Consumer Bankruptcy Law and Practice: 9.8.2.2.3 Amount necessary for adequate assurance
Utilities often demand a deposit equal to the amount required of new customers under state utility regulations.
Utilities often demand a deposit equal to the amount required of new customers under state utility regulations.
Once the debtor has provided adequate assurance to a utility, the involvement of the bankruptcy court normally ends.
Finally, there is a significant question as to the interplay of section 366 with section 525 of the Code, which prohibits discrimination by a governmental unit with respect to the granting of a “license, permit, charter, franchise, or other similar grant,” solely because of bankruptcy or because of nonpayment of a debt discharged in bankruptcy.
Theoretically, a party obligated to turn over property should do so immediately upon notice of the case. Sometimes this turnover happens when the party is notified of the bankruptcy. Thus, the first step that should be taken on behalf of the debtor is to give the creditor or other party in possession notice of the case, both informal and formal, in a manner similar to that used to give notice of the automatic stay.607
It must be noted that section 542 requires turnover of property to the trustee, and not to the debtor.616 Nowhere does the Code clearly spell out the procedure that should be used to transfer such property to the debtor in cases in which it seems clear the debtor should have possession of it. Thus, for example, if property that the debtor may exempt in a chapter 7 case is turned over to the trustee, the trustee may not feel free to relinquish it immediately to the debtor before the exemptions are approved.
The basic purpose of the stay is to protect the debtor and their property. As stated in the House Report on the Bankruptcy Code:
A presumption that a case was not filed in good faith can be overcome by clear and convincing evidence.37 If the presumption does not arise, the debtor need only show that the current case was filed in good faith under the less demanding preponderance of the evidence standard.38 There is no reason to think that the evidence required to show good faith under section 362(c)(3) should be any different than that necessary to show good faith under current law.
Section 362(j) of the Code provides that, on request of a party in interest, the court shall issue an order under section 362(c) confirming that the automatic stay has been terminated. A similar provision is found in section 362(c)(4)(A)(ii), stating that the court shall promptly enter an order confirming that no stay is in effect as a result of the application of section 362(c)(4).
The 2005 Act did not amend any of the provisions of section 1301 of the Code, and no mention of the codebtor stay is made in the revised versions of subsections 362(c)(3) or (c)(4).
From the 1990s until about 2015, the RAL market was much larger than it is today. In 2004, there were about 13.8 million RAL applications, and about 12.4 million taxpayers taking out RALs at a cost of $1.24 billion.6 By 2014, applications had dropped by over 99.7% to 34,000 applications sent to non-bank lenders.7
In 2016, several bank and non-bank lenders began offering a form of RALs that did not impose a fee on the consumer, which the lenders referred to as an “advance.”16 These so-called advances, or “no-fee” RALs, are alleged to be non-recourse. In other words, the consumer is not required to repay the loan if the tax refund is not received. Even so, there were reports by some of being required to repay when the tax refund was not disbursed as expected.17
[Editor's note: This subsection has been deleted.]
Chapter 13 bankruptcy gives debtors the opportunity to adjust their financial affairs without having to liquidate current assets. Rather than being designed to pay debts out of those assets, a chapter 13 case usually involves payment of debts out of future income (although the debtor may also choose to make some payment out of current assets). The debtor is allowed to keep and use all property, whether exempt or not, and to pay some or all debts according to a plan approved by the court.
Chapter 13 is available to “individual[s] with regular income”1 who reside, are domiciled, or have a place of business or property in the United States.
To qualify as an “individual with regular income,” one must be “any individual whose income is sufficiently stable and regular to enable such individual to make payments under a plan under chapter 13.”4 This definition was clearly intended to encompass not only wage earners, but also recipients of government benefits, alimony or support payments, or any other regular type of income.5 The question of how regular the income must be is left to case law but, as types of income such as commissions are meant
Besides the requirement of regular income, a second limitation on eligibility to file a chapter 13 case, not present in chapter 7, is the amount of debt.
Some state debt collection statutes apply only to debts below a certain dollar amount.101 The debt collection provisions of the Colorado Uniform Consumer Credit Code explicitly exempt the collection of student loans.102 Pennsylvania’s debt collection statute excludes debts owed to the state103 and debts arising from loans secured by purchase money mortgages.104
The typical state debt collection statute covers contacts made for the purpose of debt collection. An allegation that the defendant left messages requesting the called party to call a certain number may be insufficient, without more, to establish the debt collection purpose of the calls.110 Some courts hold that contacts made in connection with mortgage foreclosure, or to offer a mortgage workout, are not made in connection with debt collection.111
While some state debt collection statutes apply only to collection agencies,115 many go beyond the FDCPA and apply to creditors collecting their own debts.116 One implication of this broader coverage is that, while landlords are usually immune from liability under the federal Fair Debt Collection Practices Act because they are collecting their own debts,117 they are often subject to state debt collection and other state consumer protection statutes
The scope of state debt collection statutes is particularly complex as applied to debt buyers. Most state debt collection statutes were originally enacted before the proliferation of debt buying, and some are ambiguous as to whether they apply to debt buyers. Many of these statutes’ definitions have been amended piecemeal over the years, and it is common for the definition of “debt collector” or “collection agency” to include multiple prongs, any number of which may apply to debt buyers.
Some state debt collection statutes exclude entities that collect debts only occasionally.147 For example, one of North Carolina’s two debt collection statutes allows a claim only if the acts or practices were “in or affecting commerce,” which is construed to mean those normal day-to-day activities regularly conducted by the business and for which the business was organized.148 Illinois exempts businesses whose collection activities are confined to and directly related to the operation of a busi
It is common for debt collection statutes to exclude lawyers from their licensing provisions, and sometimes from their substantive prohibitions as well.150 In other states, courts distinguish between the practice of law on the one hand, and running a collection agency151 or buying defaulted debts for purposes of collection on the other.152 Some states exempt lawyers from the registration requirements for collection agencies, but apply the substanti
Some decisions hold that state debt collection statutes apply to repossession.166 As the U.S.