
if my income less my monthly expenses does not leave enough to make the
payments, this reaffirmation agreement is presumed to be an undue hardship on
me and must be reviewed by the court. However, this presumption may be overcome
if I explain to the satisfaction of the court how I can afford to make the
payments here: XXX.
"2. I
received a copy of the Reaffirmation Disclosure Statement in Part A and a
completed and signed reaffirmation agreement.".
(B) Where the
debtor is represented by an attorney and is reaffirming a debt owed to a
creditor defined in section 19(b)(1)(A)(iv) of the Federal Reserve Act, the
statement of support of the reaffirmation agreement, which the debtor shall
sign and date prior to filing with the court, shall consist of the following:
"I believe
this reaffirmation agreement is in my financial interest. I can afford to make
the payments on the reaffirmed debt. I received a copy of the Reaffirmation
Disclosure Statement in Part A and a completed and signed reaffirmation
agreement.".
(7) The motion
that may be used if approval of such agreement by the court is required in
order for it to be effective, shall be signed and dated by the movant and shall
consist of the following:
"Part E:
Motion for Court Approval (To be completed only if the debtor is not
represented by an attorney.). I (we), the debtor(s), affirm the following to be
true and correct:
"I am not
represented by an attorney in connection with this reaffirmation agreement.
"I believe
this reaffirmation agreement is in my best interest based on the income and
expenses I have disclosed in my Statement in Support of this reaffirmation
agreement, and because (provide any additional relevant reasons the court
should consider):
"Therefore,
I ask the court for an order approving this reaffirmation agreement.".
(8) The court
order, which may be used to approve such agreement, shall consist of the
following:
"Court
Order: The court grants the debtor's motion and approves the reaffirmation
agreement described above.".
(l)
Notwithstanding any other provision of this title the following shall apply:
(1) A creditor
may accept payments from a debtor before and after the filing of an agreement
of the kind specified in subsection (c) with the court.
(2) A creditor
may accept payments from a debtor under such agreement that the creditor
believes in good faith to be effective.
(3) The
requirements of subsections (c)(2) and (k) shall be satisfied if disclosures
required under those subsections are given in good faith.
(m)
(1) Until 60 days
after an agreement of the kind specified in subsection (c) is filed with the
court (or such additional period as the court, after notice and a hearing and
for cause, orders before the expiration of such period), it shall be presumed
that such agreement is an undue hardship on the debtor if the debtor's monthly
income less the debtor's monthly expenses as shown on the debtor's completed
and signed statement in support of such agreement required under subsection
(k)(6)(A) is less than the scheduled payments on the reaffirmed debt. This
presumption shall be reviewed by the court. The presumption may be rebutted in
writing by the debtor if the statement includes an explanation that identifies
additional sources of funds to make the payments as agreed upon under the terms
of such agreement. If the presumption is not rebutted to the satisfaction of
the court, the court may disapprove such agreement. No agreement shall be
disapproved without notice and a hearing to the debtor and creditor, and such
hearing shall be concluded before the entry of the debtor's discharge.
(2) This
subsection does not apply to reaffirmation agreements where the creditor is a
credit union, as defined in section 19(b)(1)(A)(iv) of the Federal Reserve Act.
[Rev. 5-10-05]
--------------------------------------------------------------------------------
11 USC §
525. Protection against discriminatory
treatment
(a) Except as
provided in the Perishable Agricultural Commodities Act, 1930, the Packers and
Stockyards Act, 1921, and section 1 of the Act entitled “An Act making
appropriations for the Department of Agriculture for the fiscal year ending
June 30, 1944, and for other purposes,” approved July 12, 1943, a governmental
unit may not deny, revoke, suspend, or refuse to renew a license, permit,
charter, franchise, or other similar grant to, condition such a grant to,
discriminate with respect to such a grant against, deny employment to,
terminate the employment of, or discriminate with respect to employment
against, a person that is or has been a debtor under this title or a bankrupt
or a debtor under the Bankruptcy Act, or another person with whom such bankrupt
or debtor has been associated, solely because such bankrupt or debtor is or has
been a debtor under this title or a bankrupt or debtor under the Bankruptcy
Act, has been insolvent before the commencement of the case under this title,
or during the case but before the debtor is granted or denied a discharge, or
has not paid a debt that is dischargeable in the case under this title or that
was discharged under the Bankruptcy Act.
(b) No private
employer may terminate the employment of, or discriminate with respect to
employment against, an individual who is or has been a debtor under this title,
a debtor or bankrupt under the Bankruptcy Act, or an individual associated with
such debtor or bankrupt, solely because such debtor or bankrupt--
(1) is or has
been a debtor under this title or a debtor or bankrupt under the Bankruptcy
Act;
(2) has been
insolvent before the commencement of a case under this title or during the case
but before the grant or denial of a discharge; or
(3) has not paid
a debt that is dischargeable in a case under this title or that was discharged
under the Bankruptcy Act.
(c)
(1) A
governmental unit that operates a student grant or loan program and a person
engaged in a business that includes the making of loans guaranteed or insured
under a student loan program may not deny a grant, loan, loan guarantee, or
loan insurance to a person that is or has been a debtor under this title or a
bankrupt or debtor under the Bankruptcy Act, or another person with whom the
debtor or bankrupt has been associated, because the debtor or bankrupt is or
has been a debtor under this title or a bankrupt or debtor under the Bankruptcy
Act, has been insolvent before the commencement of a case under this title or
during the pendency of the case but before the debtor is granted or denied a
discharge, or has not paid a debt that is dischargeable in the case under this
title or that was discharged under the Bankruptcy Act.
(2) In this
section, "student loan program" means any program operated under
title IV of the Higher Education Act of 1965 or a similar program operated
under State or local law.
[Rev. 5-12-05]
--------------------------------------------------------------------------------
11 USC §
526. Restrictions on debt relief
agencies
(a) A debt relief
agency shall not--
(1) fail to
perform any service that such agency informed an assisted person or prospective
assisted person it would provide in connection with a case or proceeding under
this title;
(2) make any
statement, or counsel or advise any assisted person or prospective assisted
person to make a statement in a document filed in a case or proceeding under
this title, that is untrue and misleading, or that upon the exercise of
reasonable care, should have been known by such agency to be untrue or
misleading;
(3) misrepresent
to any assisted person or prospective assisted person, directly or indirectly,
affirmatively or by material omission, with respect to--
(A) the services
that such agency will provide to such person; or
(B) the benefits
and risks that may result if such person becomes a debtor in a case under this
title; or
(4) advise an assisted
person or prospective assisted person to incur more debt in contemplation of
such person filing a case under this title or to pay an attorney or bankruptcy
petition preparer fee or charge for services performed as part of preparing for
or representing a debtor in a case under this title.
(b) Any waiver by
any assisted person of any protection or right provided under this section
shall not be enforceable against the debtor by any Federal or State court or
any other person, but may be enforced against a debt relief agency.
(c)
(1) Any contract
for bankruptcy assistance between a debt relief agency and an assisted person
that does not comply with the material requirements of this section, section
527, or section 528 shall be void and may not be enforced by any Federal or
State court or by any other person, other than such assisted person.
(2) Any debt
relief agency shall be liable to an assisted person in the amount of any fees
or charges in connection with providing bankruptcy assistance to such person
that such debt relief agency has received, for actual damages, and for
reasonable attorneys' fees and costs if such agency is found, after notice and
a hearing, to have--
(A) intentionally
or negligently failed to comply with any provision of this section, section
527, or section 528 with respect to a case or proceeding under this title for
such assisted person;
(B) provided
bankruptcy assistance to an assisted person in a case or proceeding under this
title that is dismissed or converted to a case under another chapter of this
title because of such agency's intentional or negligent failure to file any
required document including those specified in section 521; or
(C) intentionally
or negligently disregarded the material requirements of this title or the
Federal Rules of Bankruptcy Procedure applicable to such agency.
(3) In addition
to such other remedies as are provided under State law, whenever the chief law
enforcement officer of a State, or an official or agency designated by a State,
has reason to believe that any person has violated or is violating this
section, the State--
(A) may bring an
action to enjoin such violation;
(B) may bring an
action on behalf of its residents to recover the actual damages of assisted
persons arising from such violation, including any liability under paragraph
(2); and
(C) in the case
of any successful action under subparagraph (A) or (B), shall be awarded the
costs of the action and reasonable attorneys' fees as determined by the court.
(4) The district
courts of the United States for districts located in the State shall have
concurrent jurisdiction of any action under subparagraph (A) or (B) of
paragraph (3).
(5)
Notwithstanding any other provision of Federal law and in addition to any other
remedy provided under Federal or State law, if the court, on its own motion or
on the motion of the United States trustee or the debtor, finds that a person
intentionally violated this section, or engaged in a clear and consistent
pattern or practice of violating this section, the court may--
(A) enjoin the
violation of such section; or
(B) impose an
appropriate civil penalty against such person.
(d) No provision
of this section, section 527, or section 528 shall--
(1) annul, alter,
affect, or exempt any person subject to such sections from complying with any
law of any State except to the extent that such law is inconsistent with those
sections, and then only to the extent of the inconsistency; or
(2) be deemed to
limit or curtail the authority or ability--
(A) of a State or
subdivision or instrumentality thereof, to determine and enforce qualifications
for the practice of law under the laws of that State; or
(B) of a Federal
court to determine and enforce the qualifications for the practice of law
before that court.
[Rev. 5-12-05]
--------------------------------------------------------------------------------
11 USC §
527. Disclosures
(a) A debt relief
agency providing bankruptcy assistance to an assisted person shall provide--
(1) the written
notice required under section 342(b)(1); and
(2) to the extent
not covered in the written notice described in paragraph (1), and not later
than 3 business days after the first date on which a debt relief agency first
offers to provide any bankruptcy assistance services to an assisted person, a
clear and conspicuous written notice advising assisted persons that--
(A) all
information that the assisted person is required to provide with a petition and
thereafter during a case under this title is required to be complete, accurate,
and truthful;
(B) all assets
and all liabilities are required to be completely and accurately disclosed in
the documents filed to commence the case, and the replacement value of each
asset as defined in section 506 must be stated in those documents where
requested after reasonable inquiry to establish such value;
(C) current
monthly income, the amounts specified in section 707(b)(2), and, in a case
under chapter 13 of this title, disposable income (determined in accordance
with section 707(b)(2)), are required to be stated after reasonable inquiry;
and
(D) information
that an assisted person provides during their case may be audited pursuant to
this title, and that failure to provide such information may result in
dismissal of the case under this title or other sanction, including a criminal
sanction.
(b) A debt relief
agency providing bankruptcy assistance to an assisted person shall provide each
assisted person at the same time as the notices required under subsection
(a)(1) the following statement, to the extent applicable, or one substantially
similar. The statement shall be clear and conspicuous and shall be in a single
document separate from other documents or notices provided to the assisted
person:
"IMPORTANT
INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN ATTORNEY OR BANKRUPTCY
PETITION PREPARER.
"If you
decide to seek bankruptcy relief, you can represent yourself, you can hire an
attorney to represent you, or you can get help in some localities from a
bankruptcy petition preparer who is not an attorney. THE LAW REQUIRES AN
ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT
SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION PREPARER WILL DO FOR YOU
AND HOW MUCH IT WILL COST. Ask to see the contract before you hire anyone.
"The
following information helps you understand what must be done in a routine
bankruptcy case to help you evaluate how much service you need. Although
bankruptcy can be complex, many cases are routine.
"Before
filing a bankruptcy case, either you or your attorney should analyze your
eligibility for different forms of debt relief available under the Bankruptcy
Code and which form of relief is most likely to be beneficial for you. Be sure
you understand the relief you can obtain and its limitations. To file a
bankruptcy case, documents called a Petition, Schedules and Statement of
Financial Affairs, as well as in some cases a Statement of Intention need to be
prepared correctly and filed with the bankruptcy court. You will have to pay a
filing fee to the bankruptcy court. Once your case starts, you will have to
attend the required first meeting of creditors where you may be questioned by a
court official called a 'trustee' and by creditors.
"If you
choose to file a chapter 7 case, you may be asked by a creditor to reaffirm a
debt. You may want help deciding whether to do so. A creditor is not permitted
to coerce you into reaffirming your debts.
"If you
choose to file a chapter 13 case in which you repay your creditors what you can
afford over 3 to 5 years, you may also want help with preparing your chapter 13
plan and with the confirmation hearing on your plan which will be before a
bankruptcy judge.
"If you
select another type of relief under the Bankruptcy Code other than chapter 7 or
chapter 13, you will want to find out what should be done from someone familiar
with that type of relief.
"Your
bankruptcy case may also involve litigation. You are generally permitted to
represent yourself in litigation in bankruptcy court, but only attorneys, not
bankruptcy petition preparers, can give you legal advice.".
[Printable 527(b)
statement.]
(c) Except to the
extent the debt relief agency provides the required information itself after
reasonably diligent inquiry of the assisted person or others so as to obtain
such information reasonably accurately for inclusion on the petition, schedules
or statement of financial affairs, a debt relief agency providing bankruptcy
assistance to an assisted person, to the extent permitted by nonbankruptcy law,
shall provide each assisted person at the time required for the notice required
under subsection (a)(1) reasonably sufficient information (which shall be
provided in a clear and conspicuous writing) to the assisted person on how to
provide all the information the assisted person is required to provide under
this title pursuant to section 521, including--
(1) how to value
assets at replacement value, determine current monthly income, the amounts
specified in section 707(b)(2) and, in a chapter 13 case, how to determine
disposable income in accordance with section 707(b)(2) and related
calculations;
(2) how to
complete the list of creditors, including how to determine what amount is owed
and what address for the creditor should be shown; and
(3) how to
determine what property is exempt and how to value exempt property at
replacement value as defined in section 506.
(d) A debt relief
agency shall maintain a copy of the notices required under subsection (a) of
this section for 2 years after the date on which the notice is given the
assisted person.
[Rev. 5-12-05]
--------------------------------------------------------------------------------
11 USC §
528. Requirements for debt relief
agencies
(a) A debt relief
agency shall--
(1) not later
than 5 business days after the first date on which such agency provides any
bankruptcy assistance services to an assisted person, but prior to such
assisted person's petition under this title being filed, execute a written
contract with such assisted person that explains clearly and conspicuously--
(A) the services
such agency will provide to such assisted person; and
(B) the fees or
charges for such services, and the terms of payment;
(2) provide the
assisted person with a copy of the fully executed and completed contract;
(3) clearly and
conspicuously disclose in any advertisement of bankruptcy assistance services
or of the benefits of bankruptcy directed to the general public (whether in
general media, seminars or specific mailings, telephonic or electronic
messages, or otherwise) that the services or benefits are with respect to
bankruptcy relief under this title; and
(4) clearly and
conspicuously use the following statement in such advertisement: "We are a
debt relief agency. We help people file for bankruptcy relief under the
Bankruptcy Code." or a substantially similar statement.
(b)
(1) An
advertisement of bankruptcy assistance services or of the benefits of
bankruptcy directed to the general public includes--
(A) descriptions
of bankruptcy assistance in connection with a chapter 13 plan whether or not
chapter 13 is specifically mentioned in such advertisement; and
(B) statements
such as "federally supervised repayment plan" or "Federal debt
restructuring help" or other similar statements that could lead a
reasonable consumer to believe that debt counseling was being offered when in
fact the services were directed to providing bankruptcy assistance with a
chapter 13 plan or other form of bankruptcy relief under this title.
(2) An
advertisement, directed to the general public, indicating that the debt relief
agency provides assistance with respect to credit defaults, mortgage
foreclosures, eviction proceedings, excessive debt, debt collection pressure,
or inability to pay any consumer debt shall--
(A) disclose
clearly and conspicuously in such advertisement that the assistance may involve
bankruptcy relief under this title; and
(B) include the
following statement: "We are a debt relief agency. We help people file for
bankruptcy relief under the Bankruptcy Code." or a substantially similar
statement.
[Rev. 5-12-05]
--------------------------------------------------------------------------------
Subchapter
III. The Estate
11 USC §
541. Property of the estate
(a) The
commencement of a case under section 301, 302, 303 of this title creates an
estate. Such estate is comprised of all the following property, wherever
located and by whomever held:
(1) Except as
provided in subsections (b) and (c)(2) of this section, all legal or equitable
interests of the debtor in property as of the commencement of the case.
(2) All interests
of the debtor and the debtor’s spouse in community property as of the
commencement of the case that is--
(A) under the
sole, equal, or joint management and control of the debtor; or
(B) liable for an
allowable claim against the debtor, or for both an allowable claim against the
debtor and an allowable claim against the debtor’s spouse, to the extent that
such interest is so liable.
(3) Any interest
in property that the trustee recovers under section 329(b), 363(n), 543, 550,
553, or 723 of this title.
(4) Any interest
in property preserved for the benefit of or ordered transferred to the estate
under section 510(c) or 551 of this title.
(5) Any interest
in property that would have been property of the estate if such interest had
been an interest of the debtor on the date of the filing of the petition, and
that the debtor acquires or becomes entitled to acquire within 180 days after
such date--
(A) by bequest,
devise, or inheritance;
(B) as a result
of a property settlement agreement with the debtor’s spouse, or of an
interlocutory or final divorce decree; or
(C) as a
beneficiary of a life insurance policy or of a death benefit plan.
(6) Proceeds,
product, offspring, rents, or profits of or from property of the estate, except
such as are earnings from services performed by an individual debtor after the
commencement of the case.
(7) Any interest
in property that the estate acquires after the commencement of the case.
