Chapter 5 (The Voluntary Chapter 7 Bankruptcy (Liquidation) (Pp. 88-297)

Chapter 5 (The Voluntary Chapter 7 Bankruptcy (Liquidation) (pp. 88-297)88 Chapter 5, Section 2 -- after G. 12. Add "H. Statement of Current Monthly Income and Means Test Calculation" change H to I change I to J change J to K change K to L90 After the paragraph before Section 1, add Insert 5-1.Insert 5-1The Bankruptcy Abuse Prevention and Consumer Protection Act has made significant changes to Chapter 7 bankruptcy. These changes include: Creating a means test to determine whether an individual’s Chapter 7 case should be dismissed as an abuse  Giving the Chapter 7 trustee and all other parties in interest, rather than the court and the U.S. trustee, standing to file a motion to dismiss an individual debtor’s case for abuse  Making the debtor’s attorney liable for the trustee’s attorney fees in prosecuting a motion to dismiss and for civil penalties, if the motion to dismiss is granted and the papers filed with the court by the debtor’s attorney do not meet certain standards  Enabling the debtor’s attorney to recover attorney fees under certain circumstances when successfully defending a motion to dismiss for abuse brought by a creditor  Requiring the U.S. trustee to file a statement within 10 days before the meeting of creditors indicating whether a case is presumed to be abusive and requiring the clerk to send the statement to all creditors within 5 days of receiving it  Requiring the debtor to give the trustee the most recent year’s federal tax returns or transcript no later than 7 days before the meeting of creditors and providing a copy to creditors who request it  Expanding the exceptions to the automatic stay for domestic support obligations and giving domestic support obligations priority claim status  Restricting the automatic stay when the debtor has filed bankruptcy within one year of the current bankruptcy filing  Requiring the debtor to either reaffirm or redeem (but not retain) with respect to personal property securing a purchase-money security interest 1 within 30 days of the meeting of creditors, and if the debtor fails to do so within 45 days, the automatic stay is terminated and the property abandoned from the estate  Precluding an individual debtor from filing a petition who has not obtained a briefing from an approved nonprofit budget and credit counseling service within 180 days prior to filing  Requiring an individual debtor to complete a personal financial management course as a condition of receiving a discharge  Precluding the granting of a discharge if the debtor has received a discharge in a Chapter 7 case filed within 8 years of the bankruptcy filing  Excepting from discharge most obligations to a former spouse arising out of a divorce regardless of whether the obligations are in the nature of support or property division  Defining “household goods” for the purposes of lien avoidance  Restricting the state exemptions available to a debtor when the debtor has not lived in the filing state for at least 730 days before the bankruptcy filing  Requiring certain language in reaffirmation agreements  Imposing a $125,000 cap on a homestead exemption when a debtor puts money in a homestead within 1215 days preceding the bankruptcy90 Section 1 -- after the first bullet, add a new bullet (Insert 5-2)Insert 5-2• If the debtor is an individual, the paralegal advises the debtor that within 180 days before the filing a bankruptcy petition, the debtor must be briefed (including by telephone and on the Internet) by an approved nonprofit budget and credit counseling agency as to the opportunities for available credit counseling.91 1. Filing fee -- add a comma and "administrative fee, and trustee surcharge"See Procedural Form B200 (Required Lists, Schedules, Statements and Fees for a Voluntary Chapter 7 Case) for a check list. www.uscourts.gov/bkforms/bankruptcy_forms_html#relatedParagraph beginning "Good practice" -- 4th line -- delete "consumer"Same line -- after "estate" add "or personal property subject ot an unexpired lease"2 5th line -- delete "until the" and change to "by the date set for the 11 U.S.C.A. § 341"Same sentence -- deletge "or until the4 time set by the court for cause, which is between the 30 days and the meeting of creditdors"8th line -- STET the last sentenceThen check the marked-up instructions for additional changes.91 Exhibit 5-1 -- title within the flow chart -- change from "Filing the Voluntary Chapter 7 Petition" to “The Voluntary Chapter 7 Process"1st box -- 1st line -- delete "The" and replace with Insert 5-3Insert 5-3Within 180 days of filing a Chapter 7 petition, an individual debtor must be briefed (including by telephone and on the Internet) by an approved nonprofit budget and credit counseling agency as to the opportunities for available credit counseling Upon making the decision to file for bankruptcy under Chapter 7 of the Bankruptcy Code, the 1st box -- #3 -- delete #3 and replace it with Insert 5-4Insert 5-43. A certificate of the debtor's attorney or the debtor's bankruptcy petition preparer, that the clerk's 11 U.S.C.A. § 342(b) notice has been delivered to the debtor (if debtor is an individual with primarily consumer debts)1st box -- after #8 add a new #9 - #12 (Insert 5-5)Insert 5-59. 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 debtor3 10. Statement of Current Monthly Income and Means Test Calculation (Chapter 7) (Form B22A)11. 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 change former #9 to #12 and in its 1st line -- delete "consumer" and delete "is"After the new #12 and above the line that separates the last two entries, add #13 (Insert 5-6) Insert 5-613. A debtor must provide the Chapter 7 trustee with a copy of the Federal income tax returns for the most recent tax year not later than 7 days before the date first set for the meeting of creditorsIf an individual debtor fails to fill all of the information required by 11 U.S.C.A. § 521(a) within 45 days after the date of the filing of the petition, the case is automatically dismissed92 2nd box -- change ":substantial" to actual or presumed"92 Exhibit 5-1, after the Meeting of Creditors box -- add a box on he line down before the split -- this box should be above the headings Fresh Start and Administration of the Estate. The box will be the 4th box down. -- add in this box Insert 5-7Insert 5-7The US trustee has a duty to review for abuse and file a statement with the court within 10 days after the meeting of creditors and to provide a copy to all creditors within 5 days thereafter93 2nd box on the left -- after "consumer debt" add a comma and the phrase "or surrender the collateral"4 93 4th box on the left (right box of the 2 box pair) -- add the following after "discharge" -- "if debtor completed an instructional course concerning personal financial management. An individual debtor must file Official