Conditions of use · Every effort has been made to
reproduce the code accurately. However there could be errors which would
change the effect of the code. Permission to use these materials is given
only on the condition that the user will be solely responsible for verifying the
accuracy of the information contained herein.x
Text size · You may adjust the size of the text from
your browser's control bar: View, Text Size.
Printing · If the top menu bar stays at the top of the
window as you scroll in your browser, return the browser to the top of the page
before printing or the menu bar may obscure some text. You may print
selected pages of the web page by printing from File, Page Preview
instead of Print. More printing
tips.
Annotations · We have added notes linking to cases and
other information to some sections of the code. You may chose to
or
the annotations.
Redline Display · The Bankruptcy Code
shown is as amended by The Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005. You may choose to or
the redline version showing the changes made by the act.
Link to the Code · You may link your web page directly
to this version of the code, or to any subsection. More link
information.
TITLE
11. BANKRUPTCY · UNITED STATES CODE
Chapter 1. General
Provisions
Chapter 3. Case
Administration
Subchapter I.
Commencement of a Case
Subchapter II. Officers
Subchapter III.
Administration
Subchapter IV.
Administrative Powers
Chapter 5. Creditors,
the Debtor, and the Estate
Subchapter I. Creditors
and Claims
Subchapter II. Debtor's
Duties and Benefits
Subchapter III. The
Estate
Chapter 7. Liquidation
Subchapter I. Officers
and Administration
Subchapter II.
Collection, Liquidation, and Distribution of the Estate
Subchapter III. Stockbroker Liquidation - Omitted
Subchapter IV. Commodity Broker Liquidation - Omitted
Chapter 9. Adjustment of Debts of a Municipality - Omitted
Chapter 11. Reorganization - Omitted
Chapter 12. Adjustment of Debts of a Family Farmer or Fisherman with
Regular Annual Income - Omitted
Chapter 13. Adjustment of
Debts of an Individual with Regular Income
Subchapter I. Officers,
Administration, and the Estate
Subchapter II. The Plan
 
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
§ 111. Nonprofit budget and
credit counseling agencies; financial management instructional courses
§ 112. Prohibition on
disclosure of name of minor children
11
USC § 101. Definitions
In this title
the following definitions shall apply--
(1) The term
"accountant" means accountant authorized under applicable law to
practice public accounting, and includes professional accounting association,
corporation, or partnership, if so authorized.
(2) The term
"affiliate" means--
(A) entity that directly or indirectly owns,
controls, or holds with power to vote, 20 percent or more of the outstanding
voting securities of the debtor, other than an entity that holds such
securities--
(i) in a fiduciary or agency capacity without sole discretionary power
to vote such securities; or
(ii) solely to secure a debt, if such entity has not in fact exercised
such power to vote;
(B) corporation 20 percent or more of whose
outstanding voting securities are directly or indirectly owned, controlled,
or held with power to vote, by the debtor, or by an entity that directly or
indirectly owns, controls, or holds with power to vote, 20 percent or more
of the outstanding voting securities of the debtor, other than an entity
that holds such securities--
(i) in a fiduciary or agency capacity without sole discretionary power
to vote such securities; or
(ii) solely to secure a debt, if such entity has not in fact exercised
such power to vote;
(C) person whose business is operated under a
lease or operating agreement by a debtor, or person substantially all of
whose property is operated under an operating agreement with the debtor; or
(D) entity that operates the business or
substantially all of the property of the debtor under a lease or operating
agreement.
(3) The term "assisted
person" means any person whose debts consist primarily of consumer debts
and the value of whose non-exempt property is less than $150,000 [Adjusted
every 3 years by section
104.].
(4) The term
"attorney" means attorney, professional law association,
corporation, or partnership, authorized under applicable law to practice law.
(4A) The term "bankruptcy
assistance" means any goods or services sold or otherwise provided to an
assisted person with the express or implied purpose of providing information,
advice, counsel, document preparation, or filing, or attendance at a
creditors' meeting or appearing in a case or proceeding on behalf of another
or providing legal representation with respect to a case or proceeding under
this title.
(5) The term "claim"
means--
(A) right to payment, whether or not such right
is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured; or
(B) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured, or unsecured.
(6) The term "commodity
broker" means futures commission merchant, foreign futures commission
merchant, clearing organization, leverage transaction merchant, or commodity
options dealer, as defined in section 761
of this title, with respect to which there is a customer, as defined in
section 761
of this title.
(7) The term "community
claim" means claim that arose before the commencement of the case
concerning the debtor for which property of the kind specified in section 541(a)(2)
of this title is liable, whether or not there is any such property at the time
of the commencement of the case.
(7A) The term "commercial
fishing operation" means--
(A) the catching or harvesting of fish, shrimp,
lobsters, urchins, seaweed, shellfish, or other aquatic species or products
of such species; or
(B) for purposes of section
109 and chapter
12, aquaculture activities consisting of raising for market any species
or product described in subparagraph (A).
(7B) The term "commercial
fishing vessel" means a vessel used by a fisherman to carry out a
commercial fishing operation.
(8) The term "consumer
debt" means debt incurred by an individual primarily for a personal,
family, or household purpose.
(9) The term
"corporation"--
(A) includes--
(i) association having a power or privilege that a private corporation,
but not an individual or a partnership, possesses.
(ii) partnership association organized under a law that makes only the
capital subscribed responsible for the debts of such association;
(iii) joint-stock company;
(iv) unincorporated company or association; or
(v) business trust; but
(B) does not include limited partnership.
(10) The term
"creditor" means--
(A) entity that has a claim against the debtor
that arose at the time of or before the order for relief concerning the
debtor;
(B) entity that has a claim against the estate
of a kind specified in section 348(d),
502(f),
502(g),
502(h)
or 502(i)
of this title; or
(C) entity that has a community claim.
(10A) The term "current monthly
income"--
(A) means the average monthly income from all
sources that the debtor receives (or in a joint case the debtor and the
debtor's spouse receive) without regard to whether such income is taxable
income, derived during the 6-month period ending on--
(i) the last day of the calendar month immediately preceding the date
of the commencement of the case if the debtor files the schedule of
current income required by section
521(a)(1)(B)(ii); or
(ii) the date on which current income is determined by the court for
purposes of this title if the debtor does not file the schedule of current
income required by section
521(a)(1)(B)(ii); and
(B) includes any amount paid by any entity
other than the debtor (or in a joint case the debtor and the debtor's
spouse), on a regular basis for the household expenses of the debtor or the
debtor's dependents (and in a joint case the debtor's spouse if not
otherwise a dependent), but excludes benefits received under the Social
Security Act, payments to victims of war crimes or crimes against humanity
on account of their status as victims of such crimes, and payments to
victims of international terrorism (as defined in section 2331 of title 18)
or domestic terrorism (as defined in section 2331 of title 18) on account of
their status as victims of such terrorism.
(11) The term
"custodian" means--
(A) receiver or trustee of any of the property
of the debtor, appointed in a case or proceeding not under this title;
(B) assignee under a general assignment for the
benefit of the debtor's creditors; or
(C) trustee, receiver, or agent under applicable
law, or under a contract, that is appointed or authorized to take charge of
property of the debtor for the purpose of enforcing a lien against such
property, or for the purpose of general administration of such property for
the benefit of the debtor's creditors.
(12) The term "debt"
means liability on a claim.
(12A) The term "debt relief
agency" means any person who provides any bankruptcy assistance to an
assisted person in return for the payment of money or other valuable
consideration, or who is a bankruptcy petition preparer under section
110, but does not include--
(A) any person who is an officer, director,
employee, or agent of a person who provides such assistance or of the
bankruptcy petition preparer;
(B) a nonprofit organization that is exempt
from taxation under section 501(c)(3) of the Internal Revenue Code of 1986;
(C) a creditor of such assisted person, to the
extent that the creditor is assisting such assisted person to restructure
any debt owed by such assisted person to the creditor;
(D) a depository institution (as defined in
section 3 of the Federal Deposit Insurance Act) or any Federal credit union
or State credit union (as those terms are defined in section 101 of the
Federal Credit Union Act), or any affiliate or subsidiary of such depository
institution or credit union; or
(E) an author, publisher, distributor, or
seller of works subject to copyright protection under title 17, when acting
in such capacity.
(13) The term
"debtor" means person or municipality concerning which a case under
this title has been commenced.
(13A) The term "debtor's
principal residence"--
(A) means a residential structure, including incidental property, without
regard to whether that structure is attached to real property; and
(B) includes an individual condominium or cooperative unit, a mobile or
manufactured home, or trailer.
(14) The term "disinterested
person" means a person that--
(A) is not a creditor, an equity security holder, or an
insider;
(B) is not and was not, within 2 years before the date of
the filing of the petition, a director, officer, or employee of the debtor;
and
(C) does not have an interest materially adverse to the
interest of the estate or of any class of creditors or equity security
holders, by reason of any direct or indirect relationship to, connection
with, or interest in, the debtor, or for any other reason.
(14A) The term "domestic
support obligation" means a debt that accrues before, on, or after the
date of the order for relief in a case under this title, including interest
that accrues on that debt as provided under applicable nonbankruptcy law
notwithstanding any other provision of this title, that is--
(A) owed to or recoverable by--
(i) a spouse, former spouse, or child of the debtor or such child's
parent, legal guardian, or responsible relative; or
(ii) a governmental unit;
(B) in the nature of alimony, maintenance, or support (including
assistance provided by a governmental unit) of such spouse, former spouse,
or child of the debtor or such child's parent, without regard to whether
such debt is expressly so designated;
(C) established or subject to establishment before, on, or after the date
of the order for relief in a case under this title, by reason of applicable
provisions of--
(i) a separation agreement, divorce decree, or property settlement
agreement;
(ii) an order of a court of record; or
(iii) a determination made in accordance with applicable nonbankruptcy
law by a governmental unit; and
(D) not assigned to a nongovernmental entity, unless that obligation is
assigned voluntarily by the spouse, former spouse, child of the debtor, or
such child's parent, legal guardian, or responsible relative for the purpose
of collecting the debt.
(15) The term
"entity" includes person, estate, trust, governmental unit, and
United States trustee.
(16) The term "equity
security" means--
(A) share in a corporation, whether or not transferable or denominated
"stock", or similar security;
(B) interest of a limited partner in a limited partnership; or
(C) warrant or right, other than a right to convert, to purchase, sell,
or subscribe to a share, security, or interest of a kind specified in
subparagraph (A) or (B) of this paragraph.
(17) The term "equity
security holder" means holder of an equity security of the debtor.
(18) The term "family
farmer" means--
(A) individual or individual and spouse engaged in a farming operation
whose aggregate debts do not exceed
$3,237,000 [Adjusted
every 3 years by section
104.] and not less than
50 percent of whose aggregate noncontingent,
liquidated debts (excluding a debt for the principal residence of such
individual or such individual and spouse unless such debt arises out of a
farming operation), on the date the case is filed, arise out of a farming
operation owned or operated by such individual or such individual and
spouse, and such individual or such individual and spouse receive from such
farming operation more than 50 percent of such individual's or such
individual and spouse's gross income
for--
(i) the taxable year preceding; or
(ii) each of the 2d and 3d taxable years preceding;
the taxable year in which the case concerning such individual or
such individual and spouse was filed; or
(B) corporation or partnership in which more than 50 percent of the
outstanding stock or equity is held by one family, or by one family and the
relatives of the members of such family, and such family or such relatives
conduct the farming operation, and
(i) more than 80 percent of the value of its assets consists of assets
related to the farming operation;
(ii) its aggregate debts do not exceed
$3,237,000 [Adjusted
every 3 years by section
104.] and not less than
50 percent of its aggregate noncontingent,
liquidated debts (excluding a debt for one dwelling which is owned by such
corporation or partnership and which a shareholder or partner maintains as
a principal residence, unless such debt arises out of a farming
operation), on the date the case is filed, arise out of the farming
operation owned or operated by such corporation or such partnership; and
(iii) if such corporation issues stock, such stock is not publicly
traded.
(19) The term "family
farmer with regular annual income" means family farmer whose annual
income is sufficiently stable and regular to enable such family farmer to make
payments under a plan under chapter 12 of this title.
(19A) The term "family
fisherman" means--
(A) an individual or individual and spouse engaged in a commercial
fishing operation--
(i) whose aggregate debts do not exceed $1,500,000 [Adjusted
every 3 years by section
104.] and not less than 80 percent of whose aggregate
noncontingent, liquidated debts (excluding a debt for the principal
residence of such individual or such individual and spouse, unless such
debt arises out of a commercial fishing operation), on the date the case
is filed, arise out of a commercial fishing operation owned or operated by
such individual or such individual and spouse; and
(ii) who receive from such commercial fishing operation more than 50
percent of such individual's or such individual's and spouse's gross
income for the taxable year preceding the taxable year in which the case
concerning such individual or such individual and spouse was filed; or
(B) a corporation or partnership--
(i) in which more than 50 percent of the outstanding stock or equity is
held by--
(I) 1 family that conducts the commercial fishing operation; or
(II) 1 family and the relatives of the members of such family, and such
family or such relatives conduct the commercial fishing operation; and
(ii)
(I) more than 80 percent of the value of its assets consists of
assets related to the commercial fishing operation;
(II) its aggregate debts do not exceed $1,500,000 [Adjusted
every 3 years by section
104.] and not less than 80 percent of its aggregate
noncontingent, liquidated debts (excluding a debt for 1 dwelling which
is owned by such corporation or partnership and which a shareholder or
partner maintains as a principal residence, unless such debt arises out
of a commercial fishing operation), on the date the case is filed, arise
out of a commercial fishing operation owned or operated by such
corporation or such partnership; and
(III) if such corporation issues stock, such stock is not publicly
traded.
(19B) The term "family fisherman with regular
annual income" means a family fisherman whose annual income is
sufficiently stable and regular to enable such family fisherman to make
payments under a plan under chapter 12 of this title.
(20) The term
"farmer" means (except when such term appears in the term
"family farmer") person that received more than 80 percent of such
person's gross income during the taxable year of such person immediately
preceding the taxable year of such person during which the case under this
title concerning such person was commenced from a farming operation owned or
operated by such person.
(21) The term "farming
operation" includes farming, tillage of the soil, dairy farming,
ranching, production or raising of crops, poultry, or livestock, and
production of poultry or livestock products in an unmanufactured state.
(21A) The term "farmout
agreement" means a written agreement in which--
(A) the owner of a right to drill, produce, or operate liquid or gaseous
hydrocarbons on property agrees or has agreed to transfer or assign all or a
part of such right to another entity; and
(B) such other entity (either directly or through its agents or its
assigns), as consideration, agrees to perform drilling, reworking,
recompleting, testing, or similar or related operations, to develop or
produce liquid or gaseous hydrocarbons on the property.
(21B) The term "Federal
depository institutions regulatory agency" means--
(A) with respect to an insured depository institution (as defined in
section 3(c)(2) of the Federal Deposit Insurance Act) for which no
conservator or receiver has been appointed, the appropriate Federal banking
agency (as defined in section 3(q) of such Act);
(B) with respect to an insured credit union (including an insured credit
union for which the National Credit Union Administration has been appointed
conservator or liquidating agent), the National Credit Union Administration;
(C) with respect to any insured depository institution for which the
Resolution Trust Corporation has been appointed conservator or receiver, the
Resolution Trust Corporation; and
(D) with respect to any insured depository institution for which the
Federal Deposit Insurance Corporation has been appointed conservator or
receiver, the Federal Deposit Insurance Corporation.
(22) The term "financial
institution" means--
(A) a Federal reserve bank, or an entity (domestic or
foreign) that is a commercial or savings bank, industrial savings bank,
savings and loan association, trust company, federally-insured credit union,
or receiver, liquidating agent, or conservator for such entity and, when any
such Federal reserve bank, receiver, liquidating agent, conservator or
entity is acting as agent or custodian for a customer in connection with a
securities contract (as defined in section
741) such customer; or
(B) in connection with a securities contract (as defined
in section
741) an investment company registered under the Investment Company Act
of 1940.
(22A) The term "financial
participant" means--
(A) an entity that, at the time it enters into a
securities contract, commodity contract, swap agreement, repurchase
agreement, or forward contract, or at the time of the date of the filing of
the petition, has one or more agreements or transactions described in
paragraph (1),
(2),
(3), (4),
(5), or (6)
of section
561(a) with the debtor or any other entity (other than an affiliate) of
a total gross dollar value of not less than $1,000,000,000 in notional or
actual principal amount outstanding on any day during the previous 15-month
period, or has gross mark-to-market positions of not less than $100,000,000
(aggregated across counterparties) in one or more such agreements or
transactions with the debtor or any other entity (other than an affiliate)
on any day during the previous 15-month period; or
(B) a clearing organization (as defined in section 402 of
the Federal Deposit Insurance Corporation Improvement Act of 1991).
(23) The term "foreign
proceeding" means a collective judicial or administrative proceeding in a
foreign country, including an interim proceeding, under a law relating to
insolvency or adjustment of debt in which proceeding the assets and affairs of
the debtor are subject to control or supervision by a foreign court, for the
purpose of reorganization or liquidation.
(24) The term "foreign
representative" means a person or body, including a person or body
appointed on an interim basis, authorized in a foreign proceeding to
administer the reorganization or the liquidation of the debtor's assets or
affairs or to act as a representative of such foreign proceeding.
(25) The term "forward
contract"
means--
(A) a contract (other than a commodity contract)
for the purchase, sale, or transfer of a commodity, as defined in section
761(8) of this title, or any similar good, article, service, right, or
interest which is presently or in the future becomes the subject of dealing
in the forward contract trade, or product or byproduct thereof, with a
maturity date more than two days after the date the contract is entered
into, including, but not limited to, a repurchase transaction, reverse
repurchase transaction, consignment, lease, swap, hedge transaction,
deposit, loan, option, allocated transaction, unallocated transaction,
or any other similar agreement;
(B) any combination of agreements or transactions
referred to in subparagraphs (A) and (C);
(C) any option to enter into an agreement or transaction
referred to in subparagraph (A) or (B);
(D) a master agreement that provides for an agreement or
transaction referred to in subparagraph (A), (B), or (C), together with all
supplements to any such master agreement, without regard to whether such
master agreement provides for an agreement or transaction that is not a
forward contract under this paragraph, except that such master agreement
shall be considered to be a forward contract under this paragraph only with
respect to each agreement or transaction under such master agreement that is
referred to in subparagraph (A), (B), or (C); or
(E) any security agreement or arrangement, or other
credit enhancement related to any agreement or transaction referred to in
subparagraph (A), (B), (C), or (D), including any guarantee or reimbursement
obligation by or to a forward contract merchant or financial participant in
connection with any agreement or transaction referred to in any such
subparagraph, but not to exceed the damages in connection with any such
agreement or transaction, measured in accordance with section
562.
(26) The term "forward contract
merchant" means a Federal reserve bank, or an entity the business of
which consists in whole or in part of entering into forward contracts as or
with merchants in a commodity (as defined in section 761) or any similar good,
article, service, right, or interest which is presently or in the future
becomes the subject of dealing in the forward contract trade.
(27) The term
"governmental unit" means United States; State; Commonwealth;
District; Territory; municipality; foreign state; department, agency, or
instrumentality of the United States (but not a United States trustee while
serving as a trustee in a case under this title), a State, a Commonwealth, a
District, a Territory, a municipality, or a foreign state; or other foreign or
domestic government.
(27A) The term "health care
business"--
(A) means any public or private entity (without regard to whether that
entity is organized for profit or not for profit) that is primarily engaged
in offering to the general public facilities and services for--
(i) the diagnosis or treatment of injury, deformity, or disease; and
(ii) surgical, drug treatment, psychiatric, or obstetric care; and
(B) includes--
(i) any--
(I) general or specialized hospital;
(II) ancillary ambulatory, emergency, or surgical treatment facility;
(III) hospice;
(IV) home health agency; and
(V) other health care institution that is similar to an entity
referred to in subclause (I), (II), (III), or (IV); and
(ii) any long-term care facility, including any--
(I) skilled nursing facility;
(II) intermediate care facility;
(III) assisted living facility;
(IV) home for the aged;
(V) domiciliary care facility; and
(VI) health care institution that is related to a facility referred
to in subclause (I), (II), (III), (IV), or (V), if that institution is
primarily engaged in offering room, board, laundry, or personal
assistance with activities of daily living and incidentals to activities
of daily living.
(27B) The term "incidental
property" means, with respect to a debtor's principal residence--
(A) property commonly conveyed with a principal residence in the area
where the real property is located;
(B) all easements, rights, appurtenances, fixtures, rents, royalties,
mineral rights, oil or gas rights or profits, water rights, escrow funds, or
insurance proceeds; and
(C) all replacements or additions.
(28) The term
"indenture" means mortgage, deed of trust, or indenture, under which
there is outstanding a security, other than a voting-trust certificate,
constituting a claim against the debtor, a claim secured by a lien on any of
the debtor's property, or an equity security of the debtor.
(29) The term "indenture
trustee" means trustee under an indenture.
(30) The term "individual
with regular income" means individual whose income is sufficiently stable
and regular to enable such individual to make payments under a plan under
chapter 13 of this title, other than a stockbroker or a commodity broker.
(31) The term
"insider" includes--
(A) if the debtor is an individual--
(i) relative of the debtor or of a general partner of the debtor;
(ii) partnership in which the debtor is a general partner;
(iii) general partner of the debtor; or
(iv) corporation of which the debtor is a director, officer, or person
in control;
(B) if the debtor is a corporation--
(i) director of the debtor;
(ii) officer of the debtor;
(iii) person in control of the debtor;
(iv) partnership in which the debtor is a general partner;
(v) general partner of the debtor; or
(vi) relative of a general partner, director, officer, or person in
control of the debtor;
(C) if the debtor is a partnership--
(i) general partner in the debtor;
(ii) relative of a general partner in, general partner of, or person in
control of the debtor;
(iii) partnership in which the debtor is a general partner;
(iv) general partner of the debtor; or
(v) person in control of the debtor;
(D) if the debtor is a municipality, elected official of the debtor or
relative of an elected official of the debtor;
(E) affiliate, or insider of an affiliate as if such affiliate were the
debtor; and
(F) managing agent of the debtor.
(32) The term
"insolvent" means--
(A) with reference to an entity other than a partnership and a
municipality, financial condition such that the sum of such entity's debts
is greater than all of such entity's property, at a fair valuation,
exclusive of--
(i) property transferred, concealed, or removed with intent to hinder,
delay, or defraud such entity's creditors; and
(ii) property that may be exempted from property of the estate under section
522 of this title;
(B) with reference to a partnership, financial condition such that the
sum of such partnership's debts is greater than the aggregate of, at a fair
valuation--
(i) all of such partnership's property, exclusive of property of the
kind specified in subparagraph (A)(i) of this paragraph; and
(ii) the sum of the excess of the value of each general partner's
nonpartnership property, exclusive of property of the kind specified in
subparagraph (A) of this paragraph, over such partner's nonpartnership
debts; and
(C) with reference to a municipality, financial condition such that the
municipality is--
(i) generally not paying its debts as they become due unless such debts
are the subject of a bona fide dispute; or
(ii) unable to pay its debts as they become due.
(33) The term
"institution-affiliated party"--
(A) with respect to an insured depository institution (as defined in
section 3(c)(2) of the Federal Deposit Insurance Act), has the meaning given
it in section 3(u) of the Federal Deposit Insurance Act; and
(B) with respect to an insured credit union, has the meaning given it in
section 206(r) of the Federal Credit Union Act.
(34) The term "insured
credit union" has the meaning given it in section 101(7) of the Federal
Credit Union Act.
(35) The term "insured
depository institution"--
(A) has the meaning given it in section 3(c)(2) of the Federal Deposit
Insurance Act; and
(B) includes an insured credit union (except in the case of
paragraphs (23)
and (35)
of this subsection).
(35A) The term
"intellectual property" means--
(A) trade secret;
(B) invention, process, design, or plant protected under title 35;
(C) patent application;
(D) plant variety;
(E) work of authorship protected under title 17; or
(F) mask work protected under chapter 9 of title 17; to the extent
protected by applicable nonbankruptcy law.
(36) The term "judicial
lien" means lien obtained by judgment, levy, sequestration, or other
legal or equitable process or proceeding.
(37) The term "lien"
means charge against or interest in property to secure payment of a debt or
performance of an obligation.
(38) The term "margin
payment" means, for purposes of the forward contract provisions of this
title, payment or deposit of cash, a security or other property, that is
commonly known in the forward contract trade as original margin, initial
margin, maintenance margin, or variation margin, including mark-to-market
payments, or variation payments.
(38A) The term "master netting
agreement"--
(A) means an agreement providing for the exercise of rights, including
rights of netting, setoff, liquidation, termination, acceleration, or close
out, under or in connection with one or more contracts that are described in
any one or more of paragraphs (1) through (5) of section
561(a), or any security agreement or arrangement or other credit
enhancement related to one or more of the foregoing, including any guarantee
or reimbursement obligation related to 1 or more of the foregoing; and
(B) if the agreement contains provisions relating to agreements or
transactions that are not contracts described in paragraphs (1) through (5)
of section
561(a), shall be deemed to be a master netting agreement only with
respect to those agreements or transactions that are described in any one or
more of paragraphs (1) through (5) of section
561(a).
(38B) The term "master netting
agreement participant" means an entity that, at any time before the date
of the filing of the petition, is a party to an outstanding master netting
agreement with the debtor.
(39) The term "mask
work" has the meaning given it in section 901(a)(2) of title 17.
(39A) The term "median family
income" means for any year--
(A) the median family income both calculated and reported by the Bureau
of the Census in the then most recent year; and
(B) if not so calculated and reported in the then current year, adjusted
annually after such most recent year until the next year in which median
family income is both calculated and reported by the Bureau of the Census,
to reflect the percentage change in the Consumer Price Index for All Urban
Consumers during the period of years occurring after such most recent year
and before such current year.
(40) The term
"municipality" means political subdivision or public agency or
instrumentality of a State.
(40A) The term "patient"
means any individual who obtains or receives services from a health care
business.
(40B) The term "patient
records" means any written document relating to a patient or a record
recorded in a magnetic, optical, or other form of electronic medium.
(41) The term "person"
includes individual, partnership, and corporation, but does not include
governmental unit, except that a governmental unit that--
(A) acquires an asset from a person--
(i) as a result of the operation of a loan guarantee agreement; or
(ii) as receiver or liquidating agent of a person;
(B) is a guarantor of a pension benefit payable by or on behalf of the
debtor or an affiliate of the debtor; or
(C) is the legal or beneficial owner of an asset of--
(i) an employee pension benefit plan that is a governmental plan, as
defined in section 414(d) of the Internal Revenue Code of 1986; or
(ii) an eligible deferred compensation plan, as defined in section
457(b) of the Internal Revenue Code of 1986; shall be considered, for
purposes of section 1102
of this title, to be a person with respect to such asset or such benefit.
(41A) The term "personally
identifiable information" means--
(A) if provided by an individual to the debtor in connection with
obtaining a product or a service from the debtor primarily for personal,
family, or household purposes--
(i) the first name (or initial) and last name of such individual,
whether given at birth or time of adoption, or resulting from a lawful
change of name;
(ii) the geographical address of a physical place of residence of such
individual;
(iii) an electronic address (including an e-mail address) of such
individual;
(iv) a telephone number dedicated to contacting such individual at such
physical place of residence;
(v) a social security account number issued to such individual; or
(vi) the account number of a credit card issued to such individual; or
(B) if identified in connection with 1 or more of the items of
information specified in subparagraph (A)--
(i) a birth date, the number of a certificate of birth or adoption, or
a place of birth; or
(ii) any other information concerning an identified individual that, if
disclosed, will result in contacting or identifying such individual
physically or electronically.
(42) The term
"petition" means petition filed under section 301,
302,
303,
or 304
of this title, as the case may be, commencing a case under this title.
(42A) The term
"production payment" means a term overriding royalty satisfiable in
cash or in kind--
(A) contingent on the production of a liquid or gaseous hydrocarbon from
particular real property; and
(B) from a specified volume, or a specified value, from the liquid or
gaseous hydrocarbon produced from such property, and determined without
regard to production costs.
(43) The term
"purchaser" means transferee of a voluntary transfer, and includes
immediate or mediate transferee of such a transferee.
(44) The term
"railroad" means common carrier by railroad engaged in the
transportation of individuals or property or owner of trackage facilities
leased by such a common carrier.
(45) The term
"relative" means individual related by affinity or consanguinity
within the third degree as determined by the common law, or individual in a
step or adoptive relationship within such third degree.
(46) The term "repo
participant" means an entity that, at any time before
the date of the filing of the petition, has an outstanding repurchase
agreement with the debtor.
(47) The term "repurchase
agreement" (which definition also applies to a reverse repurchase
agreement)--
(A) means--
(i) an agreement, including related terms, which provides for the
transfer of one or more certificates of deposit, mortgage related
securities (as defined in section 3 of the Securities Exchange Act of
1934), mortgage loans, interests in mortgage related securities or
mortgage loans, eligible bankers' acceptances, qualified foreign
government securities (defined as a security that is a direct obligation
of, or that is fully guaranteed by, the central government of a member of
the Organization for Economic Cooperation and Development), or securities
that are direct obligations of, or that are fully guaranteed by, the
United States or any agency of the United States against the transfer of
funds by the transferee of such certificates of deposit, eligible bankers'
acceptances, securities, mortgage loans, or interests, with a simultaneous
agreement by such transferee to transfer to the transferor thereof
certificates of deposit, eligible bankers' acceptance, securities,
mortgage loans, or interests of the kind described in this clause, at a
date certain not later than 1 year after such transfer or on demand,
against the transfer of funds;
(ii) any combination of agreements or transactions referred to in
clauses (i) and (iii);
(iii) an option to enter into an agreement or transaction referred to
in clause (i) or (ii);
(iv) a master agreement that provides for an agreement or transaction
referred to in clause (i), (ii), or (iii), together with all supplements
to any such master agreement, without regard to whether such master
agreement provides for an agreement or transaction that is not a
repurchase agreement under this paragraph, except that such master
agreement shall be considered to be a repurchase agreement under this
paragraph only with respect to each agreement or transaction under the
master agreement that is referred to in clause (i), (ii), or (iii); or
(v) any security agreement or arrangement or other credit enhancement
related to any agreement or transaction referred to in clause (i), (ii),
(iii), or (iv), including any guarantee or reimbursement obligation by or
to a repo participant or financial participant in connection with any
agreement or transaction referred to in any such clause, but not to exceed
the damages in connection with any such agreement or transaction, measured
in accordance with section 562 of this title; and
(B) does not include a repurchase obligation under a participation in a
commercial mortgage loan.
(48) The term "securities
clearing agency" means person that is registered as a clearing agency
under section 17A of the Securities Exchange Act of 1934, or
exempt from such registration under such section pursuant to an order of the
Securities and Exchange Commission, or whose business is confined to
the performance of functions of a clearing agency with respect to exempted
securities, as defined in section 3(a)(12) of such Act for the purposes of
such section 17A.
(48A) The term "securities self
regulatory organization" means either a securities association registered
with the Securities and Exchange Commission under section 15A of the
Securities Exchange Act of 1934 or a national securities exchange registered
with the Securities and Exchange Commission under section 6 of the Securities
Exchange Act of 1934.
(49) The term
"security"--
(A) includes--
(i) note;
(ii) stock;
(iii) treasury stock;
(iv) bond;
(v) debenture;
(vi) collateral trust certificate;
(vii) pre-organization certificate or subscription;
(viii) transferable share;
(ix) voting-trust certificate;
(x) certificate of deposit;
(xi) certificate of deposit for security;
(xii) investment contract or certificate of interest or participation
in a profit-sharing agreement or in an oil, gas, or mineral royalty or
lease, if such contract or interest is required to be the subject of a
registration statement filed with the Securities and Exchange Commission
under the provisions of the Securities Act of 1933, or is exempt under
section 3(b) of such Act from the requirement to file such a statement;
(xiii) interest of a limited partner in a limited partnership;
(xiv) other claim or interest commonly known as "security";
and
(xv) certificate of interest or participation in, temporary or interim
certificate for, receipt for, or warrant or right to subscribe to or
purchase or sell, a security; but
(B) does not include--
(i) currency, check, draft, bill of exchange, or bank letter of credit;
(ii) leverage transaction, as defined in section
761 of this title;
(iii) commodity futures contract or forward contract;
(iv) option, warrant, or right to subscribe to or purchase or sell a
commodity futures contract;
(v) option to purchase or sell a commodity;
(vi) contract or certificate of a kind specified in subparagraph
(A)(xii) of this paragraph that is not required to be the subject of a
registration statement filed with the Securities and Exchange Commission
and is not exempt under section 3(b) of the Securities Act of 1933 from
the requirement to file such a statement; or
(vii) debt or evidence of indebtedness for goods sold and delivered or
services rendered.