(b) Property of
the estate does not include--
(1) any power
that the debtor may exercise solely for the benefit of an entity other than the
debtor;
(2) any interest
of the debtor as a lessee under a lease of nonresidential real property that
has terminated at the expiration of the stated term of such lease before the
commencement of the case under this title, and ceases to include any interest of
the debtor as a lessee under a lease of nonresidential real property that has
terminated at the expiration of the stated term of such lease during the case;
(3) any
eligibility of the debtor to participate in programs authorized under the
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.; 42 U.S.C. 2751 et seq.),
or any accreditation status or State licensure of the debtor as an educational
institution;
(4) any interest
of the debtor in liquid or gaseous hydrocarbons to the extent that--
(A)
(i) the debtor
has transferred or has agreed to transfer such interest pursuant to a farmout
agreement or any written agreement directly related to a farmout agreement; and
(ii) but for the
operation of this paragraph, the estate could include the interest referred to
in clause (i) only by virtue of section 365 or 544(a)(3) of this title; or
(B)
(i) the debtor
has transferred such interest pursuant to a written conveyance of a production
payment to an entity that does not participate in the operation of the property
from which such production payment is transferred; and
(ii) but for the
operation of this paragraph, the estate could include the interest referred to
in clause (i) only by virtue of section 365 or 542 of this title;
(5) funds placed
in an education individual retirement account (as defined in section 530(b)(1)
of the Internal Revenue Code of 1986) not later than 365 days before the date
of the filing of the petition in a case under this title, but--
(A) only if the
designated beneficiary of such account was a child, stepchild, grandchild, or
stepgrandchild of the debtor for the taxable year for which funds were placed
in such account;
(B) only to the
extent that such funds--
(i) are not
pledged or promised to any entity in connection with any extension of credit;
and
(ii) are not
excess contributions (as described in section 4973(e) of the Internal Revenue
Code of 1986); and
(C) in the case
of funds placed in all such accounts having the same designated beneficiary not
earlier than 720 days nor later than 365 days before such date, only so much of
such funds as does not exceed $5,000 [$5,000 (added by BAPCPA 10-17-05)
effective 4-1-04. Adjusted every 3 years by section 104.];
(6) funds used to
purchase a tuition credit or certificate or contributed to an account in
accordance with section 529(b)(1)(A) of the Internal Revenue Code of 1986 under
a qualified State tuition program (as defined in section 529(b)(1) of such
Code) not later than 365 days before the date of the filing of the petition in
a case under this title, but--
(A) only if the
designated beneficiary of the amounts paid or contributed to such tuition
program was a child, stepchild, grandchild, or stepgrandchild of the debtor for
the taxable year for which funds were paid or contributed;
(B) with respect
to the aggregate amount paid or contributed to such program having the same
designated beneficiary, only so much of such amount as does not exceed the
total contributions permitted under section 529(b)(7) of such Code with respect
to such beneficiary, as adjusted beginning on the date of the filing of the
petition in a case under this title by the annual increase or decrease (rounded
to the nearest tenth of 1 percent) in the education expenditure category of the
Consumer Price Index prepared by the Department of Labor; and
(C) in the case
of funds paid or contributed to such program having the same designated
beneficiary not earlier than 720 days nor later than 365 days before such date,
only so much of such funds as does not exceed $5,000 [$5,000 (added by BAPCPA
10-17-05) effective 4-1-04. Adjusted every 3 years by section 104.];
(7) any amount--
(A) withheld by
an employer from the wages of employees for payment as contributions--
(i) to--
(I) an employee
benefit plan that is subject to title I of the Employee Retirement Income
Security Act of 1974 or under an employee benefit plan which is a governmental
plan under section 414(d) of the Internal Revenue Code of 1986;
(II) a deferred
compensation plan under section 457 of the Internal Revenue Code of 1986; or
(III) a
tax-deferred annuity under section 403(b) of the Internal Revenue Code of 1986;
except that such
amount under this subparagraph shall not constitute disposable income as
defined in section 1325(b)(2); or
(ii) to a health
insurance plan regulated by State law whether or not subject to such title; or
(B) received by
an employer from employees for payment as contributions--
(i) to--
(I) an employee
benefit plan that is subject to title I of the Employee Retirement Income
Security Act of 1974 or under an employee benefit plan which is a governmental
plan under section 414(d) of the Internal Revenue Code of 1986;
(II) a deferred
compensation plan under section 457 of the Internal Revenue Code of 1986; or
(III) a
tax-deferred annuity under section 403(b) of the Internal Revenue Code of 1986;
except that such
amount under this subparagraph shall not constitute disposable income, as
defined in section 1325(b)(2); or
(ii) to a health
insurance plan regulated by State law whether or not subject to such title;
(8) subject to
subchapter III of chapter 5, any interest of the debtor in property where the
debtor pledged or sold tangible personal property (other than securities or
written or printed evidences of indebtedness or title) as collateral for a loan
or advance of money given by a person licensed under law to make such loans or
advances, where--
(A) the tangible
personal property is in the possession of the pledgee or transferee;
(B) the debtor
has no obligation to repay the money, redeem the collateral, or buy back the
property at a stipulated price; and
(C) neither the
debtor nor the trustee have exercised any right to redeem provided under the
contract or State law, in a timely manner as provided under State law and
section 108(b); or
(9) any interest
in cash or cash equivalents that constitute proceeds of a sale by the debtor of
a money order that is made--
(A) on or after
the date that is 14 days prior to the date on which the petition is filed; and
(B) under an
agreement with a money order issuer that prohibits the commingling of such
proceeds with property of the debtor (notwithstanding that, contrary to the
agreement, the proceeds may have been commingled with property of the debtor),
unless the money order issuer had not taken action, prior to the filing of the
petition, to require compliance with the prohibition.
Paragraph (4)
shall not be construed to exclude from the estate any consideration the debtor
retains, receives, or is entitled to receive for transferring an interest in
liquid or gaseous hydrocarbons pursuant to a farmout agreement.
(c)
(1) Except as
provided in paragraph (2) of this subsection, an interest of the debtor in
property becomes property of the estate under subsection (a)(1), (a)(2), or
(a)(5) of this section notwithstanding any provision in an agreement, transfer
instrument, or applicable nonbankruptcy law--
(A) that
restricts or conditions transfer of such interest by the debtor; or
(B) that is
conditioned on the insolvency or financial condition of the debtor, on the
commencement of a case under this title, or on the appointment of or taking
possession by a trustee in a case under this title or a custodian before such
commencement, and that effects or gives an option to effect a forfeiture,
modification, or termination of the debtor’s interest in property.
(2) A restriction
on the transfer of a beneficial interest of the debtor in a trust that is
enforceable under applicable nonbankruptcy law is enforceable in a case under
this title.
(d) Property in
which the debtor holds, as of the commencement of the case, only legal title
and not an equitable interest, such as a mortgage secured by real property, or
an interest in such a mortgage, sold by the debtor but as to which the debtor
retains legal title to service or supervise the servicing of such mortgage or
interest, becomes property of the estate under subsection (a)(1) or (2) of this
section only to the extent of the debtor’s legal title to such property, but
not to the extent of any equitable interest in such property that the debtor
does not hold.
(e) In
determining whether any of the relationships specified in paragraph (5)(A) or
(6)(A) of subsection (b) exists, a legally adopted child of an individual (and
a child who is a member of an individual's household, if placed with such
individual by an authorized placement agency for legal adoption by such
individual), or a foster child of an individual (if such child has as the
child's principal place of abode the home of the debtor and is a member of the
debtor's household) shall be treated as a child of such individual by blood.
(f)
Notwithstanding any other provision of this title, property that is held by a
debtor that is a corporation described in section 501(c)(3) of the Internal
Revenue Code of 1986 and exempt from tax under section 501(a) of such Code may
be transferred to an entity that is not such a corporation, but only under the
same conditions as would apply if the debtor had not filed a case under this
title.
[Rev. 5-16-05]
--------------------------------------------------------------------------------
11 USC §
542. Turnover of property to the estate
(a) Except as
provided in subsection (c) or (d) of this section, an entity, other than a
custodian, in possession, custody, or control, during the case, of property
that the trustee may use, sell, or lease under section 363 of this title, or
that the debtor may exempt under section 522 of this title, shall deliver to
the trustee, and account for, such property or the value of such property,
unless such property is of inconsequential value or benefit to the estate.
(b) Except as
provided in subsection (c) or (d) of this section, an entity that owes a debt
that is property of the estate and that is matured, payable on demand, or
payable on order, shall pay such debt to, or on the order of, the trustee,
except to the extent that such debt may be offset under section 553 of this
title against a claim against the debtor.
(c) Except as
provided in section 362(a)(7) of this title, an entity that has neither actual
notice nor actual knowledge of the commencement of the case concerning the
debtor may transfer property of the estate, or pay a debt owing to the debtor,
in good faith and other than in the manner specified in subsection (d) of this
section, to an entity other than the trustee, with the same effect as to the
entity making such transfer or payment as if the case under this title
concerning the debtor had not been commenced.
(d) A life
insurance company may transfer property of the estate or property of the debtor
to such company in good faith, with the same effect with respect to such
company as if the case under this title concerning the debtor had not been
commenced, if such transfer is to pay a premium or to carry out a nonforfeiture
insurance option, and is required to be made automatically, under a life
insurance contract with such company that was entered into before the date of
the filing of the petition and that is property of the estate.
(e) Subject to
any applicable privilege, after notice and a hearing, the court may order an
attorney, accountant, or other person that holds recorded information, including
books, documents, records, and papers, relating to the debtor’s property or
financial affairs, to turn over or disclose such recorded information to the
trustee.
[Rev. 5-17-05]
--------------------------------------------------------------------------------
11 USC §
543. Turnover of property by a custodian
(a) A custodian
with knowledge of the commencement of a case under this title concerning the
debtor may not make any disbursement from, or take any action in the
administration of, property of the debtor, proceeds, product, offspring, rents,
or profits of such property, or property of the estate, in the possession,
custody, or control of such custodian, except such action as is necessary to
preserve such property.
(b) A custodian
shall--
(1) deliver to
the trustee any property of the debtor held by or transferred to such
custodian, or proceeds, product, offspring, rents, or profits of such property,
that is in such custodian’s possession, custody, or control on the date that
such custodian acquires knowledge of the commencement of the case; and
(2) file an
accounting of any property of the debtor, or proceeds, product, offspring,
rents, or profits of such property, that, at any time, came into the
possession, custody, or control of such custodian.
(c) The court,
after notice and a hearing, shall--
(1) protect all
entities to which a custodian has become obligated with respect to such
property or proceeds, product, offspring, rents, or profits of such property;
(2) provide for
the payment of reasonable compensation for services rendered and costs and
expenses incurred by such custodian; and
(3) surcharge
such custodian, other than an assignee for the benefit of the debtor’s
creditors that was appointed or took possession more than 120 days before the
date of the filing of the petition, for any improper or excessive disbursement,
other than a disbursement that has been made in accordance with applicable law
or that has been approved, after notice and a hearing, by a court of competent
jurisdiction before the commencement of the case under this title.
(d) After notice
and hearing, the bankruptcy court--
(1) may excuse
compliance with subsection (a), (b), or (c) of this section if the interests of
creditors and, if the debtor is not insolvent, of equity security holders would
be better served by permitting a custodian to continue in possession, custody,
or control of such property, and
(2) shall excuse
compliance with subsections (a) and (b)(1) of this section if the custodian is
an assignee for the benefit of the debtor’s creditors that was appointed or
took possession more than 120 days before the date of the filing of the
petition, unless compliance with such subsections is necessary to prevent fraud
or injustice.
[Rev. 5-17-05]
--------------------------------------------------------------------------------
11 USC §
544. Trustee as lien creditor and as
successor to certain creditors and purchasers
(a) The trustee
shall have, as of the commencement of the case, and without regard to any
knowledge of the trustee or of any creditor, the rights and powers of, or may
avoid any transfer of property of the debtor or any obligation incurred by the
debtor that is voidable by--
(1) a creditor
that extends credit to the debtor at the time of the commencement of the case,
and that obtains, at such time and with respect to such credit, a judicial lien
on all property on which a creditor on a simple contract could have obtained
such a judicial lien, whether or not such a creditor exists;
(2) a creditor
that extends credit to the debtor at the time of the commencement of the case,
and obtains, at such time and with respect to such credit, an execution against
the debtor that is returned unsatisfied at such time, whether or not such a
creditor exists; or
(3) a bona fide
purchaser of real property, other than fixtures, from the debtor, against whom
applicable law permits such transfer to be perfected, that obtains the status
of a bona fide purchaser and has perfected such transfer at the time of the
commencement of the case, whether or not such a purchaser exists.
(b)
(1) Except as
provided in paragraph (2), the trustee may avoid any transfer of an interest of
the debtor in property or any obligation incurred by the debtor that is
voidable under applicable law by a creditor holding an unsecured claim that is
allowable under section 502 of this title or that is not allowable only under
section 502(e) of this title.
(2) Paragraph (1)
shall not apply to a transfer of a charitable contribution (as that term is
defined in section 548(d)(3)) that is not covered under section 548(a)(1)(B),
by reason of section 548(a)(2). Any claim by any person to recover a
transferred contribution described in the preceding sentence under Federal or
State law in a Federal or State court shall be preempted by the commencement of
the case.
[Rev. 5-17-05]
--------------------------------------------------------------------------------
11 USC §
545. Statutory liens
The trustee may
avoid the fixing of a statutory lien on property of the debtor to the extent
that such lien--
(1) first becomes
effective against the debtor--
(A) when a case
under this title concerning the debtor is commenced;
(B) when an
insolvency proceeding other than under this title concerning the debtor is
commenced;
(C) when a
custodian is appointed or authorized to take or takes possession;
(D) when the
debtor becomes insolvent;
(E) when the
debtor’s financial condition fails to meet a specified standard; or
(F) at the time
of an execution against property of the debtor levied at the instance of an
entity other than the holder of such statutory lien;
(2) is not
perfected or enforceable at the time of the commencement of the case against a
bona fide purchaser that purchases such property at the time of the
commencement of the case, whether or not such a purchaser exists, except in any
case in which a purchaser is a purchaser described in section 6323 of the Internal
Revenue Code of 1986, or in any other similar provision of State or local law;
(3) is for rent;
or
(4) is a lien of
distress for rent.
[Rev. 5-17-05]
--------------------------------------------------------------------------------
11 USC §
546. Limitations on avoiding powers
(a) An action or
proceeding under section 544, 545, 547, 548, or 553 of this title may not be
commenced after the earlier of--
(1) the later
of--
(A) 2 years after
the entry of the order for relief; or
(B) 1 year after
the appointment or election of the first trustee under section 702, 1104, 1163,
1202, or 1302 of this title if such appointment or such election occurs before
the expiration of the period specified in subparagraph (A); or
(2) the time the
case is closed or dismissed.
(b)
(1) The rights
and powers of a trustee under section 544, 545, and 549 of this title are
subject to any generally applicable law that--
(A) permits
perfection of an interest in property to be effective against an entity that
acquires rights in such property before the date of perfection; or
(B) provides for
the maintenance or continuation of perfection of an interest in property to be
effective against an entity that acquires rights in such property before the
date on which action is taken to effect such maintenance or continuation.
(2) If--
(A) a law
described in paragraph (1) requires seizure of such property or commencement of
an action to accomplish such perfection, or maintenance or continuation of
perfection of an interest in property; and
(B) such property
has not been seized or such an action has not been commenced before the date of
the filing of the petition;
such interest in
such property shall be perfected, or perfection of such interest shall be
maintained or continued, by giving notice within the time fixed by such law for
such seizure or such commencement.
(c)
(1) Except as
provided in subsection (d) of this section and in section 507(c), and subject
to the prior rights of a holder of a security interest in such goods or the
proceeds thereof, the rights and powers of the trustee under sections 544(a),
545, 547, and 549 are subject to the right of a seller of goods that has sold
goods to the debtor, in the ordinary course of such seller's business, to
reclaim such goods if the debtor has received such goods while insolvent, within
45 days before the date of the commencement of a case under this title, but
such seller may not reclaim such goods unless such seller demands in writing
reclamation of such goods--
(A) not later
than 45 days after the date of receipt of such goods by the debtor; or
(B) not later
than 20 days after the date of commencement of the case, if the 45-day period
expires after the commencement of the case.
(2) If a seller
of goods fails to provide notice in the manner described in paragraph (1), the
seller still may assert the rights contained in section 503(b)(9).
(d) In the case
of a seller who is a producer of grain sold to a grain storage facility, owned
or operated by the debtor, in the ordinary course of such seller’s business (as
such terms are defined in section 557 of this title) or in the case of a United
States fisherman who has caught fish sold to a fish processing facility owned
or operated by the debtor in the ordinary course of such fisherman’s business,
the rights and powers of the trustee under sections 544(a), 545, 547, and 549
of this title are subject to any statutory or common law right of such producer
or fisherman to reclaim such grain or fish if the debtor has received such
grain or fish while insolvent, but--
(1) such producer
or fisherman may not reclaim any grain or fish unless such producer or
fisherman demands, in writing, reclamation of such grain or fish before ten
days after receipt thereof by the debtor; and
(2) the court may
deny reclamation to such a producer or fisherman with a right of reclamation
that has made such a demand only if the court secures such claim by a lien.
(e)
Notwithstanding section 544, 545, 547, 548(a)(1)(B), and 548(b) of this title,
the trustee may not avoid a transfer that is a margin payment, as defined in
section 101, 741, or 761 of this title, or settlement payment, as defined in
section 101 or 741 of this title, made by or to a commodity broker, forward
contract merchant, stockbroker, financial institution, financial participant,
or securities clearing agency, that is made before the commencement of the
case, except under section 548(a)(1)(A) of this title.
(f)
Notwithstanding section 544, 545, 547, 548(a)(1)(B), and 548(b) of this title,
the trustee may not avoid a transfer that is a margin payment, as defined in
section 741 or 761 of this title, or settlement payment, as defined in section
741 of this title, made by or to a repo participant or financial participant,
in connection with a repurchase agreement and that is made before the
commencement of the case, except under section 548(a)(1)(A) of this title.
(g)
Notwithstanding section 544, 545, 547, 548(a)(1)(B) and 548(b) of this title,
the trustee may not avoid a transfer or financial participant, under or in
connection with any swap agreement and that is made before the commencement of
the case, except under section 548(a)(1)(A) of this title.
(h)
Notwithstanding the rights and powers of a trustee under sections 544(a), 545,
547, 549, and 553, if the court determines on a motion by the trustee made not
later than 120 days after the date of the order for relief in a case under
chapter 11 of this title and after notice and a hearing, that a return is in
the best interests of the estate, the debtor, with the consent of a creditor
and subject to the prior rights of holders of security interests in such goods
or the proceeds of such goods, may return goods shipped to the debtor by the
creditor before the commencement of the case, and the creditor may offset the
purchase price of such goods against any claim of the creditor against the
debtor that arose before the commencement of the case.
(i)
(1) Notwithstanding
paragraphs (2) and (3) of section 545, the trustee may not avoid a
warehouseman's lien for storage, transportation, or other costs incidental to
the storage and handling of goods.
(2) The
prohibition under paragraph (1) shall be applied in a manner consistent with
any State statute applicable to such lien that is similar to section 7-209 of
the Uniform Commercial Code, as in effect on the date of enactment of the
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, or any successor
to such section 7-209.
(j)
Notwithstanding sections 544, 545, 547, 548(a)(1)(B) and 548(b) the trustee may
not avoid a transfer made by or to a master netting agreement participant under
or in connection with any master netting agreement or any individual contract
covered thereby that is made before the commencement of the case, except under
section 548(a)(1)(A) and except to the extent that the trustee could otherwise
avoid such a transfer made under an individual contract covered by such master
netting agreement.
