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Consumer Bankruptcy Law and Practice: C.5.1 Introduction

Section 603(a) of the 2005 bankruptcy amendments, Pub. L. No. 109-8, 119 Stat. 118 (2005), required the United States Department of Justice to establish procedures to audit petitions, schedules, and other information in consumer bankruptcy cases filed on or after October 20, 2006. Pursuant to 28 U.S.C. § 586(f), the Executive Office of the United States Trustees (EOUST) contracted with private accounting firms to audit cases selected by the EOUST.

Consumer Bankruptcy Law and Practice: C.5.3 Information on Debtor Audits

Pursuant to section 603 of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, individuals who file for relief under chapter 7 or chapter 13 of the Bankruptcy Code are subject to audit. At least one out of every 1,000 individual chapter 7 and chapter 13 cases will be randomly selected for audit. In addition, a case may be selected for an exception audit (audit of a case with income or expenditures above a statistical norm).

Fair Debt Collection: Cal. Fin. Code §§ 100000 through 100025 (West) (Debt Collector Licensing)

Coverage: License required for in-state collector seeking to collect from in- or out-of-state consumers, or for out-of-state collector seeking to collect from California consumers. (Statute allows for use of the Nationwide Multiple Licensing System and Registry). § 100000.1. Exceptions for depository institutions, certain consumer lenders, including pawnbrokers, mortgage lenders, real estate professionals, rent-to-own companies, and trustees carrying out non-judicial foreclosures. § 100000.1. Bonding required. § 100019.

Consumer Bankruptcy Law and Practice: Notice Required by 11 U.S.C. § 342(b) for Individuals Filing for Bankruptcy

Section 342(b) requires the clerk of the bankruptcy court to give each consumer debtor a notice prior to the filing of the petition describing the chapters of the Bankruptcy Code under which the debtor may proceed, the services of credit counseling agencies, and the possible consequences of bankruptcy fraud. However, because section 521(a)(1)(B)(iii) requires the debtor’s attorney to file a certification that the attorney delivered the notice to the debtor, a represented debtor will receive the notice from their attorney rather than from the court.

Consumer Bankruptcy Law and Practice: Amendments to Forms

Despite using best efforts to obtain complete and accurate information in preparing the forms, it is not uncommon for errors or omissions to be discovered after the documents are filed. If an amendment is needed, Bankruptcy Rule 1009 provides that the debtor may amend the filed documents as a matter of course at any time before the case is closed.

Consumer Bankruptcy Law and Practice: About the Form

Official Form 101 (formerly Form 1) is the petition used by an individual (or two married individuals filing jointly) to commence a voluntary case under chapter 7, 11, 12, or 13 of the Bankruptcy Code. The filing of the petition constitutes an “order for relief.” 11 U.S.C. §§ 301, 302. It also invokes the automatic stay, which takes effect immediately upon the filing of the petition, subject to certain exceptions. 11 U.S.C. § 362.

Consumer Bankruptcy Law and Practice: Annotations to Completed Sample Form 2030

1. In every case a disclosure of fees paid to the debtor’s attorney must be filed. 11 U.S.C. § 329; Fed. R. Bankr. P. 2016(b). Director’s Form B2030, though not an Official Form, has been promulgated by the Administrative Office of the United States Courts to fulfill this requirement. The purpose of this form is to allow the court and the United States trustee, who also must receive a copy, to monitor fees and to make sure they are reasonable.

Consumer Bankruptcy Law and Practice: Listing of Forms

This subsection contains the forms required to institute a typical chapter 13 case, while Appendix D.4, infra, contains other Official Bankruptcy Forms, including many that may be required later in the case. The initial forms and other documents reprinted below in this section are:

Consumer Bankruptcy Law and Practice: Annotations to Completed Sample Form 121

1. All Social Security numbers that the debtors have used must be listed. Although it is unusual for more than one Social Security number to be listed for a debtor, different numbers may have been obtained from the Social Security Administration, for example, if the debtor has been the victim of identity theft or domestic violence.

Consumer Bankruptcy Law and Practice: Official Form 121 Instructions

The “Instructions, Bankruptcy Forms for Individuals” (Dec. 2015, rev. Oct. 2019) published by the U.S. Bankruptcy Court does not contain separate instructions for Official Form 101. The Instructions booklet describes the form as follows: “This form gives the court your full Social Security number or federal Individual Taxpayer Identification number. To protect your privacy, the court will make only the last four digits of your number known to the general public. However, the court will make your full number available to your creditors, the U.S.

Consumer Bankruptcy Law and Practice: 2015 Advisory Committee Note on Form 121

Official Form 121, Statement About Your Social Security Numbers, is revised as part of the Forms Modernization Project. The form, which applies only in cases of individual debtors, replaces former Official Form 21, Statement of Social Security Number(s). It is renumbered to distinguish it from the forms used by non-individual debtors, such as corporations and partnerships.

Consumer Bankruptcy Law and Practice: 2007 Advisory Committee Note on Form 21

The form is amended to direct an individual debtor who does not have a social-security number but has another government-issued individual taxpayer-identification number to furnish that number to the court. In light of the new Rule 9037 which limits public disclosure to all but the last four digits of any individual taxpayer-identification number, the amendment to this form will ensure that the court and creditors can properly identify a debtor who does not have a social security number.

Consumer Bankruptcy Law and Practice: 2003 Advisory Committee Note on Form 21

The form implements Rule 1007(f), which requires a debtor to submit a statement under penalty of perjury setting out the debtor’s Social Security number. The form is necessary because Rule 1005 provides that the caption of the petition includes only the final four digits of the debtor’s Social Security number. The statement provides the information necessary for the clerk to include the debtor’s full Social Security number on the notice of the meeting of creditors, as required under Rule 2002(a)(1).