(50) The term "security
agreement" means agreement that creates or provides for a security
interest.
(51) The term "security
interest" means lien created by an agreement.
(51A) The term
"settlement payment" means, for purposes of the forward contract
provisions of this title, a preliminary settlement payment, a partial
settlement payment, an interim settlement payment, a settlement payment on
account, a final settlement payment, a net settlement payment, or any other
similar payment commonly used in the forward contract trade.
(51B) The term "single
asset real estate" means real property constituting a single property or
project, other than residential real property with fewer than 4 residential
units, which generates substantially all of the gross income of a debtor who
is not a family farmer and on which no substantial business is being
conducted by a debtor other than the business of operating the real property
and activities incidental.
(51C) The term "small business
case" means a case filed under chapter
11 of this title in which the debtor is a small business debtor.
(51D) The term "small business
debtor"--
(A) subject to subparagraph (B), means a person engaged in commercial or
business activities (including any affiliate of such person that is also a
debtor under this title and excluding a person whose primary activity is the
business of owning or operating real property or activities incidental
thereto) that has aggregate noncontingent liquidated secured and unsecured
debts as of the date of the petition or the date of the order for relief in
an amount not more than $2,000,000 [Adjusted
every 3 years by section
104.] (excluding debts owed to 1 or more affiliates or insiders)
for a case in which the United States trustee has not appointed under
section 1102(a)(1) a committee of unsecured creditors or where the court has
determined that the committee of unsecured creditors is not sufficiently
active and representative to provide effective oversight of the debtor; and
(B) does not include any member of a group of affiliated debtors that has
aggregate noncontingent liquidated secured and unsecured debts in an amount
greater than $2,000,000 [Adjusted
every 3 years by section
104.] (excluding debt owed to 1 or more affiliates or insiders).
(52) The term
"State" includes the District of Columbia and Puerto Rico, except
for the purpose of defining who may be a debtor under chapter
9 of this title.
(53) The term "statutory
lien" means lien arising solely by force of a statute on specified
circumstances or conditions, or lien of distress for rent, whether or not
statutory, but does not include security interest or judicial lien, whether or
not such interest or lien is provided by or is dependent on a statute and
whether or not such interest or lien is made fully effective by statute.
(53A) The term
"stockbroker" means person--
(A) with respect to which there is a customer, as defined in section 741
of this title; and
(B) that is engaged in the business of effecting transactions in
securities--
(i) for the account of others; or
(ii) with members of the general public, from or for such person's own
account.
(53B) The term "swap
agreement"--
(A) means--
(i) any agreement, including the terms and conditions incorporated by
reference in such agreement, which is--
(I) an interest rate swap, option, future, or forward agreement,
including a rate floor, rate cap, rate collar, cross-currency rate swap,
and basis swap;
(II) a spot, same day-tomorrow, tomorrow-next, forward, or other
foreign exchange or precious metals agreement;
(III) a currency swap, option, future, or forward agreement;
(IV) an equity index or equity swap, option, future, or forward
agreement;
(V) a debt index or debt swap, option, future, or forward agreement;
(VI) a total return, credit spread or credit swap, option, future, or
forward agreement;
(VII) a commodity index or a commodity swap, option, future, or
forward agreement; or
(VIII) a weather swap, weather derivative, or weather option;
(ii) any agreement or transaction that is similar to any other
agreement or transaction referred to in this paragraph and that--
(I) is of a type that has been, is presently, or in the future
becomes, the subject of recurrent dealings in the swap markets
(including terms and conditions incorporated by reference therein); and
(II) is a forward, swap, future, or option on one or more rates,
currencies, commodities, equity securities, or other equity instruments,
debt securities or other debt instruments, quantitative measures
associated with an occurrence, extent of an occurrence, or contingency
associated with a financial, commercial, or economic consequence, or
economic or financial indices or measures of economic or financial risk
or value;
(iii) any combination of agreements or transactions referred to in
this subparagraph;
(iv) any option to enter into an agreement or transaction referred to
in this subparagraph;
(v) a master agreement that provides for an agreement or transaction
referred to in clause (i), (ii), (iii), or (iv), together with all
supplements to any such master agreement, and without regard to whether
the master agreement contains an agreement or transaction that is not a
swap agreement under this paragraph, except that the master agreement
shall be considered to be a swap agreement under this paragraph only
with respect to each agreement or transaction under the master agreement
that is referred to in clause (i), (ii), (iii), or (iv); or
(vi) any security agreement or arrangement or other credit
enhancement related to any agreements or transactions referred to in
clause (i) through (v), including any guarantee or reimbursement
obligation by or to a swap participant or financial participant in
connection with any agreement or transaction referred to in any such
clause, but not to exceed the damages in connection with any such
agreement or transaction, measured in accordance with section
562; and
(B) is applicable for purposes of this title only, and shall not be
construed or applied so as to challenge or affect the characterization,
definition, or treatment of any swap agreement under any other statute,
regulation, or rule, including the Securities Act of 1933, the Securities
Exchange Act of 1934, the Public Utility Holding Company Act of 1935, the
Trust Indenture Act of 1939, the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Securities Investor Protection Act of
1970, the Commodity Exchange Act, the Gramm-Leach-Bliley Act, and the Legal
Certainty for Bank Products Act of 2000.
(53C) The term "swap
participant" means an entity that, at any time before the filing of the
petition, has an outstanding swap agreement with the debtor.
(53D) The term
"timeshare plan" means and shall include that interest purchased in
any arrangement, plan, scheme, or similar device, but not including exchange
programs, whether by membership, agreement, tenancy in common, sale, lease,
deed, rental agreement, license, right to use agreement, or by any other
means, whereby a purchaser, in exchange for consideration, receives a right to
use accommodations, facilities, or recreational sites, whether improved or
unimproved, for a specific period of time less than a full year during any
given year, but not necessarily for consecutive years, and which extends for a
period of more than three years. A "timeshare interest" is that
interest purchased in a timeshare plan which grants the purchaser the right to
use and occupy accommodations, facilities, or recreational sites, whether
improved or unimproved, pursuant to a timeshare plan.
(54) The term "transfer"
means--
(A) the creation of a lien;
(B) the retention of title as a security interest;
(C) the foreclosure of a debtor's equity of redemption; or
(D) each mode, direct or indirect, absolute or conditional, voluntary or
involuntary, of disposing of or parting with--
(i) property; or
(ii) an interest in property.
(54A) The
term "uninsured State member bank" means a State member bank
(as defined in section 3 of the Federal Deposit Insurance Act) the deposits of
which are not insured by the Federal Deposit Insurance Corporation.
(55) The term "United
States", when used in a geographical sense, includes all locations where
the judicial jurisdiction of the United States extends, including territories
and possessions of the United States.
[Rev. 4-29-05]
11
USC § 102. Rules of construction
In this title--
(1) "after notice and a hearing", or a similar phrase--
(A) means after such notice as is appropriate in the particular
circumstances, and such opportunity for a hearing as is appropriate in the
particular circumstances; but
(B) authorizes an act without an actual hearing if such notice is given
properly and if--
(i) such a hearing is not requested timely by a party in interest; or
(ii) there is insufficient time for a hearing to be commenced before
such act must be done, and the court authorizes such act;
(2) "claim against the debtor" includes claim against property of
the debtor;
(3) "includes" and "including" are not limiting;
(4) "may not" is prohibitive, and not permissive;
(5) "or" is not exclusive;
(6) "order for relief" means entry of an order for relief;
(7) the singular includes the plural;
(8) a definition, contained in a section of this title that refers to
another section of this title, does not, for the purpose of such reference,
affect the meaning of a term used in such other section; and
(9) "United States trustee" includes a designee of the United
States trustee.
[Rev. 4-29-05]
11
USC § 103. Applicability of chapters
(a) Except as provided in section
1161 of this title, chapters
1, 3,
and 5
of this title apply in a case under chapter
7, 11, 12,
or 13
of this title, and this chapter, sections
307, 362(n),
555
through 557,
and 559
through 562
apply in a case under chapter
15.
(b) Subchapters
I and II
of chapter 7 of this
title apply only in a case under such chapter.
(c) Subchapter
III of chapter 7
of this title applies only in a case under such chapter concerning a
stockbroker.
(d) Subchapter
IV of chapter 7
of this title applies only in a case under such chapter concerning a commodity
broker.
(e) Scope of Application.— Subchapter
V of chapter 7
of this title shall apply only in a case under such chapter concerning the
liquidation of an uninsured State member bank, or a corporation organized
under section 25A of the Federal Reserve Act, which operates, or operates as,
a multilateral clearing organization pursuant to section 409 of the Federal
Deposit Insurance Corporation Improvement Act of 1991.
(f) Except as provided in section
901 of this title, only chapters
1 and 9
of this title apply in a case under such chapter
9.
(g) Except as provided in section
901 of this title, subchapters
I, II,
and III
of chapter 11 of
this title apply only in a case under such chapter.
(h) Subchapter
IV of chapter 11
of this title applies only in a case under such chapter concerning a railroad.
(i) Chapter
13 of this title applies only in a case under such chapter.
(j) Chapter
12 of this title applies only in a case under such chapter.
[Rev. 4-29-05]
11
USC § 104. Adjustment of dollar amounts
(a) The Judicial Conference of the United States shall transmit to the
Congress and to the President before May 1, 1985, and before May 1 of every
sixth year after May 1, 1985, a recommendation for the uniform percentage
adjustment of each dollar amount in this title and in section 1930 of title
28.
(b)
(1) On April 1, 1998, and at each 3-year interval ending on April 1
thereafter, each dollar amount in effect under sections 101(3),
101(18),
101(19A),
101(51D),
109(e),
303(b),
507(a),
522(d),
522(f)(3)
and (f)(4),
522(n),
522(p),
522(q),
523(a)(2)(C),
541(b),
547(c)(9),
707(b),
1322(d),
1325(b),
and 1326(b)(3)
of this title and section 1409(b)
of title 28 immediately before such April 1 shall be adjusted—
(A) to reflect the change in the Consumer Price Index for All Urban
Consumers, published by the Department of Labor, for the most recent
3-year period ending immediately before January 1 preceding such April 1,
and
(B) to round to the nearest $25 the dollar amount that represents such
change.
(2) Not later than March 1, 1998, and at each 3-year interval ending on
March 1 thereafter, the Judicial Conference of the United States shall
publish in the Federal Register the dollar amounts that will become
effective on such April 1 under sections 101(3),
101(18),
101(19A),
101(51D),
109(e),
303(b),
507(a),
522(d),
522(f)(3)
and (f)(4),
522(n),
522(p),
522(q),
523(a)(2)(C),
541(b),
547(c)(9),
707(b),
1322(d),
1325(b),
and 1326(b)(3)
of this title
and section 1409(b)
of title 28.
(3) Adjustments made in accordance with paragraph (1) shall not apply
with respect to cases commenced before the date of such adjustments.
[Rev. 4-29-05]
11
USC § 105. Power of court
(a) The court may issue any order, process, or judgment that is necessary
or appropriate to carry out the provisions of this title. No provision of this
title providing for the raising of an issue by a party in interest shall be
construed to preclude the court from, sua sponte, taking any action or making
any determination necessary or appropriate to enforce or implement court
orders or rules, or to prevent an abuse of process.
(b) Notwithstanding subsection (a) of this section, a court may not appoint
a receiver in a case under this title.
(c) The ability of any district judge or other officer or employee of a
district court to exercise any of the authority or responsibilities conferred
upon the court under this title shall be determined by reference to the
provisions relating to such judge, officer, or employee set forth in title
28. This subsection shall not be interpreted to exclude bankruptcy judges
and other officers or employees appointed pursuant to chapter
6 of title 28 from its operation.
(d) The court, on its own motion or on the request of a party in interest--
(1) shall hold such status conferences as are necessary
to further the expeditious and economical resolution of the case; and
(2) unless inconsistent with another provision of this title or with
applicable Federal Rules of Bankruptcy
Procedure, issue an order at any such conference prescribing such
limitations and conditions as the court deems appropriate to ensure that the
case is handled expeditiously and economically, including an order that—
(A) sets the date by which the trustee must assume or reject an
executory contract or unexpired lease; or
(B) in a case under chapter
11 of this title—
(i) sets a date by which the debtor, or trustee if one has been
appointed, shall file a disclosure statement and plan;
(ii) sets a date by which the debtor, or trustee if one has been
appointed, shall solicit acceptances of a plan;
(iii) sets the date by which a party in interest other than a debtor
may file a plan;
(iv) sets a date by which a proponent of a plan, other than the
debtor, shall solicit acceptances of such plan;
(v) fixes the scope and format of the notice to be provided regarding
the hearing on approval of the disclosure statement; or
(vi) provides that the hearing on approval of the disclosure
statement may be combined with the hearing on confirmation of the plan.
[Rev. 4-29-05]
11
USC § 106. Waiver of sovereign immunity
(a) Notwithstanding an assertion of sovereign immunity, sovereign immunity
is abrogated as to a governmental unit to the extent set forth in this section
with respect to the following:
(1) Sections 105,
106,
107, 108,
303, 346,
362, 363,
364, 365,
366, 502,
503,
505,
506,
510, 522,
523, 524,
525,
542,
543,
544,
545, 546,
547, 548,
549,
550,
551,
552,
553, 722,
724,
726,
728, 744,
749, 764,
901,
922,
926, 928,
929, 944,
1107,
1141, 1142,
1143, 1146,
1201,
1203,
1205, 1206,
1227, 1231,
1301,
1303,
1305,
and 1327
of this title.
(2) The court may hear and determine any issue arising with respect to
the application of such sections to governmental units.
(3) The court may issue against a governmental unit an order, process, or
judgment under such sections or the Federal Rules of Bankruptcy Procedure,
including an order or judgment awarding a money recovery, but not including
an award of punitive damages. Such order or judgment for costs or fees under
this title or the Federal Rules of Bankruptcy Procedure against any
governmental unit shall be consistent with the provisions and limitations of
section
2412 (d)(2)(A) of title 28.
(4) The enforcement of any such order, process, or judgment against any
governmental unit shall be consistent with appropriate nonbankruptcy law
applicable to such governmental unit and, in the case of a money judgment
against the United States, shall be paid as if it is a judgment rendered by
a district court of the United States.
(5) Nothing in this section shall create any substantive claim for relief
or cause of action not otherwise existing under this title, the Federal
Rules of Bankruptcy Procedure, or nonbankruptcy law.
(b) A governmental unit that has filed a proof of claim in the case is
deemed to have waived sovereign immunity with respect to a claim against such
governmental unit that is property of the estate and that arose out of the
same transaction or occurrence out of which the claim of such governmental
unit arose.
(c) Notwithstanding any assertion of sovereign immunity by a governmental
unit, there shall be offset against a claim or interest of a governmental unit
any claim against such governmental unit that is property of the estate.
[Rev. 4-29-05]
11
USC § 107. Public access to papers
(a) Except as provided in subsection (b) of this section, a paper filed in
a case under this title and the dockets of a bankruptcy court are public
records and open to examination by an entity at reasonable times without
charge.
(b) On request of a party in interest, the bankruptcy court shall, and on
the bankruptcy court’s own motion, the bankruptcy court may—
(1) protect an entity with respect to a trade secret or confidential
research, development, or commercial information; or
(2) protect a person with respect to scandalous or defamatory matter
contained in a paper filed in a case under this title.
(c)
(1) The bankruptcy court, for cause, may protect an individual, with
respect to the following types of information to the extent the court finds
that disclosure of such information would create undue risk of identity
theft or other unlawful injury to the individual or the individual's
property:
A) Any means of identification (as defined in section 1028(d) of title 18) contained in a paper filed, or to
be filed, in a case under this title.
(B) Other information contained in a paper described in subparagraph
(A).
(2) Upon ex parte application demonstrating cause, the court shall
provide access to information protected pursuant to paragraph (1) to an
entity acting pursuant to the police or regulatory power of a domestic
governmental unit.
(3) The United States trustee, bankruptcy administrator, trustee, and any
auditor serving under section 586(f) of title 28--
(A) shall have full access to all information contained in any paper
filed or submitted in a case under this title; and
(B) shall not disclose information specifically protected by the court
under this title.
[Rev. 4-29-05]
11
USC § 108. Extension of time
(a) If applicable nonbankruptcy law, an order entered in a nonbankruptcy
proceeding, or an agreement fixes a period within which the debtor may
commence an action, and such period has not expired before the date of the
filing of the petition, the trustee may commence such action only before the
later of—
(1) the end of such period, including any suspension of such period
occurring on or after the commencement of the case; or
(2) two years after the order for relief.
(b) Except as provided in subsection (a) of this section, if applicable
nonbankruptcy law, an order entered in a nonbankruptcy proceeding, or an
agreement fixes a period within which the debtor or an individual protected
under section
1201 or 1301
of this title may file any pleading, demand, notice, or proof of claim or
loss, cure a default, or perform any other similar act, and such period has
not expired before the date of the filing of the petition, the trustee may
only file, cure, or perform, as the case may be, before the later of—
(1) the end of such period, including any suspension of such period
occurring on or after the commencement of the case; or
(2) 60 days after the order for relief.
(c) Except as provided in section
524 of this title, if applicable nonbankruptcy law, an order entered in a
nonbankruptcy proceeding, or an agreement fixes a period for commencing or
continuing a civil action in a court other than a bankruptcy court on a claim
against the debtor, or against an individual with respect to which such
individual is protected under section
1201 or 1301
of this title, and such period has not expired before the date of the filing
of the petition, then such period does not expire until the later of—
(1) the end of such period, including any suspension of such period
occurring on or after the commencement of the case; or
(2) 30 days after notice of the termination or expiration of the stay
under section 362,
922,
1201,
or 1301
of this title, as the case may be, with respect to such claim.
[Rev. 4-29-05]
11
USC § 109. Who may be a debtor
(a) Notwithstanding any other provision of this
section, only a person that resides or has a domicile, a place of business, or
property in the United States, or a municipality, may be a debtor under this
title.
(b) A person may be a debtor under chapter
7 of this title only if such person is not—
(1) a railroad;
(2) a domestic insurance company, bank, savings
bank, cooperative bank, savings and loan association, building and loan
association, homestead association, a New Markets Venture Capital company as
defined in section 351 of the Small Business Investment Act of 1958, a small
business investment company licensed by the Small Business Administration
under
section
301 of the Small Business Investment Act of 1958, credit union, or
industrial bank or similar institution which is an insured bank as defined
in section 3(h) of the Federal Deposit Insurance Act, except that an
uninsured State member bank, or a corporation organized under section 25A of
the Federal Reserve Act, which operates, or operates as, a multilateral
clearing organization pursuant to section 409 of the Federal Deposit
Insurance Corporation Improvement Act of 1991 may be a debtor if a petition
is filed at the direction of the Board of Governors of the Federal Reserve
System; or
(3)
(A) a foreign insurance company, engaged in such business in the United
States; or
(B) a foreign bank, savings bank, cooperative bank, savings and loan
association, building and loan association, or credit union, that has a
branch or agency (as defined in section 1(b) of the International Banking
Act of 1978 in the United States.
(c) An entity may be a debtor
under chapter
9 of this title if and only if such entity—
(1) is a municipality;
(2) is specifically authorized, in its capacity
as a municipality or by name, to be a debtor under such chapter by State
law, or by a governmental officer or organization empowered by State law to
authorize such entity to be a debtor under such chapter;
(3) is insolvent;
(4) desires to effect a plan to adjust such
debts; and
(5)
(A) has obtained the agreement of creditors holding at least a majority
in amount of the claims of each class that such entity intends to impair
under a plan in a case under such chapter;
(B) has negotiated in good faith with creditors and has failed to
obtain the agreement of creditors holding at least a majority in amount of
the claims of each class that such entity intends to impair under a plan
in a case under such chapter;
(C) is unable to negotiate with creditors because such negotiation is
impracticable; or
(D) reasonably believes that a creditor may attempt to obtain a
transfer that is avoidable under section
547 of this title.
(d) Only a railroad, a person that may be a debtor
under chapter 7 of
this title (except a stockbroker or a commodity broker), and an uninsured
State member bank, or a corporation organized under section 25A of the Federal
Reserve Act, which operates, or operates as, a multilateral clearing
organization pursuant to section 409 of the Federal Deposit Insurance
Corporation Improvement Act of 1991 may be a debtor under chapter
11 of this title.
(e) Only an individual with regular income that owes,
on the date of the filing of the petition, noncontingent, liquidated,
unsecured debts of less than $250,000 []
and noncontingent, liquidated, secured debts of less than $750,000 [],
or an individual with regular income and such individual’s spouse, except a
stockbroker or a commodity broker, that owe, on the date of the filing of the
petition, noncontingent, liquidated, unsecured debts that aggregate less than
$250,000 []
and noncontingent, liquidated, secured debts of less than $750,000 []
may be a debtor under chapter
13 of this title.
[Dollar amounts in this paragraph are adjusted on April 1
every 3 years by section
104. Adjusted amounts for
are in brackets.]
(f) Only a family farmer or family
fisherman with regular annual income may be a debtor under chapter
12 of this title.
(g) Notwithstanding any other provision of this
section, no individual or family farmer may be a debtor under this title who
has been a debtor in a case pending under this title at any time in the
preceding 180 days if—
(1) the case was dismissed by the court for
willful failure of the debtor to abide by orders of the court, or to appear
before the court in proper prosecution of the case; or
(2) the debtor requested and obtained the
voluntary dismissal of the case following the filing of a request for relief
from the automatic stay provided by section
362 of this title.
(h)
(1) Subject to paragraphs (2) and
(3), and notwithstanding any other provision of this section, an individual
may not be a debtor under this title unless such individual has, during the
180-day period preceding the date of filing of the petition by such
individual, received from an approved nonprofit budget and credit counseling
agency described in section
111(a) an individual or group briefing (including a briefing conducted
by telephone or on the Internet) that outlined the opportunities for
available credit counseling and assisted such individual in performing a
related budget analysis.
(2)
(A) Paragraph (1) shall not apply with respect to a debtor who resides
in a district for which the United States trustee (or the bankruptcy
administrator, if any) determines that the approved nonprofit budget and
credit counseling agencies for such district are not reasonably able to
provide adequate services to the additional individuals who would
otherwise seek credit counseling from such agencies by reason of the
requirements of paragraph (1).
(B) The United States trustee (or the bankruptcy administrator, if any)
who makes a determination described in subparagraph (A) shall review such
determination not later than 1 year after the date of such determination,
and not less frequently than annually thereafter. Notwithstanding the
preceding sentence, a nonprofit budget and credit counseling agency may be
disapproved by the United States trustee (or the bankruptcy administrator,
if any) at any time.
(3)
(A) Subject to subparagraph (B), the requirements of paragraph (1)
shall not apply with respect to a debtor who submits to the court a
certification that--
(i) describes exigent circumstances that merit a waiver of the
requirements of paragraph (1);
(ii) states that the debtor requested credit counseling services from
an approved nonprofit budget and credit counseling agency, but was
unable to obtain the services referred to in paragraph (1) during the
5-day period beginning on the date on which the debtor made that
request; and
(iii) is satisfactory to the court.
(B) With respect to a debtor, an exemption under subparagraph (A) shall
cease to apply to that debtor on the date on which the debtor meets the
requirements of paragraph (1), but in no case may the exemption apply to
that debtor after the date that is 30 days after the debtor files a
petition, except that the court, for cause, may order an additional 15
days.
(4) The requirements of paragraph (1) shall not
apply with respect to a debtor whom the court determines, after notice and
hearing, is unable to complete those requirements because of incapacity,
disability, or active military duty in a military combat zone. For the
purposes of this paragraph, incapacity means that the debtor is impaired by
reason of mental illness or mental deficiency so that he is incapable of
realizing and making rational decisions with respect to his financial
responsibilities; and "disability" means that the debtor is so
physically impaired as to be unable, after reasonable effort, to participate
in an in person, telephone, or Internet briefing required under paragraph
(1).
[Rev. 4-29-05]
11
USC § 110. Penalty for persons who negligently or fraudulently prepare
bankruptcy petitions
(a) In this section—
(1) "bankruptcy petition preparer"
means a person, other than an attorney for
the debtor or an employee of such attorney under the direct supervision of
such attorney, who prepares for compensation a document for filing;
and
(2) "document for filing" means a
petition or any other document prepared for filing by a debtor in a United
States bankruptcy court or a United States district court in connection with
a case under this title.
(b)
(1) A bankruptcy petition preparer who prepares a
document for filing shall sign the document and print on the document the
preparer’s name and address. If a bankruptcy petition
preparer is not an individual, then an officer, principal, responsible
person, or partner of the bankruptcy petition preparer shall be required
to--
(A) sign the document for filing; and
(B) print on the document the name and
address of that officer, principal, responsible person, or partner.
(2)
(A) Before preparing any
document for filing or accepting any fees from a debtor, the bankruptcy
petition preparer shall provide to the debtor a written notice which shall
be on an official form prescribed by the Judicial Conference of the United
States in accordance with rule
9009 of the Federal Rules of Bankruptcy Procedure.
(B) The notice under subparagraph (A)--
(i) shall inform the debtor in simple language that a bankruptcy
petition preparer is not an attorney and may not practice law or give
legal advice;
(ii) may contain a description of examples of legal advice that a
bankruptcy petition preparer is not authorized to give, in addition to
any advice that the preparer may not give by reason of subsection
(e)(2); and
(iii) shall--
(I) be signed by the debtor and, under penalty of perjury, by the
bankruptcy petition preparer; and
(II) be filed with any document for filing.
(c)
(1) A bankruptcy petition preparer who prepares a
document for filing shall place on the document, after the preparer’s
signature, an identifying number that identifies individuals who prepared
the document.
(2)
(A) Subject to subparagraph (B), for
purposes of this section, the identifying number of a bankruptcy
petition preparer shall be the Social Security account number of each
individual who prepared the document or assisted in its preparation.
(B) If a bankruptcy petition
preparer is not an individual, the identifying number of the bankruptcy
petition preparer shall be the Social Security account number of the
officer, principal, responsible person, or partner of the bankruptcy
petition preparer.
(d) A bankruptcy petition
preparer shall, not later than the time at which a document for filing is
presented for the debtor’s signature, furnish to the debtor a copy of the
document.
(e)
(1) A bankruptcy petition preparer shall not
execute any document on behalf of a debtor.
(2)
(A) A bankruptcy petition
preparer may not offer a potential bankruptcy debtor any legal advice,
including any legal advice described in subparagraph (B).
(B) The legal advice referred to in
subparagraph (A) includes advising the debtor--
(i) whether--
(I) to file a petition under this title; or
(II) commencing a case under chapter
7, 11,
12,
or 13
is appropriate;
(ii) whether the debtor's debts will be discharged in a case under
this title;
(iii) whether the debtor will be able to retain the debtor's home,
car, or other property after commencing a case under this title;
(iv) concerning--
(I) the tax consequences of a case brought under this title; or
(II) the dischargeability of tax claims;
(v) whether the debtor may or should promise to repay debts to a
creditor or enter into a reaffirmation agreement with a creditor to
reaffirm a debt;
(vi) concerning how to characterize the nature of the debtor's
interests in property or the debtor's debts; or
(vii) concerning bankruptcy procedures and rights.
(f) A bankruptcy petition
preparer shall not use the word "legal" or any similar term in any
advertisements, or advertise under any category that includes the word
"legal" or any similar term.
(g) A bankruptcy petition
preparer shall not collect or receive any payment from the debtor or on behalf
of the debtor for the court fees in connection with filing the petition.
(h)
(1) The Supreme Court may
promulgate rules under section
2075 of title 28, or the Judicial Conference of the United States may
prescribe guidelines, for setting a maximum allowable fee chargeable by a
bankruptcy petition preparer. A bankruptcy petition preparer shall notify
the debtor of any such maximum amount before preparing any document for
filing for a debtor or accepting any fee from the debtor.
(2) A declaration under
penalty of perjury by the bankruptcy petition preparer shall
be filed together with the petition, disclosing any fee received from
or on behalf of the debtor within 12 months immediately prior to the filing
of the case, and any unpaid fee charged to the debtor. If
rules or guidelines setting a maximum fee for services have been promulgated
or prescribed under paragraph (1), the declaration under this paragraph
shall include a certification that the bankruptcy petition preparer complied
with the notification requirement under paragraph (1).
(3)
(A) The court shall disallow and order the
immediate turnover to the bankruptcy trustee any fee referred to in
paragraph (2) found to be in excess of the value of any services--
(i) rendered by the bankruptcy petition preparer during the 12-month
period immediately preceding the date of the filing of the petition; or
(ii) found to be in violation of any rule or guideline promulgated or
prescribed under paragraph (1).
(B) All fees charged by a bankruptcy
petition preparer may be forfeited in any case in which the bankruptcy
petition preparer fails to comply with this subsection or subsection
(b), (c),
(d),
(e),
(f),
or (g).
(C) An individual may exempt any funds
recovered under this paragraph under section
522(b).
(4) The debtor, the trustee,
a creditor, the
United States trustee (or the bankruptcy administrator, if any) or the
court, on the initiative of the court, may file a motion for an order
under paragraph (2).
(5)
A bankruptcy petition preparer shall be fined not more than $500 for each
failure to comply with a court order to turn over funds within 30 days of
service of such order.
(i)
(1) If a bankruptcy petition
preparer violates this section or commits any act that the court finds to be
fraudulent, unfair, or deceptive, on the motion of the debtor, trustee,
United States trustee (or the bankruptcy administrator, if any), and after
notice and a hearing, the court shall order the bankruptcy petition preparer
to pay to the debtor--
(A) the debtor’s actual damages;
(B) the greater of--
(i) $2,000; or
(ii) twice the amount paid by the debtor to the bankruptcy petition
preparer for the preparer’s services; and
(C) reasonable attorneys’ fees and costs
in moving for damages under this subsection.
(2) If the trustee or creditor moves for damages
on behalf of the debtor under this subsection, the bankruptcy petition
preparer shall be ordered to pay the movant the additional amount of $1,000
plus reasonable attorneys’ fees and costs incurred.
(j)
(1) A debtor for whom a bankruptcy petition
preparer has prepared a document for filing, the trustee, a creditor, or the
United States trustee in the district in which the bankruptcy petition
preparer resides, has conducted business, or the United States trustee in
any other district in which the debtor resides may bring a civil action to
enjoin a bankruptcy petition preparer from engaging in any conduct in
violation of this section or from further acting as a bankruptcy petition
preparer.
(2)
(A) In an action under paragraph (1), if the
court finds that—
(i) a bankruptcy petition preparer has—
(I) engaged in conduct in violation of this section or of any
provision of this title;
(II) misrepresented the preparer’s experience or education as a
bankruptcy petition preparer; or
(III) engaged in any other fraudulent, unfair, or deceptive
conduct; and
(ii) injunctive relief is appropriate to prevent the recurrence of
such conduct,
the court may enjoin the bankruptcy petition preparer from engaging in
such conduct.
(B) If the court finds that a bankruptcy
petition preparer has continually engaged in conduct described in
subclause (I), (II), or (III) of clause (i) and that an injunction
prohibiting such conduct would not be sufficient to prevent such person’s
interference with the proper administration of this title, has
not paid a penalty imposed under this section, or
failed to disgorge all fees ordered by the court the court may
enjoin the person from acting as a bankruptcy petition preparer.
(3) The court, as part of its
contempt power, may enjoin a bankruptcy petition preparer that has failed to
comply with a previous order issued under this section. The injunction under
this paragraph may be issued on the motion of the court, the trustee, or the
United States trustee (or the bankruptcy administrator, if any).
(4)
The court shall award to a debtor, trustee, or creditor that brings a
successful action under this subsection reasonable
attorneys' fees and costs of the action, to be paid
by the bankruptcy petition preparer.
(k) Nothing in this section shall be construed to
permit activities that are otherwise prohibited by law, including rules and
laws that prohibit the unauthorized practice of law.
(l)
(1) A bankruptcy petition preparer who fails to
comply with any provision of subsection
(b), (c),
(d),
(e),
(f),
(g),
or (h)
may be fined not more than $500 for each such failure.
(2) The court shall triple the amount of a fine
assessed under paragraph (1) in any case in which the court finds that a
bankruptcy petition preparer--
(A) advised the debtor to exclude assets or
income that should have been included on applicable schedules;
(B) advised the debtor to use a false Social
Security account number;
(C) failed to inform the debtor that the
debtor was filing for relief under this title; or
(D) prepared a document for filing in a
manner that failed to disclose the identity of the bankruptcy petition
preparer.
(3) A debtor, trustee, creditor, or United States
trustee (or the bankruptcy administrator, if any) may file a motion for an
order imposing a fine on the bankruptcy petition preparer for any violation
of this section.