[Rev. 5-17-05]
--------------------------------------------------------------------------------
11 USC §
547. Preferences
(a) In this
section--
(1)
"inventory" means personal property leased or furnished, held for
sale or lease, or to be furnished under a contract for service, raw materials,
work in process, or materials used or consumed in a business, including farm
products such as crops or livestock, held for sale or lease;
(2) "new
value" means money or money’s worth in goods, services, or new credit, or
release by a transferee of property previously transferred to such transferee
in a transaction that is neither void nor voidable by the debtor or the trustee
under any applicable law, including proceeds of such property, but does not include
an obligation substituted for an existing obligation;
(3)
"receivable" means right to payment, whether or not such right has
been earned by performance; and
(4) a debt for a
tax is incurred on the day when such tax is last payable without penalty,
including any extension.
(b) Except as
provided in subsections (c) and (i) of this section, the trustee may avoid any
transfer of an interest of the debtor in property--
(1) to or for the
benefit of a creditor;
(2) for or on
account of an antecedent debt owed by the debtor before such transfer was made;
(3) made while
the debtor was insolvent;
(4) made--
(A) on or within
90 days before the date of the filing of the petition; or
(B) between
ninety days and one year before the date of the filing of the petition, if such
creditor at the time of such transfer was an insider; and
(5) that enables
such creditor to receive more than such creditor would receive if--
(A) the case were
a case under chapter 7 of this title;
(B) the transfer
had not been made; and
(C) such creditor
received payment of such debt to the extent provided by the provisions of this
title.
(c) The trustee
may not avoid under this section a transfer--
(1) to the extent
that such transfer was--
(A) intended by
the debtor and the creditor to or for whose benefit such transfer was made to
be a contemporaneous exchange for new value given to the debtor; and
(B) in fact a
substantially contemporaneous exchange;
(2) to the extent
that such transfer was in payment of a debt incurred by the debtor in the
ordinary course of business or financial affairs of the debtor and the
transferee, and such transfer was--
(A) made in the
ordinary course of business or financial affairs of the debtor and the
transferee; or
(B) made
according to ordinary business terms;
(3) that creates
a security interest in property acquired by the debtor--
(A) to the extent
such security interest secures new value that was--
(i) given at or
after the signing of a security agreement that contains a description of such
property as collateral;
(ii) given by or
on behalf of the secured party under such agreement;
(iii) given to
enable the debtor to acquire such property; and
(iv) in fact used
by the debtor to acquire such property; and
(B) that is
perfected on or before 30 days after the debtor receives possession of such
property;
(4) to or for the
benefit of a creditor, to the extent that, after such transfer, such creditor
gave new value to or for the benefit of the debtor--
(A) not secured
by an otherwise unavoidable security interest; and
(B) on account of
which new value the debtor did not make an otherwise unavoidable transfer to or
for the benefit of such creditor;
(5) that creates
a perfected security interest in inventory or a receivable or the proceeds of
either, except to the extent that the aggregate of all such transfers to the
transferee caused a reduction, as of the date of the filing of the petition and
to the prejudice of other creditors holding unsecured claims, of any amount by
which the debt secured by such security interest exceeded the value of all
security interests for such debt on the later of--
(A)
(i) with respect
to a transfer to which subsection (b)(4)(A) of this section applies, 90 days
before the date of the filing of the petition; or
(ii) with respect
to a transfer to which subsection (b)(4)(B) of this section applies, one year
before the date of the filing of the petition; or
(B) the date on
which new value was first given under the security agreement creating such
security interest;
(6) that is the
fixing of a statutory lien that is not avoidable under section 545 of this
title;
(7) to the extent
such transfer was a bona fide payment of a debt for a domestic support
obligation;
(8) if, in a case
filed by an individual debtor whose debts are primarily consumer debts, the
aggregate value of all property that constitutes or is affected by such
transfer is less than $600 ; or
(9) if, in a case
filed by a debtor whose debts are not primarily consumer debts, the aggregate
value of all property that constitutes or is affected by such transfer is less
than $5,000 [$5,000 (added by BAPCPA 10-17-05) effective 4-1-04. Adjusted every
3 years by section 104.].
(d) The trustee
may avoid a transfer of an interest in property of the debtor transferred to or
for the benefit of a surety to secure reimbursement of such a surety that
furnished a bond or other obligation to dissolve a judicial lien that would
have been avoidable by the trustee under subsection (b) of this section. The
liability of such surety under such bond or obligation shall be discharged to
the extent of the value of such property recovered by the trustee or the amount
paid to the trustee.
(e)
(1) For the
purposes of this section--
(A) a transfer of
real property other than fixtures, but including the interest of a seller or
purchaser under a contract for the sale of real property, is perfected when a
bona fide purchaser of such property from the debtor against whom applicable
law permits such transfer to be perfected cannot acquire an interest that is
superior to the interest of the transferee; and
(B) a transfer of
a fixture or property other than real property is perfected when a creditor on
a simple contract cannot acquire a judicial lien that is superior to the
interest of the transferee.
(2) For the
purposes of this section, except as provided in paragraph (3) of this
subsection, a transfer is made--
(A) at the time
such transfer takes effect between the transferor and the transferee, if such
transfer is perfected at, or within 30 days after, such time, except as
provided in subsection (c)(3)(B);
(B) at the time
such transfer is perfected, if such transfer is perfected after such 30 days;
or
(C) immediately
before the date of the filing of the petition, if such transfer is not
perfected at the later of--
(i) the
commencement of the case; or
(ii) 30 days
after such transfer takes effect between the transferor and the transferee.
(3) For the
purposes of this section, a transfer is not made until the debtor has acquired
rights in the property transferred.
(f) For the
purposes of this section, the debtor is presumed to have been insolvent on and
during the 90 days immediately preceding the date of the filing of the
petition.
(g) For the
purposes of this section, the trustee has the burden of proving the
avoidability of a transfer under subsection (b) of this section, and the
creditor or party in interest against whom recovery or avoidance is sought has
the burden of proving the nonavoidability of a transfer under subsection (c) of
this section.
(h) The trustee
may not avoid a transfer if such transfer was made as a part of an alternative
repayment schedule between the debtor and any creditor of the debtor created by
an approved nonprofit budget and credit counseling agency.
(i) If the
trustee avoids under subsection (b) a transfer made between 90 days and 1 year
before the date of the filing of the petition, by the debtor to an entity that
is not an insider for the benefit of a creditor that is an insider, such
transfer shall be considered to be avoided under this section only with respect
to the creditor that is an insider.
[Rev. 5-17-05]
--------------------------------------------------------------------------------
11 USC §
548. Fraudulent transfers and
obligations
(a)
(1) The trustee
may avoid any transfer (including any transfer to or for the benefit of an
insider under an employment contract) of an interest of the debtor in property,
or any obligation (including any obligation to or for the benefit of an insider
under an employment contract) incurred by the debtor, that was made or incurred
on or within 2 years before the date of the filing of the petition, if the
debtor voluntarily or involuntarily--
(A) made such
transfer or incurred such obligation with actual intent to hinder, delay, or
defraud any entity to which the debtor was or became, on or after the date that
such transfer was made or such obligation was incurred, indebted; or
(B)
(i) received less
than a reasonably equivalent value in exchange for such transfer or obligation;
and
(ii)
(I) was insolvent
on the date that such transfer was made or such obligation was incurred, or
became insolvent as a result of such transfer or obligation;
(II) was engaged
in business or a transaction, or was about to engage in business or a
transaction, for which any property remaining with the debtor was an
unreasonably small capital;
(III) intended to
incur, or believed that the debtor would incur, debts that would be beyond the
debtor's ability to pay as such debts matured ; or
(IV) made such
transfer to or for the benefit of an insider, or incurred such obligation to or
for the benefit of an insider, under an employment contract and not in the
ordinary course of business.
(2) A transfer of
a charitable contribution to a qualified religious or charitable entity or
organization shall not be considered to be a transfer covered under paragraph
(1)(B) in any case in which--
(A) the amount of
that contribution does not exceed 15 percent of the gross annual income of the
debtor for the year in which the transfer of the contribution is made; or
(B) the
contribution made by a debtor exceeded the percentage amount of gross annual
income specified in subparagraph (A), if the transfer was consistent with the
practices of the debtor in making charitable contributions.
(b) The trustee
of a partnership debtor may avoid any transfer of an interest of the debtor in
property, or any obligation incurred by the debtor, that was made or incurred
on or within 2 years before the date of the filing of the petition, to a general
partner in the debtor, if the debtor was insolvent on the date such transfer
was made or such obligation was incurred, or became insolvent as a result of
such transfer or obligation.
(c) Except to the
extent that a transfer or obligation voidable under this section is voidable
under section 544, 545, or 547 of this title, a transferee or obligee of such a
transfer or obligation that takes for value and in good faith has a lien on or
may retain any interest transferred or may enforce any obligation incurred, as
the case may be, to the extent that such transferee or obligee gave value to
the debtor in exchange for such transfer or obligation.
(d)
(1) For the
purposes of this section, a transfer is made when such transfer is so perfected
that a bona fide purchaser from the debtor against whom applicable law permits
such transfer to be perfected cannot acquire an interest in the property
transferred that is superior to the interest in such property of the
transferee, but if such transfer is not so perfected before the commencement of
the case, such transfer is made immediately before the date of the filing of
the petition.
(2) In this
section--
(A)
"value" means property, or satisfaction or securing of a present or
antecedent debt of the debtor, but does not include an unperformed promise to
furnish support to the debtor or to a relative of the debtor;
(B) a commodity
broker, forward contract merchant, stockbroker, financial institution,
financial participant, or securities clearing agency that receives a margin
payment, as defined in section 101, 741, or 761 of this title, or settlement
payment, as defined in section 101 or 741 of this title, takes for value to the
extent of such payment;
(C) a repo
participant or financial participant that receives a margin payment, as defined
in section 741 or 761 of this title, or settlement payment, as defined in
section 741 of this title, in connection with a repurchase agreement, takes for
value to the extent of such payment;
(D) a swap
participant or financial participant that receives a transfer in connection
with a swap agreement takes for value to the extent of such transfer; and
(E) a master
netting agreement participant that receives a transfer in connection with a
master netting agreement or any individual contract covered thereby takes for
value to the extent of such transfer, except that, with respect to a transfer
under any individual contract covered thereby, to the extent that such master
netting agreement participant otherwise did not take (or is otherwise not
deemed to have taken) such transfer for value.
(3) In this
section, the term "charitable contribution" means a charitable
contribution, as that term is defined in section 170(c) of the Internal Revenue
Code of 1986, if that contribution--
(A) is made by a
natural person; and
(B) consists of--
(i) a financial
instrument (as that term is defined in section 731(c)(2)(C) of the Internal Revenue
Code of 1986); or
(ii) cash.
(4) In this
section, the term "qualified religious or charitable entity or
organization" means--
(A) an entity
described in section 170(c)(1) of the Internal Revenue Code of 1986; or
(B) an entity or
organization described in section 170(c)(2) of the Internal Revenue Code of
1986.
(e)
(1) In addition
to any transfer that the trustee may otherwise avoid, the trustee may avoid any
transfer of an interest of the debtor in property that was made on or within 10
years before the date of the filing of the petition, if--
(A) such transfer
was made to a self-settled trust or similar device;
(B) such transfer
was by the debtor;
(C) the debtor is
a beneficiary of such trust or similar device; and
(D) the debtor
made such transfer with actual intent to hinder, delay, or defraud any entity
to which the debtor was or became, on or after the date that such transfer was
made, indebted.
(2) For the
purposes of this subsection, a transfer includes a transfer made in
anticipation of any money judgment, settlement, civil penalty, equitable order,
or criminal fine incurred by, or which the debtor believed would be incurred
by--
(A) any violation
of the securities laws (as defined in section 3(a)(47) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(47))), any State securities laws, or any
regulation or order issued under Federal securities laws or State securities
laws; or
(B) fraud,
deceit, or manipulation in a fiduciary capacity or in connection with the
purchase or sale of any security registered under section 12 or 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78l and 78o(d)) or under section 6
of the Securities Act of 1933 (15 U.S.C. 77f).
[Rev. 5-18-05]
--------------------------------------------------------------------------------
11 USC §
549. Postpetition transactions
(a) Except as
provided in subsection (b) or (c) of this section, the trustee may avoid a
transfer of property of the estate--
(1) that occurs
after the commencement of the case; and
(2)
(A) that is
authorized only under section 303(f) or 542(c) of this title; or
(B) that is not
authorized under this title or by the court.
(b) In an
involuntary case, the trustee may not avoid under subsection (a) of this
section a transfer made after the commencement of such case but before the
order for relief to the extent any value, including services, but not including
satisfaction or securing of a debt that arose before the commencement of the
case, is given after the commencement of the case in exchange for such
transfer, notwithstanding any notice or knowledge of the case that the
transferee has.
(c) The trustee
may not avoid under subsection (a) of this section a transfer of an interest in
real property to a good faith purchaser without knowledge of the commencement
of the case and for present fair equivalent value unless a copy or notice of
the petition was filed, where a transfer of an interest in such real property
may be recorded to perfect such transfer, before such transfer is so perfected that
a bona fide purchaser of such real property, against whom applicable law
permits such transfer to be perfected, could not acquire an interest that is
superior to such interest of such good faith purchaser. A good faith purchaser
without knowledge of the commencement of the case and for less than present
fair equivalent value has a lien on the property transferred to the extent of
any present value given, unless a copy or notice of the petition was so filed
before such transfer was so perfected.
(d) An action or
proceeding under this section may not be commenced after the earlier of--
(1) two years
after the date of the transfer sought to be avoided; or
(2) the time the
case is closed or dismissed.
[Rev. 5-18-05]
--------------------------------------------------------------------------------
11 USC §
550. Liability of transferee of avoided
transfer
(a) Except as
otherwise provided in this section, to the extent that a transfer is avoided
under section 544, 545, 547, 548, 549, 553(b), or 724(a) of this title, the
trustee may recover, for the benefit of the estate, the property transferred,
or, if the court so orders, the value of such property, from--
(1) the initial
transferee of such transfer or the entity for whose benefit such transfer was
made; or
(2) any immediate
or mediate transferee of such initial transferee.
(b) The trustee
may not recover under section (a)(2) of this section from--
(1) a transferee
that takes for value, including satisfaction or securing of a present or
antecedent debt, in good faith, and without knowledge of the voidability of the
transfer avoided; or
(2) any immediate
or mediate good faith transferee of such transferee.
(c) If a transfer
made between 90 days and one year before the filing of the petition--
(1) is avoided
under section 547(b) of this title; and
(2) was made for
the benefit of a creditor that at the time of such transfer was an insider;
the trustee may
not recover under subsection (a) from a transferee that is not an insider.
(d) The trustee
is entitled to only a single satisfaction under subsection (a) of this section.
(e)
(1) A good faith
transferee from whom the trustee may recover under subsection (a) of this
section has a lien on the property recovered to secure the lesser of--
(A) the cost, to
such transferee, of any improvement made after the transfer, less the amount of
any profit realized by or accruing to such transferee from such property; and
(B) any increase
in the value of such property as a result of such improvement, of the property
transferred.
(2) In this
subsection, "improvement" includes--
(A) physical
additions or changes to the property transferred;
(B) repairs to
such property;
(C) payment of
any tax on such property;
(D) payment of
any debt secured by a lien on such property that is superior or equal to the
rights of the trustee; and
(E) preservation
of such property.
(f) An action or
proceeding under this section may not be commenced after the earlier of--
(1) one year
after the avoidance of the transfer on account of which recovery under this
section is sought; or
(2) the time the
case is closed or dismissed.
[Rev. 5-18-05]
--------------------------------------------------------------------------------
11 USC §
551. Automatic preservation of avoided
transfer
Any transfer
avoided under section 522, 544, 545, 547, 548, 549, or 724(a) of this title, or
any lien void under section 506(d) of this title, is preserved for the benefit
of the estate but only with respect to property of the estate.
[Rev. 5-18-05]
--------------------------------------------------------------------------------
11 USC §
552. Postpetition effect of security
interest
(a) Except as
provided in subsection (b) of this section, property acquired by the estate or
by the debtor after the commencement of the case is not subject to any lien
resulting from any security agreement entered into by the debtor before the
commencement of the case.
(b)
(1) Except as
provided in sections 363, 506(c), 522, 544, 545, 547, and 548 of this title, if
the debtor and an entity entered into a security agreement before the
commencement of the case and if the security interest created by such security
agreement extends to property of the debtor acquired before the commencement of
the case and to proceeds, products, offspring, or profits of such property,
then such security interest extends to such proceeds, products, offspring, or
profits acquired by the estate after the commencement of the case to the extent
provided by such security agreement and by applicable nonbankruptcy law, except
to any extent that the court, after notice and a hearing and based on the
equities of the case, orders otherwise.
(2) Except as provided
in sections 363, 506(c), 522, 544, 545, 547, and 548 of this title, and
notwithstanding section 546(b) of this title, if the debtor and an entity
entered into a security agreement before the commencement of the case and if
the security interest created by such security agreement extends to property of
the debtor acquired before the commencement of the case and to amounts paid as
rents of such property or the fees, charges, accounts, or other payments for
the use or occupancy of rooms and other public facilities in hotels, motels, or
other lodging properties, then such security interest extends to such rents and
such fees, charges, accounts, or other payments acquired by the estate after
the commencement of the case to the extent provided in such security agreement,
except to any extent that the court, after notice and a hearing and based on
the equities of the case, orders otherwise.
[Rev. 5-18-05]
--------------------------------------------------------------------------------
11 USC §
553. Setoff
(a) Except as
otherwise provided in this section and in sections 362 and 363 of this title,
this title does not affect any right of a creditor to offset a mutual debt
owing by such creditor to the debtor that arose before the commencement of the
case under this title against a claim of such creditor against the debtor that
arose before the commencement of the case, except to the extent that--
(1) the claim of
such creditor against the debtor is disallowed;
(2) such claim
was transferred, by an entity other than the debtor, to such creditor--
(A) after the
commencement of the case; or
(B)
(i) after 90 days
before the date of the filing of the petition; and
(ii) while the
debtor was insolvent (except for a setoff of a kind described in section 362(b)(6),
362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561); or
(3) the debt owed
to the debtor by such creditor was incurred by such creditor--
(A) after 90 days
before the date of the filing of the petition;
(B) while the
debtor was insolvent; and
(C) for the
purpose of obtaining a right of setoff against the debtor (except for a setoff
of a kind described in section 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27),
555, 556, 559, 560, or 561).
