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Consumer Bankruptcy Law and Practice: 1.1.3 Bankruptcy’s Past as a Neglected Remedy

Despite its potential importance to consumer clients, the use of bankruptcy law is avoided by some attorneys. These practitioners see bankruptcy as an intimidating maze of paperwork in an unfamiliar and sometimes (for rural offices) inconvenient forum. And, perhaps, a touch of the old-time stigma still remains from the early days of consumer debtor representation, that saw bankruptcy as a lazy cop-out, either for client or lawyer, if not just a bit immoral.

Consumer Bankruptcy Law and Practice: 1.1.4 Making Bankruptcy Available to Consumer Clients

It is incumbent upon those who represent financially troubled clients to have a basic knowledge of what can be accomplished through the use of bankruptcy. Not only may such knowledge save a client thousands of dollars, a home, a car, or a job, but it may accomplish these desired results better, faster, and with less expenditure of attorney and client resources than any other means. The bankruptcy court may be a more favorable forum for the raising of affirmative claims and may dispose of them more quickly.

Consumer Bankruptcy Law and Practice: 1.3.1 Purpose of the Treatise

This treatise is intended to serve as a basic resource to advocates, both attorneys and paralegals working with attorneys, handling bankruptcy cases. It is meant to provide an introduction for the novice considering their first bankruptcy case and also a useful tool for the expert who has handled many such cases. It should be serviceable both as a quick reference in offices with substantial libraries as well as a fairly complete basic resource in those offices that maintain only a minimal library immediately accessible.

Consumer Bankruptcy Law and Practice: 1.3.3 Organization of the Treatise

Volume One contains the text chapters, bibliography, and index, while Volume Two contains the appendices. Additional pleadings, primary sources, and practice tools are available online as companion material to the online treatise.

To facilitate Volume One’s use by the various constituencies to which it is addressed, it is divided into several parts. Although there are frequent cross-references, each part has a different purpose.

Consumer Bankruptcy Law and Practice: 1.3.4 Pleadings, Primary Sources, and Practice Tools

The digital version of this treatise includes pleadings and discovery, practice tools, and primary sources, that can easily be downloaded, emailed, and cut and pasted into documents. They may be found using either the Companion Material tab found at the top of the left pane of any subsection in the treatise and are fully searchable. Search filters allow users to search only for pleadings, only for primary sources, or only for practice tools. Additional filters for each category of companion material allow one to further narrow a search with or without a search term.

Consumer Bankruptcy Law and Practice: 1.3.5.1 This Treatise Does Not Contain Citations to Every Relevant Case

The number of reported cases on consumer bankruptcy issues has far outstripped the space in this treatise to catalogue them. The text of the treatise discusses a wide variety of issues that may arise in consumer cases. The footnotes contain case law that will serve as a starting point for research. We have attempted, whenever possible, to include the relevant court of appeals decisions on the topics discussed as well as other cases that support the arguments a consumer may wish to make. However, do not expect to find all relevant cases on any topic or cases in each jurisdiction.

Consumer Bankruptcy Law and Practice: 1.3.5.2 Other NCLC Treatises

Consumer law questions on issues other than bankruptcy often arise in the context of a bankruptcy case. For example, bankruptcy clients are often the victims of debt collection abuses and may have causes of action to remedy those abuses. Similarly, creditor overcharges can often result in overstated claims.

Consumer Bankruptcy Law and Practice: 1.4.1.1 The Bankruptcy Code

The most important source of law in bankruptcy cases is, of course, the statute itself. The Bankruptcy Code, which is title 11 of the United States Code, was meant to be a comprehensive body of law, gathering from other parts of the United States Code all those provisions dealing with the substantive law of bankruptcy.

Consumer Bankruptcy Law and Practice: 1.4.2 The Federal Rules of Bankruptcy Procedure

Complementing the statute’s mostly substantive provisions are the Federal Rules of Bankruptcy Procedure, also known as the Bankruptcy Rules, which were promulgated by the Supreme Court in 1983 and amended at various times since then.82 These rules provide detailed guidelines in numerous areas not specifically covered by the Code. They cover the procedures not only for administering the bankruptcy petitions themselves, but also for proceedings within or related to the principal bankruptcy case.83

Consumer Bankruptcy Law and Practice: 1.4.4.1 Pending Legislation and Amendments to the Rules

Nearly every year there are a variety of efforts to amend the Bankruptcy Code, rules, and official forms. Some of these efforts come to fruition and others do not. Careful attention to the progress of those amendments and their effective dates is required.

