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Consumer Bankruptcy Law and Practice: 2020-02 Advisory Committee Note on Form 309

Official Forms 309E2 and 309F2 are new. They are promulgated 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. Because a trustee is always appointed in a subchapter V case, both forms require the name and contact information of the trustee to be provided. Previously existing Official Forms 309E and 309F have been renumbered 309E1 and 309F1, respectively. Other changes are stylistic.

Consumer Bankruptcy Law and Practice: 17.1.4.2 The Farm Credit System

The Farm Credit System (FCS) is a network of federally chartered borrower-owned cooperatives that was specifically created to provide a competitive source of agricultural credit.48 It now stands as the largest competitor to commercial banks, holding the second largest portfolio of outstanding agricultural loans.

Consumer Bankruptcy Law and Practice: 17.1.4.3 The Farm Service Agency Loan Programs

The Farm Service Agency (FSA), formerly the Farmers Home Administration (FmHA), is a federal agency within the United States Department of Agriculture (USDA) that was created expressly for the purpose of providing loans to family farmers that are unable to obtain credit from conventional sources.50 FSA farm loan programs also target certain groups by reserving a portion of loan funding for use by socially disadvantaged (SDA) family farmers and beginning farmers.51 FSA’s mission recognizes imperfecti

Consumer Bankruptcy Law and Practice: Official Form 318 Instructions

DISCHARGE OF THE DEBTOR—CHAPTER 7

General Information

The discharge is a court order that grants a discharge of debts to the person named as the debtor. Official Form 318 covers only an individual or joint debtor(s) in a chapter 7 case. There are other procedural forms issued by the Director of the Administrative Office of the United States Courts for use in cases filed in chapter 12 and chapter 13 cases.

Consumer Bankruptcy Law and Practice: 2015 Advisory Committee Note on Form 318

Official Form 318, Order of Discharge, is revised and renumbered as part of the Forms Modernization Project. The form is used to issue a discharge in chapter 7 cases filed by individuals or joint debtors. It replaces former Official Form 18, Discharge of Debtor, Director’s Procedural Form 18J, Discharge of Joint Debtors, and Director’s Procedural Form 18JO, Discharge of One Joint Debtor.

Consumer Bankruptcy Law and Practice: 17.2.2.4.2 Debt ceiling

A family farmer’s “aggregate debts” cannot exceed $11,097,350.131 This maximum amount is adjusted every three years based on the Consumer Price Index.132 The same debt ceiling applies to family farm corporations and partnerships.133 In a joint case the aggregate debt ceiling applies to both an individual and their spouse together.

Consumer Bankruptcy Law and Practice: 17.2.2.4.3 Debt arising from the farm operation or commercial fishing operation

Another requirement for individual “family farmer” status is that at least fifty percent of the debtor’s aggregate noncontingent liquidated debt must arise from the farming operation owned or operated by the farmer.146 A debt for the debtor’s principal residence is excluded from this computation unless the debt arises out of the farming operation.147 The same requirement applies to partnerships and corporations.148

Consumer Bankruptcy Law and Practice: 17.2.2.4.4 Income arising from the farming operation or the commercial fishing operation

In order to be a “family farmer,” an individual or married couple must have received at least fifty percent of their gross income from the farming operation, either in the taxable year immediately preceding the tax year in which the bankruptcy petition is filed or in each of the second and third taxable years preceding the year of filing.154 This fifty percent income requirement does not apply to farm partnerships or corporations.155

Consumer Bankruptcy Law and Practice: 17.2.2.5 Joint Chapter 12 Filings

Joint filings under chapter 12 by both spouses are permitted.186 A debtor may also file an individual case without including a spouse; or spouses may file individual cases and move for joint administration of the cases, provided each individually meets the eligibility requirements.187 Many farm loans will have both spouses as signatories, making a joint filing desirable.188

Consumer Bankruptcy Law and Practice: 17.2.3.2 Appointment of Counsel

Because the debtor in chapter 12 operates as a debtor-in-possession and because of the amount of the fees that may be involved, the Code requires the same application process for chapter 12 cases as for chapter 11, with application for appointment of counsel and an order approving the application.195 Such appointment should be routinely granted unless some conflict of interest or perceived inability competently to represent a debtor due to time constraints or past unacceptable performances is apparent.196

Consumer Bankruptcy Law and Practice: 17.2.3.3 Costs and Attorney Fees

The non-waivable filing fee for a chapter 12 case, whether individual, joint, corporate, or partnership, is $200.199 There is also a $78 administrative fee due in every case. Counsel for the chapter 12 debtor should check the local rules and orders of the applicable court for imposition of other charges attendant to a chapter 12 filing.

Consumer Bankruptcy Law and Practice: 17.2.4 Voluntary Conversion from Other Chapters to Chapter 12

Chapter 7: Section 706(a) provides an absolute right to convert from a chapter 7 bankruptcy to one under chapter 12, provided there has been no previous conversion.

Chapter 11: Section 1112(d) allows conversion from a chapter 11 case to one under chapter 12 at the request of the debtor if the debtor has not received a discharge under section 1141(d) and the conversion is found to be “equitable.”

Consumer Bankruptcy Law and Practice: Official Form 410A Instructions

Official Form 410A Instructions for Mortgage Proof of Claim Attachment

Introduction

This form is used only in individual debtor cases. When required to be filed, it must be attached to Proof of Claim (Official Form B410) with other documentation required under the Federal Rules of Bankruptcy Procedure.

Applicable Law and Rules

Consumer Bankruptcy Law and Practice: About the Form

Bankruptcy Rule 3002.1(b) requires a mortgage creditor to “file and serve on the debtor, debtor’s counsel, and the trustee a notice of any change in the payment amount, including any change that results from an interest rate or escrow account adjustment, no later than 21 days before a payment in the new amount is due.” The notice must be given using this Official Form 410S1, Notice of Mortgage Payment Change (formerly Form 10 (Supplement 1)).