(4)
(A) Fines imposed under this subsection in
judicial districts served by United States trustees shall be paid to the
United States trustee, who shall deposit an amount equal to such fines in
a special account of the United States Trustee System Fund referred to in section
586(e)(2) of title 28. Amounts deposited under this subparagraph shall
be available to fund the enforcement of this section on a national basis.
(B) Fines imposed under this subsection in
judicial districts served by bankruptcy administrators shall be deposited
as offsetting receipts to the fund established under section
1931 of title 28, and shall remain available until expended to
reimburse any appropriation for the amount paid out of such appropriation
for expenses of the operation and maintenance of the courts of the United
States.
[Rev. 4-29-05]
11
USC § 111. Nonprofit budget and credit counseling agencies;
financial management instructional courses
(a) The clerk shall maintain a
publicly available list of--
(1) nonprofit budget and credit counseling
agencies that provide 1 or more services described in section 109(h)
currently approved by the United States trustee (or the bankruptcy
administrator, if any); and
(2) instructional courses concerning personal
financial management currently approved by the United States trustee (or the
bankruptcy administrator, if any), as applicable.
(b) The United States trustee (or bankruptcy
administrator, if any) shall only approve a nonprofit budget and credit
counseling agency or an instructional course concerning personal financial
management as follows:
(1) The United States trustee (or bankruptcy
administrator, if any) shall have thoroughly reviewed the qualifications of
the nonprofit budget and credit counseling agency or of the provider of the
instructional course under the standards set forth in this section, and the
services or instructional courses that will be offered by such agency or
such provider, and may require such agency or such provider that has sought
approval to provide information with respect to such review.
(2) The United States trustee (or bankruptcy
administrator, if any) shall have determined that such agency or such
instructional course fully satisfies the applicable standards set forth in
this section.
(3) If a nonprofit budget and credit counseling
agency or instructional course did not appear on the approved list for the
district under subsection (a) immediately before approval under this
section, approval under this subsection of such agency or such instructional
course shall be for a probationary period not to exceed 6 months.
(4) At the conclusion of the applicable
probationary period under paragraph (3), the United States trustee (or
bankruptcy administrator, if any) may only approve for an additional 1-year
period, and for successive 1-year periods thereafter, an agency or
instructional course that has demonstrated during the probationary or
applicable subsequent period of approval that such agency or instructional
course--
(A) has met the standards set forth under this section during such
period; and
(B) can satisfy such standards in the future.
(5) Not later than 30 days after any final
decision under paragraph (4), an interested person may seek judicial review
of such decision in the appropriate district court of the United States.
(c)
(1) The United States trustee (or the bankruptcy
administrator, if any) shall only approve a nonprofit budget and credit
counseling agency that demonstrates that it will provide qualified
counselors, maintain adequate provision for safekeeping and payment of
client funds, provide adequate counseling with respect to client credit
problems, and deal responsibly and effectively with other matters relating
to the quality, effectiveness, and financial security of the services it
provides.
(2) To be approved by the United States trustee
(or the bankruptcy administrator, if any), a nonprofit budget and credit
counseling agency shall, at a minimum--
(A) have a board of directors the majority of which--
(i) are not employed by such agency; and
(ii) will not directly or indirectly benefit financially from the
outcome of the counseling services provided by such agency;
(B) if a fee is charged for counseling services, charge a reasonable
fee, and provide services without regard to ability to pay the fee;
(C) provide for safekeeping and payment of client funds, including an
annual audit of the trust accounts and appropriate employee bonding;
(D) provide full disclosures to a client, including funding sources,
counselor qualifications, possible impact on credit reports, and any costs
of such program that will be paid by such client and how such costs will
be paid;
(E) provide adequate counseling with respect to a client's credit
problems that includes an analysis of such client's current financial
condition, factors that caused such financial condition, and how such
client can develop a plan to respond to the problems without incurring
negative amortization of debt;
(F) provide trained counselors who receive no commissions or bonuses
based on the outcome of the counseling services provided by such agency,
and who have adequate experience, and have been adequately trained to
provide counseling services to individuals in financial difficulty,
including the matters described in subparagraph (E);
(G) demonstrate adequate experience and background in providing credit
counseling; and
(H) have adequate financial resources to provide continuing support
services for budgeting plans over the life of any repayment plan.
(d) The United States trustee (or the bankruptcy
administrator, if any) shall only approve an instructional course concerning
personal financial management--
(1) for an initial probationary period under
subsection (b)(3) if the course will provide at a minimum--
(A) trained personnel with adequate experience and training in
providing effective instruction and services;
(B) learning materials and teaching methodologies designed to assist
debtors in understanding personal financial management and that are
consistent with stated objectives directly related to the goals of such
instructional course;
(C) adequate facilities situated in reasonably convenient locations at
which such instructional course is offered, except that such facilities
may include the provision of such instructional course by telephone or
through the Internet, if such instructional course is effective;
(D) the preparation and retention of reasonable records (which shall
include the debtor's bankruptcy case number) to permit evaluation of the
effectiveness of such instructional course, including any evaluation of
satisfaction of instructional course requirements for each debtor
attending such instructional course, which shall be available for
inspection and evaluation by the Executive Office for United States
Trustees, the United States trustee (or the bankruptcy administrator, if
any), or the chief bankruptcy judge for the district in which such
instructional course is offered; and
(E) if a fee is charged for the instructional course, charge a
reasonable fee, and provide services without regard to ability to pay the
fee.
(2) for any 1-year period if the provider thereof
has demonstrated that the course meets the standards of paragraph (1) and,
in addition--
(A) has been effective in assisting a substantial number of debtors to
understand personal financial management; and
(B) is otherwise likely to increase substantially the debtor's
understanding of personal financial management.
(e) The district court may, at any time, investigate
the qualifications of a nonprofit budget and credit counseling agency referred
to in subsection (a), and request production of documents to ensure the
integrity and effectiveness of such agency. The district court may, at any
time, remove from the approved list under subsection (a) a nonprofit budget
and credit counseling agency upon finding such agency does not meet the
qualifications of subsection (b).
(f) The United States trustee (or the bankruptcy
administrator, if any) shall notify the clerk that a nonprofit budget and
credit counseling agency or an instructional course is no longer approved, in
which case the clerk shall remove it from the list maintained under subsection
(a).
(g)
(1) No nonprofit budget and credit counseling
agency may provide to a credit reporting agency information concerning
whether a debtor has received or sought instruction concerning personal
financial management from such agency.
(2) A nonprofit budget and credit counseling
agency that willfully or negligently fails to comply with any requirement
under this title with respect to a debtor shall be liable for damages in an
amount equal to the sum of--
(A) any actual damages sustained by the debtor as a result of the
violation; and
(B) any court costs or reasonable attorneys' fees (as determined by the
court) incurred in an action to recover those damages.
[Rev. 4-29-05]
11
USC § 112. Prohibition on disclosure of name of minor
children
The debtor may be required to provide information regarding
a minor child involved in matters under this title but may not be required to
disclose in the public records in the case the name of such minor child. The
debtor may be required to disclose the name of such minor child in a nonpublic
record that is maintained by the court and made available by the court for
examination by the United States trustee, the trustee, and the auditor (if
any) serving under section 586(f) of title 28, in the case. The court, the
United States trustee, the trustee, and such auditor shall not disclose the
name of such minor child maintained in such nonpublic record.
[Rev. 4-29-05]
Chapter
3. Case Administration
Subchapter I. Commencement of a Case
§ 301. Voluntary cases
§ 302. Joint cases
§ 303. Involuntary cases
§ 304.
[Deleted]
§ 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
§ 325. Effect of vacancy
§ 326. Limitation on
compensation of trustee
§ 327. Employment of
professional persons
§ 328. Limitation on
compensation of professional persons
§ 329. Debtor's transactions
with attorneys
§ 330. Compensation of
officers
§ 331. Interim compensation
§ 332. Consumer privacy
ombudsman
§ 333. Appointment of patient
care ombudsman
Subchapter III. Administration
§ 341. Meetings of creditors
and equity security holders
§ 342. Notice
§ 343. Examination of the
debtor
§ 344. Self-incrimination;
immunity
§ 345. Money of estate
§ 346. Special
provisions related to the treatment of State and local taxes
§ 347. Unclaimed property
§ 348. Effect of conversion
§ 349. Effect of dismissal
§ 350. Closing and reopening
cases
§ 351. Disposal
of patient records
Subchapter IV. Administrative Powers
§ 361. Adequate protection
§ 362. Automatic stay
§ 363. Use, sale, or lease of
property
§ 364. Obtaining credit
§ 365. Executory contracts
and unexpired leases
§ 366. Utility service
Subchapter I. Commencement of a Case
11
USC § 301. Voluntary cases
(a) A voluntary case under a chapter of this title
is commenced by the filing with the bankruptcy court of a petition under such
chapter by an entity that may be a debtor under such chapter.
(b) The commencement of a voluntary case under a
chapter of this title constitutes an order for relief under such chapter.
[Rev. 4-29-05]
11
USC § 302. Joint cases
(a) A joint case under a chapter of this title is commenced by the filing
with the bankruptcy court of a single petition under such chapter by an
individual that may be a debtor under such chapter and such individual’s
spouse. The commencement of a joint case under a chapter of this title
constitutes an order for relief under such chapter.
(b) After the commencement of a joint case, the court shall determine the
extent, if any, to which the debtors’ estates shall be consolidated.
[Rev. 4-29-05]
11
USC § 303. Involuntary cases
(a) An involuntary case may be commenced only under chapter
7 or 11 of
this title, and only against a person, except a farmer, family farmer, or a
corporation that is not a moneyed, business, or commercial corporation, that
may be a debtor under the chapter under which such case is commenced.
(b) An involuntary case against a person is commenced
by the filing with the bankruptcy court of a petition under chapter
7 or 11 of
this title—
(1) by three or more entities, each of which is either a holder of a
claim against such person that is not contingent as to liability or the
subject of a bona fide dispute as to liability or amount,
or an indenture trustee representing such a holder,
if such noncontingent, undisputed claims aggregate at
least $10,000 [
Adjusted every 3 years by section
104.] more than the value of any lien on property of the debtor
securing such claims held by the holders of such claims;
(2) if there are fewer than 12 such holders, excluding any employee or
insider of such person and any transferee of a transfer that is voidable
under section
544, 545,
547, 548,
549,
or 724(a)
of this title, by one or more of such holders that hold in the aggregate at
least $10,000 [
Adjusted every 3 years by section
104.] of such claims;
(3) if such person is a partnership—
(A) by fewer than all of the general partners in such partnership; or
(B) if relief has been ordered under this title with respect to all of
the general partners in such partnership, by a general partner in such
partnership, the trustee of such a general partner, or a holder of a claim
against such partnership; or
(4) by a foreign representative of the estate in a foreign proceeding
concerning such person.
(c) After the filing of a petition under this section
but before the case is dismissed or relief is ordered, a creditor holding an
unsecured claim that is not contingent, other than a creditor filing under
subsection (b) of this section, may join in the petition with the same effect
as if such joining creditor were a petitioning creditor under subsection (b)
of this section.
(d) The debtor, or a general partner in a partnership
debtor that did not join in the petition, may file an answer to a petition
under this section.
(e) After notice and a hearing, and for cause, the
court may require the petitioners under this section to file a bond to
indemnify the debtor for such amounts as the court may later allow under
subsection (i) of this section.
(f) Notwithstanding section
363 of this title, except to the extent that the court orders otherwise,
and until an order for relief in the case, any business of the debtor may
continue to operate, and the debtor may continue to use, acquire, or dispose
of property as if an involuntary case concerning the debtor had not been
commenced.
(g) At any time after the commencement of an
involuntary case under chapter
7 of this title but before an order for relief in the case, the court, on
request of a party in interest, after notice to the debtor and a hearing, and
if necessary to preserve the property of the estate or to prevent loss to the
estate, may order the United States trustee to appoint an interim trustee
under section
701 of this title to take possession of the property of the estate and to
operate any business of the debtor. Before an order for relief, the debtor may
regain possession of property in the possession of a trustee ordered appointed
under this subsection if the debtor files such bond as the court requires,
conditioned on the debtor’s accounting for and delivering to the trustee, if
there is an order for relief in the case, such property, or the value, as of
the date the debtor regains possession, of such property.
(h) If the petition is not timely controverted, the
court shall order relief against the debtor in an involuntary case under the
chapter under which the petition was filed. Otherwise, after trial, the court
shall order relief against the debtor in an involuntary case under the chapter
under which the petition was filed, only if—
(1) the debtor is generally not paying such debtor’s debts as such
debts become due unless such debts are the subject of a bona fide dispute;
or
(1) the debtor is generally not paying such debtor's debts as such debts
become due unless such debts are the subject of a bona fide dispute as
to liability or amount; or
(2) within 120 days before the date of the filing of the petition, a
custodian, other than a trustee, receiver, or agent appointed or authorized
to take charge of less than substantially all of the property of the debtor
for the purpose of enforcing a lien against such property, was appointed or
took possession.
(i) If the court dismisses a petition under this
section other than on consent of all petitioners and the debtor, and if the
debtor does not waive the right to judgment under this subsection, the court
may grant judgment—
(1) against the petitioners and in favor of the debtor for—
(A) costs; or
(B) a reasonable attorney’s fee; or
(2) against any petitioner that filed the petition in bad faith, for—
(A) any damages proximately caused by such filing; or
(B) punitive damages.
(j) Only after notice to all creditors and a hearing
may the court dismiss a petition filed under this section—
(1) on the motion of a petitioner;
(2) on consent of all petitioners and the debtor; or
(3) for want of prosecution.
[Rev. 4-29-05]
11
USC § 304.
[Deleted]
[Rev. 4-29-05]
11
USC § 305. Abstention
(a) The court, after notice and a hearing, may dismiss a case under this
title, or may suspend all proceedings in a case under this title, at any time
if—
(1) the interests of creditors and the debtor would be better served by
such dismissal or suspension; or
(2)
(A) a
petition under section
1515 for recognition of a foreign proceeding has been granted; and
(B) the
purposes of chapter
15 of this title would be best served by such dismissal or suspension.
(b) A foreign representative may seek dismissal or suspension under
subsection (a)(2) of this section.
(c) An order under subsection (a) of this section dismissing a case or
suspending all proceedings in a case, or a decision not so to dismiss or
suspend, is not reviewable by appeal or otherwise by the court of appeals
under section
158(d), 1291,
or 1292
of title 28 or by the Supreme Court of the United States under section
1254 of title 28.
[Rev. 4-29-05]
11
USC § 306. Limited appearance
An appearance in a bankruptcy court by a foreign representative in connection
with a petition or request under section
303
or 305
of this title does not submit such foreign representative to the jurisdiction of
any court in the United States for any other purpose, but the bankruptcy court
may condition any order under section
303
or 305
of this title on compliance by such foreign representative with the orders of
such bankruptcy court.
[Rev. 4-29-05]
11
USC § 307. United States trustee
The United States trustee may raise and may appear and be heard on any issue
in any case or proceeding under this title but may not file a plan pursuant to section
1121(c) of this title.
[Rev. 4-29-05]
11
USC § 308. Debtor reporting requirements
(a) For purposes of this section, the term
"profitability" means, with respect to a debtor, the amount of money
that the debtor has earned or lost during current and recent fiscal periods.
(b) A small business debtor shall file periodic financial and other reports
containing information including--
(1) the debtor's profitability;
(2) reasonable approximations of the debtor's projected cash receipts and
cash disbursements over a reasonable period;
(3) comparisons of actual cash receipts and disbursements with
projections in prior reports;
(4)
(A) whether the debtor is--
(i) in compliance in all material respects with postpetition
requirements imposed by this title and the Federal
Rules of Bankruptcy Procedure; and
(ii) timely filing tax returns and other required government filings
and paying taxes and other administrative expenses when due;
(B) if the debtor is not in compliance with the requirements referred
to in subparagraph (A)(i) or filing tax returns and other required
government filings and making the payments referred to in subparagraph
(A)(ii), what the failures are and how, at what cost, and when the debtor
intends to remedy such failures; and
(C) such other matters as are in the best interests of the debtor and
creditors, and in the public interest in fair and efficient procedures
under chapter 11
of this title.
[Rev. 4-29-05]
Subchapter II. Officers
11
USC § 321. Eligibility to serve as trustee
(a) A person may serve as trustee in a case under this title only if such
person is—
(1) an individual that is competent to perform the duties of trustee and,
in a case under chapter 7, 12, or 13 of this title, resides or has an office
in the judicial district within which the case is pending, or in any
judicial district adjacent to such district; or
(2) a corporation authorized by such corporation’s charter or bylaws to
act as trustee, and, in a case under chapter 7, 12, or 13 of this title,
having an office in at least one of such districts.
(b) A person that has served as an examiner in the case may not serve as
trustee in the case.
(c) The United States trustee for the judicial district in which the case
is pending is eligible to serve as trustee in the case if necessary.
[Rev. 4-30-05]
11
USC § 322. Qualification of trustee
(a) Except as provided in subsection (b)(1), a person selected under section
701, 702,
703,
1104,
1163,
1202,
or 1302
of this title to serve as trustee in a case under this title qualifies if
before five days after such selection, and before beginning official duties,
such person has filed with the court a bond in favor of the United States
conditioned on the faithful performance of such official duties.
(b)
(1) The United States trustee qualifies wherever such trustee serves as
trustee in a case under this title.
(2) The United States trustee shall determine—
(A) the amount of a bond required to be filed under subsection (a) of
this section; and
(B) the sufficiency of the surety on such bond.
(c) A trustee is not liable personally or on such trustee’s bond in
favor of the United States for any penalty or forfeiture incurred by the
debtor.
(d) A proceeding on a trustee’s bond may not be commenced after two years
after the date on which such trustee was discharged.
[Rev. 4-30-05]
11
USC § 323. Role and capacity of trustee
(a) The trustee in a case under this title is the representative of the
estate.
(b) The trustee in a case under this title has capacity to sue and be sued.
[Rev. 4-30-05]
11
USC § 324. Removal of trustee or examiner
(a) The court, after notice and a hearing, may remove a trustee, other than
the United States trustee, or an examiner, for cause.
(b) Whenever the court removes a trustee or examiner under subsection (a)
in a case under this title, such trustee or examiner shall thereby be removed
in all other cases under this title in which such trustee or examiner is then
serving unless the court orders otherwise.
[Rev. 4-30-05]
11
USC § 325. Effect of vacancy
A vacancy in the office of trustee during a case does not abate any pending
action or proceeding, and the successor trustee shall be substituted as a party
in such action or proceeding.
[Rev. 4-30-05]
11
USC § 326. Limitation on compensation of trustee
(a) In a case under chapter
7 or 11, the
court may allow reasonable compensation under section
330 of this title of the trustee for the trustee’s services, payable
after the trustee renders such services, not to exceed 25 percent on the first
$5,000 or less, 10 percent on any amount in excess of $5,000 but not in excess
of $50,000, 5 percent on any amount in excess of $50,000 but not in excess of
$1,000,000, and reasonable compensation not to exceed 3 percent of such moneys
in excess of $1,000,000, upon all moneys disbursed or turned over in the case
by the trustee to parties in interest, excluding the debtor, but including
holders of secured claims.
(b) In a case under chapter
12 or 13
of this title, the court may not allow compensation for services or
reimbursement of expenses of the United States trustee or of a standing
trustee appointed under section
586(b) of title 28, but may allow reasonable compensation under section
330 of this title of a trustee appointed under section
1202(a) or 1302(a)
of this title for the trustee’s services, payable after the trustee renders
such services, not to exceed five percent upon all payments under the plan.
(c) If more than one person serves as trustee in the case, the aggregate
compensation of such persons for such service may not exceed the maximum
compensation prescribed for a single trustee by subsection (a) or (b) of this
section, as the case may be.
(d) The court may deny allowance of compensation for services or
reimbursement of expenses of the trustee if the trustee failed to make
diligent inquiry into facts that would permit denial of allowance under section
328(c) of this title or, with knowledge of such facts, employed a
professional person under section
327 of this title.
[Rev. 4-30-05]
11
USC § 327. Employment of professional persons
(a) Except as otherwise provided in this section, the trustee, with the
court’s approval, may employ one or more attorneys, accountants, appraisers,
auctioneers, or other professional persons, that do not hold or represent an
interest adverse to the estate, and that are disinterested persons, to
represent or assist the trustee in carrying out the trustee’s duties under
this title.
(b) If the trustee is authorized to operate the business of the debtor
under section
721, 1202,
or 1108
of this title, and if the debtor has regularly employed attorneys,
accountants, or other professional persons on salary, the trustee may retain
or replace such professional persons if necessary in the operation of such
business.
(c) In a case under chapter
7, 12,
or 11 of this
title, a person is not disqualified for employment under this section solely
because of such person’s employment by or representation of a creditor,
unless there is objection by another creditor or the United States trustee, in
which case the court shall disapprove such employment if there is an actual
conflict of interest.
(d) The court may authorize the trustee to act as attorney or accountant
for the estate if such authorization is in the best interest of the estate.
(e) The trustee, with the court’s approval, may employ, for a specified
special purpose, other than to represent the trustee in conducting the case,
an attorney that has represented the debtor, if in the best interest of the
estate, and if such attorney does not represent or hold any interest adverse
to the debtor or to the estate with respect to the matter on which such
attorney is to be employed.
(f) The trustee may not employ a person that has served as an examiner in
the case.
[Rev. 4-30-05]
11
USC § 328. Limitation on compensation of professional persons
(a) The trustee, or a committee appointed under section
1102 of this title, with the court’s approval, may employ or authorize
the employment of a professional person under section
327 or 1103
of this title, as the case may be, on any reasonable terms and conditions of
employment, including on a retainer, on an hourly basis, on a
fixed or percentage fee basis, or on a contingent fee basis.
Notwithstanding such terms and conditions, the court may allow compensation
different from the compensation provided under such terms and conditions after
the conclusion of such employment, if such terms and conditions prove to have
been improvident in light of developments not capable of being anticipated at
the time of the fixing of such terms and conditions.
(b) If the court has authorized a trustee to serve as an attorney or
accountant for the estate under section
327(d) of this title, the court may allow compensation for the trustee’s
services as such attorney or accountant only to the extent that the trustee
performed services as attorney or accountant for the estate and not for
performance of any of the trustee’s duties that are generally performed by a
trustee without the assistance of an attorney or accountant for the estate.
(c) Except as provided in section
327(c), 327(e),
or 1107(b)
of this title, the court may deny allowance of compensation for services and
reimbursement of expenses of a professional person employed under section
327 or 1103
of this title if, at any time during such professional person’s employment
under section
327 or 1103>
of this title, such professional person is not a disinterested person, or
represents or holds an interest adverse to the interest of the estate with
respect to the matter on which such professional person is employed.
[Rev. 4-30-05]
11
USC § 329. Debtor’s transactions with attorneys
(a) Any attorney representing a debtor in a case under this title, or in
connection with such a case, whether or not such attorney applies for
compensation under this title, shall file with the court a statement of the
compensation paid or agreed to be paid, if such payment or agreement was made
after one year before the date of the filing of the petition, for services
rendered or to be rendered in contemplation of or in connection with the case
by such attorney, and the source of such compensation.
(b) If such compensation exceeds the reasonable value of any such services,
the court may cancel any such agreement, or order the return of any such
payment, to the extent excessive, to—
(1) the estate, if the property transferred—
(A) would have been property of the estate; or
(B) was to be paid by or on behalf of the debtor under a plan under chapter
11, 12,
or 13
of this title; or
(2) the entity that made such payment.
[Rev. 4-30-05]
11
USC § 330. Compensation of officers
(a)
(1) After notice to the parties in interest and the United States Trustee
and a hearing, and subject to sections
326, 328,
and 329,
the court may award to a trustee, a consumer privacy
ombudsman appointed under section
332, an examiner, an ombudsman appointed under section
333, or a professional person employed under section
327 or 1103--
(A) reasonable compensation for actual, necessary services rendered by
the trustee, examiner, professional person, or attorney and by any
paraprofessional person employed by any such person; and
(B) reimbursement for actual, necessary expenses.
(2) The court may, on its own motion or on the motion of the United
States Trustee, the United States Trustee for the District or Region, the
trustee for the estate, or any other party in interest, award compensation
that is less than the amount of compensation that is requested.
(3) In
determining the amount of reasonable compensation to be awarded to
an examiner, trustee under chapter
11, or professional person, the court shall consider the nature,
the extent, and the value of such services, taking into account all relevant
factors, including--
(A) the time spent on such services;
(B) the rates charged for such services;
(C) whether the services were necessary to the administration of, or
beneficial at the time at which the service was rendered toward the
completion of, a case under this title;
(D) whether the services were performed within a reasonable amount of
time commensurate with the complexity, importance, and nature of the
problem, issue, or task addressed; and
(E) with respect to a professional person, whether the
person is board certified or otherwise has demonstrated skill and
experience in the bankruptcy field; and
(F) whether the compensation is reasonable based
on the customary compensation charged by comparably skilled practitioners
in cases other than cases under this title.
(4)
(A) Except as provided in subparagraph (B), the court shall not allow
compensation for—
(i) unnecessary duplication of services; or
(ii) services that were not—
(I) reasonably likely to benefit the debtor’s estate; or
(II) necessary to the administration of the case.
(B) In a chapter
12 or chapter
13 case in which the debtor is an individual, the court may allow
reasonable compensation to the debtor’s attorney for representing the
interests of the debtor in connection with the bankruptcy case based on a
consideration of the benefit and necessity of such services to the debtor
and the other factors set forth in this section.
(5) The court shall reduce the amount of compensation awarded under this
section by the amount of any interim compensation awarded under section
331, and, if the amount of such interim compensation exceeds the amount
of compensation awarded under this section, may order the return of the
excess to the estate.
(6) Any compensation awarded for the preparation of a fee application
shall be based on the level and skill reasonably required to prepare the
application.
(7) In determining the amount of reasonable compensation
to be awarded to a trustee, the court shall treat such compensation as a
commission, based on section
326.
(b)
(1) There shall be paid from the filing fee in a case under chapter
7 of this title $45 to the trustee serving in such case, after such
trustee’s services are rendered.
(2) The Judicial Conference of the United States—
(A) shall prescribe additional fees of the same kind as prescribed
under section
1914(b) of title 28; and
(B) may prescribe notice of appearance fees and fees charged against
distributions in cases under this title;
to pay $15 to trustees serving in cases after such trustees’ services
are rendered. Beginning 1 year after the date of the enactment of the
Bankruptcy Reform Act of 1994, such $15 shall be paid in addition to the
amount paid under paragraph (1).
(c) Unless the court orders otherwise, in a case under chapter
12 or 13
of this title the compensation paid to the trustee serving in the case shall
not be less than $5 per month from any distribution under the plan during the
administration of the plan.
(d) In a case in which the United States trustee serves as trustee, the
compensation of the trustee under this section shall be paid to the clerk of
the bankruptcy court and deposited by the clerk into the United States Trustee
System Fund established by section
589a of title 28.
[Rev. 4-30-05]
11
USC § 331. Interim compensation
A trustee, an examiner, a debtor’s attorney, or any professional person
employed under section
327 or 1103
of this title may apply to the court not more than once every 120 days after an
order for relief in a case under this title, or more often if the court permits,
for such compensation for services rendered before the date of such an
application or reimbursement for expenses incurred before such date as is
provided under section
330 of this title. After notice and a hearing, the court may allow and
disburse to such applicant such compensation or reimbursement.
[Rev. 4-30-05]
11
USC § 332. Consumer privacy ombudsman
(a) If a hearing is required under section
363(b)(1)(B), the court shall order the United States trustee to appoint,
not later than 5 days before the commencement of the hearing, 1 disinterested
person (other than the United States trustee) to serve as the consumer privacy
ombudsman in the case and shall require that notice of such hearing be timely
given to such ombudsman.
(b) The consumer privacy ombudsman may appear and be heard at such hearing
and shall provide to the court information to assist the court in its
consideration of the facts, circumstances, and conditions of the proposed sale
or lease of personally identifiable information under section
363(b)(1)(B). Such information may include presentation of--
(1) the debtor's privacy policy;
(2) the potential losses or gains of privacy to consumers if such sale or
such lease is approved by the court;
(3) the potential costs or benefits to consumers if such sale or such
lease is approved by the court; and
(4) the potential alternatives that would mitigate potential privacy
losses or potential costs to consumers.
(c) A consumer privacy ombudsman shall not disclose any personally
identifiable information obtained by the ombudsman under this title.
[Rev. 4-30-05]
11
USC § 333. Appointment of patient care ombudsman
(a)
(1) If the debtor in a case under chapter
7, 9,
or 11 is a
health care business, the court shall order, not later than 30 days after
the commencement of the case, the appointment of an ombudsman to monitor the
quality of patient care and to represent the interests of the patients of
the health care business unless the court finds that the appointment of such
ombudsman is not necessary for the protection of patients under the specific
facts of the case.
(2)
(A) If the court orders the appointment of an ombudsman under paragraph
(1), the United States trustee shall appoint 1 disinterested person (other
than the United States trustee) to serve as such ombudsman.
(B) If the debtor is a health care business that provides long-term
care, then the United States trustee may appoint the State Long-Term Care
Ombudsman appointed under the Older Americans Act of 1965 for the State in
which the case is pending to serve as the ombudsman required by paragraph
(1).
(C) If the United States trustee does not appoint a State Long-Term
Care Ombudsman under subparagraph (B), the court shall notify the State
Long-Term Care Ombudsman appointed under the Older Americans Act of 1965
for the State in which the case is pending, of the name and address of the
person who is appointed under subparagraph (A).
(b) An ombudsman appointed under subsection (a) shall--
(1) monitor the quality of patient care provided to patients of the
debtor, to the extent necessary under the circumstances, including
interviewing patients and physicians;
(2) not later than 60 days after the date of appointment, and not less
frequently than at 60-day intervals thereafter, report to the court after
notice to the parties in interest, at a hearing or in writing, regarding the
quality of patient care provided to patients of the debtor; and
(3) if such ombudsman determines that the quality of patient care
provided to patients of the debtor is declining significantly or is
otherwise being materially compromised, file with the court a motion or a
written report, with notice to the parties in interest immediately upon
making such determination.
(c)
(1) An ombudsman appointed under subsection (a) shall maintain any
information obtained by such ombudsman under this section that relates to
patients (including information relating to patient records) as confidential
information. Such ombudsman may not review confidential patient records
unless the court approves such review in advance and imposes restrictions on
such ombudsman to protect the confidentiality of such records.
(2) An ombudsman appointed under subsection (a)(2)(B) shall have access
to patient records consistent with authority of such ombudsman under the
Older Americans Act of 1965 and under non-Federal laws governing the State
Long-Term Care Ombudsman program.
[Rev. 4-30-05]
Subchapter III. Administration
11
USC § 341. Meetings of creditors and equity security holders
(a) Within a reasonable time after the order for
relief in a case under this title, the United States trustee shall convene and
preside at a meeting of creditors.
(b) The United States trustee may convene a meeting of
any equity security holders.
(c) The court may not preside at, and may not attend,
any meeting under this section including any final meeting of creditors. Notwithstanding
any local court rule, provision of a State constitution, any otherwise
applicable nonbankruptcy law, or any other requirement that representation at
the meeting of creditors under subsection (a) be by an attorney, a creditor
holding a consumer debt or any representative of the creditor (which may
include an entity or an employee of an entity and may be a representative for
more than 1 creditor) shall be permitted to appear at and participate in the
meeting of creditors in a case under chapter 7 or 13, either alone or in
conjunction with an attorney for the creditor. Nothing in this subsection
shall be construed to require any creditor to be represented by an attorney at
any meeting of creditors.
(d) Prior to the conclusion of the meeting of
creditors or equity security holders, the trustee shall orally examine the
debtor to ensure that the debtor in a case under chapter 7 of this title is
aware of—
(1) the potential consequences of seeking a discharge in bankruptcy,
including the effects on credit history;
(2) the debtor’s ability to file a petition under a different chapter
of this title;
(3) the effect of receiving a discharge of debts under this title; and
(4) the effect of reaffirming a debt, including the debtor’s knowledge
of the provisions of section
524(d) of this title.
(e) Notwithstanding subsections (a)
and (b), the court, on the request of a party in interest and after notice and
a hearing, for cause may order that the United States trustee not convene a
meeting of creditors or equity security holders if the debtor has filed a plan
as to which the debtor solicited acceptances prior to the commencement of the
case.
[Rev. 4-30-05]
11
USC § 342. Notice
[Sample notice
given by U. S. Bankruptcy Court, District of Arizona]
(a) There shall be given such notice as is appropriate, including notice to
any holder of a community claim, of an order for relief in a case under this
title.