In addition, potential changes to the rules and forms are almost always percolating through the system. The progress of proposed amendments can be tracked at the United States Courts’ website.104

Consumer Bankruptcy Law and Practice: 1.4.4.3 Local Bankruptcy Rules

In addition to the Bankruptcy Rules, practitioners should refer to any local rules106 and local practice to fill in gaps in interpretation. Pursuant to the policy of the federal Judicial Conference, local bankruptcy rules are generally numbered to correspond to the Federal Rules of Bankruptcy Procedure to which they relate. Some courts may also promulgate local “procedural orders” applying to all cases before that court.

Consumer Bankruptcy Law and Practice: 1.4.4.4 Case Law Under the Code

Over the years, many bankruptcy cases under the Code have reached the United States Supreme Court. Although the Supreme Court’s definitive holdings reach only limited specific issues in bankruptcy law, two important guiding principles have been enunciated on several occasions.

Consumer Bankruptcy Law and Practice: Introduction

Appendix A.1 contains the complete text of chapters 1, 3, and 5, subchapters I and II of chapter 7, subchapters I, II, III, and V of chapter 11, and the complete text of chapters 12 and 13 of title 11 of the United States Code, as amended through June 2022. Included in this appendix are changes made to the dollar amounts effective April 1, 2022, and amendments enacted by the Bankruptcy Threshold Adjustment and Technical Corrections Act, Pub. L. No. 117–151, 136 Stat. 1298 (June 21, 2022).

Consumer Bankruptcy Law and Practice: Chapter 1

TITLE 11—BANKRUPTCY

CHAPTER 1—GENERAL PROVISIONS

§ 101. Definitions

§ 102. Rules of construction

§ 103. Applicability of chapters

§ 104. Adjustment of dollar amounts

§ 105. Power of court

§ 106. Waiver of sovereign immunity

§ 107. Public access to papers

§ 108. Extension of time

§ 109. Who may be a debtor

§ 110. Penalty for persons who negligently or fraudulently prepare bankruptcy petitions

Consumer Bankruptcy Law and Practice: Chapter 3

CHAPTER 3—CASE ADMINISTRATION

SUBCHAPTER I—COMMENCEMENT OF A CASE

§ 301. Voluntary cases

§ 302. Joint cases

§ 303. Involuntary cases

§ 305. Abstention

§ 306. Limited appearance

§ 307. United States trustee

§ 308. Debtor reporting requirements

SUBCHAPTER II—OFFICERS

§ 321. Eligibility to serve as trustee

§ 322. Qualification of trustee

§ 323. Role and capacity of trustee

§ 324. Removal of trustee or examiner

Consumer Bankruptcy Law and Practice: Chapter 5

CHAPTER 5—CREDITORS, THE DEBTOR, AND THE ESTATE

SUBCHAPTER I—CREDITORS AND CLAIMS

§ 501. Filing of proofs of claims or interests

§ 502. Allowance of claims or interests

§ 503. Allowance of administrative expenses

§ 504. Sharing of compensation

§ 505. Determination of tax liability

§ 506. Determination of secured status

§ 507. Priorities

§ 508. Effect of distribution other than under this title

§ 509. Claims of codebtors

§ 510. Subordination

Consumer Bankruptcy Law and Practice: Chapter 7

CHAPTER 7—LIQUIDATION

SUBCHAPTER I—OFFICERS AND ADMINISTRATION

§ 701. Interim trustee

§ 702. Election of trustee

§ 703. Successor trustee

§ 704. Duties of trustee

§ 705. Creditors’ committee

§ 706. Conversion

§ 707. Dismissal of a case or conversion to a case under chapter 11 or 13

SUBCHAPTER II—COLLECTION, LIQUIDATION, AND DISTRIBUTION OF THE ESTATE

§ 721. Authorization to operate business

§ 722. Redemption

Consumer Bankruptcy Law and Practice: Chapter 11

CHAPTER 11—REORGANIZATION

SUBCHAPTER I—OFFICERS AND ADMINISTRATION

§ 1101. Definitions for this chapter

§ 1102. Creditors’ and equity security holders’ committees

§ 1103. Powers and duties of committees

§ 1104. Appointment of trustee or examiner

§ 1105. Termination of trustee’s appointment

§ 1106. Duties of trustee and examiner

§ 1107. Rights, powers, and duties of debtor in possession

§ 1108. Authorization to operate business

§ 1109. Right to be heard

Consumer Bankruptcy Law and Practice: Chapter 12

CHAPTER 12—ADJUSTMENT OF DEBTS OF A FAMILY FARMER OR FISHERMAN WITH REGULAR ANNUAL INCOME

SUBCHAPTER I—OFFICERS, ADMINISTRATION, AND THE ESTATE

§ 1201. Stay of action against codebtor

§ 1202. Trustee

§ 1203. Rights and powers of debtor

§ 1204. Removal of debtor as debtor in possession

§ 1205. Adequate protection

§ 1206. Sales free of interests

§ 1207. Property of the estate

§ 1208. Conversion or dismissal

SUBCHAPTER II—THE PLAN