Form B23 (The Debtor's Certification of Completion of Instructional Court Concerning Personal Financial Management) prior to receiving a discharge."95 add the following ¶ (Insert 5-8) following the ¶ ending "the McPhersons' bankruptcy filing, if a filing were to occur."Insert 5-8If the debtor is an individual, the paralegal advises the debtor that within 180 days before the filing of a bankruptcy petition, the debtor must be briefed (including by telephone and on the Internet) by an approved nonprofit budget and credit counseling agency as to the opportunities for available credit counseling. The paralegal arranges for the debtor to receive the necessary counseling with an agency.99 After 3rd ¶, add Insert 5-9.Insert 5-9In fact, the McPhersons’ eligibility to file Chapter 7 is subject to a means test. There is a presumption that the filing of a Chapter 7 petition would be an abuse, requiring dismissal of the case if the McPhersons’ current monthly income multiplied by 60 is no less than the lesser of 25% of the nonpriority unsecured claims or $10,000. Currently monthly income means a six month average of the monthly income from all sources for both spouses.4th ¶, 6th line – change period after “60 months” to a comma and add Insert 5-9A.Insert 5-9A, depending on how their monthly income compared to the median monthly income for a family of comparable size in their state.5 Problem 5.2 – after 1st ¶ -- add a new ¶ (Insert 5-10)Insert 5-10If the McPhersons were to file a Chapter 7 petition, would their filing constitute presumed abuse under 11 U.S.C.A. § 707(b)? Complete Form B22A. Statement of Current Monthly Income and Means Test Calculation (Chapter 7) (10/05) found at www.uscourts.gov/rules/index.html > Interim Bankruptcy Rules and Official Forms > New and Revised Official Forms or www.uscourts.gov > U.S. Bankruptcy Courts > bankruptcy forms.Problem 5.2 – 2nd ¶ -- change “they” to “the McPhersons”Last ¶, 2nd line – after “may” add “, depending on the Chapter 13 means test,”Last ¶, l2nd line – delete “ , with the court’s approval,”100 bottom of the page -- delete item #3 and replace with Insert 5-11Insert 5-113. A certificate of the debtor's attorney or the debtor's bankruptcy petition preparer, that the clerk's 11 U.S.C.A. § 342(b) notice has been delivered to the debtor (if debtor is an individual with primarily consumer debts)103 After #8 add Insert 5-12Insert 5-126 9. 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; 10. Statement of Current Monthly Income and Means Test Calculation (Chapter 7) (Form B22A) 11. 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;Change former #9 to 12 and in its 1st line -- delete "with consumer debts" middle of the page -- ¶ beginning "The official bankruptcy forms" -- 2nd line -- after "Forms" and before the period add "or www.uscourts.gov/bkforms/bankruptcy_forms.html. See Procedural Form B200 (Required Lists, Schedules, Statements and Fees for a Voluntary Chapter 7 Case) for a checklist. www.uscourts.gov/bkforms/bankruptcy_forms_html#related." ¶ beginning -- "Good practice mandates" -- 4th line -- delete "consumer" same ¶ and line -- after "estate" add "or personal property subject to an unexpired lease" same ¶, 5th line -- delete "until" and replace with "by the date set for the 11 U.S.C.A. § 341" same line -- delete after "earlier" --- "or until . . . creditors"Next ¶, 2nd line -- delete 2nd sentence ("They are to be printed on one side of the paper only.") so the 3rd sentence becomes the 2nd sentence of that ¶. After what is now the 2nd sentence, add Insert 5-13Insert 5-13Many courts require the bankruptcy petition and accompanying documents to be filed electronically.7 After this ¶, begin the next ¶ with Insert 5-14. Complete the ¶ with the two sentences before section A, THE DEBTOR'S PEITITON.Insert 5-14In courts that do not mandate electronic filing, the forms must be printed on one side of the paper only.After the last ¶ and before section A. THE DEBTOR'S PETITION -- add the following ¶ (Insert 5-15)Insert 5-15If an individual debtor fails to fill all of the information required by 11 U.S.C.A. § 521(a) within 45 days after the date of the filing of the petition, the case is automatically dismissed. 11 U.S.C.A. § 521(i). In addition to those documents that must be filed, a debtor must provide the Chapter 7 trustee with a copy of the Federal income tax returns for the most recent tax year not later than 7 days before the date first set for the meeting of creditors.104 EXHIBIT 5-3 – Delete Form 1 (12/03) and replace with Form 1 (10/05). Form 1 (10/05) may be found at found at www.uscourts.gov/rules/index.html > Interim Bankruptcy Rules and Official Forms > New and Revised Official Forms108 2nd ¶, 1st line – change “two” to “three”109 The following changes from “six” to “eight” appear in “C”1st ¶, 1st line – change six to eight1st set of examples – 3rd line – change six to eight6th line – change six to eight9th line – change six to eight11th line – change six to eight13th line – change six tgo eight8 2nd set of example – 2nd line – change six to eight3rd set of examples – 2nd line – change six to eight110-111 Change “E” to “R” and realphabetize.Change “F” to “E” and reaphabetizeChange “G” to “H” and realphatbetizeChange “H” to “G” and realphabetize“I” – 2nd line – change “No. 3” to “No. 3A” -- this change appears twice in 2nd lineAlso in “I” – add the following new ¶ as Insert 5-16Insert 5-16An individual Chapter 7 debtor who cannot afford to pay the filing fee ($274) in full or over installments may request waiver of the fee by filing an application for waiver with the Clerk of the Court. The bankruptcy judge will determine whether the applicant will receive a waiver. The judge may only waive the fee if the applicant’s income is less than 150 percent of the official poverty line applicable to the applicant’s family size and the applicant is unable to pay the fee in installments. The application for waiver is Form 3B.“L” – 1st line – change “six” to “eight”2nd line – change “six” to “eight”Change “N” to “T” and realphabetizeChange “O” to “U” and realphabetize.Change “P” to “V” and realphabetize3rd set of examples – 1st line – change “2004” to “2006” 2nd line – change “04” to“06” 3rd line – change “2004” to “2006”9 Change “Q” to “O” and realphabetizeChange “R” to “P” and realphabetizeChange “S” to “X” and realphabetizeAdd “Q” and realphabetize and add Insert 5-17Insert 5-17This box has been added to Form 1 to provide for individuals to certify that they have received budget and credit counseling prior to filing, as required by 11 U.S.C.A. § 109(h). An individual debtor may seek a waiver based on incapacity, disab ility, or active military duty in a military combat zone. See 11 U.S.C.A. § 109(h)(4). The nonprofit budget and credit counseling agencies and financial management instructional courses are described in 11 U.S.C,A. § 111. Add “S” and realphabetize and Insert 5-18Insert 5-18This box implements 11 U.S.C.A. § 362(l) so a debtor who is a tenant of residential real property can state whether the debtor’s landlord has a judgment against the debot for possession of the premises, whether under applicable nonbankruptcy law the debtor would be permitted to cure the monetary default, and whether the debtor has made the appropriate deposit with the court.Add “W” and realphabetize and Insert 5-19Insert 5-19If the debtor has a foreign representative in a foreign main proceeding, the foreign representative muis declare under penalty of perjury that the information provided in the petition is true and correct.110 PROBLEM 5.4 -- ,3rd ¶, 3rd line – capital “C” on Chapter112 1st ¶, 2nd line – delete the period after installments and add “or the filing fee is waived by the bankruptcy judge.”