(b) Before the commencement of a case under this title by
an individual whose debts are primarily consumer debts, the clerk shall give
to such individual written notice containing--
(1) a brief description of--
(A) chapters
7, 11, 12,
and 13
and the general purpose, benefits, and costs of proceeding under each of
those chapters; and
(B) the types of services available from credit
counseling agencies; and
(2) statements specifying that--
(A) a person who knowingly and fraudulently conceals
assets or makes a false oath or statement under penalty of perjury in
connection with a case under this title shall be subject to fine,
imprisonment, or both; and
(B) all information supplied by a debtor in connection
with a case under this title is subject to examination by the Attorney
General.
(c)
(1) If notice is required to be given by the
debtor to a creditor under this title, any rule, any applicable law, or any
order of the court, such notice shall contain the name, address, and last
4 digits of the taxpayer identification number of the debtor.
If the notice concerns an amendment that adds a creditor to
the schedules of assets and liabilities, the debtor shall include the full
taxpayer identification number in the notice sent to that creditor, but the
debtor shall include only the last 4 digits of the taxpayer identification
number in the copy of the notice filed with the court.
(2)
(A) If, within the 90 days before the commencement of a
voluntary case, a creditor supplies the debtor in at least 2
communications sent to the debtor with the current account number of the
debtor and the address at which such creditor requests to receive
correspondence, then any notice required by this title to be sent by the
debtor to such creditor shall be sent to such address and shall include
such account number.
(B) If a creditor would be in violation of applicable
nonbankruptcy law by sending any such communication within such 90-day
period and if such creditor supplies the debtor in the last 2
communications with the current account number of the debtor and the
address at which such creditor requests to receive correspondence, then
any notice required by this title to be sent by the debtor to such
creditor shall be sent to such address and shall include such account
number.
(d) In a case under chapter
7 of this title in which the debtor is an individual and in which the
presumption of abuse arises under section
707(b), the clerk shall give written notice to all creditors not later
than 10 days after the date of the filing of the petition that the presumption
of abuse has arisen.
(e)
(1) In a case under chapter
7 or 13
of this title of a debtor who is an individual, a creditor at any time may
both file with the court and serve on the debtor a notice of address to be
used to provide notice in such case to such creditor.
(2) Any notice in such case required to be provided to
such creditor by the debtor or the court later than 5 days after the court
and the debtor receive such creditor's notice of address, shall be provided
to such address.
(f)
(1) An entity may file with any bankruptcy court a notice
of address to be used by all the bankruptcy courts or by particular
bankruptcy courts, as so specified by such entity at the time such notice is
filed, to provide notice to such entity in all cases under chapters
7 and 13
pending in the courts with respect to which such notice is filed, in which
such entity is a creditor.
(2) In any case filed under chapter
7 or 13,
any notice required to be provided by a court with respect to which a notice
is filed under paragraph (1), to such entity later than 30 days after the
filing of such notice under paragraph (1) shall be provided to such address
unless with respect to a particular case a different address is specified in
a notice filed and served in accordance with subsection (e).
(3) A notice filed under paragraph (1) may be withdrawn
by such entity.
(g)
(1) Notice provided to a creditor by the debtor or the
court other than in accordance with this section (excluding this subsection)
shall not be effective notice until such notice is brought to the attention
of such creditor. If such creditor designates a person or an organizational
subdivision of such creditor to be responsible for receiving notices under
this title and establishes reasonable procedures so that such notices
receivable by such creditor are to be delivered to such person or such
subdivision, then a notice provided to such creditor other than in
accordance with this section (excluding this subsection) shall not be
considered to have been brought to the attention of such creditor until such
notice is received by such person or such subdivision.
(2) A monetary penalty may not be imposed on a creditor
for a violation of a stay in effect under section
362(a) (including a monetary penalty imposed under section
362(k)) or for failure to comply with section
542 or 543
unless the conduct that is the basis of such violation or of such failure
occurs after such creditor receives notice effective under this section of
the order for relief.
[Rev. 4-30-05]
11
USC § 343. Examination of the debtor
The debtor shall appear and submit to examination under oath at the meeting
of creditors under section
341(a) of this title. Creditors, any indenture trustee, any trustee or
examiner in the case, or the United States trustee may examine the debtor. The
United States trustee may administer the oath required under this section.
[Rev. 4-30-05]
11
USC § 344. Self-incrimination; immunity
Immunity for persons required to submit to examination, to testify, or to
provide information in a case under this title may be granted under part V of
title 18.
[Rev. 4-30-05]
11
USC § 345. Money of estates
(a) A trustee in a case under this title may make such deposit or
investment of the money of the estate for which such trustee serves as will
yield the maximum reasonable net return on such money, taking into account the
safety of such deposit or investment.
(b) Except with respect to a deposit or investment that is insured or
guaranteed by the United States or by a department, agency, or instrumentality
of the United States or backed by the full faith and credit of the United
States, the trustee shall require from an entity with which such money is
deposited or invested—
(1) a bond—
(A) in favor of the United States;
(B) secured by the undertaking of a corporate surety approved by the
United States trustee for the district in which the case is pending; and
(C) conditioned on—
(i) a proper accounting for all money so deposited or invested and
for any return on such money;
(ii) prompt repayment of such money and return; and
(iii) faithful performance of duties as a depository; or
(2) the deposit of securities of the kind specified in section
9303 of title 31;
unless the court for cause orders otherwise.
(c) An entity with which such moneys are deposited or invested is
authorized to deposit or invest such moneys as may be required under this
section.
[Rev. 4-30-05]
11
USC § 346. Special
provisions related to the treatment of State and local taxes
(a) Whenever the Internal Revenue Code of 1986 provides
that a separate taxable estate or entity is created in a case concerning a
debtor under this title, and the income, gain, loss, deductions, and credits
of such estate shall be taxed to or claimed by the estate, a separate taxable
estate is also created for purposes of any State and local law imposing a tax
on or measured by income and such income, gain, loss, deductions, and credits
shall be taxed to or claimed by the estate and may not be taxed to or claimed
by the debtor. The preceding sentence shall not apply if the case is
dismissed. The trustee shall make tax returns of income required under any
such State or local law.
(b) Whenever the Internal Revenue Code of 1986 provides that no separate
taxable estate shall be created in a case concerning a debtor under this
title, and the income, gain, loss, deductions, and credits of an estate shall
be taxed to or claimed by the debtor, such income, gain, loss, deductions, and
credits shall be taxed to or claimed by the debtor under a State or local law
imposing a tax on or measured by income and may not be taxed to or claimed by
the estate. The trustee shall make such tax returns of income of corporations
and of partnerships as are required under any State or local law, but with
respect to partnerships, shall make such returns only to the extent such
returns are also required to be made under such Code. The estate shall be
liable for any tax imposed on such corporation or partnership, but not for any
tax imposed on partners or members.
(c) With respect to a partnership or any entity treated as a partnership
under a State or local law imposing a tax on or measured by income that is a
debtor in a case under this title, any gain or loss resulting from a
distribution of property from such partnership, or any distributive share of
any income, gain, loss, deduction, or credit of a partner or member that is
distributed, or considered distributed, from such partnership, after the
commencement of the case, is gain, loss, income, deduction, or credit, as the
case may be, of the partner or member, and if such partner or member is a
debtor in a case under this title, shall be subject to tax in accordance with
subsection (a) or (b).
(d) For purposes of any State or local law imposing a tax on or measured by
income, the taxable period of a debtor in a case under this title shall
terminate only if and to the extent that the taxable period of such debtor
terminates under the Internal Revenue Code of 1986.
(e) The estate in any case described in subsection (a) shall use the same
accounting method as the debtor used immediately before the commencement of
the case, if such method of accounting complies with applicable nonbankruptcy
tax law.
(f) For purposes of any State or local law imposing a tax on or measured by
income, a transfer of property from the debtor to the estate or from the
estate to the debtor shall not be treated as a disposition for purposes of any
provision assigning tax consequences to a disposition, except to the extent
that such transfer is treated as a disposition under the Internal Revenue Code
of 1986.
(g) Whenever a tax is imposed pursuant to a State or local law imposing a
tax on or measured by income pursuant to subsection (a) or (b), such tax shall
be imposed at rates generally applicable to the same types of entities under
such State or local law.
(h) The trustee shall withhold from any payment of claims for wages,
salaries, commissions, dividends, interest, or other payments, or collect, any
amount required to be withheld or collected under applicable State or local
tax law, and shall pay such withheld or collected amount to the appropriate
governmental unit at the time and in the manner required by such tax law, and
with the same priority as the claim from which such amount was withheld or
collected was paid.
(i)
(1) To the extent that any State or local law imposing a tax on or
measured by income provides for the carryover of any tax attribute from one
taxable period to a subsequent taxable period, the estate shall succeed to
such tax attribute in any case in which such estate is subject to tax under
subsection (a).
(2) After such a case is closed or dismissed, the debtor shall succeed to
any tax attribute to which the estate succeeded under paragraph (1) to the
extent consistent with the Internal Revenue Code of 1986.
(3) The estate may carry back any loss or tax attribute to a taxable
period of the debtor that ended before the date of the order for relief
under this title to the extent that--
(A) applicable State or local tax law provides for a carryback in the
case of the debtor; and
(B) the same or a similar tax attribute may be carried back by the
estate to such a taxable period of the debtor under the Internal Revenue
Code of 1986.
(j)
(1) For purposes of any State or local law imposing a tax on or measured
by income, income is not realized by the estate, the debtor, or a successor
to the debtor by reason of discharge of indebtedness in a case under this
title, except to the extent, if any, that such income is subject to tax
under the Internal Revenue Code of 1986.
(2) Whenever the Internal Revenue Code of 1986 provides that the amount
excluded from gross income in respect of the discharge of indebtedness in a
case under this title shall be applied to reduce the tax attributes of the
debtor or the estate, a similar reduction shall be made under any State or
local law imposing a tax on or measured by income to the extent such State
or local law recognizes such attributes. Such State or local law may also
provide for the reduction of other attributes to the extent that the full
amount of income from the discharge of indebtedness has not been applied.
(k)
(1) Except as provided in this section and section
505, the time and manner of filing tax returns and the items of income,
gain, loss, deduction, and credit of any taxpayer shall be determined under
applicable nonbankruptcy law.
(2) For Federal tax purposes, the provisions of this section are subject
to the Internal Revenue Code of 1986 and other applicable Federal
nonbankruptcy law.
[Rev. 4-30-05]
11
USC § 347. Unclaimed property
(a) Ninety days after the final distribution under section
726, 1226,
or 1326
of this title in a case under chapter
7, 12,
or 13
of this title, as the case may be, the trustee shall stop payment on any check
remaining unpaid, and any remaining property of the estate shall be paid into
the court and disposed of under chapter
129 of title 28.
(b) Any security, money, or other property remaining unclaimed at the
expiration of the time allowed in a case under chapter
9, 11, or 12
of this title for the presentation of a security or the performance of any
other act as a condition to participation in the distribution under any plan
confirmed under section
943(b), 1129,
1173,
or 1225
of this title, as the case may be, becomes the property of the debtor or of
the entity acquiring the assets of the debtor under the plan, as the case may
be.
[Rev. 4-30-05]
11
USC § 348. Effect of conversion
(a) Conversion of a case from a case under one chapter of this title to a
case under another chapter of this title constitutes an order for relief under
the chapter to which the case is converted, but, except as provided in
subsections (b) and (c) of this section, does not effect a change in the date
of the filing of the petition, the commencement of the case, or the order for
relief.
(b) Unless the court for cause orders otherwise, in sections
701(a), 727(a)(10),
727(b),
728(a),
728(b),
1102(a),
1110(a)(1),
1121(b),
1121(c),
1141(d)(4),
1146(a),
1146(b),
1201(a),
1221,
1228(a),
1301(a),
and 1305(a)
of this title, "the order for relief under this chapter" in a
chapter to which a case has been converted under section
706, 1112,
1208,
or 1307
of this title means the conversion of such case to such chapter.
(c) Sections
342 and 365(d)
of this title apply in a case that has been converted under section
706, 1112,
1208,
or 1307
of this title, as if the conversion order were the order for relief.
(d) A claim against the estate or the debtor that arises after the order
for relief but before conversion in a case that is converted under section
1112, 1208,
or 1307
of this title, other than a claim specified in section
503(b) of this title, shall be treated for all purposes as if such claim
had arisen immediately before the date of the filing of the petition.
(e) Conversion of a case under section
706, 1112,
1208,
or 1307
of this title terminates the service of any trustee or examiner that is
serving in the case before such conversion.
(f)
(1) Except as provided in paragraph (2), when a case under chapter
13 of this title is converted to a case under another chapter under this
title--
(A) property of the estate in the converted case shall consist of
property of the estate, as of the date of filing of the petition, that
remains in the possession of or is under the control of the debtor on the
date of conversion;
(B) valuations of property and of allowed secured claims in the chapter
13 case shall apply only
in a case converted to a case under chapter
11 or 12,
but not in a case converted to a case under chapter
7, with allowed secured claims in cases under chapters
11 and 12
reduced to the extent that they have been paid in accordance with the chapter
13 plan;
and
(C) with respect to cases converted from chapter
13--
(i) the claim of any creditor holding security as of
the date of the petition shall continue to be secured by that security
unless the full amount of such claim determined under applicable
nonbankruptcy law has been paid in full as of the date of conversion,
notwithstanding any valuation or determination of the amount of an
allowed secured claim made for the purposes of the case under chapter
13; and
(ii) unless a prebankruptcy default has been fully
cured under the plan at the time of conversion, in any proceeding under
this title or otherwise, the default shall have the effect given under
applicable nonbankruptcy law.
(2) If the debtor converts a case under chapter
13 of this title to a case under another chapter under this title in bad
faith, the property of the estate in the converted
case shall consist of the property of the estate as of the date of
conversion.
[Rev. 4-30-05]
11
USC § 349. Effect of dismissal
(a) Unless the court, for cause, orders otherwise, the dismissal of a case
under this title does not bar the discharge, in a later case under this title,
of debts that were dischargeable in the case dismissed; nor does the dismissal
of a case under this title prejudice the debtor with regard to the filing of a
subsequent petition under this title, except as provided in section
109(g) of this title.
(b) Unless the court, for cause, orders otherwise, a dismissal of a case
other than under section 742 of this title—
(1) reinstates—
(A) any proceeding or custodianship superseded under section
543 of this title;
(B) any transfer avoided under section
522, 544,
545,
547,
548,
549,
or 724(a)
of this title, or preserved under section
510(c)(2), 522(i)(2),
or 551
of this title; and
(C) any lien voided under section
506(d) of this title;
(2) vacates any order, judgment, or transfer ordered, under section
522(i)(1), 542,
550,
or 553 of
this title; and
(3) revests the property of the estate in the entity in which such
property was vested immediately before the commencement of the case under
this title.
[Rev. 4-30-05]
11
USC § 350. Closing and reopening cases
(a) After an estate is fully administered and the court has discharged the
trustee, the court shall close the case.
(b) A case may be reopened in the court in which such case was closed to
administer assets, to accord relief to the debtor, or for other cause.
[Rev. 4-30-05]
11
USC § 351. Disposal of patient records
If a health care business commences a case under chapter
7, 9,
or 11, and the
trustee does not have a sufficient amount of funds to pay for the storage of
patient records in the manner required under applicable Federal or State law,
the following requirements shall apply:
(1) The trustee shall--
(A) promptly publish notice, in 1 or more appropriate newspapers, that if
patient records are not claimed by the patient or an insurance provider (if
applicable law permits the insurance provider to make that claim) by the
date that is 365 days after the date of that notification, the trustee will
destroy the patient records; and
(B) during the first 180 days of the 365-day period described in
subparagraph (A), promptly attempt to notify directly each patient that is
the subject of the patient records and appropriate insurance carrier
concerning the patient records by mailing to the most recent known address
of that patient, or a family member or contact person for that patient, and
to the appropriate insurance carrier an appropriate notice regarding the
claiming or disposing of patient records.
(2) If, after providing the notification under paragraph (1), patient
records are not claimed during the 365-day period described under that
paragraph, the trustee shall mail, by certified mail, at the end of such
365-day period a written request to each appropriate Federal agency to request
permission from that agency to deposit the patient records with that agency,
except that no Federal agency is required to accept patient records under this
paragraph.
(3) If, following the 365-day period described in paragraph (2) and after
providing the notification under paragraph (1), patient records are not
claimed by a patient or insurance provider, or request is not granted by a
Federal agency to deposit such records with that agency, the trustee shall
destroy those records by--
(A) if the records are written, shredding or burning the records; or
(B) if the records are magnetic, optical, or other electronic records, by
otherwise destroying those records so that those records cannot be
retrieved.
[Rev. 4-30-05]
Subchapter IV. Administrative Powers
11
USC § 361. Adequate protection
When adequate protection is required under section
362, 363,
or 364
of this title of an interest of an entity in property, such adequate protection
may be provided by--
(1) requiring the trustee to make a cash payment or periodic cash payments
to such entity, to the extent that the stay under section 362 of this title,
use, sale, or lease under section
363 of this title, or any grant of a lien under section
364 of this title results in a decrease in the value of such entity’s
interest in such property;
(2) providing to such entity an additional or replacement lien to the
extent that such stay, use, sale, lease, or grant results in a decrease in the
value of such entity’s interest in such property; or
(3) granting such other relief, other than entitling such entity to
compensation allowable under section
503(b)(1) of this title as an administrative expense, as will result in
the realization by such entity of the indubitable equivalent of such entity’s
interest in such property.
[Rev. 5-2-05]
11
USC § 362. Automatic stay
(a) Except as provided in subsection (b) of this
section, a petition filed under section
301, 302,
or 303
of this title, or an application filed under section 5(a)(3) of the Securities
Investor Protection Act of 1970, operates as a stay, applicable to all
entities, of--
(1) the commencement or continuation, including
the issuance or employment of process, of a judicial, administrative, or
other action or proceeding against the debtor that was or could have been
commenced before the commencement of the case under this title, or to
recover a claim against the debtor that arose before the commencement of the
case under this title;
(2) the enforcement, against the debtor or
against property of the estate, of a judgment obtained before the
commencement of the case under this title;
(3) any act to obtain possession of property of
the estate or of property from the estate or to exercise control over
property of the estate;
(4) any act to create, perfect, or enforce any
lien against property of the estate;
(5) any act to create, perfect, or enforce
against property of the debtor any lien to the extent that such lien secures
a claim that arose before the commencement of the case under this title;
(6) any act to collect, assess, or recover a
claim against the debtor that arose before the commencement of the case
under this title;
(7) the setoff of any debt owing to the debtor
that arose before the commencement of the case under this title against any
claim against the debtor; and
(8) the commencement or continuation of a
proceeding before the United States Tax Court concerning a
corporate debtor's tax liability for a taxable period the bankruptcy court
may determine or concerning the tax liability of a debtor who is an
individual for a taxable period ending before the date of the order for
relief under this title.
(b) The filing of a petition under section
301, 302,
or 303
of this title, or of an application under section 5(a)(3) of the Securities
Investor Protection Act of 1970, does not operate as a stay--
(1) under subsection
(a) of this section, of the commencement or continuation of a criminal
action or proceeding against the debtor;
(2) under subsection
(a)--
(A) of the commencement or continuation of a civil
action or proceeding--
(i) for the establishment of paternity;
(ii) for the establishment or modification of an
order for domestic support obligations;
(iii) concerning child custody or visitation;
(iv) for the dissolution of a marriage, except to the
extent that such proceeding seeks to determine the division of property
that is property of the estate; or
(v) regarding domestic violence;
(B) of the collection of a domestic support obligation
from property that is not property of the estate;
(C) with respect to the withholding of income that is
property of the estate or property of the debtor for payment of a domestic
support obligation under a judicial or administrative order or a statute;
(D) of the withholding, suspension, or restriction of a
driver's license, a professional or occupational license, or a
recreational license, under State law, as specified in section 466(a)(16)
of the Social Security Act;
(E) of the reporting of overdue support owed by a
parent to any consumer reporting agency as specified in section 466(a)(7)
of the Social Security Act;
(F) of the interception of a tax refund, as specified
in sections 464 and 466(a)(3) of the Social Security Act or under an
analogous State law; or
(G) of the enforcement of a medical obligation, as
specified under title IV of the Social Security Act;
(3) under subsection
(a) of this section, of any act to perfect, or to maintain or continue
the perfection of, an interest in property to the extent that the
trustee’s rights and powers are subject to such perfection under section
546(b) of this title or to the extent that such act is accomplished
within the period provided under section
547(e)(2)(A) of this title;
(4) under paragraph
(1), (2),
(3),
or (6)
of subsection
(a) of this section, of the commencement or continuation of an action or
proceeding by a governmental unit or any organization exercising authority
under the Convention on the Prohibition of the Development, Production,
Stockpiling and Use of Chemical Weapons and on Their Destruction, opened for
signature on January 13, 1993, to enforce such governmental unit’s or
organization’s police and regulatory power, including the enforcement of a
judgment other than a money judgment, obtained in an action or proceeding by
the governmental unit to enforce such governmental unit’s or
organization’s police or regulatory power;
[(5) Repealed. Pub. L. 105–277, div. I, title
VI, § 603(1), Oct. 21, 1998, 112 Stat. 2681–866;]
(6) under subsection
(a) of this section, of the setoff by a commodity broker, forward
contract merchant, stockbroker, financial
institution, financial participant, or securities clearing agency of
any mutual debt and claim under or in connection with commodity contracts,
as defined in section
761 of this title, forward contracts, or securities contracts, as
defined in section
741 of this title, that constitutes the setoff of a claim against the
debtor for a margin payment, as defined in section
101, 741,
or 761
of this title, or settlement payment, as defined in section
101 or 741
of this title, arising out of commodity contracts, forward contracts, or
securities contracts against cash, securities, or other property held by,
pledged to, under the control of, or due from such commodity broker,
forward contract merchant, stockbroker, financial
institution, financial participant, or securities clearing agency to
margin, guarantee, secure, or settle commodity contracts, forward contracts,
or securities contracts;
(7) under subsection
(a) of this section, of the setoff by a repo participant or
financial participant, of any mutual debt and claim under or in
connection with repurchase agreements that constitutes the setoff of a claim
against the debtor for a margin payment, as defined in section
741, or 761
of this title, or settlement payment, as defined in section 741 of this
title, arising out of repurchase agreements against cash, securities, or
other property held by, pledged to, under the control of,
or due from such repo participant or financial participant
to margin, guarantee, secure or settle repurchase agreements;
(8) under subsection
(a) of this section, of the commencement of any action by the Secretary
of Housing and Urban Development to foreclose a mortgage or deed of trust in
any case in which the mortgage or deed of trust held by the Secretary is
insured or was formerly insured under the National Housing Act and covers
property, or combinations of property, consisting of five or more living
units;
(9) under subsection
(a), of--
(A) an audit by a governmental unit to determine tax liability;
(B) the issuance to the debtor by a governmental unit of a notice of
tax deficiency;
(C) a demand for tax returns; or
(D) the making of an assessment for any tax and issuance of a notice
and demand for payment of such an assessment (but any tax lien that would
otherwise attach to property of the estate by reason of such an assessment
shall not take effect unless such tax is a debt of the debtor that will
not be discharged in the case and such property or its proceeds are
transferred out of the estate to, or otherwise revested in, the debtor).
(10) under subsection
(a) of this section, of any act by a lessor to the debtor under a lease
of nonresidential real property that has terminated by the expiration of the
stated term of the lease before the commencement of or during a case under
this title to obtain possession of such property;
(11) under subsection
(a) of this section, of the presentment of a negotiable instrument and
the giving of notice of and protesting dishonor of such an instrument;
(12) under subsection
(a) of this section, after the date which is 90 days after the filing of
such petition, of the commencement or continuation, and conclusion to the
entry of final judgment, of an action which involves a debtor subject to
reorganization pursuant to chapter 11 of this title and which was brought by
the Secretary of Transportation under section 31325 of title 46 (including
distribution of any proceeds of sale) to foreclose a preferred ship or fleet
mortgage, or a security interest in or relating to a vessel or vessel under
construction, held by the Secretary of Transportation under section 207 or
title XI of the Merchant Marine Act, 1936, or under applicable State law;
(13) under subsection
(a) of this section, after the date which is 90 days after the filing of
such petition, of the commencement or continuation, and conclusion to the
entry of final judgment, of an action which involves a debtor subject to
reorganization pursuant to chapter 11 of this title and which was brought by
the Secretary of Commerce under section 31325 of title 46 (including
distribution of any proceeds of sale) to foreclose a preferred ship or fleet
mortgage in a vessel or a mortgage, deed of trust, or other security
interest in a fishing facility held by the Secretary of Commerce under
section 207 or title XI of the Merchant Marine Act, 1936;
(14) under subsection
(a) of this section, of any action by an accrediting agency regarding
the accreditation status of the debtor as an educational institution;
(15) under subsection
(a) of this section, of any action by a State licensing body regarding
the licensure of the debtor as an educational institution;
(16) under subsection
(a) of this section, of any action by a guaranty agency, as defined in
section 435(j) of the Higher Education Act of 1965 or the Secretary of
Education regarding the eligibility of the debtor to participate in programs
authorized under such Act;
(17) under subsection
(a), of the setoff by a swap participant or financial participant of a
mutual debt and claim under or in connection with one or more swap
agreements that constitutes the setoff of a claim against the debtor for any
payment or other transfer of property due from the debtor under or in
connection with any swap agreement against any payment due to the debtor
from the swap participant or financial participant under or in connection
with any swap agreement or against cash, securities, or other property held
by, pledged to, under the control of, or due from such swap participant or
financial participant to margin, guarantee, secure, or settle any swap
agreement;
(18) under subsection
(a) of the creation or perfection of a statutory lien for an ad valorem
property tax, or a special tax or special assessment on real property
whether or not ad valorem, imposed by a governmental unit, if such tax or
assessment comes due after the date of the filing of the petition;
(19) under subsection
(a), of withholding of income from a debtor's wages and collection of
amounts withheld, under the debtor's agreement authorizing that withholding
and collection for the benefit of a pension, profit-sharing, stock bonus, or
other plan established under section
401, 403,
408,
408A, 414,
457, or 501(c)
of the Internal Revenue
Code of 1986, that is sponsored by the employer of the debtor, or an
affiliate, successor, or predecessor of such employer--
(A) to the extent that the amounts withheld and
collected are used solely for payments relating to a loan from a plan
under section 408(b)(1) of the Employee Retirement Income Security Act of
1974 or is subject to section
72(p) of the Internal Revenue Code of 1986; or
(B) a loan from a thrift savings plan permitted under
subchapter III of chapter 84 of title 5, that satisfies the requirements
of section 8433(g) of such title;
but nothing in this paragraph may be construed to provide
that any loan made under a governmental plan under section
414(d), or a contract or account under section
403(b), of the Internal Revenue Code of 1986 constitutes a claim or a
debt under this title;
(20) under subsection
(a), of any act to enforce any lien against or security interest
in real property following entry of the order under subsection (d)(4) as to
such real property in any prior case under this title, for a period of 2
years after the date of the entry of such an order, except that the debtor,
in a subsequent case under this title, may move for relief from such order
based upon changed circumstances or for other good cause shown, after notice
and a hearing;
(21) under subsection
(a), of any act to enforce any lien against or security interest in real
property--
(A) if the debtor is ineligible under section
109(g) to be a debtor in a case under this title; or
(B) if the case under this title was filed in violation
of a bankruptcy court order in a prior case under this title prohibiting
the debtor from being a debtor in another case under this title;
(22) subject to subsection
(l), under subsection
(a)(3), of the continuation of any eviction, unlawful detainer action,
or similar proceeding by a lessor against a debtor involving residential
property in which the debtor resides as a tenant under a lease or rental
agreement and with respect to which the lessor has obtained before the date
of the filing of the bankruptcy petition, a judgment for possession of such
property against the debtor;
(23) subject to subsection
(m), under subsection
(a)(3), of an eviction action that seeks possession of the residential
property in which the debtor resides as a tenant under a lease or rental
agreement based on endangerment of such property or the illegal use of
controlled substances on such property, but only if the lessor files with
the court, and serves upon the debtor, a certification under penalty of
perjury that such an eviction action has been filed, or that the debtor,
during the 30-day period preceding the date of the filing of the
certification, has endangered property or illegally used or allowed to be
used a controlled substance on the property;
(24) under subsection
(a), of any transfer that is not avoidable under section
544 and that is not avoidable under section
549;
(25) under subsection
(a), of--
(A) the commencement or continuation of an
investigation or action by a securities self regulatory organization to
enforce such organization's regulatory power;
(B) the enforcement of an order or decision, other than
for monetary sanctions, obtained in an action by such securities self
regulatory organization to enforce such organization's regulatory power;
or
(C) any act taken by such securities self regulatory
organization to delist, delete, or refuse to permit quotation of any stock
that does not meet applicable regulatory requirements;
(26) under subsection
(a), of the setoff under applicable nonbankruptcy law of an income tax
refund, by a governmental unit, with respect to a taxable period that ended
before the date of the order for relief against an income tax liability for
a taxable period that also ended before the date of the order for relief,
except that in any case in which the setoff of an income tax refund is not
permitted under applicable nonbankruptcy law because of a pending action to
determine the amount or legality of a tax liability, the governmental unit
may hold the refund pending the resolution of the action, unless the court,
on the motion of the trustee and after notice and a hearing, grants the
taxing authority adequate protection (within the meaning of section
361) for the secured claim of such authority in the setoff under section
506(a);
(27) under subsection
(a), of the setoff by a master netting agreement participant of a mutual
debt and claim under or in connection with one or more master netting
agreements or any contract or agreement subject to such agreements that
constitutes the setoff of a claim against the debtor for any payment or
other transfer of property due from the debtor under or in connection with
such agreements or any contract or agreement subject to such agreements
against any payment due to the debtor from such master netting agreement
participant under or in connection with such agreements or any contract or
agreement subject to such agreements or against cash, securities, or other
property held by, pledged to, under the control of, or due from such master
netting agreement participant to margin, guarantee, secure, or settle such
agreements or any contract or agreement subject to such agreements, to the
extent that such participant is eligible to exercise such offset rights
under paragraph
(6), (7),
or (17)
for each individual contract covered by the master netting agreement in
issue; and
(28) under subsection
(a), of the exclusion by the Secretary of Health and Human Services of
the debtor from participation in the medicare program or any other Federal
health care program (as defined in section 1128B(f) of the Social Security
Act pursuant to title XI or XVIII of such Act).
The provisions of paragraphs
(12) and (13)
of this subsection shall apply with respect to any such petition filed on or
before December 31, 1989.
(c) Except as provided in subsections
(d), (e),
(f),
and (h)
of this section--
(1) the stay of an act against property of the
estate under subsection
(a) of this section continues until such property is no longer property
of the estate;
(2) the stay of any other act under subsection
(a) of this section continues until the earliest of--
(A) the time the case is closed;
(B) the time the case is dismissed; or
(C) if the case is a case under chapter
7 of this title concerning an individual or a case under chapter
9, 11, 12,
or 13
of this title, the time a discharge is granted or denied;
(3) if a single or joint case is
filed by or against debtor who is an individual in a case under chapter
7, 11, or 13,
and if a single or joint case of the debtor was pending within the preceding
1-year period but was dismissed, other than a case refiled under a chapter
other than chapter 7
after dismissal under section
707(b)--
(A) the stay under subsection
(a) with respect to any action taken with respect to a debt or
property securing such debt or with respect to any lease shall terminate
with respect to the debtor on the 30th day after the filing of the later
case;
(B) on the motion of a party in interest for
continuation of the automatic stay and upon notice and a hearing, the
court may extend the stay in particular cases as to any or all creditors
(subject to such conditions or limitations as the court may then impose)
after notice and a hearing completed before the expiration of the 30-day
period only if the party in interest demonstrates that the filing of the
later case is in good faith as to the creditors to be stayed; and
(C) for purposes of subparagraph (B), a case is
presumptively filed not in good faith (but such presumption may be
rebutted by clear and convincing evidence to the contrary)--
(i) as to all creditors, if--
(I) more than 1 previous case under any of chapters
7, 11,
and 13
in which the individual was a debtor was pending within the preceding
1-year period;
(II) a previous case under any of chapters
7, 11,
and 13
in which the individual was a debtor was dismissed within such 1-year
period, after the debtor failed to--
(aa) file or amend the petition or other
documents as required by this title or the court without substantial
excuse (but mere inadvertence or negligence shall not be a
substantial excuse unless the dismissal was caused by the negligence
of the debtor's attorney);
(bb) provide adequate protection as ordered by
the court; or
(cc) perform the terms of a plan confirmed by the
court; or
(III) there has not been a substantial change in
the financial or personal affairs of the debtor since the dismissal of
the next most previous case under chapter
7, 11,
or 13
or any other reason to conclude that the later case will be
concluded--
(aa) if a case under chapter
7, with a discharge; or
(bb) if a case under chapter
11 or 13,
with a confirmed plan that will be fully performed; and
(ii) as to any creditor that commenced an action
under subsection
(d) in a previous case in which the individual was a debtor if, as
of the date of dismissal of such case, that action was still pending or
had been resolved by terminating, conditioning, or limiting the stay as
to actions of such creditor; and
(4)
(A)
(i) if a single or joint case is filed by or against
a debtor who is an individual under this title, and if 2 or more single
or joint cases of the debtor were pending within the previous year but
were dismissed, other than a case refiled under section
707(b), the stay under subsection
(a) shall not go into effect upon the filing of the later case; and
(ii) on request of a party in interest, the court
shall promptly enter an order confirming that no stay is in effect;
(B) if, within 30 days after the filing of the later
case, a party in interest requests the court may order the stay to take
effect in the case as to any or all creditors (subject to such conditions
or limitations as the court may impose), after notice and a hearing, only
if the party in interest demonstrates that the filing of the later case is
in good faith as to the creditors to be stayed;
(C) a stay imposed under subparagraph (B) shall be
effective on the date of the entry of the order allowing the stay to go
into effect; and
(D) for purposes of subparagraph (B), a case is
presumptively filed not in good faith (but such presumption may be
rebutted by clear and convincing evidence to the contrary)--
(i) as to all creditors if--
(I) 2 or more previous cases under this title in
which the individual was a debtor were pending within the 1-year
period;
(II) a previous case under this title in which the
individual was a debtor was dismissed within the time period stated in
this paragraph after the debtor failed to file or amend the petition
or other documents as required by this title or the court without
substantial excuse (but mere inadvertence or negligence shall not be
substantial excuse unless the dismissal was caused by the negligence
of the debtor's attorney), failed to provide adequate protection as
ordered by the court, or failed to perform the terms of a plan
confirmed by the court; or
(III) there has not been a substantial change in
the financial or personal affairs of the debtor since the dismissal of
the next most previous case under this title, or any other reason to
conclude that the later case will not be concluded, if a case under chapter
7, with a discharge, and if a case under chapter
11 or 13,
with a confirmed plan that will be fully performed; or
(ii) as to any creditor that commenced an action
under subsection
(d) in a previous case in which the individual was a debtor if, as
of the date of dismissal of such case, such action was still pending or
had been resolved by terminating, conditioning, or limiting the stay as
to such action of such creditor.