(b)
(1) Except with
respect to a setoff of a kind described in section 362(b)(6), 362(b)(7),
362(b)(17), 362(b)(27), 555, 556, 559, 560, 561, 365(h), 546(h), or 365(i)(2)
of this title, if a creditor offsets a mutual debt owing to the debtor against
a claim against the debtor on or within 90 days before the date of the filing
of the petition, then the trustee may recover from such creditor the amount so
offset to the extent that any insufficiency on the date of such setoff is less
than the insufficiency on the later of--
(A) 90 days
before the date of the filing of the petition; and
(B) the first
date during the 90 days immediately preceding the date of the filing of the
petition on which there is an insufficiency.
(2) In this
subsection, “insufficiency” means amount, if any, by which a claim against the
debtor exceeds a mutual debt owing to the debtor by the holder of such claim.
(c) For the
purposes of this section, the debtor is presumed to have been insolvent on and
during the 90 days immediately preceding the date of the filing of the
petition.
[Rev. 5-18-05]
--------------------------------------------------------------------------------
11 USC §
554. Abandonment of property of the
estate
(a) After notice
and a hearing, the trustee may abandon any property of the estate that is
burdensome to the estate or that is of inconsequential value and benefit to the
estate.
(b) On request of
a party in interest and after notice and a hearing, the court may order the
trustee to abandon any property of the estate that is burdensome to the estate
or that is of inconsequential value and benefit to the estate.
(c) Unless the
court orders otherwise, any property scheduled under section 521(1)
[sic--reference to previous subsection; now 521(a)(1)] of this title not
otherwise administered at the time of the closing of a case is abandoned to the
debtor and administered for purposes of section 350 of this title.
(d) Unless the
court orders otherwise, property of the estate that is not abandoned under this
section and that is not administered in the case remains property of the
estate.
[Rev. 5-19-05]
--------------------------------------------------------------------------------
11 USC §
555. Contractual right to liquidate,
terminate, or accelerate a securities contract
The exercise of a
contractual right of a stockbroker, financial institution, financial participant,
or securities clearing agency to cause the liquidation, termination, or
acceleration of a securities contract, as defined in section 741 of this title,
because of a condition of the kind specified in section 365(e)(1) of this title
shall not be stayed, avoided, or otherwise limited by operation of any
provision of this title or by order of a court or administrative agency in any
proceeding under this title unless such order is authorized under the
provisions of the Securities Investor Protection Act of 1970 or any statute
administered by the Securities and Exchange Commission. As used in this
section, the term "contractual right" includes a right set forth in a
rule or bylaw of a derivatives clearing organization (as defined in the Commodity
Exchange Act), a multilateral clearing organization (as defined in the Federal
Deposit Insurance Corporation Improvement Act of 1991), a national securities
exchange, a national securities association, a securities clearing agency, a
contract market designated under the Commodity Exchange Act, a derivatives
transaction execution facility registered under the Commodity Exchange Act, or
a board of trade (as defined in the Commodity Exchange Act), or in a resolution
of the governing board thereof, and a right, whether or not in writing, arising
under common law, under law merchant, or by reason of normal business practice.
[Rev. 5-19-05]
--------------------------------------------------------------------------------
11 USC §
556. Contractual right to liquidate, terminate,
or accelerate a commodities contract or forward contract
The contractual
right of a commodity broker, financial participant, or forward contract
merchant to cause the liquidation, termination, or acceleration of a commodity
contract, as defined in section 761 of this title, or forward contract because
of a condition of the kind specified in section 365(e)(1) of this title, and
the right to a variation or maintenance margin payment received from a trustee
with respect to open commodity contracts or forward contracts, shall not be
stayed, avoided, or otherwise limited by operation of any provision of this
title or by the order of a court in any proceeding under this title. As used in
this section, the term "contractual right" includes a right set forth
in a rule or bylaw of a derivatives clearing organization (as defined in the
Commodity Exchange Act), a multilateral clearing organization (as defined in
the Federal Deposit Insurance Corporation Improvement Act of 1991), a national
securities exchange, a national securities association, a securities clearing
agency, a contract market designated under the Commodity Exchange Act, a
derivatives transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the Commodity Exchange Act) or
in a resolution of the governing board thereof and a right, whether or not
evidenced in writing, arising under common law, under law merchant or by reason
of normal business practice.
[Rev. 5-19-05]
--------------------------------------------------------------------------------
11 USC §
557. Expedited determination of
interests in, and abandonment or other disposition of grain assets
(a) This section
applies only in a case concerning a debtor that owns or operates a grain
storage facility and only with respect to grain and the proceeds of grain. This
section does not affect the application of any other section of this title to
property other than grain and proceeds of grain.
(b) In this
section--
(1)
"grain" means wheat, corn, flaxseed, grain sorghum, barley, oats,
rye, soybeans, other dry edible beans, or rice;
(2) "grain
storage facility" means a site or physical structure regularly used to
store grain for producers, or to store grain acquired from producers for
resale; and
(3)
"producer" means an entity which engages in the growing of grain.
(c)
(1)
Notwithstanding sections 362, 363, 365, and 554 of this title, on the court’s
own motion the court may, and on the request of the trustee or an entity that
claims an interest in grain or the proceeds of grain the court shall, expedite
the procedures for the determination of interests in and the disposition of
grain and the proceeds of grain, by shortening to the greatest extent feasible
such time periods as are otherwise applicable for such procedures and by
establishing, by order, a timetable having a duration of not to exceed 120 days
for the completion of the applicable procedure specified in subsection (d) of
this section. Such time periods and such timetable may be modified by the
court, for cause, in accordance with subsection (f) of this section.
(2) The court
shall determine the extent to which such time periods shall be shortened, based
upon--
(A) any need of
an entity claiming an interest in such grain or the proceeds of grain for a
prompt determination of such interest;
(B) any need of
such entity for a prompt disposition of such grain;
(C) the market
for such grain;
(D) the
conditions under which such grain is stored;
(E) the costs of
continued storage or disposition of such grain;
(F) the orderly
administration of the estate;
(G) the
appropriate opportunity for an entity to assert an interest in such grain; and
(H) such other
considerations as are relevant to the need to expedite such procedures in the
case.
(d) The
procedures that may be expedited under subsection (c) of this section include--
(1) the filing of
and response to--
(A) a claim of
ownership;
(B) a proof of
claim;
(C) a request for
abandonment;
(D) a request for
relief from the stay of action against property under section 362 (a) of this
title;
(E) a request for
determination of secured status;
(F) a request for
determination of whether such grain or the proceeds of grain--
(i) is property
of the estate;
(ii) must be
turned over to the estate; or
(iii) may be
used, sold, or leased; and
(G) any other
request for determination of an interest in such grain or the proceeds of
grain;
(2) the disposition
of such grain or the proceeds of grain, before or after determination of
interests in such grain or the proceeds of grain, by way of--
(A) sale of such
grain;
(B) abandonment;
(C) distribution;
or
(D) such other
method as is equitable in the case;
(3) subject to
sections 701, 702, 703, 1104, 1202, and 1302 of this title, the appointment of
a trustee or examiner and the retention and compensation of any professional
person required to assist with respect to matters relevant to the determination
of interests in or disposition of such grain or the proceeds of grain; and
(4) the
determination of any dispute concerning a matter specified in paragraph (1),
(2), or (3) of this subsection.
(e)
(1) Any governmental
unit that has regulatory jurisdiction over the operation or liquidation of the
debtor or the debtor’s business shall be given notice of any request made or
order entered under subsection (c) of this section.
(2) Any such
governmental unit may raise, and may appear and be heard on, any issue relating
to grain or the proceeds of grain in a case in which a request is made, or an
order is entered, under subsection (c) of this section.
(3) The trustee
shall consult with such governmental unit before taking any action relating to
the disposition of grain in the possession, custody, or control of the debtor
or the estate.
(f) The court may
extend the period for final disposition of grain or the proceeds of grain under
this section beyond 120 days if the court finds that--
(1) the interests
of justice so require in light of the complexity of the case; and
(2) the interests
of those claimants entitled to distribution of grain or the proceeds of grain
will not be materially injured by such additional delay.
(g) Unless an
order establishing an expedited procedure under subsection (c) of this section,
or determining any interest in or approving any disposition of grain or the
proceeds of grain, is stayed pending appeal--
(1) the reversal
or modification of such order on appeal does not affect the validity of any
procedure, determination, or disposition that occurs before such reversal or
modification, whether or not any entity knew of the pendency of the appeal; and
(2) neither the
court nor the trustee may delay, due to the appeal of such order, any
proceeding in the case in which such order is issued.
(h)
(1) The trustee
may recover from grain and the proceeds of grain the reasonable and necessary
costs and expenses allowable under section 503 (b) of this title attributable
to preserving or disposing of grain or the proceeds of grain, but may not
recover from such grain or the proceeds of grain any other costs or expenses.
(2)
Notwithstanding section 326(a) of this title, the dollar amounts of money
specified in such section include the value, as of the date of disposition, of
any grain that the trustee distributes in kind.
(i) In all cases
where the quantity of a specific type of grain held by a debtor operating a
grain storage facility exceeds ten thousand bushels, such grain shall be sold
by the trustee and the assets thereof distributed in accordance with the
provisions of this section.
[Rev. 5-19-05]
--------------------------------------------------------------------------------
11 USC §
558. Defenses of the estate
The estate shall
have the benefit of any defense available to the debtor as against any entity
other than the estate, including statutes of limitation, statutes of frauds,
usury, and other personal defenses. A waiver of any such defense by the debtor
after the commencement of the case does not bind the estate.
[Rev. 5-19-05]
--------------------------------------------------------------------------------
11 USC §
559. Contractual right to liquidate,
terminate, or accelerate a repurchase agreement
The exercise of a
contractual right of a repo participant or financial participant to cause the
liquidation, termination, or acceleration of a repurchase agreement because of
a condition of the kind specified in section 365(e)(1) of this title shall not
be stayed, avoided, or otherwise limited by operation of any provision of this
title or by order of a court or administrative agency in any proceeding under
this title, unless, where the debtor is a stockbroker or securities clearing
agency, such order is authorized under the provisions of the Securities
Investor Protection Act of 1970 or any statute administered by the Securities
and Exchange Commission. In the event that a repo participant or financial
participant liquidates one or more repurchase agreements with a debtor and
under the terms of one or more such agreements has agreed to deliver assets
subject to repurchase agreements to the debtor, any excess of the market prices
received on liquidation of such assets (or if any such assets are not disposed
of on the date of liquidation of such repurchase agreements, at the prices
available at the time of liquidation of such repurchase agreements from a
generally recognized source or the most recent closing bid quotation from such
a source) over the sum of the stated repurchase prices and all expenses in
connection with the liquidation of such repurchase agreements shall be deemed
property of the estate, subject to the available rights of setoff. As used in
this section, the term "contractual right" includes a right set forth
in a rule or bylaw of a derivatives clearing organization (as defined in the
Commodity Exchange Act), a multilateral clearing organization (as defined in
the Federal Deposit Insurance Corporation Improvement Act of 1991), a national
securities exchange, a national securities association, a securities clearing
agency, a contract market designated under the Commodity Exchange Act, a
derivatives transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the Commodity Exchange Act) or
in a resolution of the governing board thereof and a right, whether or not
evidenced in writing, arising under common law, under law merchant or by reason
of normal business practice.
[Rev. 5-19-05]
--------------------------------------------------------------------------------
11 USC §
560. Contractual right to liquidate,
terminate, or accelerate a swap agreement
The exercise of
any contractual right of any swap participant or financial participant to cause
the liquidation, termination, or acceleration of one or more swap agreements
because of a condition of the kind specified in section 365(e)(1) of this title
or to offset or net out any termination values or payment amounts arising under
or in connection with the termination, liquidation, or acceleration of one or
more swap agreements shall not be stayed, avoided, or otherwise limited by
operation of any provision of this title or by order of a court or
administrative agency in any proceeding under this title. As used in this
section, the term "contractual right" includes a right set forth in a
rule or bylaw of a derivatives clearing organization (as defined in the
Commodity Exchange Act), a multilateral clearing organization (as defined in
the Federal Deposit Insurance Corporation Improvement Act of 1991), a national
securities exchange, a national securities association, a securities clearing
agency, a contract market designated under the Commodity Exchange Act, a
derivatives transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the Commodity Exchange Act) or
in a resolution of the governing board thereof and a right, whether or not
evidenced in writing, arising under common law, under law merchant, or by
reason of normal business practice.
[Rev. 5-19-05]
--------------------------------------------------------------------------------
11 USC §
561. Contractual right to terminate,
liquidate, accelerate, or offset under a master netting agreement and across
contracts; proceedings under chapter 15
(a) Subject to
subsection (b), the exercise of any contractual right, because of a condition
of the kind specified in section 365(e)(1), to cause the termination,
liquidation, or acceleration of or to offset or net termination values, payment
amounts, or other transfer obligations arising under or in connection with one
or more (or the termination, liquidation, or acceleration of one or more)--
(1) securities
contracts, as defined in section 741(7);
(2) commodity
contracts, as defined in section 761(4);
(3) forward
contracts;
(4) repurchase
agreements;
(5) swap
agreements; or
(6) master
netting agreements,
shall not be
stayed, avoided, or otherwise limited by operation of any provision of this
title or by any order of a court or administrative agency in any proceeding
under this title.
(b)
(1) A party may
exercise a contractual right described in subsection (a) to terminate,
liquidate, or accelerate only to the extent that such party could exercise such
a right under section 555, 556, 559, or 560 for each individual contract
covered by the master netting agreement in issue.
(2) If a debtor
is a commodity broker subject to subchapter IV of chapter 7--
(A) a party may
not net or offset an obligation to the debtor arising under, or in connection
with, a commodity contract traded on or subject to the rules of a contract
market designated under the Commodity Exchange Act or a derivatives transaction
execution facility registered under the Commodity Exchange Act against any
claim arising under, or in connection with, other instruments, contracts, or
agreements listed in subsection (a) except to the extent that the party has
positive net equity in the commodity accounts at the debtor, as calculated
under such subchapter; and
(B) another
commodity broker may not net or offset an obligation to the debtor arising
under, or in connection with, a commodity contract entered into or held on
behalf of a customer of the debtor and traded on or subject to the rules of a
contract market designated under the Commodity Exchange Act or a derivatives
transaction execution facility registered under the Commodity Exchange Act against
any claim arising under, or in connection with, other instruments, contracts,
or agreements listed in subsection (a).
(3) No provision
of subparagraph (A) or (B) of paragraph (2) shall prohibit the offset of claims
and obligations that arise under--
(A) a
cross-margining agreement or similar arrangement that has been approved by the
Commodity Futures Trading Commission or submitted to the Commodity Futures
Trading Commission under paragraph (1) or (2) of section 5c(c) of the Commodity
Exchange Act and has not been abrogated or rendered ineffective by the
Commodity Futures Trading Commission; or
(B) any other
netting agreement between a clearing organization (as defined in section 761)
and another entity that has been approved by the Commodity Futures Trading
Commission.
(c) As used in
this section, the term "contractual right" includes a right set forth
in a rule or bylaw of a derivatives clearing organization (as defined in the
Commodity Exchange Act), a multilateral clearing organization (as defined in
the Federal Deposit Insurance Corporation Improvement Act of 1991), a national
securities exchange, a national securities association, a securities clearing
agency, a contract market designated under the Commodity Exchange Act, a
derivatives transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the Commodity Exchange Act) or
in a resolution of the governing board thereof, and a right, whether or not
evidenced in writing, arising under common law, under law merchant, or by
reason of normal business practice.
(d) Any
provisions of this title relating to securities contracts, commodity contracts,
forward contracts, repurchase agreements, swap agreements, or master netting
agreements shall apply in a case under chapter 15, so that enforcement of
contractual provisions of such contracts and agreements in accordance with
their terms will not be stayed or otherwise limited by operation of any
provision of this title or by order of a court in any case under this title,
and to limit avoidance powers to the same extent as in a proceeding under
chapter 7 or 11 of this title (such enforcement not to be limited based on the
presence or absence of assets of the debtor in the United States).
[Rev. 5-19-05]
--------------------------------------------------------------------------------
11 USC §
562. Timing of damage measurement in
connection with swap agreements, securities contracts, forward contracts,
commodity contracts, repurchase agreements, and master netting agreements
(a) If the
trustee rejects a swap agreement, securities contract (as defined in section
741), forward contract, commodity contract (as defined in section 761),
repurchase agreement, or master netting agreement pursuant to section 365(a),
or if a forward contract merchant, stockbroker, financial institution,
securities clearing agency, repo participant, financial participant, master
netting agreement participant, or swap participant liquidates, terminates, or
accelerates such contract or agreement, damages shall be measured as of the
earlier of--
(1) the date of
such rejection; or
(2) the date or
dates of such liquidation, termination, or acceleration.
(b) If there are
not any commercially reasonable determinants of value as of any date referred
to in paragraph (1) or (2) of subsection (a), damages shall be measured as of
the earliest subsequent date or dates on which there are commercially
reasonable determinants of value.
(c) For the
purposes of subsection (b), if damages are not measured as of the date or dates
of rejection, liquidation, termination, or acceleration, and the forward
contract merchant, stockbroker, financial institution, securities clearing
agency, repo participant, financial participant, master netting agreement
participant, or swap participant or the trustee objects to the timing of the
measurement of damages--
(1) the trustee,
in the case of an objection by a forward contract merchant, stockbroker,
financial institution, securities clearing agency, repo participant, financial
participant, master netting agreement participant, or swap participant; or
(2) the forward
contract merchant, stockbroker, financial institution, securities clearing
agency, repo participant, financial participant, master netting agreement
participant, or swap participant, in the case of an objection by the trustee,
has the burden of
proving that there were no commercially reasonable determinants of value as of
such date or dates.
[Rev. 5-19-05]
--------------------------------------------------------------------------------
Chapter 7. Liquidation
Subchapter
I. Officers and Administration
§ 701. Interim
trustee
§ 702. Election
of trustee
§ 703. Successor
trustee
§ 704. Duties of
trustee
§ 705. Creditors'
committee
§ 706. Conversion
§ 707. Dismissal
of a case or conversion to a case under chapter 11 or 13
Subchapter
II. Collection, Liquidation, and
Distribution of the Estate
§ 721.
Authorization to operate business
§ 722. Redemption
§ 723. Rights of
partnership trustee against general partners
§ 724. Treatment
of certain liens
§ 725.
Disposition of certain property
§ 726.
Distribution of property of the estate
§ 727. Discharge
§ 728. Special
tax provisions
Subchapter
III. Stockbroker Liquidation
Omitted
Subchapter
IV. Commodity Broker Liquidation
Omitted
--------------------------------------------------------------------------------
Subchapter
I. Officers and Administration
11 USC §
701. Interim trustee
(a)
(1) Promptly
after the order for relief under this chapter, the United States trustee shall
appoint one disinterested person that is a member of the panel of private
trustees established under section 586(a)(1) of title 28 or that is serving as
trustee in the case immediately before the order for relief under this chapter
to serve as interim trustee in the case.