¶ beginning “The application and order” – 1st line – change “No. 3” to “No. 3A”10 2nd line – change “No. 3” to No. 3A”Instructions for Completing -- – change “No. 3” to No. 3A”113.114 EXHIBIT 5-4 – replace Form 3 ( 12/05) with Form 3A (10/05).115 before PROBLEM 5.5 add Insert 5-20Insert 5-20If the debtor cannot afford to pay the filing fee either in full at the time of filing or in installments, the debtor may apply for a waiver of the filing fee by completing Form 3B. The bankruptcy judge may waive the filing fee only if the debtor’s income is less than 150 percent of the official poverty line applicable to the debtor’s family sixae and the debtor is unable to pay the fee in installments.EXHIBIT 5-5 Official Form No. 3B (Application for Waiver of the Chapter 7 Filing Fee for Individuals Who Cannot Pay the Filing Fee in Full or in Installments)[include Form No. 3B here] 115 PROBLEM 5.5 – 1st ¶, 2nd line – delete the period after installments and add “or for a waiver of their filing fee.”1st ¶, 3rd line – change “No. 3” to “No. 3A” and delete the period after Installments and add “or Official Form No. 3B – Application for Waiver of the Chapter 7 Filing Fee for Individuals Who Cannot Pay the Filing Fee in Full or in Installments.”115 C. THE CLERK'S NOTICE -- 1st ¶, 1st line -- after "consumer debts," delete "then the clerk's notice . . . Bankruptcy Code, however, in"1st ¶, last line -- after "debtor could proceed" -- delete the remainder of the sentence and replace with Insert 5-21Insert 5-21 and the types of services available from credit counseling agencies.2ND ¶, 1ST line – after “In practice,” add “Procedural Form”3rd ¶, 1st line – change “forms, are” to “form,, “Procecdural Form 201, is”11 3rd ¶, 2nd line – change Exhibit 5-5 to Exhibit 5-6116 EXHIBIT 5.5 -- change to EXHIBIT 5.6 and change the heading To "Procedural Form B201 (Notice to Individual Consumer Debtor under § 342(b) of the Bankruptcy Code and replace with new Procedural Form B201 (10/05) www.uscourts.gov/bkforms/bankruptcy_forms.html117 3RD ¶, 3RD line – change 5-6 to 5-7. Title to exhibit – change from 5-6 to 5-7.118 1st ¶, 6th line – change 5-7 to 5-8119 EXHIBIT 5-7 – change to 5-8120 EXHIBIT 5-7 – change to 5-8123 EXHIBIT 5-8 – change to 5-9. Replace with Form 6 (summary of Schedules) (10/05) (now 2 pages rather than one)124 EXHIBIT 5-9 – change to 5-10. Replace with Form 6, Schedule A (10.05)125 E, 1st line – delete “market” and after the first sentence ending “in the property.” Add Insert 5-21A.Insert 5-21ABAPCPA eliminated the reference to “market” from Schedule A so the debtor may choose an appropriate value (i.e.,, the replacement value, trhe market value or some other value).E, 2nd line – delete “market”E, 5th line – delete “market”F, example, 1st line – delete “market” 125 2. Schedule B: Personal Property, 1st ¶, 1st line – change 5-10 to 5-112nd ¶, first line – change 33 to 35126-128 EXHIBIT 5-10 – change to 5-11. Replace wit h new Form B6B (10.05) (3 pages). All official forms may be found at www.uscourts.gov/rules/index.html >12 Interim Bankruptcy Rules and Official Forms > New and Revised Official Forms Add letters “A” –“JJ” as indicated.129 1st ¶, 4th line – delete “and that is what should be listed on Schedule B.” and end the sentence with a period. After this sentence add Insert 5-22.Insert 5-22PreBAPCPA, this market value was what the debtor should list on Schedule B. BAPCPA eliminated the reference to “market” from Schedule B so the debtor may choose an appropriate value, whether it be the replacement, market, or some other value.130 no change131 Change “K” to “L” and before the new “L” add Insert 5-23. Insert 5-23K Interest in an education IRA or interest under a State tuition plan”This category is new due to BAPCPA, An education IRA is defined in 26 U.S.C.A. § 530(b)(1) and a qualified State tuition plan is defined in 26 U.S.C.A. § 529(b)(1). Change “L” to “M,” M to N, N to O, O to P, In the new “P”, 3rd example – change 04 to 06Change P to Q. 132 In the last example for Q, change 04 to 06Change Q to R and change (3 times) 2004 to 2005Change R to S, S to T, T to U. a. Change U to V, V to W and W to Y. Before the new “Y” add “X” and Insert 5-24Insert 5-24X Customer lists or other compilations containing personally identifiable information provided to the debtor by individuals in connection with obtaining a product or service from the debtor primarily for personal, family, or household purposes.13 This category is post-BAPCPA.Change X to Z, Y to AA,134` Change Z to BB, AA to CC, BB to DD, CC to EE, DD to FF, EE to GG, FF to HH135 Change GG to II, and HH to JJ3. Schedule C: Property Claimed as Exempt – 2nd ¶, 1st line – change 5-11 to 5- 12.Instructions for Schedule C – “A” -- 1st line – after “federal exemptions” add the parenthetical “(11 U.S.C.A. § 522(b)(2)) Also 1st line – after “state exemptions” add the parenthetical “(11 U.S.C.A. § 522(b)(3))Still “A”, 1st ¶, 4th line – change (2) to (3). Same change for 6th lineStill “A” but 2nd ¶, 2nd line – change (1) to (2).At the end of “A” – add the following ¶ which is insert 5-25:Insert 5-25The debtor must also check a box if the debtor claims a homestead exemption of more than $125,000.Instructions for Schedule C – bottom of the page – after the 3 examples for “C,” add Insert 5-26Insert 5-26If the debtor moved from a different state within 730 days prior to filing bankruptcy, the debtor is forced to use the exemptions from the state where the debtor had been domiciled prior to the 730-day period. If the effect of the domiciliary requirement is to render the debtor ineligible for any exemption, the debtor may elect the federal exemptions under 11 U.S.C.A. § 522(d). Moreover, a debtor may not any amount of an interest in homestead acquired during 1215 days prior to filing bankruptcy that exceeds $125,000 in value. 