(d) On request of a party in interest and after notice
and a hearing, the court shall grant relief from the stay provided under subsection
(a) of this section, such as by terminating, annulling, modifying, or
conditioning such stay--
(1) for cause, including the lack of adequate protection of an interest
in property of such party in interest;
(2) with respect to a stay of an act against property under subsection
(a) of this section, if--
(A) the debtor does not have an equity in such property; and
(B) such property is not necessary to an effective reorganization;
(3) with respect to a stay of an act against single asset real estate
under subsection
(a), by a creditor whose claim is secured by an interest in such real
estate, unless, not later than the date that is 90 days after the entry of
the order for relief (or such later date as the court may determine for
cause by order entered within that 90-day period) or 30 days
after the court determines that the debtor is subject to this paragraph,
whichever is later--
(A) the debtor has filed a plan of reorganization that has a reasonable
possibility of being confirmed within a reasonable time; or
(B) the debtor has commenced monthly payments that--
(i) may, in the debtor's sole discretion,
notwithstanding section
363(c)(2), be made from rents or other income generated before, on,
or after the date of the commencement of the case by or from the
property to each creditor whose claim is secured by such real estate
(other than a claim secured by a judgment lien or by an unmatured
statutory lien); and
(ii) are in an amount equal to interest at the then
applicable nondefault contract rate of interest on the value of the
creditor's interest in the real estate; or
(4) with respect to a stay of an act against real
property under subsection
(a), by a creditor whose claim is secured by an interest in such real
property, if the court finds that the filing of the petition was part of a
scheme to delay, hinder, and defraud creditors that involved either--
(A) transfer of all or part ownership of, or other
interest in, such real property without the consent of the secured
creditor or court approval; or
(B) multiple bankruptcy filings affecting such real
property.
If recorded in compliance with applicable State laws
governing notices of interests or liens in real property, an order entered
under paragraph (4) shall be binding in any other case under this title
purporting to affect such real property filed not later than 2 years after the
date of the entry of such order by the court, except that a debtor in a
subsequent case under this title may move for relief from such order based
upon changed circumstances or for good cause shown, after notice and a
hearing. Any Federal, State, or local governmental unit that accepts notices
of interests or liens in real property shall accept any certified copy of an
order described in this subsection for indexing and recording.
(e)
(1) Thirty days after a request under subsection
(d) of this section for relief from the stay of any act against property
of the estate under subsection
(a) of this section, such stay is terminated with respect to the party
in interest making such request, unless the court, after notice and a
hearing, orders such stay continued in effect pending the conclusion of, or
as a result of, a final hearing and determination under subsection
(d) of this section. A hearing under this subsection may be a
preliminary hearing, or may be consolidated with the final hearing under subsection
(d) of this section. The court shall order such stay continued in effect
pending the conclusion of the final hearing under subsection
(d) of this section if there is a reasonable likelihood that the party
opposing relief from such stay will prevail at the conclusion of such final
hearing. If the hearing under this subsection is a preliminary hearing, then
such final hearing shall be concluded not later than thirty days after the
conclusion of such preliminary hearing, unless the 30-day period is extended
with the consent of the parties in interest or for a specific time which the
court finds is required by compelling circumstances.
(2) Notwithstanding paragraph (1), in a case under chapter
7, 11, or 13
in which the debtor is an individual, the stay under subsection
(a) shall terminate on the date that is 60 days after a request is made
by a party in interest under subsection
(d), unless--
(A) a final decision is rendered by the court during
the 60-day period beginning on the date of the request; or
(B) such 60-day period is extended--
(i) by agreement of all parties in interest; or
(ii) by the court for such specific period of time as
the court finds is required for good cause, as described in findings
made by the court.
(f) Upon request of a party in interest, the court,
with or without a hearing, shall grant such relief from the stay provided
under subsection
(a) of this section as is necessary to prevent irreparable damage to the
interest of an entity in property, if such interest will suffer such damage
before there is an opportunity for notice and a hearing under subsection
(d) or (e) of this section.
(g) In any hearing under subsection
(d) or (e)
of this section concerning relief from the stay of any act under subsection
(a) of this section--
(1) the party requesting such relief has the burden of proof on the issue
of the debtor’s equity in property; and
(2) the party opposing such relief has the burden of proof on all other
issues.
(h)
(1) In a case in which the debtor is an individual, the
stay provided by subsection
(a) is terminated with respect to personal property of the estate or of
the debtor securing in whole or in part a claim, or subject to an unexpired
lease, and such personal property shall no longer be property of the estate
if the debtor fails within the applicable time set by section
521(a)(2)--
(A) to file timely any statement of intention required
under section
521(a)(2) with respect to such personal property or to indicate in
such statement that the debtor will either surrender such personal
property or retain it and, if retaining such personal property, either
redeem such personal property pursuant to section
722, enter into an agreement of the kind specified in section
524(c) applicable to the debt secured by such personal property, or
assume such unexpired lease pursuant to section
365(p) if the trustee does not do so, as applicable; and
(B) to take timely the action specified in such
statement, as it may be amended before expiration of the period for taking
action, unless such statement specifies the debtor's intention to reaffirm
such debt on the original contract terms and the creditor refuses to agree
to the reaffirmation on such terms.
(2) Paragraph (1) does not apply if the court determines,
on the motion of the trustee filed before the expiration of the applicable
time set by section
521(a)(2), after notice and a hearing, that such personal property is of
consequential value or benefit to the estate, and orders appropriate
adequate protection of the creditor's interest, and orders the debtor to
deliver any collateral in the debtor's possession to the trustee. If the
court does not so determine, the stay provided by subsection
(a) shall terminate upon the conclusion of the hearing on the motion.
(i) If a case commenced under chapter
7, 11, or 13
is dismissed due to the creation of a debt repayment plan, for purposes of subsection
(c)(3), any subsequent case commenced by the debtor under any such chapter
shall not be presumed to be filed not in good faith.
(j) On request of a party in interest,
the court shall issue an order under subsection
(c) confirming that the automatic stay has been terminated.
(k)
(1) Except as provided in paragraph (2), an
individual injured by any willful violation of a stay provided by this
section shall recover actual damages, including costs and attorneys’ fees,
and, in appropriate circumstances, may recover punitive damages.
(2) If such violation is based on an action taken by an
entity in the good faith belief that subsection (h) applies to the debtor,
the recovery under paragraph (1) of this subsection against such entity
shall be limited to actual damages.
(l)
(1) Except as otherwise provided in this subsection, subsection
(b)(22) shall apply on the date that is 30 days after the date on which
the bankruptcy petition is filed, if the debtor files with the petition and
serves upon the lessor a certification under penalty of perjury that--
(A) under nonbankruptcy law applicable in the
jurisdiction, there are circumstances under which the debtor would be
permitted to cure the entire monetary default that gave rise to the
judgment for possession, after that judgment for possession was entered;
and
(B) the debtor (or an adult dependent of the debtor)
has deposited with the clerk of the court, any rent that would become due
during the 30-day period after the filing of the bankruptcy petition.
(2) If, within the 30-day period after the filing of the
bankruptcy petition, the debtor (or an adult dependent of the debtor)
complies with paragraph (1) and files with the court and serves upon the
lessor a further certification under penalty of perjury that the debtor (or
an adult dependent of the debtor) has cured, under nonbankrupcty law
applicable in the jurisdiction, the entire monetary default that gave rise
to the judgment under which possession is sought by the lessor, subsection
(b)(22) shall not apply, unless ordered to apply by the court under
paragraph (3).
(3)
(A) If the lessor files an objection to any
certification filed by the debtor under paragraph (1) or (2), and serves
such objection upon the debtor, the court shall hold a hearing within 10
days after the filing and service of such objection to determine if the
certification filed by the debtor under paragraph (1) or (2) is true.
(B) If the court upholds the objection of the lessor
filed under subparagraph (A)--
(i) subsection
(b)(22) shall apply immediately and relief from the stay provided
under subsection
(a)(3) shall not be required to enable the lessor to complete the
process to recover full possession of the property; and
(ii) the clerk of the court shall immediately serve
upon the lessor and the debtor a certified copy of the court's order
upholding the lessor's objection.
(4) If a debtor, in accordance with paragraph (5),
indicates on the petition that there was a judgment for possession of the
residential rental property in which the debtor resides and does not file a
certification under paragraph (1) or (2)--
(A) subsection
(b)(22) shall apply immediately upon failure to file such
certification, and relief from the stay provided under subsection
(a)(3) shall not be required to enable the lessor to complete the
process to recover full possession of the property; and
(B) the clerk of the court shall immediately serve upon
the lessor and the debtor a certified copy of the docket indicating the
absence of a filed certification and the applicability of the exception to
the stay under subsection
(b)(22).
(5)
(A) Where a judgment for possession of residential
property in which the debtor resides as a tenant under a lease or rental
agreement has been obtained by the lessor, the debtor shall so indicate on
the bankruptcy petition and shall provide the name and address of the
lessor that obtained that pre-petition judgment on the petition and on any
certification filed under this subsection.
(B) The form of certification filed with the petition,
as specified in this subsection, shall provide for the debtor to certify,
and the debtor shall certify--
(i) whether a judgment for possession of residential
rental housing in which the debtor resides has been obtained against the
debtor before the date of the filing of the petition; and
(ii) whether the debtor is claiming under paragraph
(1) that under nonbankruptcy law applicable in the jurisdiction, there
are circumstances under which the debtor would be permitted to cure the
entire monetary default that gave rise to the judgment for possession,
after that judgment of possession was entered, and has made the
appropriate deposit with the court.
(C) The standard forms (electronic and otherwise) used
in a bankruptcy proceeding shall be amended to reflect the requirements of
this subsection.
(D) The clerk of the court shall arrange for the prompt
transmittal of the rent deposited in accordance with paragraph (1)(B) to
the lessor.
(m)
(1) Except as otherwise provided in this subsection, subsection
(b)(23) shall apply on the date that is 15 days after the date on which
the lessor files and serves a certification described in subsection
(b)(23).
(2)
(A) If the debtor files with the court an objection to
the truth or legal sufficiency of the certification described in subsection
(b)(23) and serves such objection upon the lessor, subsection
(b)(23) shall not apply, unless ordered to apply by the court under
this subsection.
(B) If the debtor files and serves the objection under
subparagraph (A), the court shall hold a hearing within 10 days after the
filing and service of such objection to determine if the situation giving
rise to the lessor's certification under paragraph (1) existed or has been
remedied.
(C) If the debtor can demonstrate to the satisfaction
of the court that the situation giving rise to the lessor's certification
under paragraph (1) did not exist or has been remedied, the stay provided
under subsection
(a)(3) shall remain in effect until the termination of the stay under
this section.
(D) If the debtor cannot demonstrate to the
satisfaction of the court that the situation giving rise to the lessor's
certification under paragraph (1) did not exist or has been remedied--
(i) relief from the stay provided under subsection
(a)(3) shall not be required to enable the lessor to proceed with
the eviction; and
(ii) the clerk of the court shall immediately serve
upon the lessor and the debtor a certified copy of the court's order
upholding the lessor's certification.
(3) If the debtor fails to file, within 15 days, an
objection under paragraph (2)(A)--
(A) subsection (b)(23)
shall apply immediately upon such failure and relief from the stay
provided under subsection
(a)(3) shall not be required to enable the lessor to complete the
process to recover full possession of the property; and
(B) the clerk of the court shall immediately serve upon
the lessor and the debtor a certified copy of the docket indicating such
failure.
(n)
(1) Except as provided in paragraph (2), subsection
(a) does not apply in a case in which the debtor--
(A) is a debtor in a small business case pending at the
time the petition is filed;
(B) was a debtor in a small business case that was
dismissed for any reason by an order that became final in the 2-year
period ending on the date of the order for relief entered with respect to
the petition;
(C) was a debtor in a small business case in which a
plan was confirmed in the 2-year period ending on the date of the order
for relief entered with respect to the petition; or
(D) is an entity that has acquired substantially all of
the assets or business of a small business debtor described in
subparagraph (A), (B), or (C), unless such entity establishes by a
preponderance of the evidence that such entity acquired substantially all
of the assets or business of such small business debtor in good faith and
not for the purpose of evading this paragraph.
(2) Paragraph (1) does not apply--
(A) to an involuntary case involving no collusion by
the debtor with creditors; or
(B) to the filing of a petition if--
(i) the debtor proves by a preponderance of the
evidence that the filing of the petition resulted from circumstances
beyond the control of the debtor not foreseeable at the time the case
then pending was filed; and
(ii) it is more likely than not that the court will
confirm a feasible plan, but not a liquidating plan, within a reasonable
period of time.
(o) The exercise of rights not subject
to the stay arising under subsection
(a) pursuant to paragraph
(6), (7), (17),
or (27)
of subsection (b) shall not be stayed by any order of a court or
administrative agency in any proceeding under this title.
Rev. 5-2-05]
11
USC § 363. Use, sale, or lease of property
(a) In this section, "cash collateral" means
cash, negotiable instruments, documents of title, securities, deposit
accounts, or other cash equivalents whenever acquired in which the estate and
an entity other than the estate have an interest and includes the proceeds,
products, offspring, rents, or profits of property and the fees, charges,
accounts or other payments for the use or occupancy of rooms and other public
facilities in hotels, motels, or other lodging properties subject to a
security interest as provided in section
552(b) of this title, whether existing before or after the commencement of
a case under this title.
(b)
(1) The trustee, after notice and a hearing, may use, sell, or lease,
other than in the ordinary course of business, property of the estate.,
except that if the debtor in connection with offering a product or a service
discloses to an individual a policy prohibiting the transfer of personally
identifiable information about individuals to persons that are not
affiliated with the debtor and if such policy is in effect on the date of
the commencement of the case, then the trustee may not sell or lease
personally identifiable information to any person unless--
(A) such sale or such lease is consistent with such
policy; or
(B) after appointment of a consumer privacy ombudsman
in accordance with section
332, and after notice and a hearing, the court approves such sale or
such lease--
(i) giving due consideration to the facts,
circumstances, and conditions of such sale or such lease; and
(ii) finding that no showing was made that such sale
or such lease would violate applicable nonbankruptcy law.
(2) If notification is required under subsection (a) of section 7A of the
Clayton Act in the case of a transaction under this subsection, then--
(A) notwithstanding subsection (a) of such section, the notification
required by such subsection to be given by the debtor shall be given by
the trustee; and
(B) notwithstanding subsection (b) of such section, the required
waiting period shall end on the 15th day after the date of the receipt, by
the Federal Trade Commission and the Assistant Attorney General in charge
of the Antitrust Division of the Department of Justice, of the
notification required under such subsection (a), unless such waiting
period is extended--
(i) pursuant to subsection (e)(2) of such section, in the same manner
as such subsection (e)(2) applies to a cash tender offer;
(ii) pursuant to subsection (g)(2) of such section; or
(iii) by the court after notice and a hearing.
(c)
(1) If the business of the debtor is authorized to be operated under section
721, 1108,
1203,
1204,
or 1304
of this title and unless the court orders otherwise, the trustee may enter
into transactions, including the sale or lease of property of the estate, in
the ordinary course of business, without notice or a hearing, and may use
property of the estate in the ordinary course of business without notice or
a hearing.
(2) The trustee may not use, sell, or lease cash collateral under
paragraph (1) of this subsection unless--
(A) each entity that has an interest in such cash collateral consents;
or
(B) the court, after notice and a hearing, authorizes such use, sale,
or lease in accordance with the provisions of this section.
(3) Any hearing under paragraph (2)(B) of this subsection may be a
preliminary hearing or may be consolidated with a hearing under subsection
(e) of this section, but shall be scheduled in accordance with the needs
of the debtor. If the hearing under paragraph (2)(B) of this subsection is a
preliminary hearing, the court may authorize such use, sale, or lease only
if there is a reasonable likelihood that the trustee will prevail at the
final hearing under subsection
(e) of this section. The court shall act promptly on any request for
authorization under paragraph (2)(B) of this subsection.
(4) Except as provided in paragraph (2) of this subsection, the trustee
shall segregate and account for any cash collateral in the trustee’s
possession, custody, or control.
(d) The trustee may use, sell, or lease property under
subsection
(b) or (c)
of this section only--
(1) in accordance with applicable nonbankruptcy law that
governs the transfer of property by a corporation or trust that is not a
moneyed, business, or commercial corporation or trust; and
(2) to the extent not inconsistent with any relief
granted under subsection
(c), (d),
(e),
or (f)
of section
362.
(e) Notwithstanding any other provision of this
section, at any time, on request of an entity that has an interest in property
used, sold, or leased, or proposed to be used, sold, or leased, by the
trustee, the court, with or without a hearing, shall prohibit or condition
such use, sale, or lease as is necessary to provide adequate protection of
such interest. This subsection also applies to property that is subject to any
unexpired lease of personal property (to the exclusion of such property being
subject to an order to grant relief from the stay under section
362).
(f) The trustee may sell property under subsection
(b) or (c)
of this section free and clear of any interest in such property of an entity
other than the estate, only if--
(1) applicable nonbankruptcy law permits sale of such property free and
clear of such interest;
(2) such entity consents;
(3) such interest is a lien and the price at which such property is to be
sold is greater than the aggregate value of all liens on such property;
(4) such interest is in bona fide dispute; or
(5) such entity could be compelled, in a legal or equitable proceeding,
to accept a money satisfaction of such interest.
(g) Notwithstanding subsection
(f) of this section, the trustee may sell property under subsection
(b) or (c)
of this section free and clear of any vested or contingent right in the nature
of dower or curtesy.
(h) Notwithstanding subsection
(f) of this section, the trustee may sell both the estate’s interest,
under subsection
(b) or (c)
of this section, and the interest of any co-owner in property in which the
debtor had, at the time of the commencement of the case, an undivided interest
as a tenant in common, joint tenant, or tenant by the entirety, only if--
(1) partition in kind of such property among the estate and such
co-owners is impracticable;
(2) sale of the estate’s undivided interest in such property would
realize significantly less for the estate than sale of such property free of
the interests of such co-owners;
(3) the benefit to the estate of a sale of such property free of the
interests of co-owners outweighs the detriment, if any, to such co-owners;
and
(4) such property is not used in the production, transmission, or
distribution, for sale, of electric energy or of natural or synthetic gas
for heat, light, or power.
(i) Before the consummation of a sale of property to
which subsection (g) or (h) of this section applies, or of property of the
estate that was community property of the debtor and the debtor’s spouse
immediately before the commencement of the case, the debtor’s spouse, or a
co-owner of such property, as the case may be, may purchase such property at
the price at which such sale is to be consummated.
(j) After a sale of property to which subsection
(g) or (h)
of this section applies, the trustee shall distribute to the debtor’s spouse
or the co-owners of such property, as the case may be, and to the estate, the
proceeds of such sale, less the costs and expenses, not including any
compensation of the trustee, of such sale, according to the interests of such
spouse or co-owners, and of the estate.
(k) At a sale under subsection
(b) of this section of property that is subject to a lien that secures an
allowed claim, unless the court for cause orders otherwise the holder of such
claim may bid at such sale, and, if the holder of such claim purchases such
property, such holder may offset such claim against the purchase price of such
property.
(l) Subject to the provisions of section 365, trustee
may use, sell, or lease property under subsection
(b) or (c)
of this section, or a plan under chapter
11, 12,
or 13
of this title may provide for the use, sale, or lease of property,
notwithstanding any provision in a contract, a lease, or applicable law that
is conditioned on the insolvency or financial condition of the debtor, on the
commencement of a case under this title concerning the debtor, or on the
appointment of or the taking possession by a trustee in a case under this
title or a custodian, and that effects, or gives an option to effect, a
forfeiture, modification, or termination of the debtor’s interest in such
property.
(m) The reversal or modification on appeal of an
authorization under subsection
(b) or (c)
of this section of a sale or lease of property does not affect the validity of
a sale or lease under such authorization to an entity that purchased or leased
such property in good faith, whether or not such entity knew of the pendency
of the appeal, unless such authorization and such sale or lease were stayed
pending appeal.
(n) The trustee may avoid a sale under this section if
the sale price was controlled by an agreement among potential bidders at such
sale, or may recover from a party to such agreement any amount by which the
value of the property sold exceeds the price at which such sale was
consummated, and may recover any costs, attorneys’ fees, or expenses
incurred in avoiding such sale or recovering such amount. In addition to any
recovery under the preceding sentence, the court may grant judgment for
punitive damages in favor of the estate and against any such party that
entered into such an agreement in willful disregard of this subsection.
(o) Notwithstanding subsection
(f), if a person purchases any interest in a consumer credit transaction
that is subject to the Truth in Lending Act or any interest in a consumer
credit contract (as defined in section 433.1 of title 16 of the Code of
Federal Regulations (January 1, 2004), as amended from time to time), and if
such interest is purchased through a sale under this section, then such person
shall remain subject to all claims and defenses that are related to such
consumer credit transaction or such consumer credit contract, to the same
extent as such person would be subject to such claims and defenses of the
consumer had such interest been purchased at a sale not under this section.
(p)
In any hearing under this section--
(1) the trustee has the burden of proof on the issue of adequate
protection; and
(2) the entity asserting an interest in property has the burden of proof
on the issue of the validity, priority, or extent of such interest.
[Rev. 5-4-05]
11
USC § 364. Obtaining credit
(a) If the trustee is authorized to operate the business of the debtor
under section
721, 1108,
1203,
1204,
or 1304
of this title, unless the court orders otherwise, the trustee may obtain
unsecured credit and incur unsecured debt in the ordinary course of business
allowable under section
503(b)(1) of this title as an administrative expense.
(b) The court, after notice and a hearing, may authorize the trustee to
obtain unsecured credit or to incur unsecured debt other than under subsection
(a) of this section, allowable under section
503(b)(1) of this title as an administrative expense.
(c) If the trustee is unable to obtain unsecured credit allowable under section
503(b)(1) of this title as an administrative expense, the court, after
notice and a hearing, may authorize the obtaining of credit or the incurring
of debt--
(1) with priority over any or all administrative expenses of the kind
specified in section
503(b) or 507(b)
of this title;
(2) secured by a lien on property of the estate that is not otherwise
subject to a lien; or
(3) secured by a junior lien on property of the estate that is subject to
a lien.
(d)
(1) The court, after notice and a hearing, may authorize the obtaining of
credit or the incurring of debt secured by a senior or equal lien on
property of the estate that is subject to a lien only if--
(A) the trustee is unable to obtain such credit otherwise; and
(B) there is adequate protection of the interest of the holder of the
lien on the property of the estate on which such senior or equal lien is
proposed to be granted.
(2) In any hearing under this subsection, the trustee has the burden of
proof on the issue of adequate protection.
(e) The reversal or modification on appeal of an authorization under this
section to obtain credit or incur debt, or of a grant under this section of a
priority or a lien, does not affect the validity of any debt so incurred, or
any priority or lien so granted, to an entity that extended such credit in
good faith, whether or not such entity knew of the pendency of the appeal,
unless such authorization and the incurring of such debt, or the granting of
such priority or lien, were stayed pending appeal.
(f) Except with respect to an entity that is an underwriter as defined in
section 1145 (b) of this title, section 5 of the Securities Act of 1933, the
Trust Indenture Act of 1939, and any State or local law requiring registration
for offer or sale of a security or registration or licensing of an issuer of,
underwriter of, or broker or dealer in, a security does not apply to the offer
or sale under this section of a security that is not an equity security.
[Rev. 5-4-05]
11
USC § 365. Executory contracts and unexpired leases
(a) Except as provided in sections
765 and 766
of this title and in subsections
(b), (c),
and (d)
of this section, the trustee, subject to the court’s approval, may assume or
reject any executory contract or unexpired lease of the debtor.
(b)
(1) If there has been a default in an executory
contract or unexpired lease of the debtor, the trustee may not assume such
contract or lease unless, at the time of assumption of such contract or
lease, the trustee--
(A) cures, or provides adequate assurance that the trustee will
promptly cure, such default
other than a default that is a breach of a provision
relating to the satisfaction of any provision (other than a penalty rate
or penalty provision) relating to a default arising from any failure to
perform nonmonetary obligations under an unexpired lease of real property,
if it is impossible for the trustee to cure such default by performing
nonmonetary acts at and after the time of assumption, except that if such
default arises from a failure to operate in accordance with a
nonresidential real property lease, then such default shall be cured by
performance at and after the time of assumption in accordance with such
lease, and pecuniary losses resulting from such default shall be
compensated in accordance with the provisions of this paragraph;
(B) compensates, or provides adequate assurance that the trustee will
promptly compensate, a party other than the debtor to such contract or
lease, for any actual pecuniary loss to such party resulting from such
default; and
(C) provides adequate assurance of future performance under such
contract or lease.
(2) Paragraph (1) of this subsection does not
apply to a default that is a breach of a provision relating to--
(A) the insolvency or financial condition of the debtor at any time
before the closing of the case;
(B) the commencement of a case under this title;
(C) the appointment of or taking possession by a trustee in a case
under this title or a custodian before such commencement; or
(D) the satisfaction of any penalty
rate or penalty provision relating to a default arising from any
failure by the debtor to perform nonmonetary obligations under the
executory contract or unexpired lease.
(3) For the purposes of paragraph (1) of this
subsection and paragraph (2)(B) of subsection
(f), adequate assurance of future performance of a lease of real
property in a shopping center includes adequate assurance--
(A) of the source of rent and other consideration due under such lease,
and in the case of an assignment, that the financial condition and
operating performance of the proposed assignee and its guarantors, if any,
shall be similar to the financial condition and operating performance of
the debtor and its guarantors, if any, as of the time the debtor became
the lessee under the lease;
(B) that any percentage rent due under such lease will not decline
substantially;
(C) that assumption or assignment of such lease is subject to all the
provisions thereof, including (but not limited to) provisions such as a
radius, location, use, or exclusivity provision, and will not breach any
such provision contained in any other lease, financing agreement, or
master agreement relating to such shopping center; and
(D) that assumption or assignment of such lease will not disrupt any
tenant mix or balance in such shopping center.
(4) Notwithstanding any other provision of this
section, if there has been a default in an unexpired lease of the debtor,
other than a default of a kind specified in paragraph (2) of this
subsection, the trustee may not require a lessor to provide services or
supplies incidental to such lease before assumption of such lease unless the
lessor is compensated under the terms of such lease for any services and
supplies provided under such lease before assumption of such lease.
(c) The trustee may not assume or assign any executory
contract or unexpired lease of the debtor, whether or not such contract or
lease prohibits or restricts assignment of rights or delegation of duties,
if--
(1)
(A) applicable law excuses a party, other than the debtor, to such
contract or lease from accepting performance from or rendering performance
to an entity other than the debtor or the debtor in possession, whether or
not such contract or lease prohibits or restricts assignment of rights or
delegation of duties; and
(B) such party does not consent to such assumption or assignment; or
(2) such contract is a contract to make a loan, or extend other debt
financing or financial accommodations, to or for the benefit of the debtor,
or to issue a security of the debtor; or
(3) such lease is of nonresidential real property and has been terminated
under applicable nonbankruptcy law prior to the order for relief.
(d)
(1) In a case under chapter
7 of this title, if the trustee does not assume or reject an executory
contract or unexpired lease of residential real property or of personal
property of the debtor within 60 days after the order for relief, or within
such additional time as the court, for cause, within such 60-day period,
fixes, then such contract or lease is deemed rejected.
(2) In a case under chapter
9, 11, 12,
or 13
of this title, the trustee may assume or reject an executory contract or
unexpired lease of residential real property or of personal property of the
debtor at any time before the confirmation of a plan but the court, on the
request of any party to such contract or lease, may order the trustee to
determine within a specified period of time whether to assume or reject such
contract or lease.
(3) The trustee shall timely perform all the
obligations of the debtor, except those specified in section
365(b)(2), arising from and after the order for relief under any
unexpired lease of nonresidential real property, until such lease is assumed
or rejected, notwithstanding section
503(b)(1) of this title. The court may extend, for cause, the time for
performance of any such obligation that arises within 60 days after the date
of the order for relief, but the time for performance shall not be extended
beyond such 60-day period. This subsection shall not be deemed to affect the
trustee’s obligations under the provisions of subsection
(b) or (f)
of this section. Acceptance of any such performance does not constitute
waiver or relinquishment of the lessor’s rights under such lease or under
this title.
(4)
(A) Subject to subparagraph (B), an unexpired lease of
nonresidential real property under which the debtor is the lessee shall be
deemed rejected, and the trustee shall immediately surrender that
nonresidential real property to the lessor, if the trustee does not assume
or reject the unexpired lease by the earlier of--
(i) the date that is 120 days after the date of the
order for relief; or
(ii) the date of the entry of an order confirming a
plan.
(B)
(i) The court may extend the period determined under
subparagraph (A), prior to the expiration of the 120-day period, for 90
days on the motion of the trustee or lessor for cause.
(ii) If the court grants an extension under clause
(i), the court may grant a subsequent extension only upon prior written
consent of the lessor in each instance.
(5)
The trustee shall timely perform all of the obligations of the debtor,
except those specified in section
365(b)(2), first arising from or after 60 days after the order for
relief in a case under chapter
11 of this title under an unexpired lease of personal property (other
than personal property leased to an individual primarily for personal,
family, or household purposes), until such lease is assumed or rejected
notwithstanding section
503(b)(1) of this title, unless the court, after notice and a hearing
and based on the equities of the case, orders otherwise with respect to the
obligations or timely performance thereof. This subsection shall not be
deemed to affect the trustee's obligations under the provisions of subsection
(b) or (f).
Acceptance of any such performance does not constitute waiver or
relinquishment of the lessor's rights under such lease or under this title.
(e)
(1) Notwithstanding a provision in an executory
contract or unexpired lease, or in applicable law, an executory contract or
unexpired lease of the debtor may not be terminated or modified, and any
right or obligation under such contract or lease may not be terminated or
modified, at any time after the commencement of the case solely because of a
provision in such contract or lease that is conditioned on--
(A) the insolvency or financial condition of the debtor at any time
before the closing of the case;
(B) the commencement of a case under this title; or
(C) the appointment of or taking possession by a trustee in a case
under this title or a custodian before such commencement.
(2) Paragraph (1) of this subsection does not
apply to an executory contract or unexpired lease of the debtor, whether or
not such contract or lease prohibits or restricts assignment of rights or
delegation of duties, if--
(A)
(i) applicable law excuses a party, other than the debtor, to such
contract or lease from accepting performance from or rendering performance
to the trustee or to an assignee of such contract or lease, whether or not
such contract or lease prohibits or restricts assignment of rights or
delegation of duties; and
(ii) such party does not consent to such assumption or assignment; or
(B) such contract is a contract to make a loan, or extend other debt
financing or financial accommodations, to or for the benefit of the debtor,
or to issue a security of the debtor.
