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Bankruptcy Basics: 2013 Advisory Committee Note on Form 3B

This form, which applies only in cases of individual debtors, has been revised as part of the Forms Modernization Project, making the form easier to read and, as a result, likely to generate more complete and accurate responses. Additionally, in calculating the income that determines the debtor’s initial eligibility for a fee waiver, line 2 of the form now directs the debtor to exclude non-cash governmental assistance, such as food stamps and housing subsidies.

Bankruptcy Basics: 2005–2007 Advisory Committee Note on Form 3B

This form is new. 28 U.S.C. § 1930(f), enacted as part of the Bankruptcy Abuse and Consumer Protection Act of 2005, Pub. L. No. 109-8, 119 Stat. 23 (April 20, 2005), provides that “under procedures prescribed by the Judicial Conference of the United States, the district court or the bankruptcy court may waive the filing fee in a case under chapter 7 of title 11 for an individual if the court determines that such individual has income less than 150 percent of the income official poverty line . . .

Consumer Bankruptcy Law and Practice: 12.9.1 Definition of Executory Contract

Another important feature of chapter 13 is found in section 1322(b)(7). This section provides that the debtor has the power to assume or reject any executory contract or unexpired lease. Prior to 2005 this power could be exercised in a chapter 7 case only by the trustee.479 Indeed, a default or anticipated difficulties with respect to an executory contract or lease may be a prime reason for choosing to file under chapter 13.480

Bankruptcy Basics: About the Form

Official Form 106 (formerly Form 6) contains the debtor’s bankruptcy schedules used to comply with section 521(1) of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 1007(b). Official Form 106 must be filed by all debtors without regard to the chapter under which they have filed.

Bankruptcy Basics: Summary of Your Assets and Liabilities and Certain Statistical Information

Accompanying the schedules is a form (Official Form 106Sum) that summarizes the debtor’s debts, property, income, and expenses. The form reports the totals of certain information listed on other forms, and is used for statistical reports that the courts are required by law to prepare and make public. The form is self-explanatory. Bankruptcy software programs will typically insert the applicable figures from the schedules and forms automatically once they are completed. Lines 8 and 9 in part 4 of the form are to be filled out only if the debtor has primarily consumer debts.

Consumer Bankruptcy Law and Practice: 9.7.3.3.1 Valuation problems

Necessarily, the tactics to be followed in litigating to preserve the automatic stay vary from case to case. Certain issues, however, are likely to recur frequently, and certain strategies are likely to be repeatedly useful.

One problem that will very often arise is that of proving the value of property.524 Although the party seeking to lift the stay has the initial burden on the question of equity, it will normally be necessary to have evidence ready to rebut that party’s proof. Obtaining such evidence is not always easy.

Bankruptcy Basics: Schedule A/B

Schedule A/B (Official Form 106A/B) is a list of the debtor’s real and personal property. In this schedule the debtor must list all legal, equitable, and future interests in property. Part 1 of Schedule A/B is a list of the debtor’s real property.

Consumer Bankruptcy Law and Practice: 7.3.7.2.3 Schedule C—property claimed as exempt

Schedule C is the debtor’s list of property claimed as exempt. Normally, it is permissible to incorporate by reference much of the listing in Schedules A/B, by referring to the applicable line on Schedule A/B, in order to avoid repetition, and most bankruptcy software programs are designed to avoid the need to re-enter the debtor’s assets.109 As always, though, local practice should be checked.

Consumer Bankruptcy Law and Practice: 10.2.1.1 Generally

In many states, a debtor may choose from two sets of exemptions. As under the prior law, a debtor in any state may choose to utilize the exemptions provided by state law, as enhanced by section 522(b)(3)(C), and the exemptions provided by federal nonbankruptcy law (for example, laws protecting Social Security benefits and veterans benefits, and so forth). If the debtor chooses the state exemptions, then certain other property of the estate not normally subject to process under state law may also be claimed as exempt.21

Consumer Bankruptcy Law and Practice: 10.2.3.4.1 Introduction

The 2005 Act added three new subsections to section 522 that prevent the debtor from taking full advantage of state homestead exemptions under certain circumstances. These provisions deal with the prepetition conversion of nonexempt property with fraudulent intent (section 522(o)), the acquisition of homestead property within 1215 days before the bankruptcy filing (section 522(p)), and the commission of certain bad acts by the debtor (section 522(q)).

Bankruptcy Basics: Schedule C

Schedule C is a list of the debtor’s exemptions. All possible good faith exemptions should be listed, because if no party in interest files a timely objection, the exemptions will be allowed as listed.

Consumer Bankruptcy Law and Practice: 7.3.7.3.2 Schedule D—secured debts

Schedule D lists all secured creditors. This schedule should include all creditors that hold liens, even if they are undersecured or have a completely unsecured lien, and even if their liens can later be avoided by the debtor or trustee.140 Creditors holding security deposits also should be listed here, as well as creditors holding less noticeable types of security interests, such as those in the refunds of credit insurance.