(2) If none of
the members of such panel is willing to serve as interim trustee in the case,
then the United States trustee may serve as interim trustee in the case.
(b) The service
of an interim trustee under this section terminates when a trustee elected or
designated under section 702 of this title to serve as trustee in the case
qualifies under section 322 of this title.
(c) An interim
trustee serving under this section is a trustee in a case under this title.
[Rev. 5-20-05]
--------------------------------------------------------------------------------
11 USC §
702. Election of trustee
(a) A creditor
may vote for a candidate for trustee only if such creditor--
(1) holds an
allowable, undisputed, fixed, liquidated, unsecured claim of a kind entitled to
distribution under section 726(a)(2), 726(a)(3), 726(a)(4), 752(a), 766(h), or
766(i) of this title;
(2) does not have
an interest materially adverse, other than an equity interest that is not
substantial in relation to such creditor’s interest as a creditor, to the
interest of creditors entitled to such distribution; and
(3) is not an
insider.
(b) At the
meeting of creditors held under section 341 of this title, creditors may elect
one person to serve as trustee in the case if election of a trustee is
requested by creditors that may vote under subsection (a) of this section, and
that hold at least 20 percent in amount of the claims specified in subsection
(a)(1) of this section that are held by creditors that may vote under
subsection (a) of this section.
(c) A candidate
for trustee is elected trustee if--
(1) creditors
holding at least 20 percent in amount of the claims of a kind specified in
subsection (a)(1) of this section that are held by creditors that may vote
under subsection (a) of this section vote; and
(2) such
candidate receives the votes of creditors holding a majority in amount of
claims specified in subsection (a)(1) of this section that are held by
creditors that vote for a trustee.
(d) If a trustee
is not elected under this section, then the interim trustee shall serve as
trustee in the case.
[Rev. 5-20-05]
--------------------------------------------------------------------------------
11 USC §
703. Successor trustee
(a) If a trustee
dies or resigns during a case, fails to qualify under section 322 of this
title, or is removed under section 324 of this title, creditors may elect, in
the manner specified in section 702 of this title, a person to fill the vacancy
in the office of trustee.
(b) Pending
election of a trustee under subsection (a) of this section, if necessary to
preserve or prevent loss to the estate, the United States trustee may appoint
an interim trustee in the manner specified in section 701(a).
(c) If creditors
do not elect a successor trustee under subsection (a) of this section or if a
trustee is needed in a case reopened under section 350 of this title, then the
United States trustee--
(1) shall appoint
one disinterested person that is a member of the panel of private trustees
established under section 586(a)(1) of title 28 to serve as trustee in the
case; or
(2) may, if none
of the disinterested members of such panel is willing to serve as trustee,
serve as trustee in the case.
[Rev. 5-20-05]
--------------------------------------------------------------------------------
11 USC §
704. Duties of trustee
(a) The trustee
shall--
(1) collect and
reduce to money the property of the estate for which such trustee serves, and
close such estate as expeditiously as is compatible with the best interests of
parties in interest;
(2) be
accountable for all property received;
(3) ensure that
the debtor shall perform his intention as specified in section 521(2)(B)
[sic--reference to previous subsection; now 521(a)(2)(B)] of this title;
(4) investigate
the financial affairs of the debtor;
(5) if a purpose
would be served, examine proofs of claims and object to the allowance of any
claim that is improper;
(6) if advisable,
oppose the discharge of the debtor;
(7) unless the
court orders otherwise, furnish such information concerning the estate and the
estate’s administration as is requested by a party in interest;
(8) if the
business of the debtor is authorized to be operated, file with the court, with
the United States trustee, and with any governmental unit charged with
responsibility for collection or determination of any tax arising out of such
operation, periodic reports and summaries of the operation of such business,
including a statement of receipts and disbursements, and such other information
as the United States trustee or the court requires;
(9) make a final
report and file a final account of the administration of the estate with the
court and with the United States trustee;
(10) if with
respect to the debtor there is a claim for a domestic support obligation,
provide the applicable notice specified in subsection (c);
(11) if, at the
time of the commencement of the case, the debtor (or any entity designated by
the debtor) served as the administrator (as defined in section 3 of the
Employee Retirement Income Security Act of 1974) of an employee benefit plan,
continue to perform the obligations required of the administrator; and
(12) use all reasonable
and best efforts to transfer patients from a health care business that is in
the process of being closed to an appropriate health care business that--
(A) is in the
vicinity of the health care business that is closing;
(B) provides the
patient with services that are substantially similar to those provided by the
health care business that is in the process of being closed; and
(C) maintains a
reasonable quality of care.
(b)
(1) With respect
to a debtor who is an individual in a case under this chapter--
(A) the United
States trustee (or the bankruptcy administrator, if any) shall review all
materials filed by the debtor and, not later than 10 days after the date of the
first meeting of creditors, file with the court a statement as to whether the
debtor's case would be presumed to be an abuse under section 707(b); and
(B) not later
than 5 days after receiving a statement under subparagraph (A), the court shall
provide a copy of the statement to all creditors.
(2) The United
States trustee (or bankruptcy administrator, if any) shall, not later than 30
days after the date of filing a statement under paragraph (1), either file a
motion to dismiss or convert under section 707(b) or file a statement setting
forth the reasons the United States trustee (or the bankruptcy administrator,
if any) does not consider such a motion to be appropriate, if the United States
trustee (or the bankruptcy administrator, if any) determines that the debtor's
case should be presumed to be an abuse under section 707(b) and the product of
the debtor's current monthly income, multiplied by 12 is not less than--
(A) in the case
of a debtor in a household of 1 person, the median family income of the
applicable State for 1 earner; or
(B) in the case
of a debtor in a household of 2 or more individuals, the highest median family
income of the applicable State for a family of the same number or fewer
individuals.
(c)
(1) In a case
described in subsection (a)(10) to which subsection (a)(10) applies, the
trustee shall--
(A)
(i) provide
written notice to the holder of the claim described in subsection (a)(10) of
such claim and of the right of such holder to use the services of the State
child support enforcement agency established under sections 464 and 466 of the
Social Security Act for the State in which such holder resides, for assistance
in collecting child support during and after the case under this title;
(ii) include in
the notice provided under clause (i) the address and telephone number of such
State child support enforcement agency; and
(iii) include in
the notice provided under clause (i) an explanation of the rights of such
holder to payment of such claim under this chapter;
(B)
(i) provide
written notice to such State child support enforcement agency of such claim;
and
(ii) include in
the notice provided under clause (i) the name, address, and telephone number of
such holder; and
(C) at such time
as the debtor is granted a discharge under section 727, provide written notice
to such holder and to such State child support enforcement agency of--
(i) the granting
of the discharge;
(ii) the last
recent known address of the debtor;
(iii) the last
recent known name and address of the debtor's employer; and
(iv) the name of
each creditor that holds a claim that--
(I) is not
discharged under paragraph (2), (4), or (14A) of section 523(a); or
(II) was
reaffirmed by the debtor under section 524(c).
(2)
(A) The holder of
a claim described in subsection (a)(10) or the State child support enforcement
agency of the State in which such holder resides may request from a creditor
described in paragraph (1)(C)(iv) the last known address of the debtor.
(B)
Notwithstanding any other provision of law, a creditor that makes a disclosure
of a last known address of a debtor in connection with a request made under
subparagraph (A) shall not be liable by reason of making such disclosure.
[Rev. 5-20-05]
--------------------------------------------------------------------------------
11 USC §
705. Creditors’ committee
(a) At the
meeting under section 341(a) of this title, creditors that may vote for a
trustee under section 702(a) of this title may elect a committee of not fewer
than three, and not more than eleven, creditors, each of whom holds an
allowable unsecured claim of a kind entitled to distribution under section
726(a)(2) of this title.
(b) A committee
elected under subsection (a) of this section may consult with the trustee or
the United States trustee in connection with the administration of the estate,
make recommendations to the trustee or the United States trustee respecting the
performance of the trustee’s duties, and submit to the court or the United
States trustee any question affecting the administration of the estate.
[Rev. 5-20-05]
--------------------------------------------------------------------------------
11 USC §
706. Conversion
(a) The debtor
may convert a case under this chapter to a case under chapter 11, 12, or 13 of
this title at any time, if the case has not been converted under section 1112,
1208, or 1307 of this title. Any waiver of the right to convert a case under
this subsection is unenforceable.
(b) On request of
a party in interest and after notice and a hearing, the court may convert a
case under this chapter to a case under chapter 11 of this title at any time.
(c) The court may
not convert a case under this chapter to a case under chapter 12 or 13 of this
title unless the debtor requests or consents to such conversion.
(d)
Notwithstanding any other provision of this section, a case may not be
converted to a case under another chapter of this title unless the debtor may
be a debtor under such chapter.
[Rev. 5-20-05]
--------------------------------------------------------------------------------
11 USC §
707. Dismissal of a case or conversion
to a case under chapter 11 or 13
(a) The court may
dismiss a case under this chapter only after notice and a hearing and only for
cause, including--
(1) unreasonable
delay by the debtor that is prejudicial to creditors;
(2) nonpayment of
any fees or charges required under chapter 123 of title 28; and
(3) failure of
the debtor in a voluntary case to file, within fifteen days or such additional
time as the court may allow after the filing of the petition commencing such
case, the information required by paragraph (1) [sic--reference to previous
paragraph number; now paragraph (a)(1)] of section 521, but only on a motion by
the United States trustee.
(b)
(1) After notice
and a hearing, the court, on its own motion or on a motion by the United States
trustee, trustee (or bankruptcy administrator, if any), or any party in
interest, may dismiss a case filed by an individual debtor under this chapter
whose debts are primarily consumer debts, or, with the debtor's consent,
convert such a case to a case under chapter 11 or 13 of this title, if it finds
that the granting of relief would be an abuse of the provisions of this
chapter. In making a determination whether to dismiss a case under this
section, the court may not take into consideration whether a debtor has made,
or continues to make, charitable contributions (that meet the definition of
"charitable contribution" under section 548(d)(3)) to any qualified
religious or charitable entity or organization (as that term is defined in
section 548(d)(4)).
(2)
(A)
(i) In
considering under paragraph (1) whether the granting of relief would be an
abuse of the provisions of this chapter, the court shall presume abuse exists
if the debtor's current monthly income reduced by the amounts determined under
clauses (ii), (iii), and (iv), and multiplied by 60 is not less than the lesser
of--
(I) 25 percent of
the debtor's nonpriority unsecured claims in the case, or $6,000 [$6,000 (added
by BAPCPA 10-17-05)], whichever is greater; or
(II) $10,000
[$10,000 (added by BAPCPA 10-17-05)].
(ii)
(I) The debtor's
monthly expenses shall be the debtor's applicable monthly expense amounts
specified under the National Standards and Local Standards, and the debtor's
actual monthly expenses for the categories specified as Other Necessary
Expenses issued by the Internal Revenue Service for the area in which the
debtor resides, as in effect on the date of the order for relief, for the debtor,
the dependents of the debtor, and the spouse of the debtor in a joint case, if
the spouse is not otherwise a dependent. Such expenses shall include reasonably
necessary health insurance, disability insurance, and health savings account
expenses for the debtor, the spouse of the debtor, or the dependents of the
debtor. Notwithstanding any other provision of this clause, the monthly
expenses of the debtor shall not include any payments for debts. In addition,
the debtor's monthly expenses shall include the debtor's reasonably necessary
expenses incurred to maintain the safety of the debtor and the family of the
debtor from family violence as identified under section 309 of the Family
Violence Prevention and Services Act, or other applicable Federal law. The
expenses included in the debtor's monthly expenses described in the preceding
sentence shall be kept confidential by the court. In addition, if it is
demonstrated that it is reasonable and necessary, the debtor's monthly expenses
may also include an additional allowance for food and clothing of up to 5
percent of the food and clothing categories as specified by the National
Standards issued by the Internal Revenue Service.
(II) In addition,
the debtor's monthly expenses may include, if applicable, the continuation of
actual expenses paid by the debtor that are reasonable and necessary for care
and support of an elderly, chronically ill, or disabled household member or
member of the debtor's immediate family (including parents, grandparents,
siblings, children, and grandchildren of the debtor, the dependents of the
debtor, and the spouse of the debtor in a joint case who is not a dependent)
and who is unable to pay for such reasonable and necessary expenses.
(III) In
addition, for a debtor eligible for chapter 13, the debtor's monthly expenses
may include the actual administrative expenses of administering a chapter 13
plan for the district in which the debtor resides, up to an amount of 10
percent of the projected plan payments, as determined under schedules issued by
the Executive Office for United States Trustees.
(IV) In addition,
the debtor's monthly expenses may include the actual expenses for each
dependent child less than 18 years of age, not to exceed $1,500 [$1,500 (added
by BAPCPA 10-17-05)] per year per child, to attend a private or public
elementary or secondary school if the debtor provides documentation of such
expenses and a detailed explanation of why such expenses are reasonable and
necessary, and why such expenses are not already accounted for in the National
Standards, Local Standards, or Other Necessary Expenses referred to in
subclause (I).
(V) In addition,
the debtor's monthly expenses may include an allowance for housing and
utilities, in excess of the allowance specified by the Local Standards for
housing and utilities issued by the Internal Revenue Service, based on the
actual expenses for home energy costs if the debtor provides documentation of
such actual expenses and demonstrates that such actual expenses are reasonable
and necessary.
(iii) The
debtor's average monthly payments on account of secured debts shall be
calculated as the sum of--
(I) the total of
all amounts scheduled as contractually due to secured creditors in each month
of the 60 months following the date of the petition; and
(II) any
additional payments to secured creditors necessary for the debtor, in filing a
plan under chapter 13 of this title, to maintain possession of the debtor's
primary residence, motor vehicle, or other property necessary for the support
of the debtor and the debtor's dependents, that serves as collateral for
secured debts;
divided by 60.
(iv) The debtor's
expenses for payment of all priority claims (including priority child support
and alimony claims) shall be calculated as the total amount of debts entitled
to priority, divided by 60.
(B)
(i) In any
proceeding brought under this subsection, the presumption of abuse may only be
rebutted by demonstrating special circumstances, such as a serious medical
condition or a call or order to active duty in the Armed Forces, to the extent
such special circumstances that justify additional expenses or adjustments of
current monthly income for which there is no reasonable alternative.
(ii) In order to
establish special circumstances, the debtor shall be required to itemize each
additional expense or adjustment of income and to provide--
(I) documentation
for such expense or adjustment to income; and
(II) a detailed
explanation of the special circumstances that make such expenses or adjustment
to income necessary and reasonable.
(iii) The debtor
shall attest under oath to the accuracy of any information provided to
demonstrate that additional expenses or adjustments to income are required.
(iv) The
presumption of abuse may only be rebutted if the additional expenses or
adjustments to income referred to in clause (i) cause the product of the
debtor's current monthly income reduced by the amounts determined under clauses
(ii), (iii), and (iv) of subparagraph (A) when multiplied by 60 to be less than
the lesser of--
(I) 25 percent of
the debtor's nonpriority unsecured claims, or $6,000 [$6,000 (added by BAPCPA
10-17-05)], whichever is greater; or
(II) $10,000
[$10,000 (added by BAPCPA 10-17-05)].
(C) As part of
the schedule of current income and expenditures required under section 521, the
debtor shall include a statement of the debtor's current monthly income, and
the calculations that determine whether a presumption arises under subparagraph
(A)(i), that show how each such amount is calculated.
(D) Subparagraphs
(A) through (C) shall not apply, and the court may not dismiss or convert a
case based on any form of means testing, if the debtor is a disabled veteran
(as defined in section 3741(1) of title 38), and the indebtedness occurred
primarily during a period during which he or she was--
(i) on active
duty (as defined in section 101(d)(1) of title 10); or
(ii) performing a
homeland defense activity (as defined in section 901(1) of title 32).
(3) In
considering under paragraph (1) whether the granting of relief would be an
abuse of the provisions of this chapter in a case in which the presumption in
subparagraph (A)(i) of such paragraph does not arise or is rebutted, the court
shall consider--
(A) whether the
debtor filed the petition in bad faith; or
(B) the totality
of the circumstances (including whether the debtor seeks to reject a personal
services contract and the financial need for such rejection as sought by the
debtor) of the debtor's financial situation demonstrates abuse.
(4)
(A) The court, on
its own initiative or on the motion of a party in interest, in accordance with
the procedures described in rule 9011 of the Federal Rules of Bankruptcy
Procedure, may order the attorney for the debtor to reimburse the trustee for
all reasonable costs in prosecuting a motion filed under section 707(b),
including reasonable attorneys' fees, if--
(i) a trustee
files a motion for dismissal or conversion under this subsection; and
(ii) the court--
(I) grants such
motion; and
(II) finds that
the action of the attorney for the debtor in filing a case under this chapter
violated rule 9011 of the Federal Rules of Bankruptcy Procedure.
(B) If the court
finds that the attorney for the debtor violated rule 9011 of the Federal Rules
of Bankruptcy Procedure, the court, on its own initiative or on the motion of a
party in interest, in accordance with such procedures, may order--
(i) the
assessment of an appropriate civil penalty against the attorney for the debtor;
and
(ii) the payment
of such civil penalty to the trustee, the United States trustee (or the
bankruptcy administrator, if any).
(C) The signature
of an attorney on a petition, pleading, or written motion shall constitute a
certification that the attorney has--
(i) performed a
reasonable investigation into the circumstances that gave rise to the petition,
pleading, or written motion; and
(ii) determined
that the petition, pleading, or written motion--
(I) is well
grounded in fact; and
(II) is warranted
by existing law or a good faith argument for the extension, modification, or
reversal of existing law and does not constitute an abuse under paragraph (1).
(D) The signature
of an attorney on the petition shall constitute a certification that the
attorney has no knowledge after an inquiry that the information in the
schedules filed with such petition is incorrect.
(5)
(A) Except as
provided in subparagraph (B) and subject to paragraph (6), the court, on its
own initiative or on the motion of a party in interest, in accordance with the
procedures described in rule 9011 of the Federal Rules of Bankruptcy Procedure,
may award a debtor all reasonable costs (including reasonable attorneys' fees)
in contesting a motion filed by a party in interest (other than a trustee or
United States trustee (or bankruptcy administrator, if any)) under this
subsection if--
(i) the court
does not grant the motion; and
(ii) the court
finds that--
(I) the position
of the party that filed the motion violated rule 9011 of the Federal Rules of
Bankruptcy Procedure; or
(II) the attorney
(if any) who filed the motion did not comply with the requirements of clauses
(i) and (ii) of paragraph (4)(C), and the motion was made solely for the
purpose of coercing a debtor into waiving a right guaranteed to the debtor
under this title.