(f)
(1) Except as provided in subsections
(b) and (c)
of this section, notwithstanding a provision in an executory contract or
unexpired lease of the debtor, or in applicable law, that prohibits,
restricts, or conditions the assignment of such contract or lease, the
trustee may assign such contract or lease under paragraph (2) of this
subsection.
(2) The trustee may assign an executory contract or unexpired lease of
the debtor only if--
(A) the trustee assumes such contract or lease in accordance with the
provisions of this section; and
(B) adequate assurance of future performance by the assignee of such
contract or lease is provided, whether or not there has been a default in
such contract or lease.
(3) Notwithstanding a provision in an executory contract or unexpired
lease of the debtor, or in applicable law that terminates or modifies, or
permits a party other than the debtor to terminate or modify, such contract
or lease or a right or obligation under such contract or lease on account of
an assignment of such contract or lease, such contract, lease, right, or
obligation may not be terminated or modified under such provision because of
the assumption or assignment of such contract or lease by the trustee.
(g) Except as provided in subsections
(h)(2) and (i)(2)
of this section, the rejection of an executory contract or unexpired lease of
the debtor constitutes a breach of such contract or lease--
(1) if such contract or lease has not been assumed under this section or
under a plan confirmed under chapter
9, 11, 12,
or 13
of this title, immediately before the date of the filing of the petition; or
(2) if such contract or lease has been assumed under this section or
under a plan confirmed under chapter
9, 11,
12,
or 13
of this title--
(A) if before such rejection the case has not been converted under section
1112, 1208,
or 1307
of this title, at the time of such rejection; or
(B) if before such rejection the case has been converted under section
1112, 1208,
or 1307
of this title--
(i) immediately before the date of such conversion, if such contract
or lease was assumed before such conversion; or
(ii) at the time of such rejection, if such contract or lease was
assumed after such conversion.
(h)
(1)
(A) If the trustee rejects an unexpired lease of real property under
which the debtor is the lessor and--
(i) if the rejection by the trustee amounts to such a breach as
would entitle the lessee to treat such lease as terminated by virtue
of its terms, applicable nonbankruptcy law, or any agreement made by
the lessee, then the lessee under such lease may treat such lease as
terminated by the rejection; or
(ii) if the term of such lease has commenced, the lessee may retain
its rights under such lease (including rights such as those relating
to the amount and timing of payment of rent and other amounts payable
by the lessee and any right of use, possession, quiet enjoyment,
subletting, assignment, or hypothecation) that are in or appurtenant
to the real property for the balance of the term of such lease and for
any renewal or extension of such rights to the extent that such rights
are enforceable under applicable nonbankruptcy law.
(B) If the lessee retains its rights under subparagraph (A)(ii), the
lessee may offset against the rent reserved under such lease for the
balance of the term after the date of the rejection of such lease and
for the term of any renewal or extension of such lease, the value of any
damage caused by the nonperformance after the date of such rejection, of
any obligation of the debtor under such lease, but the lessee shall not
have any other right against the estate or the debtor on account of any
damage occurring after such date caused by such nonperformance.
(C) The rejection of a lease of real property in a shopping center
with respect to which the lessee elects to retain its rights under
subparagraph (A)(ii) does not affect the enforceability under applicable
nonbankruptcy law of any provision in the lease pertaining to radius,
location, use, exclusivity, or tenant mix or balance.
(D) In this paragraph, “lessee” includes any successor, assign,
or mortgagee permitted under the terms of such lease.
(2)
(A) If the trustee rejects a timeshare interest under a timeshare
plan under which the debtor is the timeshare interest seller and--
(i) if the rejection amounts to such a breach as would entitle the
timeshare interest purchaser to treat the timeshare plan as terminated
under its terms, applicable nonbankruptcy law, or any agreement made
by timeshare interest purchaser, the timeshare interest purchaser
under the timeshare plan may treat the timeshare plan as terminated by
such rejection; or
(ii) if the term of such timeshare interest has commenced, then the
timeshare interest purchaser may retain its rights in such timeshare
interest for the balance of such term and for any term of renewal or
extension of such timeshare interest to the extent that such rights
are enforceable under applicable nonbankruptcy law.
(B) If the timeshare interest purchaser retains its rights under
subparagraph (A), such timeshare interest purchaser may offset against
the moneys due for such timeshare interest for the balance of the term
after the date of the rejection of such timeshare interest, and the term
of any renewal or extension of such timeshare interest, the value of any
damage caused by the nonperformance after the date of such rejection, of
any obligation of the debtor under such timeshare plan, but the
timeshare interest purchaser shall not have any right against the estate
or the debtor on account of any damage occurring after such date caused
by such nonperformance.
(i)
(1) If the trustee rejects an executory contract of the debtor for the
sale of real property or for the sale of a timeshare interest under a
timeshare plan, under which the purchaser is in possession, such purchaser
may treat such contract as terminated, or, in the alternative, may remain
in possession of such real property or timeshare interest.
(2) If such purchaser remains in possession--
(A) such purchaser shall continue to make all payments due under such
contract, but may, offset against such payments any damages occurring
after the date of the rejection of such contract caused by the
nonperformance of any obligation of the debtor after such date, but
such purchaser does not have any rights against the estate on account of
any damages arising after such date from such rejection, other than such
offset; and
(B) the trustee shall deliver title to such purchaser in accordance
with the provisions of such contract, but is relieved of all other
obligations to perform under such contract.
(j) A purchaser that treats an executory contract as
terminated under subsection
(i) of this section, or a party whose executory contract to purchase
real property from the debtor is rejected and under which such party is not
in possession, has a lien on the interest of the debtor in such property for
the recovery of any portion of the purchase price that such purchaser or
party has paid.
(k) Assignment by the trustee to an entity of a
contract or lease assumed under this section relieves the trustee and the
estate from any liability for any breach of such contract or lease occurring
after such assignment.
(l) If an unexpired lease under which the debtor is
the lessee is assigned pursuant to this section, the lessor of the property
may require a deposit or other security for the performance of the
debtor’s obligations under the lease substantially the same as would have
been required by the landlord upon the initial leasing to a similar tenant.
(m) For purposes of this section
365 and sections
541(b)(2) and 362(b)(10),
leases of real property shall include any rental agreement to use real
property.
(n)
(1) If the trustee rejects an executory contract under which the debtor
is a licensor of a right to intellectual property, the licensee under such
contract may elect--
(A) to treat such contract as terminated by such rejection if such
rejection by the trustee amounts to such a breach as would entitle the
licensee to treat such contract as terminated by virtue of its own
terms, applicable nonbankruptcy law, or an agreement made by the
licensee with another entity; or
(B) to retain its rights (including a right to enforce any
exclusivity provision of such contract, but excluding any other right
under applicable nonbankruptcy law to specific performance of such
contract) under such contract and under any agreement supplementary to
such contract, to such intellectual property (including any embodiment
of such intellectual property to the extent protected by applicable
nonbankruptcy law), as such rights existed immediately before the case
commenced, for--
(i) the duration of such contract; and
(ii) any period for which such contract may be extended by the
licensee as of right under applicable nonbankruptcy law.
(2) If the licensee elects to retain its rights, as described in
paragraph (1)(B) of this subsection, under such contract--
(A) the trustee shall allow the licensee to exercise such rights;
(B) the licensee shall make all royalty payments due under such
contract for the duration of such contract and for any period described
in paragraph (1)(B) of this subsection for which the licensee extends
such contract; and
(C) the licensee shall be deemed to waive--
(i) any right of setoff it may have with respect to such contract
under this title or applicable nonbankruptcy law; and
(ii) any claim allowable under section
503(b) of this title arising from the performance of such
contract.
(3) If the licensee elects to retain its rights, as described in
paragraph (1)(B) of this subsection, then on the written request of the
licensee the trustee shall--
(A) to the extent provided in such contract, or any agreement
supplementary to such contract, provide to the licensee any intellectual
property (including such embodiment) held by the trustee; and
(B) not interfere with the rights of the licensee as provided in such
contract, or any agreement supplementary to such contract, to such
intellectual property (including such embodiment) including any right to
obtain such intellectual property (or such embodiment) from another
entity.
(4) Unless and until the trustee rejects such contract, on the written
request of the licensee the trustee shall--
(A) to the extent provided in such contract or any agreement
supplementary to such contract--
(i) perform such contract; or
(ii) provide to the licensee such intellectual property (including
any embodiment of such intellectual property to the extent protected
by applicable nonbankruptcy law) held by the trustee; and
(B) not interfere with the rights of the licensee as provided in such
contract, or any agreement supplementary to such contract, to such
intellectual property (including such embodiment), including any right
to obtain such intellectual property (or such embodiment) from another
entity.
(o) In a case under chapter
11 of this title, the trustee shall be deemed to have assumed
(consistent with the debtor’s other obligations under section
507), and shall immediately cure any deficit under, any commitment by
the debtor to a Federal depository institutions regulatory agency (or
predecessor to such agency) to maintain the capital of an insured depository
institution, and any claim for a subsequent breach of the obligations
thereunder shall be entitled to priority under section
507. This subsection shall not extend any commitment that would
otherwise be terminated by any act of such an agency.
(p)
(1) If a lease of personal property is rejected or not
timely assumed by the trustee under subsection
(d), the leased property is no longer property of the estate and the
stay under section
362(a) is automatically terminated.
(2)
(A) If the debtor in a case under chapter
7 is an individual, the debtor may notify the creditor in writing
that the debtor desires to assume the lease. Upon being so notified, the
creditor may, at its option, notify the debtor that it is willing to
have the lease assumed by the debtor and may condition such assumption
on cure of any outstanding default on terms set by the contract.
(B) If, not later than 30 days after notice is
provided under subparagraph (A), the debtor notifies the lessor in
writing that the lease is assumed, the liability under the lease will be
assumed by the debtor and not by the estate.
(C) The stay under section
362 and the injunction under section
524(a)(2) shall not be violated by notification of the debtor and
negotiation of cure under this subsection.
(3) In a case under chapter
11 in which the debtor is an individual and in a case under chapter
13, if the debtor is the lessee with respect to personal property and
the lease is not assumed in the plan confirmed by the court, the lease is
deemed rejected as of the conclusion of the hearing on confirmation. If
the lease is rejected, the stay under section
362 and any stay under section
1301 is automatically terminated with respect to the property subject
to the lease.
[Rev. 5-4-05]
11
USC § 366. Utility service
(a) Except as provided in subsections
(b) and (c) of this section, a utility may not alter, refuse, or
discontinue service to, or discriminate against, the trustee or the debtor
solely on the basis of the commencement of a case under this title or that a
debt owed by the debtor to such utility for service rendered before the order
for relief was not paid when due.
(b) Such utility may alter, refuse, or discontinue service if neither the
trustee nor the debtor, within 20 days after the date of the order for relief,
furnishes adequate assurance of payment, in the form of a deposit or other
security, for service after such date. On request of a party in interest and
after notice and a hearing, the court may order reasonable modification of the
amount of the deposit or other security necessary to provide adequate
assurance of payment.
(c)
(1)
(A) For purposes of this subsection, the term
`assurance of payment' means--
(i) a cash deposit;
(ii) a letter of credit;
(iii) a certificate of deposit;
(iv) a surety bond;
(v) a prepayment of utility consumption; or
(vi) another form of security that is mutually agreed on between the
utility and the debtor or the trustee.
(B) For purposes of this subsection an administrative expense priority
shall not constitute an assurance of payment.
(2) Subject to paragraphs (3) and (4), with respect to a case filed
under chapter 11,
a utility referred to in subsection (a) may alter, refuse, or discontinue
utility service, if during the 30-day period beginning on the date of the
filing of the petition, the utility does not receive from the debtor or
the trustee adequate assurance of payment for utility service that is
satisfactory to the utility.
(3)
(A) On request of a party in interest and after notice and a hearing,
the court may order modification of the amount of an assurance of
payment under paragraph (2).
(B) In making a determination under this paragraph whether an
assurance of payment is adequate, the court may not consider--
(i) the absence of security before the date of the filing of the
petition;
(ii) the payment by the debtor of charges for utility service in a
timely manner before the date of the filing of the petition; or
(iii) the availability of an administrative expense priority.
(4) Notwithstanding any other provision of law, with respect to a case
subject to this subsection, a utility may recover or set off against a
security deposit provided to the utility by the debtor before the date of
the filing of the petition without notice or order of the court.
[Rev. 5-5-05]
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
§ 511. Rate of interest on
tax claims
Subchapter II. Debtor's Duties and Benefits
§ 521. Debtor's duties
§ 522. Exemptions
§ 523. Exceptions to
discharge
§ 524. Effect of discharge
§ 525. Protection against
discriminatory treatment
§ 526. Restrictions on debt
relief agencies
§ 527. Disclosures
§ 528. Requirements for debt
relief agencies
Subchapter III. The Estate
§ 541. Property of the estate
§ 542. Turnover of property
to the estate
§ 543. Turnover of property
by a custodian
§ 544. Trustee as lien
creditor and as successor to certain creditors and purchasers
§ 545. Statutory liens
§ 546. Limitations on
avoiding powers
§ 547. Preferences
§ 548. Fraudulent transfers
and obligations
§ 549. Postpetition
transactions
§ 550. Liability of
transferee of avoided transfer
§ 551. Automatic preservation
of avoided transfer
§ 552. Postpetition effect of
security interest
§ 553. Setoff
§ 554. Abandonment of
property of the estate
§ 555. Contractual
right to liquidate, terminate, or accelerate a securities contract
§ 556. Contractual
right to liquidate, terminate, or accelerate a commodities contract or forward
contract
§ 557. Expedited
determination of interests in, and abandonment or other disposition of grain
assets
§ 558. Defenses of the estate
§ 559. Contractual
right to liquidate, terminate, or accelerate a repurchase agreement
§ 560. Contractual
right to liquidate, terminate, or accelerate a swap agreement
§ 561. Contractual right to
terminate, liquidate, accelerate, or offset under a master netting agreement and
across contracts; proceedings under chapter 15
§ 562. Timing of damage
measurement in connection with swap agreements, securities contracts, forward
contracts, commodity contracts, repurchase agreements, and master netting
agreements
Subchapter I. Creditors and Claims
11
USC § 501. Filing of proofs of claims or interests
(a) A creditor or an indenture trustee may file a
proof of claim. An equity security holder may file a proof of interest.
(b) If a creditor does not timely file a proof of such
creditor’s claim, an entity that is liable to such creditor with the debtor,
or that has secured such creditor, may file a proof of such claim.
(c) If a creditor does not timely file a proof of such
creditor’s claim, the debtor or the trustee may file a proof of such claim.
(d) A claim of a kind specified in section
502(e)(2), 502(f),
502(g),
502(h)
or 502(i)
of this title may be filed under subsection (a), (b), or (c) of this section
the same as if such claim were a claim against the debtor and had arisen
before the date of the filing of the petition.
(e) A claim arising from the liability
of a debtor for fuel use tax assessed consistent with the requirements of
section 31705 of title 49 may be filed by the base jurisdiction designated
pursuant to the International Fuel Tax Agreement (as defined in section 31701
of title 49) and, if so filed, shall be allowed as a single claim.
[Rev. 5-6-05]
11
USC § 502. Allowance of claims or interests
(a) A claim or interest, proof of which is filed under
section
501 of this title, is deemed allowed, unless a party in interest,
including a creditor of a general partner in a partnership that is a debtor in
a case under chapter 7
of this title, objects.
(b) Except as provided in subsections
(e)(2), (f),
(g),
(h)
and (i)
of this section, if such objection to a claim is made, the court, after notice
and a hearing, shall determine the amount of such claim in lawful currency of
the United States as of the date of the filing of the petition, and shall
allow such claim in such amount, except to the extent that--
(1) such claim is unenforceable against the
debtor and property of the debtor, under any agreement or applicable law for
a reason other than because such claim is contingent or unmatured;
(2) such claim is for unmatured interest;
(3) if such claim is for a tax assessed against
property of the estate, such claim exceeds the value of the interest of the
estate in such property;
(4) if such claim is for services of an insider
or attorney of the debtor, such claim exceeds the reasonable value of such
services;
(5) such claim is for a debt that is unmatured on
the date of the filing of the petition and that is excepted from discharge
under section
523(a)(5) of this title;
(6) if such claim is the claim of a lessor for
damages resulting from the termination of a lease of real property, such
claim exceeds--
(A) the rent reserved by such lease, without acceleration, for the
greater of one year, or 15 percent, not to exceed three years, of the
remaining term of such lease, following the earlier of--
(i) the date of the filing of the petition; and
(ii) the date on which such lessor repossessed, or the lessee
surrendered, the leased property; plus
(B) any unpaid rent due under such lease, without acceleration, on the
earlier of such dates;
(7) if such claim is the claim of an employee for
damages resulting from the termination of an employment contract, such claim
exceeds--
(A) the compensation provided by such contract, without acceleration,
for one year following the earlier of--
(i) the date of the filing of the petition; or
(ii) the date on which the employer directed the employee to
terminate, or such employee terminated, performance under such contract;
plus
(B) any unpaid compensation due under such contract, without
acceleration, on the earlier of such dates;
(8) such claim results from a reduction, due to
late payment, in the amount of an otherwise applicable credit available to
the debtor in connection with an employment tax on wages, salaries, or
commissions earned from the debtor; or
(9) proof of such claim is not timely filed,
except to the extent tardily filed as permitted under paragraph (1), (2), or
(3) of section
726(a) of this title or under the Federal Rules of Bankruptcy Procedure,
except that a claim of a governmental unit shall be timely filed if it is
filed before 180 days after the date of the order for relief or such later
time as the Federal Rules of Bankruptcy Procedure may provide,
and except that in a case under chapter
13, a claim of a governmental unit for a tax with respect to a return
filed under section
1308 shall be timely if the claim is filed on or before the date that is
60 days after the date on which such return was filed as required.
(c) There shall be estimated for purpose of allowance
under this section--
(1) any contingent or unliquidated claim, the fixing or liquidation of
which, as the case may be, would unduly delay the administration of the
case; or
(2) any right to payment arising from a right to an equitable remedy for
breach of performance.
(d) Notwithstanding subsections
(a) and (b)
of this section, the court shall disallow any claim of any entity from which
property is recoverable under section
542, 543,
550,
or 553 of
this title or that is a transferee of a transfer avoidable under section
522(f), 522(h),
544,
545,
547, 548,
549,
or 724(a)
of this title, unless such entity or transferee has paid the amount, or turned
over any such property, for which such entity or transferee is liable under section
522(i), 542,
543,
550,
or 553 of
this title.
(e)
(1) Notwithstanding subsections
(a), (b),
and (c)
of this section and paragraph (2) of this subsection, the court shall
disallow any claim for reimbursement or contribution of an entity that is
liable with the debtor on or has secured the claim of a creditor, to the
extent that--
(A) such creditor’s claim against the estate is disallowed;
(B) such claim for reimbursement or contribution is contingent as of
the time of allowance or disallowance of such claim for reimbursement or
contribution; or
(C) such entity asserts a right of subrogation to the rights of such
creditor under section
509 of this title.
(2) A claim for reimbursement or contribution of such an entity that
becomes fixed after the commencement of the case shall be determined, and
shall be allowed under subsection
(a), (b)
or (c)
of this section, or disallowed under subsection
(d) of this section, the same as if such claim had become fixed before
the date of the filing of the petition.
(f) In an involuntary case, a claim arising in the
ordinary course of the debtor’s business or financial affairs after the
commencement of the case but before the earlier of the appointment of a
trustee and the order for relief shall be determined as of the date such claim
arises, and shall be allowed under subsection
(a), (b)
or (c)
of this section or disallowed under subsection (d) or (e) of this section, the
same as if such claim had arisen before the date of the filing of the
petition.
(g)
(1) A claim arising from the rejection, under section
365 of this title or under a plan under chapter
9, 11, 12,
or 13
of this title, of an executory contract or unexpired lease of the debtor
that has not been assumed shall be determined, and shall be allowed under
subsection
(a), (b)
or (c)
of this section or disallowed under subsection (d) or (e) of this section,
the same as if such claim had arisen before the date of the filing of the
petition.
(2) A claim for damages calculated in accordance with
section 562 shall be allowed under subsection (a), (b), or (c), or
disallowed under subsection (d) or (e), as if such claim had arisen before
the date of the filing of the petition.
(h) A claim arising from the recovery of property
under section
522, 550,
or 553 of
this title shall be determined, and shall be allowed under subsection
(a), (b)
or (c)
of this section, or disallowed under subsection
(d) or (e)
of this section, the same as if such claim had arisen before the date of the
filing of the petition.
(i) A claim that does not arise until after the
commencement of the case for a tax entitled to priority under section
507(a)(8) of this title shall be determined, and shall be allowed under subsection
(a), (b)
or (c)
of this section, or disallowed under subsection
(d) or (e)
of this section, the same as if such claim had arisen before the date of the
filing of the petition.
(j) A claim that has been allowed or disallowed may be
reconsidered for cause. A reconsidered claim may be allowed or disallowed
according to the equities of the case. Reconsideration of a claim under this
subsection does not affect the validity of any payment or transfer from the
estate made to a holder of an allowed claim on account of such allowed claim
that is not reconsidered, but if a reconsidered claim is allowed and is of the
same class as such holder’s claim, such holder may not receive any
additional payment or transfer from the estate on account of such holder’s
allowed claim until the holder of such reconsidered and allowed claim receives
payment on account of such claim proportionate in value to that already
received by such other holder. This subsection does not alter or modify the
trustee’s right to recover from a creditor any excess payment or transfer
made to such creditor.
(k)
(1) The court, on the motion of the debtor and after a
hearing, may reduce a claim filed under this section based in whole on an
unsecured consumer debt by not more than 20 percent of the claim, if--
(A) the claim was filed by a creditor who unreasonably refused to
negotiate a reasonable alternative repayment schedule proposed on behalf
of the debtor by an approved nonprofit budget and credit counseling agency
described in section
111;
(B) the offer of the debtor under subparagraph (A)--
(i) was made at least 60 days before the date of the filing of the
petition; and
(ii) provided for payment of at least 60 percent of the amount of the
debt over a period not to exceed the repayment period of the loan, or a
reasonable extension thereof; and
(C) no part of the debt under the alternative repayment schedule is
nondischargeable.
(2) The debtor shall have the burden of proving, by clear and convincing
evidence, that--
(A) the creditor unreasonably refused to consider the debtor's
proposal; and
(B) the proposed alternative repayment schedule was made prior to
expiration of the 60-day period specified in paragraph (1)(B)(i).
[Rev. 5-6-05]
11
USC § 503. Allowance of administrative expenses
(a) An entity may timely file a request for payment of
an administrative expense, or may tardily file such request if permitted by
the court for cause.
(b) After notice and a hearing, there shall be allowed
administrative expenses, other than claims allowed under section
502(f) of this title, including--
(1)
(A) the actual, necessary costs and expenses of
preserving the estate including--
(i) wages, salaries, and commissions for services
rendered after the commencement of the case; and
(ii) wages and benefits awarded pursuant to a
judicial proceeding or a proceeding of the National Labor Relations
Board as back pay attributable to any period of time occurring after
commencement of the case under this title, as a result of a violation of
Federal or State law by the debtor, without regard to the time of the
occurrence of unlawful conduct on which such award is based or to
whether any services were rendered, if the court determines that payment
of wages and benefits by reason of the operation of this clause will not
substantially increase the probability of layoff or termination of
current employees, or of nonpayment of domestic support obligations,
during the case under this title;
(B) any tax--
(i) incurred by the estate, whether secured or
unsecured, including property taxes for which liability is in rem, in
personam, or both, except a tax of a kind specified in section
507(a)(8) of this title; or
(ii) attributable to an excessive allowance of a tentative carryback
adjustment that the estate received, whether the taxable year to which
such adjustment relates ended before or after the commencement of the
case;
(C) any fine, penalty, or reduction in credit relating to a tax of a
kind specified in subparagraph (B) of this paragraph; and
(D) notwithstanding the requirements of subsection (a),
a governmental unit shall not be required to file a request for the
payment of an expense described in subparagraph (B) or (C), as a condition
of its being an allowed administrative expense;
(2) compensation and reimbursement awarded under section
330(a) of this title;
(3) the actual, necessary expenses, other than
compensation and reimbursement specified in paragraph (4) of this
subsection, incurred by--
(A) a creditor that files a petition under section
303 of this title;
(B) a creditor that recovers, after the court’s approval, for the
benefit of the estate any property transferred or concealed by the debtor;
(C) a creditor in connection with the prosecution of a criminal offense
relating to the case or to the business or property of the debtor;
(D) a creditor, an indenture trustee, an equity security holder, or a
committee representing creditors or equity security holders other than a
committee appointed under section
1102 of this title, in making a substantial contribution in a case
under chapter
9 or 11
of this title;
(E) a custodian superseded under section
543 of this title, and compensation for the services of such
custodian; or
(F) a member of a committee appointed under section
1102 of this title, if such expenses are incurred in the performance
of the duties of such committee;
(4) reasonable compensation for professional
services rendered by an attorney or an accountant of an entity whose expense
is allowable under subparagraph (A), (B), (C), (D), or (E)
of paragraph (3) of this subsection, based on the time, the nature,
the extent, and the value of such services, and the cost of comparable
services other than in a case under this title, and reimbursement for
actual, necessary expenses incurred by such attorney or accountant;
(5) reasonable compensation for services rendered
by an indenture trustee in making a substantial contribution in a case under
chapter
9 or 11 of
this title, based on the time, the nature, the extent, and the value of such
services, and the cost of comparable services other than in a case under
this title;
(6) the fees and mileage payable under chapter
119 of title 28;
(7) with respect to a
nonresidential real property lease previously assumed under section
365, and subsequently rejected, a sum equal to all monetary obligations
due, excluding those arising from or relating to a failure to operate or a
penalty provision, for the period of 2 years following the later of the
rejection date or the date of actual turnover of the premises, without
reduction or setoff for any reason whatsoever except for sums actually
received or to be received from an entity other than the debtor, and the
claim for remaining sums due for the balance of the term of the lease shall
be a claim under section
502(b)(6);
(8) the actual, necessary costs and expenses of
closing a health care business incurred by a trustee or by a Federal agency
(as defined in section
551(1) of title 5) or a department or agency of a State or political
subdivision thereof, including any cost or expense incurred--
(A) in disposing of patient records in accordance with section
351; or
(B) in connection with transferring patients from the health care
business that is in the process of being closed to another health care
business; and
(9) the value of any goods received by the debtor
within 20 days before the date of commencement of a case under this title in
which the goods have been sold to the debtor in the ordinary course of such
debtor's business.
(c) Notwithstanding subsection (b), there shall
neither be allowed, nor paid--
(1) a transfer made to, or an obligation
incurred for the benefit of, an insider of the debtor for the purpose of
inducing such person to remain with the debtor's business, absent a
finding by the court based on evidence in the record that--
(A) the transfer or obligation is essential to retention of the
person because the individual has a bona fide job offer from another
business at the same or greater rate of compensation;
(B) the services provided by the person are essential to the survival
of the business; and
(C) either--
(i) the amount of the transfer made to, or obligation incurred for
the benefit of, the person is not greater than an amount equal to 10
times the amount of the mean transfer or obligation of a similar kind
given to nonmanagement employees for any purpose during the calendar
year in which the transfer is made or the obligation is incurred; or
(ii) if no such similar transfers were made to, or obligations were
incurred for the benefit of, such nonmanagement employees during such
calendar year, the amount of the transfer or obligation is not greater
than an amount equal to 25 percent of the amount of any similar
transfer or obligation made to or incurred for the benefit of such
insider for any purpose during the calendar year before the year in
which such transfer is made or obligation is incurred;
(2) a severance payment to an insider of the
debtor, unless--
(A) the payment is part of a program that is generally applicable to
all full-time employees; and
(B) the amount of the payment is not greater than 10 times the amount
of the mean severance pay given to nonmanagement employees during the
calendar year in which the payment is made; or
(3) other transfers or obligations that are
outside the ordinary course of business and not justified by the facts and
circumstances of the case, including transfers made to, or obligations
incurred for the benefit of, officers, managers, or consultants hired
after the date of the filing of the petition.
[Rev. 5-6-05]
11
USC § 504. Sharing of compensation
(a) Except as provided in subsection (b) of this
section, a person receiving compensation or reimbursement under section
503(b)(2) or 503(b)(4)
of this title may not share or agree to share--
(1) any such compensation or reimbursement with another person; or
(2) any compensation or reimbursement received by another person under
such sections.
(b)
(1) A member, partner, or regular associate in a professional
association, corporation, or partnership may share compensation or
reimbursement received under section
503(b)(2) or of this title with another member, partner, or regular
associate in such association, corporation, or partnership, and may share in
any compensation or reimbursement received under such sections by another
member, partner, or regular associate in such association, corporation, or
partnership.
(2) An attorney for a creditor that files a petition under section
303 of this title may share compensation and reimbursement received
under section
503(b)(4) of this title with any other attorney contributing to the
services rendered or expenses incurred by such creditor’s attorney.
(c) This section shall not apply with
respect to sharing, or agreeing to share, compensation with a bona fide public
service attorney referral program that operates in accordance with non-Federal
law regulating attorney referral services and with rules of professional
responsibility applicable to attorney acceptance of referrals.
[Rev. 5-6-05]
11
USC § 505. Determination of tax liability
(a)
(1) Except as provided in paragraph (2) of this subsection, the court may
determine the amount or legality of any tax, any fine or penalty relating to
a tax, or any addition to tax, whether or not previously assessed, whether
or not paid, and whether or not contested before and adjudicated by a
judicial or administrative tribunal of competent jurisdiction.
(2) The court may not so determine--
(A) the amount or legality of a tax, fine, penalty, or addition to tax
if such amount or legality was contested before and adjudicated by a
judicial or administrative tribunal of competent jurisdiction before the
commencement of the case under this title;
(B) any right of the estate to a tax refund, before the earlier of--
(i) 120 days after the trustee properly requests such refund from the
governmental unit from which such refund is claimed; or
(ii) a determination by such governmental unit of such request
(C) the amount or legality of any amount arising in
connection with an ad valorem tax on real or personal property of the
estate, if the applicable period for contesting or redetermining that
amount under any law (other than a bankruptcy law) has expired.
(b)
(1)
(A) The clerk shall maintain a list under which a Federal, State, or
local governmental unit responsible for the collection of taxes within the
district may--
(i) designate an address for service of requests under this
subsection; and
(ii) describe where further information concerning additional
requirements for filing such requests may be found.
(B) If such governmental unit does not designate an address and provide
such address to the clerk under subparagraph (A), any request made under
this subsection may be served at the address for the filing of a tax
return or protest with the appropriate taxing authority of such
governmental unit.
(2)
A trustee may request a determination of any unpaid liability of the estate
for any tax incurred during the administration of the case by submitting a tax
return for such tax and a request for such a determination to the governmental
unit charged with responsibility for collection or determination of such tax at
the address and in the manner designated in paragraph (1). Unless such
return is fraudulent, or contains a material misrepresentation, the
estate, the trustee, the debtor, and any successor to the debtor are
discharged from any liability for such tax--
(A)
upon payment of the tax shown on such return, if--
(i)
such governmental unit does not notify the trustee, within 60 days after
such request, that such return has been selected for examination; or
(ii)
such governmental unit does not complete such an examination and notify
the trustee of any tax due, within 180 days after such request or within
such additional time as the court, for cause, permits;
(B)
upon payment of the tax determined by the court, after notice and a hearing,
after completion by such governmental unit of such examination; or
(C)
upon payment of the tax determined by such governmental unit to be due.
(c) Notwithstanding section 362 of this title, after
determination by the court of a tax under this section, the governmental unit
charged with responsibility for collection of such tax may assess such tax
against the estate, the debtor, or a successor to the debtor, as the case may
be, subject to any otherwise applicable law.
[Rev. 5-7-05]
11
USC § 506. Determination of secured status
(a)
(1) An allowed claim of a creditor secured by a
lien on property in which the estate has an interest, or that is subject to
setoff under section
553 of this title, is a secured claim to the extent of the value of such
creditor’s interest in the estate’s interest in such property, or to the
extent of the amount subject to setoff, as the case may be, and is an
unsecured claim to the extent that the value of such creditor’s interest
or the amount so subject to setoff is less than the amount of such allowed
claim. Such value shall be determined in light of the purpose of the
valuation and of the proposed disposition or use of such property, and in
conjunction with any hearing on such disposition or use or on a plan
affecting such creditor’s interest.
(2) If the debtor is an individual in a case under chapter
7 or 13,
such value with respect to personal property securing an allowed claim shall
be determined based on the replacement value of such property as of the date
of the filing of the petition without deduction for costs of sale or
marketing. With respect to property acquired for personal, family, or
household purposes, replacement value shall mean the price a retail merchant
would charge for property of that kind considering the age and condition of
the property at the time value is determined.
