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Consumer Bankruptcy Law and Practice: 18.5.2.4 Consumers’ Right to Recoupment
The consumer creditor is often subject to an obligation to pay money to a debtor in bankruptcy. This payment obligation can arise from a loan, a lease, a sales finance agreement, a service contract, or a variety of other transactions. The existence of such an obligation owed to the debtor may trigger the consumer’s right to seek recoupment.
Consumer Bankruptcy Law and Practice: 18.5.4.1 Generally
In some circumstances, particular debts may be declared nondischargeable.
Consumer Bankruptcy Law and Practice: 18.10 Other Mechanisms to Protect Consumers in Business Bankruptcies
The 2005 amendments created two new mechanisms to protect consumers in business bankruptcies.
Consumer Bankruptcy Law and Practice: 12.2.1 Overview
A threshold issue, which can occasionally be troublesome, concerns eligibility to file a chapter 13 case. In addition to section 109(a) and the section 109(h) credit counseling requirement, which are applicable to cases under all chapters filed by individual debtors, the key chapter 13 eligibility provision is section 109(e) of the Code. That section provides that to be a chapter 13 debtor, the debtor must:
Consumer Bankruptcy Law and Practice: 12.2.2 Individuals with Regular Income
Probably the most common issue for low-income debtors is whether the debtor is an “individual with regular income.” This phrase is defined in section 101(30) as an “individual whose income is sufficiently stable and regular to enable such individual to make payments under a plan under chapter 13.” The legislative history makes clear that the intent of the statute is to include others besides wage earners, and to expand eligibility to recipients of public benefits such as welfare and Social Security, small business proprietors, and those supported by other income such as alimony or pensions
Consumer Bankruptcy Law and Practice: 18.7.2.5 The United States Trustee
In 1986, after a period of experimentation, Congress established a permanent United States trustee system, covering every state except Alabama and North Carolina.526 The United States Attorney General appoints United States trustees for twenty-two regions around the country, each region composed of one or more judicial districts.527 Assistant United States trustees may also be appointed.528
Consumer Bankruptcy Law and Practice: 18.7.3 Appointment of a Creditors’ Committee
At the meeting of creditors,538 or perhaps at a separate meeting of creditors holding the largest unsecured claims, the creditors will determine if they wish to form an official creditors’ committee.
Consumer Bankruptcy Law and Practice: 18.7.4.2 General Standards
Section 1104 permits the court on the request of a party in interest or the United States trustee to order the appointment of a trustee “[f]or cause, including fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management either before or after the commencement of the case, or similar cause”; or in the (best) interests of the creditors.565
Consumer Bankruptcy Law and Practice: 18.7.4.3 Grounds for Appointment of a Trustee Under Section 1104(a)(1)
Section 1104(a)(1) allows appointment of a trustee for “cause,” which includes “fraud, dishonesty, incompetence or gross mismanagement,” but nothing in the section requires that cause be limited to only those four transgressions.
Consumer Bankruptcy Law and Practice: 18.7.4.4 Grounds for Appointment of a Trustee Under Section 1104(a)(2)
Even absent a finding of cause under subsection 1104(a)(1), the court may appoint a trustee if it is in the best interests of the parties.589 Subsection 1104(a)(2) provides a flexible standard for the appointment of a trustee,590 allowing the court to exercise equity powers to appoint a trustee to protect the interests of creditors, equity security holders, and other interests in the debtor’s estate.591 Unlike the “cause” standard, the “be
Consumer Bankruptcy Law and Practice: 18.7.4.5 Appointment of a Trustee for Fraud, Dishonesty, or Criminal Conduct by Insiders
Section 1104(e), added by the 2005 amendments, directs the United States trustee to move for the appointment of a trustee if there are reasonable grounds to suspect that officers or insiders of the debtor participated in “actual fraud, dishonesty, or criminal conduct” in managing the entity or in preparing its financial reports.599
Consumer Bankruptcy Law and Practice: 18.7.4.6 Appointment of an Examiner
Another mechanism available to creditors under chapter 11 is to move for appointment of an examiner.
Consumer Bankruptcy Law and Practice: 18.7.4.7 Practice and Procedure
An application for appointment of a trustee or an examiner is by motion and may be made by any party in interest or by the United States trustee.611 A trustee may also be appointed by the court sua sponte.612 Although the motion can be filed at any time, the court may be reluctant to appoint a trustee or an examiner based on prepetition mismanagement. It may therefore, be preferable to wait for evidence of postpetition misconduct.