(B) A small
business that has a claim of an aggregate amount less than $1,000 [$1,000
(added by BAPCPA 10-17-05)] shall not be subject to subparagraph (A)(ii)(I).
(C) For purposes
of this paragraph--
(i) the term
"small business" means an unincorporated business, partnership,
corporation, association, or organization that--
(I) has fewer
than 25 full-time employees as determined on the date on which the motion is
filed; and
(II) is engaged
in commercial or business activity; and
(ii) the number
of employees of a wholly owned subsidiary of a corporation includes the
employees of--
(I) a parent
corporation; and
(II) any other
subsidiary corporation of the parent corporation.
(6) Only the
judge or United States trustee (or bankruptcy administrator, if any) may file a
motion under section 707(b), if the current monthly income of the debtor, or in
a joint case, the debtor and the debtor's spouse, as of the date of the order
for relief, when multiplied by 12, is equal to or less than--
(A) in the case
of a debtor in a household of 1 person, the median family income of the
applicable State for 1 earner;
(B) in the case
of a debtor in a household of 2, 3, or 4 individuals, the highest median family
income of the applicable State for a family of the same number or fewer
individuals; or
(C) in the case
of a debtor in a household exceeding 4 individuals, the highest median family
income of the applicable State for a family of 4 or fewer individuals, plus
$525 [$525 (added by BAPCPA 10-17-05)] per month for each individual in excess
of 4.
(7)
(A) No judge,
United States trustee (or bankruptcy administrator, if any), trustee, or other
party in interest may file a motion under paragraph (2) if the current monthly
income of the debtor, including a veteran (as that term is defined in section
101 of title 38), and the debtor's spouse combined, as of the date of the order
for relief when multiplied by 12, is equal to or less than--
(i) in the case
of a debtor in a household of 1 person, the median family income of the
applicable State for 1 earner;
(ii) in the case
of a debtor in a household of 2, 3, or 4 individuals, the highest median family
income of the applicable State for a family of the same number or fewer
individuals; or
(iii) in the case
of a debtor in a household exceeding 4 individuals, the highest median family
income of the applicable State for a family of 4 or fewer individuals, plus
$525 [$525 (added by BAPCPA 10-17-05)] per month for each individual in excess
of 4.
(B) In a case
that is not a joint case, current monthly income of the debtor's spouse shall
not be considered for purposes of subparagraph (A) if--
(i)
(I) the debtor
and the debtor's spouse are separated under applicable nonbankruptcy law; or
(II) the debtor
and the debtor's spouse are living separate and apart, other than for the
purpose of evading subparagraph (A); and
(ii) the debtor
files a statement under penalty of perjury--
(I) specifying
that the debtor meets the requirement of subclause (I) or (II) of clause (i);
and
(II) disclosing
the aggregate, or best estimate of the aggregate, amount of any cash or money
payments received from the debtor's spouse attributed to the debtor's current
monthly income.
[Dollar amounts
in subsection 707(b) are adjusted on April 1 every 3 years by section 104.
Adjusted amounts effective 4-1-04 are in brackets.]
(c)
(1) In this
subsection--
(A) the term
"crime of violence" has the meaning given such term in section 16 of
title 18; and
(B) the term
"drug trafficking crime" has the meaning given such term in section
924(c)(2) of title 18.
(2) Except as
provided in paragraph (3), after notice and a hearing, the court, on a motion
by the victim of a crime of violence or a drug trafficking crime, may when it
is in the best interest of the victim dismiss a voluntary case filed under this
chapter by a debtor who is an individual if such individual was convicted of such
crime.
(3) The court may
not dismiss a case under paragraph (2) if the debtor establishes by a
preponderance of the evidence that the filing of a case under this chapter is
necessary to satisfy a claim for a domestic support obligation.
[Rev. 5-20-05]
--------------------------------------------------------------------------------
Subchapter
II. Collection, Liquidation, and
Distribution of the Estate
11 USC §
721. Authorization to operate business
The court may
authorize the trustee to operate the business of the debtor for a limited
period, if such operation is in the best interest of the estate and consistent
with the orderly liquidation of the estate.
[Rev. 5-20-05]
--------------------------------------------------------------------------------
11 USC §
722. Redemption
An individual
debtor may, whether or not the debtor has waived the right to redeem under this
section, redeem tangible personal property intended primarily for personal, family,
or household use, from a lien securing a dischargeable consumer debt, if such
property is exempted under section 522 of this title or has been abandoned
under section 554 of this title, by paying the holder of such lien the amount
of the allowed secured claim of such holder that is secured by such lien in
full at the time of redemption.
[Rev. 5-20-05]
--------------------------------------------------------------------------------
11 USC §
723. Rights of partnership trustee
against general partners
(a) If there is a
deficiency of property of the estate to pay in full all claims which are
allowed in a case under this chapter concerning a partnership and with respect
to which a general partner of the partnership is personally liable, the trustee
shall have a claim against such general partner to the extent that under
applicable nonbankruptcy law such general partner is personally liable for such
deficiency.
(b) To the extent
practicable, the trustee shall first seek recovery of such deficiency from any
general partner in such partnership that is not a debtor in a case under this
title. Pending determination of such deficiency, the court may order any such
partner to provide the estate with indemnity for, or assurance of payment of,
any deficiency recoverable from such partner, or not to dispose of property.
(c)
Notwithstanding section 728(c) [sic--Section 728 was deleted by BAPCPA] of this
title, the trustee has a claim against the estate of each general partner in
such partnership that is a debtor in a case under this title for the full
amount of all claims of creditors allowed in the case concerning such
partnership. Notwithstanding section 502 of this title, there shall not be
allowed in such partner’s case a claim against such partner on which both such
partner and such partnership are liable, except to any extent that such claim
is secured only by property of such partner and not by property of such
partnership. The claim of the trustee under this subsection is entitled to
distribution in such partner’s case under section 726(a) of this title the same
as any other claim of a kind specified in such section.
(d) If the
aggregate that the trustee recovers from the estates of general partners under
subsection (c) of this section is greater than any deficiency not recovered
under subsection (b) of this section, the court, after notice and a hearing,
shall determine an equitable distribution of the surplus so recovered, and the
trustee shall distribute such surplus to the estates of the general partners in
such partnership according to such determination.
[Rev. 5-20-05]
--------------------------------------------------------------------------------
11 USC §
724. Treatment of certain liens
(a) The trustee
may avoid a lien that secures a claim of a kind specified in section 726(a)(4)
of this title.
(b) Property in
which the estate has an interest and that is subject to a lien that is not
avoidable under this title and that secures an allowed claim for a tax, or
proceeds of such property, shall be distributed--
(1) first, to any
holder of an allowed claim secured by a lien on such property that is not
avoidable under this title and that is senior to such tax lien;
(2) second, to
any holder of a claim of a kind specified in section 507(a)(1), 507(a)(2),
507(a)(3), 507(a)(4), 507(a)(5), 507(a)(6), or 507(a)(7) of this title, to the
extent of the amount of such allowed tax claim that is secured by such tax
lien;
(3) third, to the
holder of such tax lien, to any extent that such holder’s allowed tax claim
that is secured by such tax lien exceeds any amount distributed under paragraph
(2) of this subsection;
(4) fourth, to
any holder of an allowed claim secured by a lien on such property that is not
avoidable under this title and that is junior to such tax lien;
(5) fifth, to the
holder of such tax lien, to the extent that such holder’s allowed claim secured
by such tax lien is not paid under paragraph (3) of this subsection; and
(6) sixth, to the
estate.
(c) If more than
one holder of a claim is entitled to distribution under a particular paragraph
of subsection (b) of this section, distribution to such holders under such
paragraph shall be in the same order as distribution to such holders would have
been other than under this section.
(d) A statutory
lien the priority of which is determined in the same manner as the priority of
a tax lien under section 6323 of the Internal Revenue Code of 1986 shall be
treated under subsection (b) of this section the same as if such lien were a
tax lien.
[Rev. 5-23-05]
--------------------------------------------------------------------------------
11 USC §
725. Distribution of property of the
estate
(a) Except as
provided in section 510 of this title, property of the estate shall be
distributed--
(1) first, in
payment of claims of the kind specified in, and in the order specified in,
section 507 of this title, proof of which is timely filed under section 501 of
this title or tardily filed before the date on which the trustee commences
distribution under this section;
(2) second, in
payment of any allowed unsecured claim, other than a claim of a kind specified
in paragraph (1), (3), or (4) of this subsection, proof of which is--
(A) timely filed
under section 501(a) of this title;
(B) timely filed
under section 501(b) or 501(c) of this title; or
(C) tardily filed
under section 501(a) of this title, if--
(i) the creditor
that holds such claim did not have notice or actual knowledge of the case in
time for timely filing of a proof of such claim under section 501(a) of this
title; and
(ii) proof of
such claim is filed in time to permit payment of such claim;
(3) third, in
payment of any allowed unsecured claim proof of which is tardily filed under
section 501(a) of this title, other than a claim of the kind specified in
paragraph (2)(C) of this subsection;
(4) fourth, in
payment of any allowed claim, whether secured or unsecured, for any fine,
penalty, or forfeiture, or for multiple, exemplary, or punitive damages,
arising before the earlier of the order for relief or the appointment of a
trustee, to the extent that such fine, penalty, forfeiture, or damages are not
compensation for actual pecuniary loss suffered by the holder of such claim;
(5) fifth, in
payment of interest at the legal rate from the date of the filing of the
petition, on any claim paid under paragraph (1), (2), (3), or (4) of this
subsection; and
(6) sixth, to the
debtor.
(b) Payment on
claims of a kind specified in paragraph (1), (2), (3), (4), (5), (6), (7), or
(8) of section 507(a) of this title, or in paragraph (2), (3), (4), or (5) of
subsection (a) of this section, shall be made pro rata among claims of the kind
specified in each such particular paragraph, except that in a case that has
been converted to this chapter under section 1009, 1112, 1208, or 1307 of this
title, a claim allowed under section 503(b) of this title incurred under this
chapter after such conversion has priority over a claim allowed under section 503(b)
of this title incurred under any other chapter of this title or under this
chapter before such conversion and over any expenses of a custodian superseded
under section 543 of this title.
(c)
Notwithstanding subsections (a) and (b) of this section, if there is property
of the kind specified in section 541(a)(2) of this title, or proceeds of such
property, in the estate, such property or proceeds shall be segregated from
other property of the estate, and such property or proceeds and other property
of the estate shall be distributed as follows:
(1) Claims
allowed under section 503 of this title shall be paid either from property of
the kind specified in section 541(a)(2) of this title, or from other property
of the estate, as the interest of justice requires.
(2) Allowed
claims, other than claims allowed under section 503 of this title, shall be
paid in the order specified in subsection (a) of this section, and, with
respect to claims of a kind specified in a particular paragraph of section 507
of this title or subsection (a) of this section, in the following order and
manner:
(A) First,
community claims against the debtor or the debtor’s spouse shall be paid from
property of the kind specified in section 541(a)(2) of this title, except to
the extent that such property is solely liable for debts of the debtor.
(B) Second, to
the extent that community claims against the debtor are not paid under
subparagraph (A) of this paragraph, such community claims shall be paid from
property of the kind specified in section 541(a)(2) of this title that is
solely liable for debts of the debtor.
(C) Third, to the
extent that all claims against the debtor including community claims against
the debtor are not paid under subparagraph (A) or (B) of this paragraph such claims
shall be paid from property of the estate other than property of the kind
specified in section 541(a)(2) of this title.
(D) Fourth, to
the extent that community claims against the debtor or the debtor’s spouse are
not paid under subparagraph (A), (B), or (C) of this paragraph, such claims
shall be paid from all remaining property of the estate.
[Rev. 5-23-05]
--------------------------------------------------------------------------------
11 USC §
726. Distribution of property of the
estate
(a) Except as
provided in section 510 of this title, property of the estate shall be
distributed--
(1) first, in
payment of claims of the kind specified in, and in the order specified in,
section 507 of this title, proof of which is timely filed under section 501 of
this title or tardily filed on or before the earlier of--
(A) the date that
is 10 days after the mailing to creditors of the summary of the trustee's final
report; or
(B) the date on
which the trustee commences final distribution under this section;
(2) second, in
payment of any allowed unsecured claim, other than a claim of a kind specified
in paragraph (1), (3), or (4) of this subsection, proof of which is--
(A) timely filed
under section 501(a) of this title;
(B) timely filed
under section 501(b) or 501(c) of this title; or
(C) tardily filed
under section 501 (a) of this title, if--
(i) the creditor
that holds such claim did not have notice or actual knowledge of the case in
time for timely filing of a proof of such claim under section 501(a) of this
title; and
(ii) proof of
such claim is filed in time to permit payment of such claim;
(3) third, in
payment of any allowed unsecured claim proof of which is tardily filed under
section 501(a) of this title, other than a claim of the kind specified in
paragraph (2)(C) of this subsection;
(4) fourth, in
payment of any allowed claim, whether secured or unsecured, for any fine,
penalty, or forfeiture, or for multiple, exemplary, or punitive damages,
arising before the earlier of the order for relief or the appointment of a
trustee, to the extent that such fine, penalty, forfeiture, or damages are not
compensation for actual pecuniary loss suffered by the holder of such claim;
(5) fifth, in
payment of interest at the legal rate from the date of the filing of the
petition, on any claim paid under paragraph (1), (2), (3), or (4) of this
subsection; and
(6) sixth, to the
debtor.
(b) Payment on
claims of a kind specified in paragraph (1), (2), (3), (4), (5), (6), (7), or
(8) of section 507(a) of this title, or in paragraph (2), (3), (4), or (5) of
subsection (a) of this section, shall be made pro rata among claims of the kind
specified in each such particular paragraph, except that in a case that has
been converted to this chapter under section 1112, 1208, or 1307 of this title,
a claim allowed under section 503(b) of this title incurred under this chapter
after such conversion has priority over a claim allowed under section 503(b) of
this title incurred under any other chapter of this title or under this chapter
before such conversion and over any expenses of a custodian superseded under
section 543 of this title.
(c)
Notwithstanding subsections (a) and (b) of this section, if there is property
of the kind specified in section 541(a)(2) of this title, or proceeds of such
property, in the estate, such property or proceeds shall be segregated from other
property of the estate, and such property or proceeds and other property of the
estate shall be distributed as follows:
(1) Claims
allowed under section 503 of this title shall be paid either from property of
the kind specified in section 541(a)(2) of this title, or from other property
of the estate, as the interest of justice requires.
(2) Allowed
claims, other than claims allowed under section 503 of this title, shall be
paid in the order specified in subsection (a) of this section, and, with
respect to claims of a kind specified in a particular paragraph of section 507
of this title or subsection (a) of this section, in the following order and
manner:
(A) First,
community claims against the debtor or the debtor’s spouse shall be paid from
property of the kind specified in section 541(a)(2) of this title, except to
the extent that such property is solely liable for debts of the debtor.
(B) Second, to
the extent that community claims against the debtor are not paid under
subparagraph (A) of this paragraph, such community claims shall be paid from
property of the kind specified in section 541(a)(2) of this title that is solely
liable for debts of the debtor.
(C) Third, to the
extent that all claims against the debtor including community claims against
the debtor are not paid under subparagraph (A) or (B) of this paragraph such
claims shall be paid from property of the estate other than property of the
kind specified in section 541(a)(2) of this title.
(D) Fourth, to
the extent that community claims against the debtor or the debtor’s spouse are
not paid under subparagraph (A), (B), or (C) of this paragraph, such claims
shall be paid from all remaining property of the estate.
[Rev. 5-23-05]
--------------------------------------------------------------------------------
11 USC §
727. Discharge
(a) The court
shall grant the debtor a discharge, unless--
(1) the debtor is
not an individual;
(2) the debtor,
with intent to hinder, delay, or defraud a creditor or an officer of the estate
charged with custody of property under this title, has transferred, removed,
destroyed, mutilated, or concealed, or has permitted to be transferred,
removed, destroyed, mutilated, or concealed--
(A) property of
the debtor, within one year before the date of the filing of the petition; or
(B) property of
the estate, after the date of the filing of the petition;
(3) the debtor
has concealed, destroyed, mutilated, falsified, or failed to keep or preserve
any recorded information, including books, documents, records, and papers, from
which the debtor’s financial condition or business transactions might be
ascertained, unless such act or failure to act was justified under all of the
circumstances of the case;
(4) the debtor
knowingly and fraudulently, in or in connection with the case--
(A) made a false
oath or account;
(B) presented or
used a false claim;
(C) gave,
offered, received, or attempted to obtain money, property, or advantage, or a
promise of money, property, or advantage, for acting or forbearing to act; or
(D) withheld from
an officer of the estate entitled to possession under this title, any recorded
information, including books, documents, records, and papers, relating to the
debtor’s property or financial affairs;
(5) the debtor
has failed to explain satisfactorily, before determination of denial of
discharge under this paragraph, any loss of assets or deficiency of assets to
meet the debtor’s liabilities;
(6) the debtor
has refused, in the case--
(A) to obey any
lawful order of the court, other than an order to respond to a material
question or to testify;
(B) on the ground
of privilege against self-incrimination, to respond to a material question
approved by the court or to testify, after the debtor has been granted immunity
with respect to the matter concerning which such privilege was invoked; or
(C) on a ground
other than the properly invoked privilege against self-incrimination, to
respond to a material question approved by the court or to testify;
(7) the debtor
has committed any act specified in paragraph (2), (3), (4), (5), or (6) of this
subsection, on or within one year before the date of the filing of the
petition, or during the case, in connection with another case, under this title
or under the Bankruptcy Act, concerning an insider;
(8) the debtor
has been granted a discharge under this section, under section 1141 of this
title, or under section 14, 371, or 476 of the Bankruptcy Act, in a case
commenced within 8 years before the date of the filing of the petition;
(9) the debtor
has been granted a discharge under section 1228 or 1328 of this title, or under
section 660 or 661 of the Bankruptcy Act, in a case commenced within six years
before the date of the filing of the petition, unless payments under the plan
in such case totaled at least--
(A) 100 percent
of the allowed unsecured claims in such case; or
(B)
(i) 70 percent of
such claims; and
(ii) the plan was
proposed by the debtor in good faith, and was the debtor's best effort;
(10) the court
approves a written waiver of discharge executed by the debtor after the order
for relief under this chapter;
(11) after filing
the petition, the debtor failed to complete an instructional course concerning
personal financial management described in section 111, except that this
paragraph shall not apply with respect to a debtor who is a person described in
section 109(h)(4) or who resides in a district for which the United States
trustee (or the bankruptcy administrator, if any) determines that the approved
instructional courses are not adequate to service the additional individuals
who would otherwise be required to complete such instructional courses under
this section (The United States trustee (or the bankruptcy administrator, if
any) who makes a determination described in this paragraph shall review such
determination not later than 1 year after the date of such determination, and
not less frequently than annually thereafter.); or
(12) the court
after notice and a hearing held not more than 10 days before the date of the
entry of the order granting the discharge finds that there is reasonable cause
to believe that--
(A) section
522(q)(1) may be applicable to the debtor; and
(B) there is
pending any proceeding in which the debtor may be found guilty of a felony of
the kind described in section 522(q)(1)(A) or liable for a debt of the kind
described in section 522(q)(1)(B).