(b) To the extent that an allowed secured claim is
secured by property the value of which, after any recovery under subsection
(c) of this section, is greater than the amount of such claim, there shall be
allowed to the holder of such claim, interest on such claim, and any
reasonable fees, costs, or charges provided for under the agreement or
State statute under which such claim arose.
(c) The trustee may recover from property securing an
allowed secured claim the reasonable, necessary costs and expenses of
preserving, or disposing of, such property to the extent of any benefit to the
holder of such claim, including the payment of all ad valorem
property taxes with respect to the property.
(d) To the extent that a lien secures a claim against
the debtor that is not an allowed secured claim, such lien is void, unless--
(1) such claim was disallowed only under section
502(b)(5) or 502(e)
of this title; or
(2) such claim is not an allowed secured claim due only to the failure of
any entity to file a proof of such claim under section
501 of this title.
[Rev. 5-7-05]
11
USC § 507. Priorities
(a) The following expenses and claims have priority in
the following order:
(1) First:
(A) Allowed unsecured claims for domestic support
obligations that, as of the date of the filing of the petition in a case
under this title, are owed to or recoverable by a spouse, former spouse,
or child of the debtor, or such child's parent, legal guardian, or
responsible relative, without regard to whether the claim is filed by such
person or is filed by a governmental unit on behalf of such person, on the
condition that funds received under this paragraph by a governmental unit
under this title after the date of the filing of the petition shall be
applied and distributed in accordance with applicable nonbankruptcy law.
(B) Subject to claims under subparagraph (A), allowed
unsecured claims for domestic support obligations that, as of the date of
the filing of the petition, are assigned by a spouse, former spouse, child
of the debtor, or such child's parent, legal guardian, or responsible
relative to a governmental unit (unless such obligation is assigned
voluntarily by the spouse, former spouse, child, parent, legal guardian,
or responsible relative of the child for the purpose of collecting the
debt) or are owed directly to or recoverable by a governmental unit under
applicable nonbankruptcy law, on the condition that funds received under
this paragraph by a governmental unit under this title after the date of
the filing of the petition be applied and distributed in accordance with
applicable nonbankruptcy law.
(C) If a trustee is appointed or elected under section
701, 702,
703,
1104,
1202,
or 1302,
the administrative expenses of the trustee allowed under paragraphs
(1)(A), (2),
and (6)
of section
503(b) shall be paid before payment of claims under subparagraphs (A)
and (B), to the extent that the trustee administers assets that are
otherwise available for the payment of such claims.
(2)
Second, administrative expenses allowed under section
503(b) of this title, and any fees and charges assessed against the
estate under chapter
123 of title 28.
(3)
Third, unsecured claims allowed under section
502(f) of this title.
(4)
Fourth, allowed unsecured claims, but only to the extent of $10,000
[
Adjusted every 3 years by section
104.] for each individual or corporation, as the case may be,
earned within 180
days before the date of the filing of the petition or the date of the
cessation of the debtor's business, whichever occurs first, for--
(A) wages, salaries, or commissions, including vacation, severance, and
sick leave pay earned by an individual; or
(B) sales commissions earned by an individual or by a corporation with
only 1 employee, acting as an independent contractor in the sale of goods
or services for the debtor in the ordinary course of the debtor's business
if, and only if, during the 12 months preceding that date, at least 75
percent of the amount that the individual or corporation earned by acting
as an independent contractor in the sale of goods or services was earned
from the debtor.
(5)
Fifth, allowed unsecured claims for contributions to an employee
benefit plan--
(A) arising from services rendered within 180 days before the date of
the filing of the petition or the date of the cessation of the debtor’s
business, whichever occurs first; but only
(B) for each such plan, to the extent of--
(i) the number of employees covered by each such plan multiplied by $10,000[
Adjusted every 3 years by section
104.]; less
(ii) the aggregate amount paid to such employees under paragraph (4)
of this subsection, plus the aggregate amount paid by the estate on
behalf of such employees to any other employee benefit plan.
(6)
Sixth, allowed unsecured claims of persons--
(A) engaged in the production or raising of grain, as defined in section
557(b) of this title, against a debtor who owns or operates a grain
storage facility, as defined in section
557(b) of this title, for grain or the proceeds of grain, or
(B) engaged as a United States fisherman against a debtor who has
acquired fish or fish produce from a fisherman through a sale or
conversion, and who is engaged in operating a fish produce storage or
processing facility--
but only to the extent of $4,000 [
Adjusted every 3 years by section
104.] for each such individual.
(7)
Seventh, allowed unsecured claims of individuals, to the extent of
$1,800 [
Adjusted every 3 years by section
104.] for each such individual, arising from the deposit, before
the commencement of the case, of money in connection with the purchase,
lease, or rental of property, or the purchase of services, for the personal,
family, or household use of such individuals, that were not delivered or
provided.
(8) Eighth, allowed unsecured claims of
governmental units, only to the extent that such claims are for--
(A) a tax on or measured by income or gross receipts for
a taxable year ending on or before the date of the filing of the petition--
(i) for
which a return, if required, is last due, including extensions, after
three years before the date of the filing of the petition;
(ii) assessed within 240 days before the date of the
filing of the petition, exclusive of--
(I) any time during which an offer in compromise
with respect to that tax was pending or in effect during that 240-day
period, plus 30 days; and
(II) any time during which a stay of proceedings
against collections was in effect in a prior case under this title
during that 240-day period, plus 90 days.
(iii) other than a tax of a kind specified in section
523(a)(1)(B) or 523(a)(1)(C)
of this title, not assessed before, but assessable, under applicable law
or by agreement, after, the commencement of the case;
(B) a property tax incurred
before the commencement of the case and last payable without penalty after
one year before the date of the filing of the petition;
(C) a tax required to be collected or withheld and for which the debtor
is liable in whatever capacity;
(D) an employment tax on a wage, salary, or commission of a kind
specified in paragraph (4)
of this subsection earned from the debtor before the date of the filing of
the petition, whether or not actually paid before such date, for which a
return is last due, under applicable law or under any extension, after
three years before the date of the filing of the petition;
(E) an excise tax on--
(i) a transaction occurring before the date of the filing of the
petition for which a return, if required, is last due, under applicable
law or under any extension, after three years before the date of the
filing of the petition; or
(ii) if a return is not required, a transaction occurring during the
three years immediately preceding the date of the filing of the
petition;
(F) a customs duty arising out of the importation of merchandise--
(i) entered for consumption within one year before the date of the
filing of the petition;
(ii) covered by an entry liquidated or reliquidated within one year
before the date of the filing of the petition; or
(iii) entered for consumption within four years before the date of
the filing of the petition but unliquidated on such date, if the
Secretary of the Treasury certifies that failure to liquidate such entry
was due to an investigation pending on such date into assessment of
antidumping or countervailing duties or fraud, or if information needed
for the proper appraisement or classification of such merchandise was
not available to the appropriate customs officer before such date; or
(G) a penalty related to a claim of a kind specified in this paragraph
and in compensation for actual pecuniary loss.
An otherwise applicable time period specified in this
paragraph shall be suspended for any period during which a governmental unit
is prohibited under applicable nonbankruptcy law from collecting a tax as a
result of a request by the debtor for a hearing and an appeal of any
collection action taken or proposed against the debtor, plus 90 days; plus
any time during which the stay of proceedings was in effect in a prior case
under this title or during which collection was precluded by the existence
of 1 or more confirmed plans under this title, plus 90 days.
(9) Ninth, allowed unsecured claims based upon
any commitment by the debtor to a Federal depository institutions regulatory
agency (or predecessor to such agency) to maintain the capital of an insured
depository institution.
(10) Tenth, allowed claims for
death or personal injury resulting from the operation of a motor vehicle or
vessel if such operation was unlawful because the debtor was intoxicated
from using alcohol, a drug, or another substance.
(b) If the trustee, under section
362, 363,
or 364
of this title, provides adequate protection of the interest of a holder of a
claim secured by a lien on property of the debtor and if, notwithstanding such
protection, such creditor has a claim allowable under subsection
(a)(2) of this section arising from the stay of action against such
property under section
362 of this title, from the use, sale, or lease of such property under section
363 of this title, or from the granting of a lien under section
364(d) of this title, then such creditor's claim under such subsection
shall have priority over every other claim allowable under such subsection.
(c) For the purpose of subsection
(a) of this section, a claim of a governmental unit arising from an
erroneous refund or credit of a tax has the same priority as a claim for the
tax to which such refund or credit relates.
(d) An entity that is subrogated to the rights of a holder of a claim of a
kind specified in subsection
(a)(1),
(a)(4),
(a)(5),
(a)(6),
(a)(7),
(a)(8),
or (a)(9)
of this section is not subrogated to the right of the holder of such claim to
priority under such subsection.
[Rev. 5-7-05]
11
USC § 508. Effect of distribution other than under this title
If a creditor of a partnership debtor receives, from a general partner that
is not a debtor in a case under chapter
7 of this title, payment of, or a transfer of property on account of, a
claim that is allowed under this title and that is not secured by a lien on
property of such partner, such creditor may not receive any payment under this
title on account of such claim until each of the other holders of claims on
account of which such holders are entitled to share equally with such creditor
under this title has received payment under this title equal in value to the
consideration received by such creditor from such general partner.
[Rev. 5-7-05]
11
USC § 509. Claims of codebtors
(a) Except as provided in subsection (b) or (c) of
this section, an entity that is liable with the debtor on, or that has
secured, a claim of a creditor against the debtor, and that pays such claim,
is subrogated to the rights of such creditor to the extent of such payment.
(b) Such entity is not subrogated to the rights of
such creditor to the extent that--
(1) a claim of such entity for reimbursement or contribution on account
of such payment of such creditor’s claim is--
(A) allowed under section 502 of this title;
(B) disallowed other than under section 502(e) of this title; or
(C) subordinated under section 510 of this title; or
(2) as between the debtor and such entity, such entity received the
consideration for the claim held by such creditor.
(c) The court shall subordinate to the claim of a
creditor and for the benefit of such creditor an allowed claim, by way of
subrogation under this section, or for reimbursement or contribution, of an
entity that is liable with the debtor on, or that has secured, such
creditor’s claim, until such creditor’s claim is paid in full, either
through payments under this title or otherwise.
[Rev. 5-7-05]
11
USC § 510. Subordination
(a) A subordination agreement is enforceable in a case under this title to
the same extent that such agreement is enforceable under applicable
nonbankruptcy law.
(b) For the purpose of distribution under this title, a claim arising from
rescission of a purchase or sale of a security of the debtor or of an
affiliate of the debtor, for damages arising from the purchase or sale of such
a security, or for reimbursement or contribution allowed under section
502 on account of such a claim, shall be subordinated to all claims or
interests that are senior to or equal the claim or interest represented by
such security, except that if such security is common stock, such claim has
the same priority as common stock.
(c) Notwithstanding subsections (a) and (b) of this section, after notice
and a hearing, the court may--
(1) under principles of equitable subordination, subordinate for purposes
of distribution all or part of an allowed claim to all or part of another
allowed claim or all or part of an allowed interest to all or part of
another allowed interest; or
(2) order that any lien securing such a subordinated claim be transferred
to the estate.
[Rev. 5-7-05]
11
USC § 511. Rate of interest on tax claims
(a) If any provision of this title requires the payment of
interest on a tax claim or on an administrative expense tax, or the payment of
interest to enable a creditor to receive the present value of the allowed
amount of a tax claim, the rate of interest shall be the rate determined under
applicable nonbankruptcy law.
(b) In the case of taxes paid under a confirmed plan under this title, the
rate of interest shall be determined as of the calendar month in which the
plan is confirmed.
[Rev. 5-7-05]
Subchapter II. Debtor's Duties and Benefits
11
USC § 521. Debtor’s duties
(a)The debtor shall--
(1) file--
(A) a list of creditors; and
(B) unless the court orders otherwise--
(i) a schedule of assets and liabilities;
(ii) a schedule of current income and current
expenditures;
(iii) a statement of the debtor's financial affairs
and, if section
342(b) applies, a certificate--
(I) of an attorney whose name is indicated on the
petition as the attorney for the debtor, or a bankruptcy petition
preparer signing the petition under section
110(b)(1), indicating that such attorney or the bankruptcy
petition preparer delivered to the debtor the notice required by section
342(b); or
(II) if no attorney is so indicated, and no
bankruptcy petition preparer signed the petition, of the debtor that
such notice was received and read by the debtor;
(iv) copies of all payment advices or other evidence
of payment received within 60 days before the date of the filing of the
petition, by the debtor from any employer of the debtor;
(v) a statement of the amount of monthly net income,
itemized to show how the amount is calculated; and
(vi) a statement disclosing any reasonably
anticipated increase in income or expenditures over the 12-month period
following the date of the filing of the petition;
(2) if an individual debtor's schedule of assets
and liabilities includes
debts
which are secured by property of the estate--
(A) within thirty days after the date of the filing of a petition under
chapter 7 of
this title or on or before the date of the meeting of creditors, whichever
is earlier, or within such additional time as the court, for cause, within
such period fixes, the debtor shall file with the clerk a statement of his
intention with respect to the retention or surrender of such property and,
if applicable, specifying that such property is claimed as exempt, that
the debtor intends to redeem such property, or that the debtor intends to
reaffirm debts secured by such property;
(B) within 30
days after the first date set for the meeting of creditors under section
341(a), or within such additional time as the court, for cause,
within such 30-day
period fixes, the debtor shall perform his intention with respect to such
property, as specified by subparagraph (A) of this paragraph; and
(C) nothing in subparagraphs (A) and (B) of this paragraph shall alter
the debtor's or the trustee's rights with regard to such property under
this title, except as provided in section
362(h);
(3) if a trustee is serving in the case or
an auditor serving under section
586(f) of title 28, cooperate with the trustee as necessary to
enable the trustee to perform the trustee's duties under this title;
(4) if a trustee is serving in the case or
an auditor serving under section
586(f) of title 28, surrender to the trustee all property of the
estate and any recorded information, including books, documents, records,
and papers, relating to property of the estate, whether or not immunity is
granted under section
344 of this title;
(5) appear at the hearing required under section
524(d) of this title;
(6) in a case under chapter
7 of this title in which the debtor is an individual, not retain
possession of personal property as to which a creditor has an allowed claim
for the purchase price secured in whole or in part by an interest in such
personal property unless the debtor, not later than 45 days after the first
meeting of creditors under section
341(a), either--
(A) enters into an agreement with the creditor pursuant
to section
524(c) with respect to the claim secured by such property; or
(B) redeems such property from the security interest
pursuant to section
722.
(7) unless a trustee is serving
in the case, continue to perform the obligations required of the
administrator (as defined in section 3 of the Employee Retirement Income
Security Act of 1974) of an employee benefit plan if at the time of the
commencement of the case the debtor (or any entity designated by the debtor)
served as such administrator.
If the debtor fails to so act within the 45-day period
referred to in paragraph (6), the stay under section
362(a) is terminated with respect to the personal property of the estate
or of the debtor which is affected, such property shall no longer be property
of the estate, and the creditor may take whatever action as to such property
as is permitted by applicable nonbankruptcy law, unless the court determines
on the motion of the trustee filed before the expiration of such 45-day
period, and after notice and a hearing, that such property is of consequential
value or benefit to the estate, orders appropriate adequate protection of the
creditor's interest, and orders the debtor to deliver any collateral in the
debtor's possession to the trustee.
(b) In addition to the requirements
under subsection
(a), a debtor who is an individual shall file with the court--
(1) a certificate from the
approved nonprofit budget and credit counseling agency that provided the
debtor services under section
109(h) describing the services provided to the debtor; and
(2) a copy of the debt repayment
plan, if any, developed under section
109(h) through the approved nonprofit budget and credit counseling
agency referred to in paragraph (1).
(c) In addition to meeting the
requirements under subsection
(a), a debtor shall file with the court a record of any interest that a
debtor has in an education individual retirement account (as defined in
section 530(b)(1) of the Internal Revenue Code of 1986) or under a qualified
State tuition program (as defined in section 529(b)(1) of such Code).
(d) If the debtor fails timely to take
the action specified in subsection
(a)(6) of this section, or in paragraphs (1) and (2) of section
362(h), with respect to property which a lessor or bailor owns and has
leased, rented, or bailed to the debtor or as to which a creditor holds a
security interest not otherwise voidable under section
522(f), 544,
545,
547, 548,
or 549,
nothing in this title shall prevent or limit the operation of a provision in
the underlying lease or agreement that has the effect of placing the debtor in
default under such lease or agreement by reason of the occurrence, pendency,
or existence of a proceeding under this title or the insolvency of the debtor.
Nothing in this subsection shall be deemed to justify limiting such a
provision in any other circumstance.
(e)
(1) If the debtor in a case under
chapter 7 or 13
is an individual and if a creditor files with the court at any time a
request to receive a copy of the petition, schedules, and statement of
financial affairs filed by the debtor, then the court shall make such
petition, such schedules, and such statement available to such creditor.
(2)
(A) The debtor shall provide--
(i) not later than 7 days before the date first set
for the first meeting of creditors, to the trustee a copy of the Federal
income tax return required under applicable law (or at the election of
the debtor, a transcript of such return) for the most recent tax year
ending immediately before the commencement of the case and for which a
Federal income tax return was filed; and
(ii) at the same time the debtor complies with clause
(i), a copy of such return (or if elected under clause (i), such
transcript) to any creditor that timely requests such copy.
(B) If the debtor fails to comply with clause (i) or
(ii) of subparagraph (A), the court shall dismiss the case unless the
debtor demonstrates that the failure to so comply is due to circumstances
beyond the control of the debtor.
(C) If a creditor requests a copy of such tax return or
such transcript and if the debtor fails to provide a copy of such tax
return or such transcript to such creditor at the time the debtor provides
such tax return or such transcript to the trustee, then the court shall
dismiss the case unless the debtor demonstrates that the failure to
provide a copy of such tax return or such transcript is due to
circumstances beyond the control of the debtor.
(3) If a creditor in a case under
chapter
13 files with the court at any time a request to receive a copy of the
plan filed by the debtor, then the court shall make available to such
creditor a copy of the plan--
(A) at a reasonable cost; and
(B) not later than 5 days after such request is filed.
(f) At the request of the court, the
United States trustee, or any party in interest in a case under chapter
7, 11, or 13,
a debtor who is an individual shall file with the court--
(1) at the same time filed with
the taxing authority, a copy of each Federal income tax return required
under applicable law (or at the election of the debtor, a transcript of such
tax return) with respect to each tax year of the debtor ending while the
case is pending under such chapter;
(2) at the same time filed with
the taxing authority, each Federal income tax return required under
applicable law (or at the election of the debtor, a transcript of such tax
return) that had not been filed with such authority as of the date of the
commencement of the case and that was subsequently filed for any tax year of
the debtor ending in the 3-year period ending on the date of the
commencement of the case;
(3) a copy of each amendment to
any Federal income tax return or transcript filed with the court under
paragraph (1) or (2); and
(4) in a case under chapter
13--
(A) on the date that is either 90 days after the end of
such tax year or 1 year after the date of the commencement of the case,
whichever is later, if a plan is not confirmed before such later date; and
(B) annually after the plan is confirmed and until the
case is closed, not later than the date that is 45 days before the
anniversary of the confirmation of the plan;
a statement, under penalty of perjury, of the income and
expenditures of the debtor during the tax year of the debtor most recently
concluded before such statement is filed under this paragraph, and of the
monthly income of the debtor, that shows how income, expenditures, and monthly
income are calculated.
(g)
(1) A statement referred to in subsection
(f)(4) shall disclose--
(A) the amount and sources of the income of the debtor;
(B) the identity of any person responsible with the
debtor for the support of any dependent of the debtor; and
(C) the identity of any person who contributed, and the
amount contributed, to the household in which the debtor resides.
(2) The tax returns, amendments,
and statement of income and expenditures described in subsections
(e)(2)(A) and (f)
shall be available to the United States trustee (or the bankruptcy
administrator, if any), the trustee, and any party in interest for
inspection and copying, subject to the requirements of section
315(c) of the Bankruptcy Abuse Prevention and Consumer Protection Act of
2005.
(h) If requested by the United States
trustee or by the trustee, the debtor shall provide--
(1) a document that establishes
the identity of the debtor, including a driver's license, passport, or other
document that contains a photograph of the debtor; or
(2) such other personal
identifying information relating to the debtor that establishes the identity
of the debtor.
(i)
(1) Subject to paragraphs (2) and
(4) and notwithstanding section
707(a), if an individual debtor in a voluntary case under chapter
7 or 13
fails to file all of the information required under subsection
(a)(1) within 45 days after the date of the filing of the petition, the
case shall be automatically dismissed effective on the 46th day after the
date of the filing of the petition.
(2) Subject to paragraph (4) and
with respect to a case described in paragraph (1), any party in interest may
request the court to enter an order dismissing the case. If requested, the
court shall enter an order of dismissal not later than 5 days after such
request.
(3) Subject to paragraph (4) and
upon request of the debtor made within 45 days after the date of the filing
of the petition described in paragraph (1), the court may allow the debtor
an additional period of not to exceed 45 days to file the information
required under subsection (a)(1) if the court finds justification for
extending the period for the filing.
(4) Notwithstanding any other
provision of this subsection, on the motion of the trustee filed before the
expiration of the applicable period of time specified in paragraph (1), (2),
or (3), and after notice and a hearing, the court may decline to dismiss the
case if the court finds that the debtor attempted in good faith to file all
the information required by subsection (a)(1)(B)(iv) and that the best
interests of creditors would be served by administration of the case.
(j)
(1) Notwithstanding any other
provision of this title, if the debtor fails to file a tax return that
becomes due after the commencement of the case or to properly obtain an
extension of the due date for filing such return, the taxing authority may
request that the court enter an order converting or dismissing the case.
(2) If the debtor does not file
the required return or obtain the extension referred to in paragraph (1)
within 90 days after a request is filed by the taxing authority under that
paragraph, the court shall convert or dismiss the case, whichever is in the
best interests of creditors and the estate.
[Rev. 5-8-05]
11
USC § 522. Exemptions
(a) In this section--
(1) "dependent" includes spouse,
whether or not actually dependent; and
(2) "value" means fair market value as
of the date of the filing of the petition or, with respect to property that
becomes property of the estate after such date, as of the date such property
becomes property of the estate.
(b)
(1) Notwithstanding section
541 of this title, an individual debtor may exempt from property of the
estate the property listed in either paragraph (2)
or, in the alternative, paragraph (3)
of this subsection. In joint cases filed under section
302 of this title and individual cases filed under section
301 or 303
of this title by or against debtors who are husband and wife, and whose
estates are ordered to be jointly administered under Rule
1015(b) of the Federal Rules of Bankruptcy Procedure, one debtor may not
elect to exempt property listed in paragraph
(2)
and the other debtor elect to exempt property listed in paragraph
(3)
of this subsection. If the parties cannot agree on the alternative to be
elected, they shall be deemed to elect paragraph
(2),
where such election is permitted under the law of the jurisdiction where the
case is filed.
(2) Property listed in this
paragraph is property that is specified under subsection
(d), unless the State law that is applicable to the debtor under
paragraph (3)(A) specifically does not so authorize.
(3)
Property listed in this paragraph is--
(A) subject to subsections
(o) and (p),
any property that is exempt under Federal law, other than subsection
(d) of this section, or State or local law that is applicable on the
date of the filing of the petition at the place in which the debtor's
domicile has been located for the
730
days immediately preceding the date of the filing of the
petition
or if the debtor's domicile has not been located at a
single State for such 730-day period, the place in which the debtor's
domicile was located for 180
days immediately preceding the 730-day period or for a longer portion
of such 180-day period than in any other place;
(B) any interest in property in which the
debtor had, immediately before the commencement of the case, an interest as
a tenant by the entirety or joint tenant to the extent that such interest as
a tenant by the entirety or joint tenant is exempt from process under
applicable nonbankruptcy law;
and
(C) retirement funds to the
extent that those funds are in a fund or account that is exempt from
taxation under section 401,
403, 408,
408A,
414, 457, or 501(a)
of the Internal Revenue Code of 1986.
If the effect of the domiciliary requirement under
subparagraph (A) is to render the debtor ineligible for any exemption, the
debtor may elect to exempt property that is specified under subsection (d).
(4) For purposes of paragraph
(3)(C) and subsection
(d)(12), the following shall apply:
(A) If the retirement funds
are in a retirement fund that has received a favorable determination under
section
7805 of the Internal Revenue Code of 1986, and that determination is
in effect as of the date of the filing of the petition in a case under
this title, those funds shall be presumed to be exempt from the estate.
(B) If the retirement funds
are in a retirement fund that has not received a favorable determination
under such section
7805, those funds are exempt from the estate if the debtor
demonstrates that--
(i) no prior determination to the contrary has been
made by a court or the Internal Revenue Service; and
(ii)
(I) the retirement fund is in substantial
compliance with the applicable requirements of the Internal Revenue
Code of 1986; or
(II) the retirement fund fails to be in substantial
compliance with the applicable requirements of the Internal Revenue
Code of 1986 and the debtor is not materially responsible for that
failure.
(C) A direct transfer of
retirement funds from 1 fund or account that is exempt from taxation under
section 401,
403,
408,
408A,
414,
457, or 501(a)of
the Internal Revenue Code of 1986, under section 401(a)(31) of the
Internal Revenue Code of 1986, or otherwise, shall not cease to qualify
for exemption under paragraph (3)(C) or subsection
(d)(12) by reason of such direct transfer.
(D)
(i) Any distribution that qualifies as an eligible
rollover distribution within the meaning of section
402(c) of the Internal Revenue Code of 1986 or that is described in
clause (ii) shall not cease to qualify for exemption under paragraph
(3)(C) or subsection
(d)(12) by reason of such distribution.
(ii) A distribution described in this clause is an
amount that--
(I) has been distributed from a fund or account
that is exempt from taxation under section 401,
403,
408,
408A,
414,
457, or 501(a)
of the Internal Revenue Code of 1986; and
(II) to the extent allowed by law, is deposited in
such a fund or account not later than 60 days after the distribution
of such amount.
(c) Unless the case is dismissed,
property exempted under this section is not liable during or after the case
for any debt of the debtor that arose, or that is determined under section
502 of this title as if such debt had arisen, before the commencement of
the case, except--
(1) a debt of a kind specified in
paragraph
(1) or (5)
of section
523(a) (in which case, notwithstanding any provision of applicable
nonbankruptcy law to the contrary, such property shall be liable for a debt
of a kind specified in section
523(a)(5));
(2) a debt secured by a lien that is--
(A)
(i) not avoided under subsection
(f) or (g)
of this section or under section 544,
545,
547,
548,
549,
or 724(a)
of this title; and
(ii) not void under section 506(d)
of this title;
(B) a tax lien, notice of which is properly
filed; or
(3) a debt of a kind specified in section
523(a)(4) or 523(a)(6)
of this title owed by an institution-affiliated party of an insured
depository institution to a Federal depository institutions regulatory
agency acting in its capacity as conservator, receiver, or liquidating agent
for such institution; or
(4) a debt in connection with fraud in the
obtaining or providing of any scholarship, grant, loan, tuition, discount,
award, or other financial assistance for purposes of financing an education
at an institution of higher education (as that term is defined in section
101 of the Higher Education Act of 1965 (20 U.S.C. 1001)).
(d) The following property may be exempted under
subsection
(b)(2)
of this section:
(1) The debtor's aggregate interest, not to
exceed $15,000 [Adjusted
every 3 years by section
104.] in value, in real property or personal property that the
debtor or a dependent of the debtor uses as a residence, in a cooperative
that owns property that the debtor or a dependent of the debtor uses as a
residence, or in a burial plot for the debtor or a dependent of the debtor.
(2) The debtor's interest, not to exceed $2,400 [Adjusted
every 3 years by section
104.] in value, in one motor vehicle.
(3) The debtor's interest, not to exceed $400 [Adjusted
every 3 years by section
104.] in value in any particular item or $8,000 [Adjusted
every 3 years by section
104.] in aggregate value, in household furnishings, household
goods, wearing apparel, appliances, books, animals, crops, or musical
instruments, that are held primarily for the personal, family, or household
use of the debtor or a dependent of the debtor.
(4) The debtor's aggregate interest, not to
exceed $1,000 [Adjusted
every 3 years by section
104.] in value, in jewelry held primarily for the personal,
family, or household use of the debtor or a dependent of the debtor.
(5) The debtor's aggregate interest in any
property, not to exceed in value $800 [Adjusted
every 3 years by section
104.] plus up to $7,500 [Adjusted
every 3 years by section
104.] of any unused amount of the exemption provided under
paragraph (1) of this subsection.
(6) The debtor's aggregate interest, not to
exceed $1,500 [Adjusted
every 3 years by section
104.] in value, in any implements, professional books, or tools,
of the trade of the debtor or the trade of a dependent of the debtor.
(7) Any unmatured life insurance contract owned
by the debtor, other than a credit life insurance contract.
(8) The debtor's aggregate interest, not to
exceed in value $8,000 [Adjusted
every 3 years by section
104.] less any amount of property of the estate transferred in
the manner specified in section
542(d) of this title, in any accrued dividend or interest under, or loan
value of, any unmatured life insurance contract owned by the debtor under
which the insured is the debtor or an individual of whom the debtor is a
dependent.
(9) Professionally prescribed health aids for the
debtor or a dependent of the debtor.
(10) The debtor's right to receive--
(A) a social security benefit, unemployment
compensation, or a local public assistance benefit;
(B) a veterans' benefit;
(C) a disability, illness, or unemployment
benefit;
(D) alimony, support, or separate
maintenance, to the extent reasonably necessary for the support of the
debtor and any dependent of the debtor;
(E) a payment under a stock bonus, pension,
profitsharing, annuity, or similar plan or contract on account of illness,
disability, death, age, or length of service, to the extent reasonably
necessary for the support of the debtor and any dependent of the debtor,
unless--
(i) such plan or contract was established by or under the auspices of
an insider that employed the debtor at the time the debtor's rights
under such plan or contract arose;
(ii) such payment is on account of age or length of service; and
(iii) such plan or contract does not qualify under section 401(a),
403(a),
403(b),
or 408
of the Internal Revenue Code of 1986.
(11) The debtor's right to receive, or property
that is traceable to--
(A) an award under a crime victim's
reparation law;
(B) a payment on account of the wrongful
death of an individual of whom the debtor was a dependent, to the extent
reasonably necessary for the support of the debtor and any dependent of
the debtor;
(C) a payment under a life insurance
contract that insured the life of an individual of whom the debtor was a
dependent on the date of such individual's death, to the extent reasonably
necessary for the support of the debtor and any dependent of the debtor;
(D) a payment, not to exceed $15,000 [Adjusted
every 3 years by section
104.] on account of personal bodily injury, not including pain
and suffering or compensation for actual pecuniary loss, of the debtor or
an individual of whom the debtor is a dependent; or
(E) a payment in compensation of loss of
future earnings of the debtor or an individual of whom the debtor is or
was a dependent, to the extent reasonably necessary for the support of the
debtor and any dependent of the debtor.
(12) Retirement funds to the
extent that those funds are in a fund or account that is exempt from
taxation under section 401,
403, 408,
408A,
414, 457, or 501(a)
of the Internal Revenue Code of 1986.
(e) A waiver of an exemption executed in favor of a
creditor that holds an unsecured claim against the debtor is unenforceable in
a case under this title with respect to such claim against property that the
debtor may exempt under subsection
(b) of this section. A waiver by the debtor of a power under subsection
(f) or (h)
of this section to avoid a transfer, under subsection
(g) or (i)
of this section to exempt property, or under subsection
(i) of this section to recover property or to preserve a transfer, is
unenforceable in a case under this title.
(f)
(1) Notwithstanding any waiver of exemptions but
subject to paragraph (3), the debtor may avoid the fixing of a lien on an
interest of the debtor in property to the extent that such lien impairs an
exemption to which the debtor would have been entitled under subsection
(b) of this section, if such lien is--
(A) a judicial lien, other than a judicial
lien that secures a debt
of a kind that is specified in section
523(a)(5); or
(B) a nonpossessory, nonpurchase-money
security interest in any--
(i) household furnishings, household goods, wearing apparel,
appliances, books, animals, crops, musical instruments, or jewelry that
are held primarily for the personal, family, or household use of the
debtor or a dependent of the debtor;
(ii) implements, professional books, or tools, of the trade of the
debtor or the trade of a dependent of the debtor; or
(iii) professionally prescribed health aids for the debtor or a
dependent of the debtor.
(2)
(A) For the purposes of this subsection, a
lien shall be considered to impair an exemption to the extent that the sum
of--
(i) the lien;
(ii) all other liens on the property; and
(iii) the amount of the exemption that the debtor could claim if
there were no liens on the property;
exceeds the value that the debtor's interest in the property would
have in the absence of any liens.