14 136 Change EXHIBIT 5-11 to 5-12. Replace with the new Form B6C (10/05). Letter the new form as indicated.137 “D” – 1st line – delete “market”2nd line – delete “market”5th line – delete “market”`E – 1st line – delete “market”2nd line – delete “market” twiceExample -- delete “market”137 4. Schedule D: Creditors Holding Secured Claims – 1st line – change 5-12 to 5-13138-139 Replace Schedule D with new B6D (10/05). Exhibit 5-12 is now 5-13.140 2nd example – delete “market”“B” – after 3rd ¶ add Insert 5-27Insert 5-27If the creditor is a minor child, do not disclose the minor’s name but rather state “minor child”141 G – 1st line – delete “market”2nd line – delete “market “ twice4th line – delete “market” twice6th line – delete “market” twice142 J – 4th line – delete “market”5. Schedule E: Creditors Holding Unsecured Priority Claims –- 2nd line – change “(a)((3)-(9) to (a)(1), (4)-(10)” same line – before “Official Form No. 6” add the phrase “With the exception of administrative expenses,”15 same line – change 5-13 to 5-143rd ¶, #1 – after “name” add Insert 5-28 as a parenthetical –Insert 5-28(if the creditor is a minor child, do not disclose the minor’s name but rather state “minor child)143.145 Replace Schedule E with the new Schedule E (10/05) and renumber the EXHIBIT 5-14146 B – 1st line – after “classified” add “in Schedule E” Same line – change “seven” to “eight”146 After the first paragraph and before #1, add Insert 5-29Insert 5-291. Does the debtor have a creditor holding an unsecured claim for a domestic support obligation?Prior to BAPCAP, the sixth type of priority claim was for a spouse, foirmer spouse, or child of the debtor for alimony, maintenance, or support. to the extent provided in 11 U.S.C.A. § 507(a)(7). This priority has become the first priority, now entitled domestic support obligations, and expanded so iit now includes claims for domestic support that are owed to or recoverable by a spouse, former spouse, or child of the debtor, or the parent, legal guardian, or responsible relative of such a child, or a governmental unit to whom such a domestic support claim has been assigned to the extent provided in 11 U.S.C.A. § 507(a)(1).If there is no creditor in this category, either state “none” or leave the box blank.Change 1. To 2.3rd line – change $4,925 to $10,000 same line – change 90 to 18016 5th line – change (a)(3) to (a)(4)Change 2. To 3.4th line – change (a)(4) to (a)(5)Change 3. To 4.` 3rd line change (a)(5) to (a)(6)` Change 4. To 5.4th line – change (a)(6) to (a)(7) delete number 5.After the paragraphs for 7 and before C, add Insert 5-30Insert 5-308. Does the debtor have a creditor holding an unsecured claim based on death ort personal injury while the debtor was intoxicated?These claims are unsecured claim for death or personal injury resulting from operation of a motor vehicle or vessel if the operation was unlawful because the debtor was intoxicated form using alcohol, a drug, or another substance as set forth in 11 U.S.C.A. § 507(a)(10). This category was added by BAPCPA.If there is no creditor in this category, either state “none” or leave the box blank.C -- #1., 1st sentence. After the first sentence add Insert 5-31 as a parentheticalInsert 5-31(If the creditor is a minor child, do not disclose the minor’s name but rather state “minor child.)Then begin the 2nd sentence of #1 as a new paragraph.17 148 6. Schedule F – 1st line – change 5-14 to 5-15#1. – after “name” add the parenthetical “(unless the creditor is a minor child)”Instructions – B – 2nd line -- after this sentence add “If the creditor is a minor child, do not list the minor’s name but only “minor child.”149-150 Change EXHIBIT 5-14 to 5-125 and replace with new B6F (10/05)152 7. Schedule G – 1st ¶ after 3rd example -- 1st line – change 5-15 to 5-16B -- after the sentence. add Insert 5-32Insert 5-32If a minor child is a party to one of the leases or contracts, do not disclose the child’s name but rather indicate “a minor child.”153 Change EXHIBIT 5-15 to 5-16 and replace with new B6G (10/05)154 8. Schedule H – 1st ¶, 1st line – change 5-16 to 5-173rd ¶, 2nd line – change “six” to “eight” after 3rd ¶, add a new paragraph -- Insert 5-33Insert 5-33It is important the codebtors are reflected in Schedule H because the codebtor may be subrogated to a creditor’s claim if the codebtor pays some or all of the obligation in which there is joint liability. If the codebtor is not scheduled as a creditor, the debt may not be discharged. 155 Change EXHIBIT 5-16 to 5-17 and replace with new B6H (10/05)156 B – 2nd line – change “six” to “eight”9. Schedule I –1st ¶, 1st line – change 5-17 to 5-18.Same paragraph, 4th line – delete “substantial”B --, 2nd line – after “spouse” add “unless the dependent is a minor child.”Examples: delete “Mary Jo. Wilson” and replace with “a minor child”18 Examples: delete Billy Joe Short” and replace with “a minor child”157 Change EXHIBIT 5-17 to 5-18 and replace with new B6H (10/05)159 E – 1st sentence – delete “of more than 10 percent”10. Schedule J – 1st ¶, 1st line – change 5-18 to 5-19 same ¶, 4th line – delete “substantial”160 Change EXHIBIT 5-18 to 5-19 and replace with new B6H (10/05)163 14. 2nd line – delete “name” and comma after age and add Insert 5-34 after the end of the sentence..Insert 5-34If a minor child is the recipient of payments, do not disclose the child’s name but rather indicate “a minor child.”15, 3rd line – delete “name of” and add “(a minor child)” as a parenthetical after “child”164 1st full ¶, 3rd line – change 5-19 to 5-20165 Change the number of the EXHIBIT from 5-19 to 5-20166 12. Declaration -- 1st ¶, 1st sentence -- change 5-20 to 5-21167 Change the number of EXHIBIT 5-20 to 5-21 and replace with new Official Form 6 - Declaration (10/05)168. After section G, and before the former section H, add new heading -- and Insert 5-35Insert 5-35H. STATEMENT OF CURRENT MONTHLY INCOME AND MEANS TEST CALCULATIONThe Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 introduced the definition of "current monthly income." 11 U.S.C.A. § 101(10A). Certain individual Chapter 7 debtors are required to calculate their income under this definition. Certain Chapter 7 debtors may also be required to calculate 19 deductions from current monthly income allowed under the "means test" of 11 U.S.C.A. § 707(b)(2)(A). As a result of these calculations, certain a debtor may be presumed to be in abuse of the provisions of Chapter 7 and thereby have his or her case dismissed.Current monthly income is a monthly average of defined "income" received in the six calendar months prior to the bankruptcy filing by the debtor, or in a joint case, by the debtor and the debtor's spouse. Include as "income" is income from all sources, whether taxable or not, and any amount paid by an entity other than the debtor, or in a joint case, by the debtor and the debtor's spouse, on a regular basis for household expenses of the debtor, the debtor's dependents, and in a joint case, the debtor's spouse. The income to be averaged does not include Social Security benefits and certain payments received by victims of