(b) Except as
provided in section 523 of this title, a discharge under subsection (a) of this
section discharges the debtor from all debts that arose before the date of the
order for relief under this chapter, and any liability on a claim that is
determined under section 502 of this title as if such claim had arisen before
the commencement of the case, whether or not a proof of claim based on any such
debt or liability is filed under section 501 of this title, and whether or not
a claim based on any such debt or liability is allowed under section 502 of
this title.
(c)
(1) The trustee,
a creditor, or the United States trustee may object to the granting of a
discharge under subsection (a) of this section.
(2) On request of
a party in interest, the court may order the trustee to examine the acts and
conduct of the debtor to determine whether a ground exists for denial of
discharge.
(d) On request of
the trustee, a creditor, or the United States trustee, and after notice and a
hearing, the court shall revoke a discharge granted under subsection (a) of
this section if--
(1) such
discharge was obtained through the fraud of the debtor, and the requesting
party did not know of such fraud until after the granting of such discharge;
(2) the debtor
acquired property that is property of the estate, or became entitled to acquire
property that would be property of the estate, and knowingly and fraudulently
failed to report the acquisition of or entitlement to such property, or to
deliver or surrender such property to the trustee;
(3) the debtor
committed an act specified in subsection (a)(6) of this section; or
(4) the debtor
has failed to explain satisfactorily--
(A) a material
misstatement in an audit referred to in section 586(f) of title 28; or
(B) a failure to
make available for inspection all necessary accounts, papers, documents,
financial records, files, and all other papers, things, or property belonging
to the debtor that are requested for an audit referred to in section 586(f) of
title 28.
(e) The trustee,
a creditor, or the United States trustee may request a revocation of a
discharge--
(1) under
subsection (d)(1) of this section within one year after such discharge is
granted; or
(2) under
subsection (d)(2) or (d)(3) of this section before the later of--
(A) one year
after the granting of such discharge; and
(B) the date the
case is closed.
[Rev. 5-23-05]
--------------------------------------------------------------------------------
11 USC §
728. [Deleted]
[Rev. 5-23-05]
--------------------------------------------------------------------------------
Chapter 13. Adjustment of Debts of an Individual with
Regular Income
Subchapter I.
Officers, Administration, and the Estate
§ 1301. Stay of
action against codebtor
§ 1302. Trustee
§ 1303. Rights
and powers of debtor
§ 1304. Debtor
engaged in business
§ 1305. Filing
and allowance of postpetition claims
§ 1306. Property
of the estate
§ 1307.
Conversion or dismissal
§ 1308. Filing of
prepetition tax returns
Subchapter
II. The Plan
§ 1321. Filing of
plan
§ 1322. Contents
of plan
§ 1323.
Modification of plan before confirmation
§ 1324.
Confirmation hearing
§ 1325.
Confirmation of plan
§ 1326. Payments
§ 1327. Effect of
confirmation
§ 1328. Discharge
§ 1329.
Modification of plan after confirmation
§ 1330.
Revocation of an order of confirmation
--------------------------------------------------------------------------------
Subchapter I.
Officers, Administration, and the Estate
11 USC §
1301. Stay of action against codebtor
(a) Except as
provided in subsections (b) and (c) of this section, after the order for relief
under this chapter, a creditor may not act, or commence or continue any civil action,
to collect all or any part of a consumer debt of the debtor from any individual
that is liable on such debt with the debtor, or that secured such debt,
unless--
(1) such
individual became liable on or secured such debt in the ordinary course of such
individual’s business; or
(2) the case is
closed, dismissed, or converted to a case under chapter 7 or 11 of this title.
(b) A creditor
may present a negotiable instrument, and may give notice of dishonor of such an
instrument.
(c) On request of
a party in interest and after notice and a hearing, the court shall grant
relief from the stay provided by subsection (a) of this section with respect to
a creditor, to the extent that--
(1) as between
the debtor and the individual protected under subsection (a) of this section,
such individual received the consideration for the claim held by such creditor;
(2) the plan
filed by the debtor proposes not to pay such claim; or
(3) such
creditor’s interest would be irreparably harmed by continuation of such stay.
(d) Twenty days
after the filing of a request under subsection (c)(2) of this section for
relief from the stay provided by subsection (a) of this section, such stay is
terminated with respect to the party in interest making such request, unless
the debtor or any individual that is liable on such debt with the debtor files
and serves upon such party in interest a written objection to the taking of the
proposed action.
[Rev. 5-25-05]
--------------------------------------------------------------------------------
11 USC §
1302. Trustee
(a) If the United
States trustee appoints an individual under section 586(b) of title 28 to serve
as standing trustee in cases under this chapter and if such individual
qualifies under section 322 of this title, then such individual shall serve as
trustee in the case. Otherwise, the United States trustee shall appoint one
disinterested person to serve as trustee in the case or the United States
trustee may serve as a trustee in the case.
(b) The trustee
shall--
(1) perform the
duties specified in sections 704(2), 704(a)(3), 704(a)(4), 704(5), 704(6),
704(7), and 704(9) of this title; [sic--BAPCPA made each numbered subsection
part of subsection (a)]
(2) appear and be
heard at any hearing that concerns--
(A) the value of
property subject to a lien;
(B) confirmation
of a plan; or
(C) modification
of the plan after confirmation;
(3) dispose of,
under regulations issued by the Director of the Administrative Office of the
United States Courts, moneys received or to be received in a case under chapter
XIII of the Bankruptcy Act;
(4) advise, other
than on legal matters, and assist the debtor in performance under the plan;
(5) ensure that
the debtor commences making timely payments under section 1326 of this title ;
and
(6) if with
respect to the debtor there is a claim for a domestic support obligation,
provide the applicable notice specified in subsection (d).
(c) If the debtor
is engaged in business, then in addition to the duties specified in subsection
(b) of this section, the trustee shall perform the duties specified in sections
1106(a)(3) and 1106(a)(4) of this title.
(d)
(1) In a case
described in subsection (b)(6) to which subsection (b)(6) applies, the trustee
shall--
(A)
(i) provide
written notice to the holder of the claim described in subsection (b)(6) of
such claim and of the right of such holder to use the services of the State
child support enforcement agency established under sections 464 and 466 of the
Social Security Act for the State in which such holder resides, for assistance
in collecting child support during and after the case under this title; and
(ii) include in
the notice provided under clause (i) the address and telephone number of such
State child support enforcement agency;
(B)
(i) provide
written notice to such State child support enforcement agency of such claim;
and
(ii) include in
the notice provided under clause (i) the name, address, and telephone number of
such holder; and
(C) at such time
as the debtor is granted a discharge under section 1328, provide written notice
to such holder and to such State child support enforcement agency of--
(i) the granting
of the discharge;
(ii) the last
recent known address of the debtor;
(iii) the last
recent known name and address of the debtor's employer; and
(iv) the name of
each creditor that holds a claim that--
(I) is not
discharged under paragraph (2) or (4) of section 523(a); or
(II) was
reaffirmed by the debtor under section 524(c).
(2)
(A) The holder of
a claim described in subsection (b)(6) or the State child support enforcement
agency of the State in which such holder resides may request from a creditor
described in paragraph (1)(C)(iv) the last known address of the debtor.
(B)
Notwithstanding any other provision of law, a creditor that makes a disclosure
of a last known address of a debtor in connection with a request made under
subparagraph (A) shall not be liable by reason of making that disclosure.
[Rev. 5-25-05]
--------------------------------------------------------------------------------
11 USC §
1303. Rights and powers of debtor
Subject to any
limitations on a trustee under this chapter, the debtor shall have, exclusive
of the trustee, the rights and powers of a trustee under sections 363(b),
363(d), 363(e), 363(f), and 363(l), of this title.
[Rev. 5-25-05]
--------------------------------------------------------------------------------
11 USC §
1304. Debtor engaged in business
(a) A debtor that
is self-employed and incurs trade credit in the production of income from such
employment is engaged in business.
(b) Unless the court
orders otherwise, a debtor engaged in business may operate the business of the
debtor and, subject to any limitations on a trustee under sections 363(c) and
364 of this title and to such limitations or conditions as the court
prescribes, shall have, exclusive of the trustee, the rights and powers of the
trustee under such sections.
(c) A debtor
engaged in business shall perform the duties of the trustee specified in
section 704(8) of this title. [sic--BAPCPA made each numbered subsection part
of subsection (a)]
[Rev. 5-25-05]
--------------------------------------------------------------------------------
11 USC §
1305. Filing and allowance of
postpetition claims
(a) A proof of
claim may be filed by any entity that holds a claim against the debtor--
(1) for taxes
that become payable to a governmental unit while the case is pending; or
(2) that is a
consumer debt, that arises after the date of the order for relief under this
chapter, and that is for property or services necessary for the debtor’s
performance under the plan.
(b) Except as
provided in subsection (c) of this section, a claim filed under subsection (a)
of this section shall be allowed or disallowed under section 502 of this title,
but shall be determined as of the date such claim arises, and shall be allowed
under section 502(a), 502(b), or 502(c) of this title, or disallowed under
section 502(d) or 502(e) of this title, the same as if such claim had arisen
before the date of the filing of the petition.
(c) A claim filed
under subsection (a)(2) of this section shall be disallowed if the holder of
such claim knew or should have known that prior approval by the trustee of the
debtor’s incurring the obligation was practicable and was not obtained.
[Rev. 5-26-05]
--------------------------------------------------------------------------------
11 USC §
1306. Property of the estate
(a) Property of
the estate includes, in addition to the property specified in section 541 of
this title--
(1) all property
of the kind specified in such section that the debtor acquires after the
commencement of the case but before the case is closed, dismissed, or converted
to a case under chapter 7, 11, or 12 of this title, whichever occurs first; and
(2) earnings from
services performed by the debtor after the commencement of the case but before
the case is closed, dismissed, or converted to a case under chapter 7, 11, or
12 of this title, whichever occurs first.
(b) Except as
provided in a confirmed plan or order confirming a plan, the debtor shall
remain in possession of all property of the estate.
[Rev. 5-26-05]
--------------------------------------------------------------------------------
11 USC §
1307. Conversion or dismissal
(a) The debtor
may convert a case under this chapter to a case under chapter 7 of this title
at any time. Any waiver of the right to convert under this subsection is
unenforceable.
(b) On request of
the debtor at any time, if the case has not been converted under section 706,
1112, or 1208 of this title, the court shall dismiss a case under this chapter.
Any waiver of the right to dismiss under this subsection is unenforceable.
(c) Except as
provided in subsection (e) of this section, on request of a party in interest
or the United States trustee and after notice and a hearing, the court may
convert a case under this chapter to a case under chapter 7 of this title, or
may dismiss a case under this chapter, whichever is in the best interests of
creditors and the estate, for cause, including--
(1) unreasonable
delay by the debtor that is prejudicial to creditors;
(2) nonpayment of
any fees and charges required under chapter 123 of title 28;
(3) failure to
file a plan timely under section 1321 of this title;
(4) failure to
commence making timely payments under section 1326 of this title;
(5) denial of
confirmation of a plan under section 1325 of this title and denial of a request
made for additional time for filing another plan or a modification of a plan;
(6) material
default by the debtor with respect to a term of a confirmed plan;
(7) revocation of
the order of confirmation under section 1330 of this title, and denial of
confirmation of a modified plan under section 1329 of this title;
(8) termination
of a confirmed plan by reason of the occurrence of a condition specified in the
plan other than completion of payments under the plan;
(9) only on
request of the United States trustee, failure of the debtor to file, within
fifteen days, or such additional time as the court may allow, after the filing
of the petition commencing such case, the information required by paragraph (1)
of section 521;
(10) only on
request of the United States trustee, failure to timely file the information
required by paragraph (2) of section 521; or
(11) failure of
the debtor to pay any domestic support obligation that first becomes payable
after the date of the filing of the petition.
(d) Except as
provided in subsection (e) of this section, at any time before the confirmation
of a plan under section 1325 of this title, on request of a party in interest
or the United States trustee and after notice and a hearing, the court may
convert a case under this chapter to a case under chapter 11 or 12 of this
title.
(e) Upon the
failure of the debtor to file a tax return under section 1308, on request of a
party in interest or the United States trustee and after notice and a hearing,
the court shall dismiss a case or convert a case under this chapter to a case
under chapter 7 of this title, whichever is in the best interest of the
creditors and the estate.
(f) The court may
not convert a case under this chapter to a case under chapter 7, 11, or 12 of
this title if the debtor is a farmer, unless the debtor requests such
conversion.
(g)
Notwithstanding any other provision of this section, a case may not be
converted to a case under another chapter of this title unless the debtor may
be a debtor under such chapter.
[Rev. 5-26-05]
--------------------------------------------------------------------------------
11 USC §
1308. Filing of prepetition tax returns
(a) Not later
than the day before the date on which the meeting of the creditors is first
scheduled to be held under section 341(a), if the debtor was required to file a
tax return under applicable nonbankruptcy law, the debtor shall file with
appropriate tax authorities all tax returns for all taxable periods ending
during the 4-year period ending on the date of the filing of the petition.
(b)
(1) Subject to paragraph
(2), if the tax returns required by subsection (a) have not been filed by the
date on which the meeting of creditors is first scheduled to be held under
section 341(a), the trustee may hold open that meeting for a reasonable period
of time to allow the debtor an additional period of time to file any unfiled
returns, but such additional period of time shall not extend beyond--
(A) for any
return that is past due as of the date of the filing of the petition, the date
that is 120 days after the date of that meeting; or
(B) for any
return that is not past due as of the date of the filing of the petition, the
later of--
(i) the date that
is 120 days after the date of that meeting; or
(ii) the date on
which the return is due under the last automatic extension of time for filing
that return to which the debtor is entitled, and for which request is timely
made, in accordance with applicable nonbankruptcy law.
(2) After notice
and a hearing, and order entered before the tolling of any applicable filing period
determined under this subsection, if the debtor demonstrates by a preponderance
of the evidence that the failure to file a return as required under this
subsection is attributable to circumstances beyond the control of the debtor,
the court may extend the filing period established by the trustee under this
subsection for--
(A) a period of
not more than 30 days for returns described in paragraph (1); and
(B) a period not
to extend after the applicable extended due date for a return described in
paragraph (2).
(c) For purposes
of this section, the term "return" includes a return prepared
pursuant to subsection (a) or (b) of section 6020 of the Internal Revenue Code
of 1986, or a similar State or local law, or a written stipulation to a
judgment or a final order entered by a nonbankruptcy tribunal.
[Rev. 5-26-05]
--------------------------------------------------------------------------------
Subchapter
II. The Plan
11 USC §
1321. Filing of plan
The debtor shall
file a plan.
[Rev. 5-27-05]
--------------------------------------------------------------------------------
11 USC §
1322. Contents of plan
(a) The plan
shall--
(1) provide for
the submission of all or such portion of future earnings or other future income
of the debtor to the supervision and control of the trustee as is necessary for
the execution of the plan;
(2) provide for
the full payment, in deferred cash payments, of all claims entitled to priority
under section 507 of this title, unless the holder of a particular claim agrees
to a different treatment of such claim;
(3) if the plan
classifies claims, provide the same treatment for each claim within a
particular class; and
(4)
notwithstanding any other provision of this section, a plan may provide for
less than full payment of all amounts owed for a claim entitled to priority
under section 507(a)(1)(B) only if the plan provides that all of the debtor's
projected disposable income for a 5-year period beginning on the date that the
first payment is due under the plan will be applied to make payments under the
plan.
(b) Subject to
subsections (a) and (c) of this section, the plan may--
(1) designate a
class or classes of unsecured claims, as provided in section 1122 of this
title, but may not discriminate unfairly against any class so designated;
however, such plan may treat claims for a consumer debt of the debtor if an
individual is liable on such consumer debt with the debtor differently than
other unsecured claims;
(2) modify the
rights of holders of secured claims, other than a claim secured only by a
security interest in real property that is the debtor’s principal residence, or
of holders of unsecured claims, or leave unaffected the rights of holders of
any class of claims;
(3) provide for
the curing or waiving of any default;
(4) provide for
payments on any unsecured claim to be made concurrently with payments on any
secured claim or any other unsecured claim;
(5)
notwithstanding paragraph (2) of this subsection, provide for the curing of any
default within a reasonable time and maintenance of payments while the case is
pending on any unsecured claim or secured claim on which the last payment is
due after the date on which the final payment under the plan is due;
(6) provide for
the payment of all or any part of any claim allowed under section 1305 of this
title;
(7) subject to
section 365 of this title, provide for the assumption, rejection, or assignment
of any executory contract or unexpired lease of the debtor not previously
rejected under such section;
(8) provide for
the payment of all or part of a claim against the debtor from property of the
estate or property of the debtor;
(9) provide for
the vesting of property of the estate, on confirmation of the plan or at a
later time, in the debtor or in any other entity;
(10) provide for
the payment of interest accruing after the date of the filing of the petition
on unsecured claims that are nondischargeable under section 1328(a), except
that such interest may be paid only to the extent that the debtor has
disposable income available to pay such interest after making provision for
full payment of all allowed claims; and
(11) include any
other appropriate provision not inconsistent with this title.
(c)
Notwithstanding subsection (b)(2) and applicable nonbankruptcy law--
(1) a default
with respect to, or that gave rise to, a lien on the debtor’s principal
residence may be cured under paragraph (3) or (5) of subsection (b) until such
residence is sold at a foreclosure sale that is conducted in accordance with
applicable nonbankruptcy law; and
(2) in a case in
which the last payment on the original payment schedule for a claim secured
only by a security interest in real property that is the debtor’s principal
residence is due before the date on which the final payment under the plan is
due, the plan may provide for the payment of the claim as modified pursuant to
section 1325(a)(5) of this title.
(d)
(1) If the
current monthly income of the debtor and the debtor's spouse combined, when
multiplied by 12, is not less than--
(A) in the case
of a debtor in a household of 1 person, the median family income of the
applicable State for 1 earner;
(B) in the case
of a debtor in a household of 2, 3, or 4 individuals, the highest median family
income of the applicable State for a family of the same number or fewer
individuals; or
(C) in the case
of a debtor in a household exceeding 4 individuals, the highest median family
income of the applicable State for a family of 4 or fewer individuals, plus
$525 [$525 (added by BAPCPA 10-17-05)] per month for each individual in excess
of 4,
the plan may not
provide for payments over a period that is longer than 5 years.