Consumer Bankruptcy Law and Practice: Bankruptcy and Consumer Blogs
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Consumer Bankruptcy Law and Practice: K.1 Introduction
This appendix contains three client handouts. The National Consumer Law Center provides copyright permission for individuals and organizations to copy or adapt these handouts for distribution without charge to consumers. No permission is granted to include these materials in other publications for sale.
Consumer Bankruptcy Law and Practice: K.2 Answers to Common Bankruptcy Questions
A decision to file for bankruptcy should be made only after determining that bankruptcy is the best way to deal with your financial problems. This brochure cannot explain every aspect of the bankruptcy process. If you still have questions after reading it, you should speak with an attorney familiar with bankruptcy.
What Is Bankruptcy?
Consumer Bankruptcy Law and Practice: K.3 Your Legal Rights During and After Bankruptcy: Making the Most of Your Bankruptcy Discharge
Bankruptcy is a choice that may help if you are facing serious financial problems. You may be able to cancel your debts, stop collection calls, and get a fresh financial start. Bankruptcy can help with some financial problems, but does not guarantee you will avoid financial problems in the future. If you choose bankruptcy, you should take advantage of the fresh start it offers and then make careful decisions about future borrowing and credit, so you won’t ever need to file bankruptcy again!
How Long Will Bankruptcy Stay on My Credit Report?
Consumer Bankruptcy Law and Practice: K.4 Using Credit Wisely After Bankruptcy
Beware of Credit Offers Aimed at Recent Bankruptcy Filers
“Disguised” Reaffirmation Agreement
Carefully read any credit card or other credit offer from a company that claims to represent a lender you listed in your bankruptcy or own a debt you discharged. This may be from a debt collection company that is trying to trick you into reaffirming a debt. The fine print of the credit offer or agreement will likely say that you will get new credit, but only if some or all of the balance from the discharged debt is added to the new account.
Consumer Bankruptcy Law and Practice: D.1.2 The Initial Forms
It is common for offices that handle significant numbers of bankruptcy cases to use special computer programs that generate bankruptcy forms based on input data. There are a wide range of such programs now on the market. For offices which do not currently have ready access to such a program, the simplest alternative is to use the blank Official Forms that are available for download in Adobe Acrobat (PDF) fillable format on the website of the Administrative Office of the U.S.
Consumer Bankruptcy Law and Practice: D.1.3 Permitted Alterations to the Official Forms
Federal Rule of Bankruptcy Procedure 9009(a) provides that the Official Forms shall be used without alteration, except as otherwise provided in the rules, in a particular Official Form, or in the national instructions for a particular Official Form.
Consumer Bankruptcy Law and Practice: D.1.4.1 Overview
Almost every bankruptcy court requires the filing of bankruptcy forms electronically. Whatever format in which the documents were created, the forms must be filed in Adobe Acrobat (PDF) format. This format is similar to an electronic photograph of the original document. An exception to the PDF requirement is that the creditor mailing list is filed in ASCII text (.txt) format.
Consumer Bankruptcy Law and Practice: D.1.4.2 Converting Documents to Adobe Acrobat (PDF) Format
Sample pleadings found in Appendix G, infra, are available in Microsoft Word format (to facilitate adapting the pleading for a particular case) as companion materials to this treatise under “Pleadings and Discovery.” These pleadings, and any other documents to be filed electronically and not already in Adobe Acrobat (PDF) format, must be converted to PDF format.
Consumer Bankruptcy Law and Practice: 2022-04 Staff Notation
The CARES Act changes Official Forms 122A-1, 122B, and 122C-1 described in the 2020-04 Committee Note lapsed on March 27, 2022. The three forms have reverted to their pre-CARES Act versions (December 2019 in the case of 122A-1, October 2019 as amended in December 2021 in the case of 122B, and October 2019 in the case of 122C-1). In addition, the dollar amounts listed in lines 29 and 40 of 122A-2, and line 29 of 122C-2 are adjusted effective April 1, 2022, as part of the tri-annual dollar adjustments required by 11 U.S.C. § 104.
Consumer Bankruptcy Law and Practice: 2021-12 Committee Note
Official Form 122B is amended in response to the enactment of the Small Business Reorganization Act of 2019, Pub. L. No. 116-54, 133 Stat. 1079. That law gives a small business debtor the option of electing to be a debtor under subchapter V of chapter 11. As amended, the initial instruction in the form includes an exception for subchapter V cases. Because Code § 1129(a)(15) is inapplicable to such cases, there is no need for an individual debtor in a subchapter V case to file a statement of current monthly income.