terrorism, war crimes, and crimes against humanity.Official Form B22A, a new form, must be completed by every individual Chapter 7 debtor, whether or not filing jointly. Form B22A must be completed and filed by the debtor in addition to Schedules I and J.EXHIBIT 5-22 Official Form B22A (Chapter 7) (Statement of Current Monthly Income and Means Test Calculation)[add Form B22A here (6 pages)]168 Change H to I.1st ¶, 1st line -- change 5-21 to 5-233. c. -- after "self-employed" add "full-time or part-time169-179 Change EXHIBIT 5-21 to 5-23 and replace with new Official Form No. 7 (10/05)180 1st ¶, 1st line -- change 5-21 to 5-23Instructions -- after the first ¶, add a new ¶, Insert 5-36Insert 5-36The name of a minor child should not be listed in this statement. A minor child should be referred to as "a minor child."A Income from employment -- 4th line -- after "debtor's business" change the period to a comma and add "including part-time activities either as an employee or in independent trade or business."20 Still "A" -- 9th line -- after "debtor's business" change the period to a comma and add "including part-time activities either as an employee or in independent trade or business."Same line -- after "state the" add "source or"11th line -- after "these periods." Add "including part-time activities,"C Payments to creditors a. Payments made within 90 days --- add in title "-- Individual or joint debtors with primarily consumer debts3rd line -- delete "aggregating more than $600" same line after "creditor" delete the period and add Insert 5-37Insert 5-37If the aggregate value of all property that constituted or is affected by such transfer is not less than $00. Indicate with an astgerisk (*) if a payment were made to a creditor on account of a domestic support obligation or as part of an alternative repayment schedule under a plan by an approved nonprofit budgeting and credit counseling agency. These payments are exempt from recovery by the trustee. 181 6th line -- after "no" add "such".181 8th line -- change "b." to "c". Before the new "c." add a new subsection "b.." Insert 5-38Insert 5-38 b. Payments made within 90 days -- Debtor whose debts are not primarily consumer debtsFor the 90- days immediately preceding the commencement of this case, list all payments of loans, installment purchases of goods or services, and other debts to any creditor if the aggregate value of all property that constitutes or is affected by such transfer is not less than $5,000.For each creditor, include the following:1) the name and address of the creditor21 2) the dates of payments3) the amount paid4) the amount still owingIf the debtor has made no such payment during this period, check the "none" box for question 3.b.181 c. Payments made within one year to insiders --5th line -- change 3.b. to 3.c.184 J Other transfers all the text from the 3rd line through the 23rd line becomes subsection "a." and it is indented appropriately.3rd line -- change "one" to "two"After the 23rd line, begin a new subsection -- "b" -- Insert 5-39Insert 5-39 b. For the ten-year period immediately preceding the commencement of this case, provide the following information for all property transferred by the debtor to a self-settled trust or similar device of which the debtor is a beneficiary:1) the name of the trust or other device2) the date or dates of transfer3) the amount of money or description and value of property or debtor's interest in propertyIf no other property was transferred to a self-settled trust or similar device of which the debtor is a beneficiary during this period, check the "none" box for question 10.b.185 O Prior address of debtor22 3rd line -- change "two" to "three"186 P Spouse and Former Spouses3rd line -- change "six' to "eight"190 After PROBLEM 5.17 -- change "I. Statement of Intention" to "J."1st ¶, 3rd line -- change Exhibit 5-22 to 5-241st ¶, 5th line -- change 521(2)(A) to 521(a)(2)(A)2nd ¶, 3rd line -- change "45 days after filing the statement of intention" to "30 days after the first date set for trhe meeting of creditors under 11 U.S.C.A. § 341."2nd ¶, 4th line -- change 45 to 302nd ¶, 5th line -- change 521(2)(B) to 521(a)(2)(B)3rd ¶, 1st line -- change 45 to 304th ¶, 2nd line -- change 45 to 30191 EXHIBIT 5-22 -- change to 5-24. Replace Official Form 8 with new Official Form B8 (10/05)192 1st line -- before "The debtor" add (a) so it reads (a) The debtor shall --2nd line -- delete "consumer"5th line -- after "title" add "except as provided in section 362(h);Instructions for Official Form No. 8 -- A -- delete the period after surrendered and add a comma and -- "claimed as exempt, to be redeemed, or reaffirmed." Delete the last sentence of instruction A that deals with creditor's name.B -- delete the first sentence.C -- add a new #1 -- 1. The property will be surrendered;And change the order of 1, 2, 3 so 1 becomes 4, 2 becomes 3. and 3 becomes 2.Title to "J. Debtor's Duty" changes from J. to K.23 193 Titlte from "K. Debtor's Right" changes from K to L.194 B. The Estate is Created -- last line -- change 5-23 to 5-25.195 change EXHIBIT 5-23 to 5-25196 toward the bottom of the page -- subsection (b)(4)((a)(ii), 2nd line -- delete "or" last line of page -- after section and before 542 -- add "365 or"197 1st line -- change (5) to (9). And before the new (9) add Insert 5-40Insert 5-40(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; (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 the24 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; (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, 25 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); or197 top of the page -- 5th and 6th lines of the block under (B) -- move these lines to the left so "w" is under "u"The next paragraph is scrambled -- This paragraph with no indentation begins with "Paragraph (4) shall not be construed" and should end on the third line with the word "agreement." Then delete the word "or: and move the remainder of that paragraph -- "unless the money order issuer had not taken action, prior to the filing of the petition, to require compliance with the prohibition." This is a free standing paragraph with no indentation and no capitalization and should immediately precede the paragraph we just worked on. So it should begin with the 7th line down.Under (c)(1)(B) -- move the second, third and 4th lines to the left so then come unde the "t" in "that" In the third line of this sentnence, add a comma after "commencement"197 at the end of the block quote [(d)], delete the citation "11 U.S.C.A. § 541" add Insert 5-41Insert 5-41(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. 11 U.S.C.A. § 541.197 paragraph before Problem 5.22, change "six" to "ten"26 After the third paragraph after Problem 5.22, add Insert 5-42Insert 5-42The fifth is "funds placed in an education individual retirement account" as defined in this section. 