(2) If the
current monthly income of the debtor and the debtor's spouse combined, when
multiplied by 12, is less than--
(A) in the case
of a debtor in a household of 1 person, the median family income of the
applicable State for 1 earner;
(B) in the case
of a debtor in a household of 2, 3, or 4 individuals, the highest median family
income of the applicable State for a family of the same number or fewer
individuals; or
(C) in the case
of a debtor in a household exceeding 4 individuals, the highest median family
income of the applicable State for a family of 4 or fewer individuals, plus
$525 [$525 (added by BAPCPA 10-17-05)] per month for each individual in excess
of 4,
the plan may not
provide for payments over a period that is longer than 3 years, unless the
court, for cause, approves a longer period, but the court may not approve a
period that is longer than 5 years.
[Dollar amounts
in subsections 523(a)(2)(C)(i) and (ii) are adjusted on April 1 every 3 years
by section 104. Adjusted amounts effective 4-1-04 are in brackets.]
(e)
Notwithstanding subsection (b)(2) of this section and sections 506(b) and
1325(a)(5) of this title, if it is proposed in a plan to cure a default, the
amount necessary to cure the default, shall be determined in accordance with
the underlying agreement and applicable nonbankruptcy law.
(f) A plan may
not materially alter the terms of a loan described in section 362(b)(19) and
any amounts required to repay such loan shall not constitute "disposable
income" under section 1325.
[Rev. 5-27-05]
--------------------------------------------------------------------------------
11 USC §
1323. Modification of plan before
confirmation
(a) The debtor
may modify the plan at any time before confirmation, but may not modify the
plan so that the plan as modified fails to meet the requirements of section
1322 of this title.
(b) After the
debtor files a modification under this section, the plan as modified becomes
the plan.
(c) Any holder of
a secured claim that has accepted or rejected the plan is deemed to have
accepted or rejected, as the case may be, the plan as modified, unless the
modification provides for a change in the rights of such holder from what such
rights were under the plan before modification, and such holder changes such
holder’s previous acceptance or rejection.
Rev. 5-27-05]
--------------------------------------------------------------------------------
11 USC §
1324. Confirmation hearing
(a) Except as
provided in subsection (b) and after notice, the court shall hold a hearing on
confirmation of the plan. A party in interest may object to confirmation of the
plan.
(b) The hearing
on confirmation of the plan may be held not earlier than 20 days and not later
than 45 days after the date of the meeting of creditors under section 341(a),
unless the court determines that it would be in the best interests of the
creditors and the estate to hold such hearing at an earlier date and there is
no objection to such earlier date.
Rev. 5-27-05]
--------------------------------------------------------------------------------
11 USC §
1325. Confirmation of plan
(a) Except as
provided in subsection (b), the court shall confirm a plan if--
(1) The plan
complies with the provisions of this chapter and with the other applicable
provisions of this title;
(2) any fee,
charge, or amount required under chapter 123 of title 28, or by the plan, to be
paid before confirmation, has been paid;
(3) the plan has
been proposed in good faith and not by any means forbidden by law;
(4) the value, as
of the effective date of the plan, of property to be distributed under the plan
on account of each allowed unsecured claim is not less than the amount that
would be paid on such claim if the estate of the debtor were liquidated under
chapter 7 of this title on such date;
(5) with respect
to each allowed secured claim provided for by the plan--
(A) the holder of
such claim has accepted the plan;
(B)
(i) the plan
provides that--
(I) the holder of
such claim retain the lien securing such claim until the earlier of--
(aa) the payment
of the underlying debt determined under nonbankruptcy law; or
(bb) discharge
under section 1328; and
(II) if the case
under this chapter is dismissed or converted without completion of the plan,
such lien shall also be retained by such holder to the extent recognized by
applicable nonbankruptcy law;
(ii) the value,
as of the effective date of the plan, of property to be distributed under the
plan on account of such claim is not less than the allowed amount of such
claim; and
(iii) if--
(I) property to
be distributed pursuant to this subsection is in the form of periodic payments,
such payments shall be in equal monthly amounts; and
(II) the holder
of the claim is secured by personal property, the amount of such payments shall
not be less than an amount sufficient to provide to the holder of such claim
adequate protection during the period of the plan; or
(C) the debtor
surrenders the property securing such claim to such holder;
(6) the debtor
will be able to make all payments under the plan and to comply with the plan;
(7) the action of
the debtor in filing the petition was in good faith;
(8) the debtor
has paid all amounts that are required to be paid under a domestic support
obligation and that first become payable after the date of the filing of the
petition if the debtor is required by a judicial or administrative order, or by
statute, to pay such domestic support obligation; and
(9) the debtor
has filed all applicable Federal, State, and local tax returns as required by
section 1328.
For purposes of
paragraph (5), section 506 shall not apply to a claim described in that
paragraph if the creditor has a purchase money security interest securing the
debt that is the subject of the claim, the debt was incurred within the 910-day
preceding the date of the filing of the petition, and the collateral for that
debt consists of a motor vehicle (as defined in section 30102 of title 49)
acquired for the personal use of the debtor, or if collateral for that debt
consists of any other thing of value, if the debt was incurred during the
1-year period preceding that filing
(b)
(1) If the
trustee or the holder of an allowed unsecured claim objects to the confirmation
of the plan, then the court may not approve the plan unless, as of the
effective date of the plan--
(A) the value of
the property to be distributed under the plan on account of such claim is not
less than the amount of such claim; or
(B) the plan
provides that all of the debtor's projected disposable income to be received in
the applicable commitment period beginning on the date that the first payment
is due under the plan will be applied to make payments to unsecured creditors
under the plan.
(2) For purposes
of this subsection, the term "disposable income" means current
monthly income received by the debtor (other than child support payments,
foster care payments, or disability payments for a dependent child made in
accordance with applicable nonbankruptcy law to the extent reasonably necessary
to be expended for such child) less amounts reasonably necessary to be
expended--
(A)
(i) for the
maintenance or support of the debtor or a dependent of the debtor, or for a
domestic support obligation, that first becomes payable after the date the
petition is filed; and
(ii) for
charitable contributions (that meet the definition of "charitable
contribution" under section 548(d)(3) to a qualified religious or
charitable entity or organization (as defined in section 548(d)(4)) in an
amount not to exceed 15 percent of gross income of the debtor for the year in
which the contributions are made; and
(B) if the debtor
is engaged in business, for the payment of expenditures necessary for the
continuation, preservation, and operation of such business.
(3) Amounts
reasonably necessary to be expended under paragraph (2) shall be determined in
accordance with subparagraphs (A) and (B) of section 707(b)(2), if the debtor
has current monthly income, when multiplied by 12, greater than--
(A) in the case
of a debtor in a household of 1 person, the median family income of the
applicable State for 1 earner;
(B) in the case
of a debtor in a household of 2, 3, or 4 individuals, the highest median family
income of the applicable State for a family of the same number or fewer
individuals; or
(C) in the case
of a debtor in a household exceeding 4 individuals, the highest median family
income of the applicable State for a family of 4 or fewer individuals, plus
$525 [$525 (added by BAPCPA 10-17-05)] per month for each individual in excess
of 4.
(4) For purposes
of this subsection, the "applicable commitment period"--
(A) subject to
subparagraph (B), shall be--
(i) 3 years; or
(ii) not less
than 5 years, if the current monthly income of the debtor and the debtor's
spouse combined, when multiplied by 12, is not less than--
(I) in the case
of a debtor in a household of 1 person, the median family income of the
applicable State for 1 earner;
(II) in the case
of a debtor in a household of 2, 3, or 4 individuals, the highest median family
income of the applicable State for a family of the same number or fewer
individuals; or
(III) in the case
of a debtor in a household exceeding 4 individuals, the highest median family
income of the applicable State for a family of 4 or fewer individuals, plus
$525 [$525 (added by BAPCPA 10-17-05)] per month for each individual in excess
of 4; and
(B) may be less
than 3 or 5 years, whichever is applicable under subparagraph (A), but only if
the plan provides for payment in full of all allowed unsecured claims over a
shorter period.
[Dollar amounts
in subsections 523(a)(2)(C)(i) and (ii) are adjusted on April 1 every 3 years
by section 104. Adjusted amounts effective 4-1-04 are in brackets.]
(c) After
confirmation of a plan, the court may order any entity from whom the debtor
receives income to pay all or any part of such income to the trustee.
Rev. 5-27-05]
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11 USC §
1326. Payments
(a)
(1) Unless the
court orders otherwise, the debtor shall commence making payments not later
than 30 days after the date of the filing of the plan or the order for relief,
whichever is earlier, in the amount--
(A) proposed by
the plan to the trustee;
(B) scheduled in
a lease of personal property directly to the lessor for that portion of the
obligation that becomes due after the order for relief, reducing the payments
under subparagraph (A) by the amount so paid and providing the trustee with
evidence of such payment, including the amount and date of payment; and
(C) that provides
adequate protection directly to a creditor holding an allowed claim secured by
personal property to the extent the claim is attributable to the purchase of
such property by the debtor for that portion of the obligation that becomes due
after the order for relief, reducing the payments under subparagraph (A) by the
amount so paid and providing the trustee with evidence of such payment,
including the amount and date of payment.
(2) A payment
made under paragraph (1)(A) shall be retained by the trustee until confirmation
or denial of confirmation. If a plan is confirmed, the trustee shall distribute
any such payment in accordance with the plan as soon as is practicable. If a
plan is not confirmed, the trustee shall return any such payments not
previously paid and not yet due and owing to creditors pursuant to paragraph
(3) to the debtor, after deducting any unpaid claim allowed under section
503(b).
(3) Subject to
section 363, the court may, upon notice and a hearing, modify, increase, or
reduce the payments required under this subsection pending confirmation of a
plan.
(4) Not later
than 60 days after the date of filing of a case under this chapter, a debtor
retaining possession of personal property subject to a lease or securing a
claim attributable in whole or in part to the purchase price of such property
shall provide the lessor or secured creditor reasonable evidence of the
maintenance of any required insurance coverage with respect to the use or
ownership of such property and continue to do so for so long as the debtor
retains possession of such property.
(b) Before or at
the time of each payment to creditors under the plan, there shall be paid--
(1) any unpaid
claim of the kind specified in section 507(a)(2) of this title;
(2) if a standing
trustee appointed under section 586(b) of title 28 is serving in the case, the
percentage fee fixed for such standing trustee under section 586(e)(1)(B) of
title 28; and
(3) if a chapter
7 trustee has been allowed compensation due to the conversion or dismissal of
the debtor's prior case pursuant to section 707(b), and some portion of that
compensation remains unpaid in a case converted to this chapter or in the case
dismissed under section 707(b) and refiled under this chapter, the amount of
any such unpaid compensation, which shall be paid monthly--
(A) by prorating
such amount over the remaining duration of the plan; and
(B) by monthly
payments not to exceed the greater of--
(i) $25 [$25
(added by BAPCPA 10-17-05) effective 4-1-04. Adjusted every 3 years by section
104.]; or
(ii) the amount
payable to unsecured nonpriority creditors, as provided by the plan, multiplied
by 5 percent, and the result divided by the number of months in the plan.
(c) Except as
otherwise provided in the plan or in the order confirming the plan, the trustee
shall make payments to creditors under the plan.
(d)
Notwithstanding any other provision of this title--
(1) compensation
referred to in subsection (b)(3) is payable and may be collected by the trustee
under that paragraph, even if such amount has been discharged in a prior case
under this title; and
(2) such
compensation is payable in a case under this chapter only to the extent
permitted by subsection (b)(3).
Rev. 5-27-05]
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11 USC §
1327. Effect of confirmation
(a) The
provisions of a confirmed plan bind the debtor and each creditor, whether or
not the claim of such creditor is provided for by the plan, and whether or not
such creditor has objected to, has accepted, or has rejected the plan.
(b) Except as
otherwise provided in the plan or the order confirming the plan, the
confirmation of a plan vests all of the property of the estate in the debtor.
(c) Except as
otherwise provided in the plan or in the order confirming the plan, the
property vesting in the debtor under subsection (b) of this section is free and
clear of any claim or interest of any creditor provided for by the plan.
Rev. 5-27-05]
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11 USC §
1328. Discharge
(a) Subject to
subsection (d), as soon as practicable after completion by the debtor of all
payments under the plan, and in the case of a debtor who is required by a
judicial or administrative order, or by statute, to pay a domestic support
obligation, after such debtor certifies that all amounts payable under such
order or such statute that are due on or before the date of the certification
(including amounts due before the petition was filed, but only to the extent
provided for by the plan) have been paid, unless the court approves a written
waiver of discharge executed by the debtor after the order for relief under
this chapter, the court shall grant the debtor a discharge of all debts
provided for by the plan or disallowed under section 502 of this title, except
any debt--
(1) provided for
under section 1322(b)(5);
(2) of the kind
specified in section 507(a)(8)(C) or in paragraph (1)(B), (1)(C), (2), (3),
(4), (5), (8), or (9) of section 523(a);
(3) for
restitution, or a criminal fine, included in a sentence on the debtor's
conviction of a crime; or
(4) for
restitution, or damages, awarded in a civil action against the debtor as a
result of willful or malicious injury by the debtor that caused personal injury
to an individual or the death of an individual.
(b) Subject to
subsection (d), at any time after the confirmation of the plan and after notice
and a hearing, the court may grant a discharge to a debtor that has not
completed payments under the plan only if--
(1) the debtor’s
failure to complete such payments is due to circumstances for which the debtor
should not justly be held accountable;
(2) the value, as
of the effective date of the plan, of property actually distributed under the
plan on account of each allowed unsecured claim is not less than the amount
that would have been paid on such claim if the estate of the debtor had been
liquidated under chapter 7 of this title on such date; and
(3) modification
of the plan under section 1329 of this title is not practicable.
(c) A discharge
granted under subsection (b) of this section discharges the debtor from all
unsecured debts provided for by the plan or disallowed under section 502 of
this title, except any debt--
(1) provided for
under section 1322(b)(5) of this title; or
(2) of a kind
specified in section 523(a) of this title.
(d)
Notwithstanding any other provision of this section, a discharge granted under
this section does not discharge the debtor from any debt based on an allowed
claim filed under section 1305(a)(2) of this title if prior approval by the
trustee of the debtor’s incurring such debt was practicable and was not
obtained.
(e) On request of
a party in interest before one year after a discharge under this section is
granted, and after notice and a hearing, the court may revoke such discharge
only if--
(1) such
discharge was obtained by the debtor through fraud; and
(2) the
requesting party did not know of such fraud until after such discharge was
granted.
(f)
Notwithstanding subsections (a) and (b), the court shall not grant a discharge
of all debts provided for in the plan or disallowed under section 502, if the
debtor has received a discharge--
(1) in a case
filed under chapter 7, 11, or 12 of this title during the 4-year period
preceding the date of the order for relief under this chapter, or
(2) in a case
filed under chapter 13 of this title during the 2-year period preceding the
date of such order.
(g)
(1) The court
shall not grant a discharge under this section to a debtor unless after filing
a petition the debtor has completed an instructional course concerning personal
financial management described in section 111.
(2) Paragraph (1)
shall not apply with respect to a debtor who is a person described in section
109(h)(4) or who resides in a district for which the United States trustee (or
the bankruptcy administrator, if any) determines that the approved
instructional courses are not adequate to service the additional individuals
who would otherwise be required to complete such instructional course by reason
of the requirements of paragraph (1).
(3) The United
States trustee (or the bankruptcy administrator, if any) who makes a
determination described in paragraph (2) shall review such determination not
later than 1 year after the date of such determination, and not less frequently
than annually thereafter.
(h) The court may
not grant a discharge under this chapter unless the court after notice and a hearing
held not more than 10 days before the date of the entry of the order granting
the discharge finds that there is no reasonable cause to believe that--
(1) section
522(q)(1) may be applicable to the debtor; and
(2) there is
pending any proceeding in which the debtor may be found guilty of a felony of
the kind described in section 522(q)(1)(A) or liable for a debt of the kind
described in section 522(q)(1)(B).
Rev. 5-27-05]
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11 USC §
1329. Modification of plan after
confirmation
(a) At any time
after confirmation of the plan but before the completion of payments under such
plan, the plan may be modified, upon request of the debtor, the trustee, or the
holder of an allowed unsecured claim, to--
(1) increase or
reduce the amount of payments on claims of a particular class provided for by
the plan;
(2) extend or
reduce the time for such payments;
(3) alter the
amount of the distribution to a creditor whose claim is provided for by the
plan to the extent necessary to take account of any payment of such claim other
than under the plan; or
(4) reduce
amounts to be paid under the plan by the actual amount expended by the debtor
to purchase health insurance for the debtor (and for any dependent of the
debtor if such dependent does not otherwise have health insurance coverage) if
the debtor documents the cost of such insurance and demonstrates that--
(A) such expenses
are reasonable and necessary;
(B)
(i) if the debtor
previously paid for health insurance, the amount is not materially larger than
the cost the debtor previously paid or the cost necessary to maintain the
lapsed policy; or
(ii) if the debtor
did not have health insurance, the amount is not materially larger than the
reasonable cost that would be incurred by a debtor who purchases health
insurance, who has similar income, expenses, age, and health status, and who
lives in the same geographical location with the same number of dependents who
do not otherwise have health insurance coverage; and
(C) the amount is
not otherwise allowed for purposes of determining disposable income under
section 1325(b) of this title;
and upon request
of any party in interest, files proof that a health insurance policy was
purchased.
(b)
(1) Sections
1322(a), 1322(b), and 1323(c) of this title and the requirements of section
1325(a) of this title apply to any modification under subsection (a) of this
section.
(2) The plan as
modified becomes the plan unless, after notice and a hearing, such modification
is disapproved.
(c) A plan
modified under this section may not provide for payments over a period that
expires after the applicable commitment period under section 1325(b)(1)(B)
after the time that the first payment under the original confirmed plan was
due, unless the court, for cause, approves a longer period, but the court may
not approve a period that expires after five years after such time.
Rev. 5-28-05]
--------------------------------------------------------------------------------
11 USC §
1330. Revocation of an order of
confirmation
(a) On request of
a party in interest at any time within 180 days after the date of the entry of
an order of confirmation under section 1325 of this title, and after notice and
a hearing, the court may revoke such order if such order was procured by fraud.
(b) If the court
revokes an order of confirmation under subsection (a) of this section, the
court shall dispose of the case under section 1307 of this title, unless,
within the time fixed by the court, the debtor proposes and the court confirms
a modification of the plan under section 1329 of this title.