11 U.S.C.A. § 541(b)(5).The sixth is "funds used to purchase a tuition credit or certificate or contributed to an account . . . under a qualified State tuition program" as qualified by this section. 11 U.S.C.A. § 541(b)(6).The seventh is "any amount . . . withheld by an employer from the wages of employees for payment as contributions . . . to . . . an employee benefit plan . . . a deferred compensation plan . . . or a tax-deferred annuity . . .." 11 U.S.C.A.§ 541(b)(7).The eighth is "any interest of the debtor in property where the debtor pledged or sold tangible personal property as collateral for a loan or advance of money given by a person licensed under law to make such loans or advances." 11 U.S.C.A. § 541(b)(8).197 two paragraphs before EXAMPLE, change "fifth" to "ninth" and change (a)(5) to (a)(9).One paragraph before EXAMPLE, change "sixth" to "tenth" -- [citation is OK]198 2. Location of Property -- block quote -- after the first line add a dash. The second line become (1) and change the period after "estate" to a semicolon. Then add Insert 5.43Insert 5.43(2) over all claims or causes of action that involve construction of section 327, of title 11, United States Code, or rules relating to disclosure requirements under section 327. Then add the citation -- 28 U.S.C.A. § 1334(e).201 4th ¶, 3rd line, change (1) to (2)EXAMPLE -- 2nd line -- delete "section 522(b)(2) . . . 1978"27 Last line of ¶m change 2003 to 2005.202 ¶ after EXAMPLE -- 5th line -- delete period and add "unless the state law that is applicable to the debtor under 11 U.S.C.A. § 522(b)(3)(A) specifically does not so authorize.Same line -- change citation from 522(b) to 522(b)(2)203 ¶ following problem 5.30 -- last line -- change 5-24 to 5-26204 change the exhibit number from 5-24 to 5-26204 2nd ¶, 1st line -- change "alimony, maintenance, or support secured by the lien." to "a domestic support obligation."205 top of the page -- (ii) -- match the space with (1) and (iii) block quote after Problem 5.33, 5th line -- after "such lien" add "in full at the time of redemption."206 3. Waiver of Exemptions -- block quote -- at the beginning include "(1) Except as provided in paragraph (2)," and lower case "A" and reformat since Rule 4003(b) now has 3 subsections.From the existing block quote, delete the last sentence -- "Copies" Add Insert 5-44Insert 5-44\(2) An objection to a claim of exemption based on § 522(q) shall be filed before the closing of the case. If an exemption is first claimed after a case is reopened, an objection shall be filed before the reopened case is closed.(3) Copies of the objections shall be delivered or mailed to the trustee, the person filing the list, and the attorney for that person207 D. Automatic Stay -- (8) in block quote -- delete "the debtor" and replace with Insert 5-45Insert 5-45A corporate debtor's tax liability for a taxable period the bankruptcy court may determine or concerning the tax liability of a debtor who is an individual for a taxable period ending before the date of the order for relief under this title. 11 U.S.C.A. § 362(a).28 208 After #8 -- delete (b)(2) and replace with Insert 5-46Insert 5-46(2) under subsection (a) -- (A) of the commencement or continuation of a civil action or proceeding-- (i) for the establishment of paternity; (ii) for the establishment or modification of an order for domestic support obligations; (iii) concerning child custody or visitation; (iv) for the dissolution of a marriage, except to the extent that such proceeding seeks to determine the division of property that is property of the estate; or (v) regarding domestic violence; (B) of the collection of a domestic support obligation from property that is not property of the estate; (C) with respect to the withholding of income that is property of the estate or property of the debtor for payment of a domestic support obligation under a judicial or administrative order or a statute; (D) of the withholding, suspension, or restriction of a driver's license, a professional or occupational license, or a recreational license, under State law, as specified in section 466(a)(16) of the Social Security Act; (E) of the reporting of overdue support owed by a parent to any consumer reporting agency as specified in section 466(a)(7) of the Social Security Act; (F) of the interception of a tax refund, as specified in sections 464 and 466(a)(3) of the Social Security Act or under an analogous State law; or (G) of the enforcement of a medical obligation, as specified under title IV of the Social Security Act;209 Before the 2nd EXAMPLE -- delete the three lines of block quote (h) and replace with Insert 5-47Insert 5-47(k)(1) Except as provided in paragraph (2), an individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, may recover punitive damages. (2) If such violation is based on an action taken by an entity in the good 29 faith belief that subsection (h) applies to the debtor, the recovery under paragraph (1) of this subsection against such entity shall be limited to actual damages. 11 U.S.C.A. § 362(k)222 last ¶, 3rd line -- change "ten" to "30"4th line change (e)(3) to (e)(2)223 1st EXAMPLE, 2nd ¶, 3rd line -- change "ten" to "30"¶ before the Owens case, 2nd line -- delete the parenthetical phrase ")more than 20 days after the Owenses received possession of the vehicle).230 line before "B. Equity Security Holders' Proofs of Interest" -- change 5-25 to 5-27231-232 replace Official Form 10 (04/04) with new Official Form 10 (10/05) The new official form is found at www.uscourts.gov/bkforms/bankruptcy_forms.html234 a. Motion to Convergt -- 3rd ¶, 3rd line -- change 5-26 to 5-28 b . Motion to Dismiss the Case -- last line of the ¶ -- change 5-27 to 5-29235 Change the number of the EXHIBIT from 5-26 to 5-28236 Change the number of the EXHIBIT from 5-27 to 5-29237 6th line before EXHIBIT --change 5-29 to 5-31Change the number of the EXHIBIT from 5-28 to 5-30238 Change the number of the EXHIBIT from 5-29 to 5-31 last line of page -- change 5-30 to 5-32239 Change the number of the EXHIBIT from 5-30 to 5-32240 Change the number of the EXHIBIT from 5-30 to 5-32241 Change the number of the EXHIBIT from 5-30 to 5-32245 ¶ after the exhibit -- 4th line -- change 5-31 to 5-33 b. Motion to Dismiss the Case -- 3rd line -- change 3-32 to 5-34Also in b. Motion to Dismiss -- add Insert 5-48 after the 1st ¶30 Insert 5-48A party in interest may move to dismiss a case filed by an individual Chapter 7 debtor whose debts are primarily consumer debts on the ground that the granting of relief would be an abuse of the provisions of Chapter 7. The abuse may be actual abuse of the Chapter 7 provisions or presumed abuse as described in the Chapter 7 means test. 11 U.S.C.A. § 707(b).246 Change the number of the EXHIBIT from 5-31 to 5-33247 Change the number of the EXHIBIT from 5-31 to 5-333. Motion by the United States Tustee -- 2nd ¶, 3rd line -- delete "a substantial" and replace with "an"At the end of this paragraph add Insert 5-49Insert 5-49If, however, the debtor fails the Chapter 7 means test described in 11 U.S.C.A. § 707(b)(2), the debtor's is presumed to be in abuse of the provisions of Chapter 7 and 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. 11 U.S.C.A. § 707((b)(2)(B)(i).248 Change the number of the EXHIBIT from 5-32 to 5-34249 EXAMPLE -- 5th line -- delete "substantial" add a second paragraph to the EXAMPLE -- Inert 5-50.Insert 5-50The McPhersons's problems are compounded by the 2005 amendments to the Bankruptcy Code that deletes the adjetive "substantial" before the term "abuse" and adds the concept of "presumed abuse." The paralegal must now help the McPhersons complete Official Form B22A (Statement of Current Monthly Income and Means Test Calculation (Chapter 7)). If the McPhersons fail the Chapter 7 means test, their case will be dismissed or, if they consent, their case will be converted to Chapter 13. If, under the means test, they are presumed to be in abuse of the provisions of Chapter 7, the presumption may only be rebutted by a demonstration of 31 special circumstance, circumstances that the McPhersons cannot demonstrate. 11 U.S.C.A. § 707(b).249 1st ¶ after the EXAMPLE -- 1st line - after "statute" and before the comma add "prior to the 2005 amendments1st line -- change "is" to "was"1st line -- change "do" to "did"2nd line -- change "holds" to "held"3rd line -- change "can" to "could"3rd line -- change "is" to "WAS"4th line -- change the first "is" to was"4th line -- change the second "is" to "was"5th line -- change "include' to "included"6th line -- change "is" to "was"7th line -- change "is" to "was"2nd ¶ after EXAMPLE -- 1st line -- change "are" to "were"2nd line -- change "is" to "was"2nd line -- change "cannot" to "could not"4th line -- change "can and should" to "could"4th line -- change "are" to "were"4th line -- change "may" to "could" 3rd after EXAMPLE --1st line -- after "In re May" add a comma and "a case before the 2005 amendments," 1st line -- change "involves" to "involved"251 After the case, add Insert 5-51Insert 5-5132 Remember that 11 U.S.C.A. § 707(b) was changed by the 2005 amendments so "substantial" abuse is no longer required. The debtor's Chapter 7 case can be dismissed for abuse, actual or presumed. Consider the facts in In re May in light of Official Form B22A, a form available at www.uscourts.gov/bkforms/bankruptcy_forms.html. Will May's Chapter 7 case be dismissed for presumed abuse?252 2nd ¶ -- 3rd line -- change "a sub stantial" to "an" same line -- after "Chapter 7." Add the following sentence -- "The abuse may be actual or presumed under the Chapter 7 means test.B. 1. a. -- 2nd ¶, 2nd line -- after "activity" and before the end of the paren -- add "including the debtor's failure to file a statement regarding completion of a course in personal financial management as required by Fed. R. Bank. P. 1007(b)(7)Same ¶ -- 4th line -- change 5-33 to 5-35255 b. Complaint Objecting to -- 1st ¶, 3rd line -- change 5-34 to 5-36259 Change the number of the EXHIBIT from 5-33 to 5-35260 Change the number of the EXHIBIT from 5-33 to 5-35261 Change the number of the EXHIBIT from 5-34 to 5-36262 Change the number of the EXHIBIT from 5-34 to 5-364. Complaint by the Debtor -- in the title -- change "Objecting to" top "to Determine"1st line -- change "objecting to" to " to determine"1st line -- after the word "debt" -- change the period to a comma and add"particularly if the debtor desires the bankruptcy court, rather than another court with concurrent jurisdiction, to make the determination."263 Section 7 -- 3rd line -- change 5-35 to 5-37 and change 5-37 to 5-39Section 8 -- after the last ¶ of the page, add Insert 5-52Insert 5-5233 If an objection to a claim of exemption is not timely filed, the exemption is allowed even if there was no colorable basis for the exemption. 11 U.S.C.A. § 522(l). See Taylor v. Freeland & Kronz, 503 U.S. 638 (1992).264 Change the number of the EXHIBIT from 5-35 to 5-37 and replace Official Form B9A (12/03) with the new Official Form B9A (10/05) found at www.uscourts.gov/bkforms/bankruptcy_forms.html265 Change the number of the EXHIBIT from 5-35 to 5-37 and replace the Explanations to Official Form B9A (12/03) with the new Explanations to Official Form B9A (10/05) found following B9A at www.uscourts.gov/bkforms/bankruptcy_forms.html266 Change the number of the EXHIBIT from 5-36 to 5-38 and replace Official Form B9C (12/03) with the new Official Form B9C (10/05) found at www.uscourts.gov/bkforms/bankruptcy_forms.html267 Change the number of the EXHIBIT from 5-36 to 5-38 and replace the Explanations to Official Form B9C (12/03) with the new Explanations to Official Form B9C (10/05) found following B9C at www.uscourts.gov/bkforms/bankruptcy_forms.html268 Change the number of the EXHIBIT from 5-37 to 5-39 and replace Official Form B9D (12/03) with the new Official Form B9D (10/05) found at www.uscourts.gov/bkforms/bankruptcy_forms.html269 Change the number of the EXHIBIT from 5-37 to 5-39 and replace the Explanations to Official Form B9D (12/03) with the new Explanations to Official Form B9D (10/05) found following B9D at www.uscourts.gov/bkforms/bankruptcy_forms.html270 A. THE MEETING OF CREDITORS -- after the last sentence in this 3 line as the final sentence to the ¶ -- Insert 5-53.Insert 5-53A creditor need not be represented by an attorney to appear and participate at a meeting of creditors. 11 U.S.C.A. § 341(c).A. 1. -- 1st ¶ -- 5th line -- delete the sentence beginning with "The scope of this examination" and ending with "2004(b)."271 Section 10 -- delete the one sentence ¶ and replace with Insert 5-5434 Insert 5-54An individual debtor under Chapter 7 may redeem property encumbered by a lien that cannot be avoided or may reaffirm the debt secured by the lien. A debtor’s intention in that regard must be reflected in a statement of intention (Official Form B8) filed within the earlier of 30 days of the filing of the petition or the meeting of creditors. 11 U.S.C.A. § 521(a)(2)(A). If the debtor does not timely perform the stated intention, the automatic stay is modified and the property is abandoned as property of the estate, thereby permitting the creditor to take whatever action is permitted with respect to the property under non-bankruptcy law (such as repossess the collateral).A. Redemption -- add Insert 5-55 at the end of the 1st ¶, last sentence.` Insert 5-55The redemption payment must be paid in full at the time of the redemption; the redemption amount may not be paid in installments. The paragraph after EXAMPLE ("Shortly") is a part of the EXAMPLE so the font and type size should be changed and it should be indented to follow the text in the first ¶ of the EXAMPLE.272 2nd ¶, last sentence ("Court approval") -- move to the end of the 1st ¶.2nd ¶, 1st line -- add "two" after the word "past" and add an "s" to "decade"2nd ¶, 3rd line -- delete the remaining sentenceds beginning with "This agreement" through "dependents." And replace with Insert 5-56Insert 5-5611 U.S.C.A. § 524(c)(2) requires that the debtor receive certain disclosures at or before the time the debtor signs the reaffirmation agreement. The contents of the disclosure statement are reflected in 11 U.S.C.A. § 524(k)(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 35 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, then36 (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 $___ is due on ___ 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 agreement37 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 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 38 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.The reaffirmation agreement must include a certification by the debtor’s attorney that: the agreement is fully informed and voluntary; the reaffirmation agreement does not impose a hardship on the debtor or a dependent of the debtor; the attorney has fully advised the debtor of the legal effect and consequences of the agreement and any default under the agreement; and that in the attorney’s opinion the debtor will be able to make the payment. 11 U.S.C.A. § 524(k)(5). A creditor may accept a payment before or after a reaffirmation agreement is filed. A creditor may accept a payment from a debtor under an agreement that the creditor believes in good faith to be effective. 11 U.S.C.A. § 524(l). 272 3rd ¶, 4th line -- change 5-38 to 5-40 and 5-39 to 5-41 block quote before C. REVOCATION OF DISCHARGE -- 2nd line -- a dash after "shall"39 273-276 Change the number of the EXHIBIT from 5-38 to 5-40 and replace Proced8ural Form B240 (03/99) with the new Procedural Form B240 (10/05) found at www.uscourts.gov/bkforms/bankruptcy_forms.html277 Change the number of the EXHIBIT from 5-39 to 5-41278 Section 11 -- 1st ¶, 2nd line -- change "704(1)" to "704(a)(1)"1st ¶, 3rd line -- after "distribution" and before the period insert "with the court and the United States trustee. Once the United States trustee approved the report, the Chapter 7 trustee will file a final report proposing how the funds in the estate will be distributed and, if applicable, fee applications.2nd ¶, 1st line -- change "Sectgion" to 11 U.S.C.A. §2nd ¶, 2nd line -- change both references to "sectrion" to 11 U.S.C.A. §A. PRIORITY CLAIMS -- 1st line -- after "include" add "domestic support obligations;"1st ¶, 2nd line -- delete "debtsd owed for alimony, maintenance, or support'" after the 1st ¶ and b efore Administrative Expenses add Insert 5-57Insert 5-571. Domestic Support Obligations Domestic Support Obligations is defined in 11 U.S.C.A. § 101(14A) includes obligations owed to a spouse, former spouse or child of the debtor in the nature of alimony, maintenance or support, even if assigned to a governmental entity for the collection of a debt. 11 U.S.C.A. § 507(a)(1).Domestic Support Obligations are, however, subordinate to administrative expenses but only to the extent that the trustee administers assets that benefit domestic support claimants. EXAMPLE Jennifer Smithson, as Chapter 7 trustee, has avoided an unperfected security interest in the debtor’s automobile, has sold the vehicle and has the sales proceeds available for distribution to creditors. Since the trustee’s efforts to avoid the unperfected security interest produced the money available to pay the domestic support claims, the trustee’s fees and expenses and the trustee’s attorney fees and expenses (both of which are allowed under 11 U.S.C.A. § 330) are entitled to priority over Domestic Support Obligations. 40 Change 1 to 2 and citation (a)(1) to (a)(2).Change 2 to 3 and citation (a)(2) to (a)(3)Change 3 to 4, the amount from $4,650 to $10,000 and the days from 90 to 180 and the citation (a)(3) to (a)(4) In the EXAMPLE, change $4,650 to $10,000 and 90 days to 180 days279 In the EXAMPLE, change 90 to 189, $6,000 to $12,000, 90 to 189, $6,000 to $12,000 $4,925 to $10,000 and $1,075 to $2,000279 Change 4 to 5, the amount from $4,925 to $10,00, and the citation (a)(4) to (a)(5)In the EXAMPLE change $3,000,000 to $6,000,000, $4,925 to $10,000 $2,462,500 to $5,000,000, $2,462,500 to $5,000,000, and $537,500 to $1,000,000Change 5 to 6, the amount from $4,925 to $10l,000 and the citation (a)(5) to (a) (6)Change 6 to 7 and citation (a)(6) to (a)(7)Delete "7. Alimony, Maintenance, and Support Claims Allowed claims, through 507(a)(7)280 after the ¶ for 9 and before "BV. Nonpriority Claims" add Insert 5-58Insert 5-5810. Drunk Driving ClaimsClaims for death or personal injury (but not property damage) 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, are entitled to the tenth priority in payment. 11 U.S.C.A. § 503(a)(10). 281 Section 12, 2nd line -- after "estate" and before the period add "filed with the court and the United States trustee. Once the United States trustee approved the report, the Chapter 7 trustee will file a final report proposing how the funds in the estate will be distributed and, if applicable, fee applications.A. Trustee's Final Report -- 1st line -- change 5-40 to 5-4141 2nd ¶, 2nd line -- change 5-41 to 5-43B. Trustee's Final Account -- 6th line -- 5-42 to 5-447th line -- change 5-43 to 5-45C. Closing the Case1st line -- 5-44 to 5-46282-287 change EXHIBIT 5-40 to 5-42287 after the first two lines, add Insert 5-59Insert 5-59A. DOMESTIC SUPPORT OBLIGATIONS (U.S.C.A. § 507(a)(1)):1. Obligations owed to or recoverable by a spouse, former spouse, or child of the debtor, or such child's parent, legal guardian, or responsible relative (list) name relationship Amount to be Paid ______total $ ______2. Obligations assigned by a spouse, former spouse, or child of the debtor, or such child's parent, legal guardian, or responsible relative to a governmental unit( list) name relationship assigned to Amount to be Paid ______total $ ______3. Trustee's administrative expenses to be paid before 1 and 2 (list) type of expense Amount to be Paid42 ______total $______287 former line "A. ADMINISTRATIVE EXPENSES" -- change "A" to "B" and change (a)(1) to (a)(2)288 change EXHIBIT 5-40 to 5-42 change (a)(1) to (a0(2) change ?B? to ?C"Change "C" to "D" Change (a)(3) to (a)(4)289 change EXHIBIT 5-40 to 5-42 change (a)(4) to (a)95) change (a)(7) to (a)(8)Change "D" to "E"290 change EXHIBIT 5-40 to 5-42 change "E" to "F" under TOTAL PROPOSED DISTRIBUTION and before Administrative Expenses add:Domestic Support Obligation s $______291 change Exhibit 5-41 to 5-43292 change EXHIBIT 5-42 to 5-44293-294 Change EXHIBIT 5-43 to 5-45295 Change EXHIBIT 5-44 to 5-4643 iin the brackets after the debtor's name -- change 6 to 844

Chapter 5 (The Voluntary Chapter 7 Bankruptcy (Liquidation) (Pp. 88-297)

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