(B) In the case of a property subject to
more than 1 lien, a lien that has been avoided shall not be considered in
making the calculation under subparagraph (A) with respect to other liens.
(C) This paragraph shall not apply with
respect to a judgment arising out of a mortgage foreclosure.
(3) In a case in which State law that is
applicable to the debtor--
(A) permits a person to voluntarily waive a
right to claim exemptions under subsection
(d) or prohibits a debtor from claiming exemptions under subsection
(d); and
(B) either permits the debtor to claim
exemptions under State law without limitation in amount, except to the
extent that the debtor has permitted the fixing of a consensual lien on
any property or prohibits avoidance of a consensual lien on property
otherwise eligible to be claimed as exempt property;
the debtor may not avoid the fixing of a lien on an interest of the
debtor or a dependent of the debtor in property if the lien is a
nonpossessory, nonpurchase-money security interest in implements,
professional books, or tools of the trade of the debtor or a dependent of
the debtor or farm animals or crops of the debtor or a dependent of the
debtor to the extent the value of such implements, professional books, tools
of the trade, animals, and crops exceeds $5,000 [Adjusted
every 3 years by section
104.].
(4)
(A) Subject to subparagraph
(B), for purposes of paragraph
(1)(B), the term "household goods" means--
(i) clothing;
(ii) furniture;
(iii) appliances;
(iv) 1 radio;
(v) 1 television;
(vi) 1 VCR;
(vii) linens;
(viii) china;
(ix) crockery;
(x) kitchenware;
(xi) educational materials and educational equipment
primarily for the use of minor dependent children of the debtor;
(xii) medical equipment and supplies;
(xiii) furniture exclusively for the use of minor
children, or elderly or disabled dependents of the debtor;
(xiv) personal effects (including the toys and hobby
equipment of minor dependent children and wedding rings) of the debtor
and the dependents of the debtor; and
(xv) 1 personal computer and related equipment.
(B) The term "household
goods" does not include--
(i) works of art (unless by or of the debtor, or any
relative of the debtor);
(ii) electronic entertainment equipment with a fair
market value of more than $500 [Adjusted
every 3 years by section
104.] in the aggregate (except 1 television, 1 radio, and 1
VCR);
(iii) items acquired as antiques with a fair market
value of more than $500 [Adjusted
every 3 years by section
104.] in the aggregate;
(iv) jewelry with a fair market value of more than
$500 in the aggregate (except wedding rings); and
(v) a computer (except as otherwise provided for in
this section), motor vehicle (including a tractor or lawn tractor),
boat, or a motorized recreational device, conveyance, vehicle,
watercraft, or aircraft.
(g) Notwithstanding sections
550 and 551
of this title, the debtor may exempt under subsection
(b) of this section property that the trustee recovers under section 510(c)(2),
542,
543,
550,
551,
or 553 of
this title, to the extent that the debtor could have exempted such property
under subsection
(b) of this section if such property had not been transferred, if--
(1)
(A) such transfer was not a voluntary
transfer of such property by the debtor; and
(B) the debtor did not conceal such
property; or
(2) the debtor could have avoided such transfer
under
subsection (f)(1)(B)
of this section.
(h) The debtor may avoid a transfer of property of the
debtor or recover a setoff to the extent that the debtor could have exempted
such property under subsection
(g)(1) of this section if the trustee had avoided such transfer, if--
(1) such transfer is avoidable by the trustee
under section
544, 545,
547, 548,
549,
or 724(a)
of this title or recoverable by the trustee under section
553 of this title; and
(2) the trustee does not attempt to avoid such
transfer.
(i)
(1) If the debtor avoids a transfer or recovers a
setoff under subsection
(f) or (h)
of this section, the debtor may recover in the manner prescribed by, and
subject to the limitations of, section
550 of this title, the same as if the trustee had avoided such transfer,
and may exempt any property so recovered under subsection
(b) of this section.
(2) Notwithstanding section
551 of this title, a transfer avoided under section
544, 545,
547, 548,
549,
or 724(a)
of this title, under subsection
(f) or (h)
of this section, or property recovered under section 553 of this title, may
be preserved for the benefit of the debtor to the extent that the debtor may
exempt such property under subsection
(g) of this section or paragraph (1) of this subsection.
(j) Notwithstanding subsections
(g) and (i)
of this section, the debtor may exempt a particular kind of property under subsections
(g) and (i)
of this section only to the extent that the debtor has exempted less property
in value of such kind than that to which the debtor is entitled under subsection
(b) of this section.
(k) Property that the debtor exempts under this
section is not liable for payment of any administrative expense except--
(1) the aliquot share of the costs and expenses
of avoiding a transfer of property that the debtor exempts under subsection
(g) of this section, or of recovery of such property, that is
attributable to the value of the portion of such property exempted in
relation to the value of the property recovered; and
(2) any costs and expenses of avoiding a transfer
under subsection
(f) or (h)
of this section, or of recovery of property under subsection
(i)(1) of this section, that the debtor has not paid.
(l) The debtor shall file a list of property that the
debtor claims as exempt under subsection
(b) of this section. If the debtor does not file such a list, a dependent
of the debtor may file such a list, or may claim property as exempt from
property of the estate on behalf of the debtor. Unless a party in interest
objects, the property claimed as exempt on such list is exempt.
(m) Subject to the limitation in subsection
(b), this section shall apply separately with respect to each debtor in a
joint case.
(n) For assets in individual
retirement accounts described in section 408
or 408A
of the Internal Revenue Code of 1986, other than a simplified employee pension
under section
408(k) of such Code or a simple retirement account under section
408(p) of such Code, the aggregate value of such assets exempted under
this section, without regard to amounts attributable to rollover contributions
under section
402(c), 402(e)(6),
403(a)(4),
403(a)(5),
and 403(b)(8)
of the Internal Revenue Code of 1986, and earnings thereon, shall not exceed
$1,000,000 [Adjusted
every 3 years by section
104.] in a case filed by a debtor who is an individual, except that
such amount may be increased if the interests of justice so require.
(o) For purposes of subsection
(b)(3)(A), and notwithstanding subsection
(a), the value of an interest in--
(1) real or personal property
that the debtor or a dependent of the debtor uses as a residence;
(2) a cooperative that owns
property that the debtor or a dependent of the debtor uses as a residence;
(3) a burial plot for the debtor
or a dependent of the debtor; or
(4) real or personal property
that the debtor or a dependent of the debtor claims as a homestead;
shall be reduced to the extent that such value is
attributable to any portion of any property that the debtor disposed of in the
10-year period ending on the date of the filing of the petition with the
intent to hinder, delay, or defraud a creditor and that the debtor could not
exempt, or that portion that the debtor could not exempt, under subsection
(b), if on such date the debtor had held the property so disposed of.
(p)
(1) Except as provided in
paragraph (2) of this subsection and sections
544 and 548,
as a result of electing under subsection
(b)(3)(A) to exempt property under State or local law, a debtor may not
exempt any amount of interest that was acquired by the debtor during the 1215-day
period preceding the date of the filing of the petition that exceeds in
the aggregate $125,000 [Adjusted
every 3 years by section
104.] in value in--
(A) real or personal
property that the debtor or a dependent of the debtor uses as a residence;
(B) a cooperative that owns
property that the debtor or a dependent of the debtor uses as a residence;
(C) a burial plot for the
debtor or a dependent of the debtor; or
(D) real or personal
property that the debtor or dependent of the debtor claims as a homestead.
(2)
(A) The limitation under
paragraph (1) shall not apply to an exemption claimed under subsection
(b)(3)(A) by a family farmer for the principal residence of such
farmer.
(B) For purposes of
paragraph (1), any amount of such interest does not include any interest
transferred from a debtor's previous principal residence (which was
acquired prior to the beginning of such 1215-day period) into the debtor's
current principal residence, if the debtor's previous and current
residences are located in the same State.
(q)
(1) As a result of electing under
subsection
(b)(3)(A) to exempt property under State or local law, a debtor may not
exempt any amount of an interest in property described in subparagraphs (A),
(B), (C), and (D) of subsection (p)(1) which exceeds in the aggregate
$125,000 [Adjusted
every 3 years by section
104.] if--
(A) the court determines,
after notice and a hearing, that the debtor has been convicted of a felony
(as defined in section
3156 of title 18), which under the circumstances, demonstrates that
the filing of the case was an abuse of the provisions of this title; or
(B) the debtor owes a debt
arising from--
(i) any violation of the Federal securities laws (as
defined in section 3(a)(47) of the Securities Exchange Act of 1934), any
State securities laws, or any regulation or order issued under Federal
securities laws or State securities laws;
(ii) fraud, deceit, or manipulation in a fiduciary
capacity or in connection with the purchase or sale of any security
registered under section 12 or 15(d) of the Securities Exchange Act of
1934 or under section 6 of the Securities Act of 1933;
(iii) any civil remedy under section
1964 of title 18; or
(iv) any criminal act, intentional tort, or willful
or reckless misconduct that caused serious physical injury or death to
another individual in the preceding 5 years.
(2) Paragraph (1) shall not apply
to the extent the amount of an interest in property described in
subparagraphs (A), (B), (C), and (D) of subsection (p)(1) is reasonably
necessary for the support of the debtor and any dependent of the debtor.
[Rev. 4-29-05]
11
USC § 523. Exceptions to discharge
(a) A discharge under section
727, 1141,
1228(a),
1228(b),
or 1328(b)
of this title does not discharge an individual debtor from any debt--
(1) for a tax or a customs duty--
(A) of the kind and for the periods
specified in section 507(a)(3)
or 507(a)(8)
of this title, whether or not a claim for such tax was filed or allowed;
(B) with respect to which a return, or
equivalent report or notice, if required--
(i) was not filed or given; or
(ii) was filed or given after the date on
which such return, report, or notice was last
due, under applicable law or under any extension, and after two years
before the date of the filing of the petition; or
(C) with respect to which the debtor made a
fraudulent return or willfully attempted in any manner to evade or defeat
such tax;
(2) for money, property, services, or an
extension, renewal, or refinancing of credit, to the extent obtained by--
(A) false pretenses, a false representation,
or actual fraud, other than a statement respecting the debtor’s or an
insider’s financial condition;
(B) use of a statement in writing--
(i) that is materially false;
(ii) respecting the debtor’s or an insider’s financial condition;
(iii) on which the creditor to whom the debtor is liable for such
money, property, services, or credit reasonably relied; and
(iv) that the debtor caused to be made or published with intent to
deceive; or
(C)
(i) for purposes of subparagraph (A)--
(I) consumer debts owed to a single creditor and
aggregating more than $500 []
for luxury goods or services incurred by an individual debtor on or
within 90 days before the order for relief under this title are presumed
to be nondischargeable; and
(II) cash advances aggregating more than $750 []
that are extensions of consumer credit under an open end credit plan
obtained by an individual debtor on or within 70 days before the order
for relief under this title, are presumed to be nondischargeable; and
[Dollar amounts in subsections 523(a)(2)(C)(i) and (ii)
are adjusted on April 1 every 3 years by section
104. Adjusted amounts effective
are in brackets.]
(ii) for purposes of this subparagraph--
(I) the terms "consumer",
"credit", and "open end credit plan" have the same
meanings as in section 103 of the Truth in Lending Act; and
(II) the term "luxury goods or services"
does not include goods or services reasonably necessary for the support
or maintenance of the debtor or a dependent of the debtor.
(3) neither listed nor scheduled under section
521(1) of this title, with the name, if known to the debtor, of the
creditor to whom such debt is owed, in time to permit--
(A) if such debt is not of a kind specified
in paragraph
(2), (4),
or (6)
of this subsection, timely filing of a proof of claim, unless such
creditor had notice or actual knowledge of the case in time for such
timely filing; or
(B) if such debt is of a kind specified in paragraph
(2), (4),
or (6)
of this subsection, timely filing of a proof of claim and timely request
for a determination of dischargeability of such debt under one of such
paragraphs, unless such creditor had notice or actual knowledge of the
case in time for such timely filing and request;
(4) for fraud or defalcation while acting in a
fiduciary capacity, embezzlement, or larceny;
(5) for a domestic support
obligation;
(6) for willful and malicious injury by the
debtor to another entity or to the property of another entity;
(7) to the extent such debt is for a fine,
penalty, or forfeiture payable to and for the benefit of a governmental
unit, and is not compensation for actual pecuniary loss, other than a tax
penalty--
(A) relating to a tax of a kind not
specified in paragraph
(1) of this subsection; or
(B) imposed with respect to a transaction or
event that occurred before three years before the date of the filing of
the petition;
(8) unless excepting such debt
from discharge under this paragraph would impose an undue hardship on the
debtor and the debtor's dependents, for--
(A)
(i) an educational benefit overpayment or loan made,
insured, or guaranteed by a governmental unit, or made under any program
funded in whole or in part by a governmental unit or nonprofit
institution; or
(ii) an obligation to repay funds received as an
educational benefit, scholarship, or stipend; or
(B) any other educational
loan that is a qualified education loan, as defined in section 221(d)(1)
of the Internal Revenue Code of 1986, incurred by a debtor who is an
individual;
(9) for death or personal injury caused by the
debtor's operation of a
motor
vehicle, vessel, or aircraft if such operation was unlawful because
the debtor was intoxicated from using alcohol, a drug, or another substance;
(10) that was or could have been listed or
scheduled by the debtor in a prior case concerning the debtor under this
title or under the Bankruptcy Act in which the debtor waived discharge, or
was denied a discharge under section
727(a)(2), (3),
(4),
(5),
(6),
or (7)
of this title, or under section 14c(1), (2), (3), (4), (6), or (7) of such
Act;
(11) provided in any final judgment,
unreviewable order, or consent order or decree entered in any court of the
United States or of any State, issued by a Federal depository institutions
regulatory agency, or contained in any settlement agreement entered into by
the debtor, arising from any act of fraud or defalcation while acting in a
fiduciary capacity committed with respect to any depository institution or
insured credit union;
(12) for malicious or reckless failure to
fulfill any commitment by the debtor to a Federal depository institutions
regulatory agency to maintain the capital of an insured depository
institution, except that this paragraph shall not extend any such commitment
which would otherwise be terminated due to any act of such agency;
(13) for any payment of an order of restitution
issued under title 18, United States Code;
(14) incurred to pay a tax to the United States
that would be nondischargeable pursuant to paragraph
(1);
(14A) incurred to pay a tax to
a governmental unit, other than the United States, that would be
nondischargeable under paragraph
(1);
(14B) incurred to pay fines or
penalties imposed under Federal election law;
(15) to a spouse, former spouse,
or child of the debtor and not of the kind described in paragraph
(5) that is incurred by the debtor in the course of a divorce or
separation or in connection with a separation agreement, divorce decree or
other order of a court of record, or a determination
made in accordance with State or territorial law by a governmental unit;
(16) for a fee or assessment that becomes due
and payable after the order for relief to a membership association with
respect to the debtor's interest in a unit
that has condominium ownership ,
in a share of a cooperative corporation,
or a lot in a homeowners association, for as long as
the debtor or the trustee has a legal, equitable, or possessory ownership
interest in such unit, such corporation, or such lot, but nothing in
this paragraph shall except from discharge the debt of a debtor for a
membership association fee or assessment for a period arising before entry
of the order for relief in a pending or subsequent bankruptcy case;
(17) for a fee imposed
on
a prisoner by any court for the filing of a case, motion, complaint,
or appeal, or for other costs and expenses assessed with respect to such
filing, regardless of an assertion of poverty by the debtor under subsection
(b)
or (f)(2)
of section
1915 of title
28 (or a similar non-Federal law), or the
debtor's status as a prisoner, as defined in section
1915(h) of title 28 (or a similar non-Federal law);
(18) owed to a pension,
profit-sharing, stock bonus, or other plan established under section
401, 403,
408,
408A, 414,
457,
or 501(c)
of the Internal Revenue Code of 1986, under--
(A) a loan permitted under
section 408(b)(1) of the Employee Retirement Income Security Act of 1974,
or subject to section
72(p) of the Internal Revenue Code of 1986; or
(B) a loan from a thrift
savings plan permitted under subchapter III of chapter 84 of title 5, that
satisfies the requirements of section 8433(g) of such title;
but nothing in this paragraph may be construed to provide
that any loan made under a governmental plan under section
414(d), or a contract or account under section
403(b), of the Internal Revenue Code of 1986 constitutes a claim or a
debt under this title; or
(19) that--
(A) is for--
(i) the violation of any of the Federal securities laws (as that term
is defined in section 3(a)(47) of the Securities Exchange Act of 1934),
any of the State securities laws, or any regulation or order issued
under such Federal or State securities laws; or
(ii) common law fraud, deceit, or manipulation in connection with the
purchase or sale of any security; and
(B) results, before, on, or
after the date on which the petition was filed, from--
(i) any judgment, order, consent order, or decree entered in any
Federal or State judicial or administrative proceeding;
(ii) any settlement agreement entered into by the debtor; or
(iii) any court or administrative order for any damages, fine,
penalty, citation, restitutionary payment, disgorgement payment,
attorney fee, cost, or other payment owed by the debtor.
For purposes of this subsection, the term
"return" means a return that satisfies the requirements of
applicable nonbankruptcy law (including applicable filing requirements).
Such term includes a return prepared pursuant to section
6020(a) of the Internal Revenue Code of 1986, or similar State or local
law, or a written stipulation to a judgment or a final order entered by a
nonbankruptcy tribunal, but does not include a return made pursuant to section
6020(b) of the Internal Revenue Code of 1986, or a similar State or
local law.
(b) Notwithstanding subsection
(a) of this section, a debt that was excepted from discharge under subsection
(a)(1), (a)(3),
or (a)(8)
of this section, under section 17a(1), 17a(3), or 17a(5) of the Bankruptcy
Act, under section 439A of the Higher Education Act of 1965, or under section
733(g) of the Public Health Service Act in a prior case concerning the debtor
under this title, or under the Bankruptcy Act, is dischargeable in a case
under this title unless, by the terms of subsection
(a) of this section, such debt is not dischargeable in the case under this
title.
(c)
(1) Except as provided in subsection
(a)(3)(B) of this section, the debtor shall be discharged from a debt of
a kind specified in paragraph
(2), (4),
or
(6) of
subsection
(a) of this section, unless, on request of the creditor to whom such
debt is owed, and after notice and a hearing, the court determines such debt
to be excepted from discharge under paragraph
(2), (4),
or
(6) ,
as the case may be, of subsection
(a) of this section.
(2) Paragraph (1) shall not apply in the case of
a Federal depository institutions regulatory agency seeking, in its capacity
as conservator, receiver, or liquidating agent for an insured depository
institution, to recover a debt described in subsection
(a)(2), (a)(4),
(a)(6),
or (a)(11)
owed to such institution by an institution-affiliated party unless the
receiver, conservator, or liquidating agent was appointed in time to
reasonably comply, or for a Federal depository institutions regulatory
agency acting in its corporate capacity as a successor to such receiver,
conservator, or liquidating agent to reasonably comply, with subsection
(a)(3)(B) as a creditor of such institution-affiliated party with
respect to such debt.
(d) If a creditor requests a determination of
dischargeability of a consumer debt under subsection
(a)(2) of this section, and such debt is discharged, the court shall grant
judgment in favor of the debtor for the costs of, and a reasonable
attorney’s fee for, the proceeding if the court finds that the position of
the creditor was not substantially justified, except that the court shall not
award such costs and fees if special circumstances would make the award
unjust.
(e) Any institution-affiliated party of
an
insured depository institution shall be considered to be acting in a
fiduciary capacity with respect to the purposes of subsection
(a)(4) or (11).
[Rev. 5-8-05]
11
USC § 524. Effect of discharge
(a) A discharge in a case under this title--
(1) voids any judgment at any time obtained, to
the extent that such judgment is a determination of the personal liability
of the debtor with respect to any debt discharged under section
727, 944,
1141,
1228,
or 1328
of this title, whether or not discharge of such debt is waived;
(2) operates as an injunction against the
commencement or continuation of an action, the employment of process, or an
act, to collect, recover or offset any such debt as a personal liability of
the debtor, whether or not discharge of such debt is waived; and
(3) operates as an injunction against the
commencement or continuation of an action, the employment of process, or an
act, to collect or recover from, or offset against, property of the debtor
of the kind specified in section
541(a)(2) of this title that is acquired after the commencement of the
case, on account of any allowable community claim, except a community claim
that is excepted from discharge under
section 523, 1228(a)(1),
or 1328(a)(1),
or that would be so excepted, determined in accordance with the
provisions of sections
523(c) and 523(d)
of this title, in a case concerning the debtor's spouse commenced on the
date of the filing of the petition in the case concerning the debtor,
whether or not discharge of the debt based on such community claim is
waived.
(b) Subsection
(a)(3) of this section does not apply if--
(1)
(A) the debtor’s spouse is a debtor in a
case under this title, or a bankrupt or a debtor in a case under the
Bankruptcy Act, commenced within six years of the date of the filing of
the petition in the case concerning the debtor; and
(B) the court does not grant the debtor’s
spouse a discharge in such case concerning the debtor’s spouse; or
(2)
(A) the court would not grant the debtor’s
spouse a discharge in a case under chapter
7 of this title concerning such spouse commenced on the date of the
filing of the petition in the case concerning the debtor; and
(B) a determination that the court would not
so grant such discharge is made by the bankruptcy court within the time
and in the manner provided for a determination under section
727 of this title of whether a debtor is granted a discharge.
(c) An agreement between a holder of a claim and the
debtor, the consideration for which, in whole or in part, is based on a debt
that is dischargeable in a case under this title is enforceable only to any
extent enforceable under applicable nonbankruptcy law, whether or not
discharge of such debt is waived, only if--
(1) such agreement was made before the granting
of the discharge under section
727, 1141,
1228,
or 1328
of this title;
(2) the debtor received the
disclosures described in subsection
(k) at or before the time at which the debtor signed the agreement;
(3) such agreement has been filed with the court and, if applicable,
accompanied by a declaration or an affidavit of the attorney that
represented the debtor during the course of negotiating an agreement under
this subsection, which states that--
(A) such agreement represents a fully
informed and voluntary agreement by the debtor;
(B) such agreement does not impose an undue
hardship on the debtor or a dependent of the debtor; and
(C) the attorney fully advised the debtor of
the legal effect and consequences of--
(i) an agreement of the kind specified in this subsection; and
(ii) any default under such an agreement;
(4) the debtor has not rescinded such agreement
at any time prior to discharge or within sixty days after such agreement is
filed with the court, whichever occurs later, by giving notice of rescission
to the holder of such claim;
(5) the provisions of subsection
(d) of this section have been complied with; and
(6)
(A) in a case concerning an individual who
was not represented by an attorney during the course of negotiating an
agreement under this subsection, the court approves such agreement as--
(i) not imposing an undue hardship on the debtor or a dependent of
the debtor; and
(ii) in the best interest of the debtor.
(B) Subparagraph (A) shall not apply to the
extent that such debt is a consumer debt secured by real property.
(d) In a case concerning an individual, when the court
has determined whether to grant or not to grant a discharge under section
727, 1141,
1228,
or 1328
of this title, the court may hold a hearing at which the debtor shall appear
in person. At any such hearing, the court shall inform the debtor that a
discharge has been granted or the reason why a discharge has not been granted.
If a discharge has been granted and if the debtor desires to make an agreement
of the kind specified in subsection
(c) of this section and was not represented by an attorney during the
course of negotiating such agreement, then the court shall hold a hearing at
which the debtor shall appear in person and at such hearing the court shall--
(1) inform the debtor--
(A) that such an agreement is not required
under this title, under nonbankruptcy law, or under any agreement not made
in accordance with the provisions of subsection
(c) of this section; and
(B) of the legal effect and consequences
of--
(i) an agreement of the kind specified in subsection
(c) of this section; and
(ii) a default under such an agreement; and
(2) determine whether the agreement that the
debtor desires to make complies with the requirements of subsection (c)(6)
of this section, if the consideration for such agreement is based in whole
or in part on a consumer debt that is not secured by real property of the
debtor.
(e) Except as provided in subsection
(a)(3) of this section, discharge of a debt of the debtor does not affect
the liability of any other entity on, or the property of any other entity for,
such debt.
(f) Nothing contained in subsection
(c) or (d)
of this section prevents a debtor from voluntarily repaying any debt.
(g)
(1)
(A) After notice and hearing, a court that
enters an order confirming a plan of reorganization under chapter 11 may
issue, in connection with such order, an injunction in accordance with
this subsection to supplement the injunctive effect of a discharge under
this section.
(B) An injunction may be issued under
subparagraph (A) to enjoin entities from taking legal action for the
purpose of directly or indirectly collecting, recovering, or receiving
payment or recovery with respect to any claim or demand that, under a plan
of reorganization, is to be paid in whole or in part by a trust described
in paragraph (2)(B)(i), except such legal actions as are expressly allowed
by the injunction, the confirmation order, or the plan of reorganization.
(2)
(A) Subject to subsection
(h), if the requirements of subparagraph (B) are met at the time an
injunction described in paragraph (1) is entered, then after entry of such
injunction, any proceeding that involves the validity, application,
construction, or modification of such injunction, or of this subsection
with respect to such injunction, may be commenced only in the district
court in which such injunction was entered, and such court shall have
exclusive jurisdiction over any such proceeding without regard to the
amount in controversy.
(B) The requirements of this subparagraph
are that--
(i) the injunction is to be implemented
in connection with a trust that, pursuant to the plan of
reorganization--
(I) is to assume the liabilities of a debtor which at the time of
entry of the order for relief has been named as a defendant in
personal injury, wrongful death, or property-damage actions seeking
recovery for damages allegedly caused by the presence of, or exposure
to, asbestos or asbestos-containing products;
(II) is to be funded in whole or in part by the securities of 1 or
more debtors involved in such plan and by the obligation of such
debtor or debtors to make future payments, including dividends;
(III) is to own, or by the exercise of rights granted under such
plan would be entitled to own if specified contingencies occur, a
majority of the voting shares of--
(aa) each such debtor;
(bb) the parent corporation of each such debtor; or
(cc) a subsidiary of each such debtor that is also a debtor; and
(IV) is to use its assets or income to pay claims and demands; and
(ii) subject to subsection
(h), the court determines that--
(I) the debtor is likely to be subject to substantial future
demands for payment arising out of the same or similar conduct or
events that gave rise to the claims that are addressed by the
injunction;
(II) the actual amounts, numbers, and timing of such future demands
cannot be determined;
(III) pursuit of such demands outside the procedures prescribed by
such plan is likely to threaten the plan’s purpose to deal equitably
with claims and future demands;
(IV) as part of the process of seeking confirmation of such plan--
(aa) the terms of the injunction proposed to be issued under
paragraph (1)(A), including any provisions barring actions against
third parties pursuant to paragraph (4)(A), are set out in such plan
and in any disclosure statement supporting the plan; and
(bb) a separate class or classes of the claimants whose claims
are to be addressed by a trust described in clause (i) is
established and votes, by at least 75 percent of those voting, in
favor of the plan; and
(V) subject to subsection
(h), pursuant to court orders or otherwise, the trust will operate
through mechanisms such as structured, periodic, or supplemental
payments, pro rata distributions, matrices, or periodic review of
estimates of the numbers and values of present claims and future
demands, or other comparable mechanisms, that provide reasonable
assurance that the trust will value, and be in a financial position to
pay, present claims and future demands that involve similar claims in
substantially the same manner.
(3)
(A) If the requirements of paragraph (2)(B)
are met and the order confirming the plan of reorganization was issued or
affirmed by the district court that has jurisdiction over the
reorganization case, then after the time for appeal of the order that
issues or affirms the plan—
(i) the injunction shall be valid and
enforceable and may not be revoked or modified by any court except
through appeal in accordance with paragraph (6);
(ii) no entity that pursuant to such
plan or thereafter becomes a direct or indirect transferee of, or
successor to any assets of, a debtor or trust that is the subject of the
injunction shall be liable with respect to any claim or demand made
against such entity by reason of its becoming such a transferee or
successor; and
(iii) no entity that pursuant to such
plan or thereafter makes a loan to such a debtor or trust or to such a
successor or transferee shall, by reason of making the loan, be liable
with respect to any claim or demand made against such entity, nor shall
any pledge of assets made in connection with such a loan be upset or
impaired for that reason;
(B) Subparagraph (A) shall not be construed
to--
(i) imply that an entity described in
subparagraph (A)(ii) or (iii) would, if this paragraph were not
applicable, necessarily be liable to any entity by reason of any of the
acts described in subparagraph (A);
(ii) relieve any such entity of the
duty to comply with, or of liability under, any Federal or State law
regarding the making of a fraudulent conveyance in a transaction
described in subparagraph (A)(ii) or (iii); or
(iii) relieve a debtor of the
debtor’s obligation to comply with the terms of the plan of
reorganization, or affect the power of the court to exercise its
authority under sections
1141 and 1142
to compel the debtor to do so.
(4)
(A)
(i) Subject to subparagraph (B), an
injunction described in paragraph (1) shall be valid and enforceable
against all entities that it addresses.
(ii) Notwithstanding the provisions of
section
524(e), such an injunction may bar any action directed against a
third party who is identifiable from the terms of such injunction (by
name or as part of an identifiable group) and is alleged to be directly
or indirectly liable for the conduct of, claims against, or demands on
the debtor to the extent such alleged liability of such third party
arises by reason of--
(I) the third party’s ownership of a financial interest in the
debtor, a past or present affiliate of the debtor, or a predecessor in
interest of the debtor;
(II) the third party’s involvement in the management of the
debtor or a predecessor in interest of the debtor, or service as an
officer, director or employee of the debtor or a related party;
(III) the third party’s provision of insurance to the debtor or a
related party; or
(IV) the third party’s involvement in a transaction changing the
corporate structure, or in a loan or other financial transaction
affecting the financial condition, of the debtor or a related party,
including but not limited to--
(aa) involvement in providing financing (debt or equity), or
advice to an entity involved in such a transaction; or
(bb) acquiring or selling a financial interest in an entity as
part of such a transaction.
(iii) As used in this subparagraph,
the term “related party” means--
(I) a past or present affiliate of the debtor;
(II) a predecessor in interest of the debtor; or
(III) any entity that owned a financial interest in--
(aa) the debtor;
(bb) a past or present affiliate of the debtor; or
(cc) a predecessor in interest of the debtor.
(B) Subject to subsection
(h), if, under a plan of reorganization, a kind of demand described in
such plan is to be paid in whole or in part by a trust described in
paragraph (2)(B)(i) in connection with which an injunction described in
paragraph (1) is to be implemented, then such injunction shall be valid
and enforceable with respect to a demand of such kind made, after such
plan is confirmed, against the debtor or debtors involved, or against a
third party described in subparagraph (A)(ii), if--
(i) as part of the proceedings leading
to issuance of such injunction, the court appoints a legal
representative for the purpose of protecting the rights of persons that
might subsequently assert demands of such kind, and
(ii) the court determines, before
entering the order confirming such plan, that identifying such debtor or
debtors, or such third party (by name or as part of an identifiable
group), in such injunction with respect to such demands for purposes of
this subparagraph is fair and equitable with respect to the persons that
might subsequently assert such demands, in light of the benefits
provided, or to be provided, to such trust on behalf of such debtor or
debtors or such third party.
(5) In this subsection, the term “demand”
means a demand for payment, present or future, that--
(A) was not a claim during the proceedings
leading to the confirmation of a plan of reorganization;
(B) arises out of the same or similar
conduct or events that gave rise to the claims addressed by the injunction
issued under paragraph (1); and
(C) pursuant to the plan, is to be paid by a
trust described in paragraph (2)(B)(i).
(6) Paragraph (3)(A)(i) does not bar an action
taken by or at the direction of an appellate court on appeal of an
injunction issued under paragraph (1) or of the order of confirmation that
relates to the injunction.
(7) This subsection does not affect the operation
of section
1144 or the power of the district court to refer a proceeding under section
157 of title 28 or any reference of a proceeding made prior to the date
of the enactment of this subsection.
(h) Application to Existing Injunctions.-- For
purposes of subsection
(g)--
(1) subject to paragraph (2), if an injunction of
the kind described in subsection (g)(1)(B) was issued before the date of the
enactment of this Act, as part of a plan of reorganization confirmed by an
order entered before such date, then the injunction shall be considered to
meet the requirements of subsection (g)(2)(B) for purposes of subsection
(g)(2)(A), and to satisfy subsection (g)(4)(A)(ii), if--
(A) the court determined at the time the
plan was confirmed that the plan was fair and equitable in accordance with
the requirements of section 1129 (b);
(B) as part of the proceedings leading to
issuance of such injunction and confirmation of such plan, the court had
appointed a legal representative for the purpose of protecting the rights
of persons that might subsequently assert demands described in subsection
(g)(4)(B) with respect to such plan; and
(C) such legal representative did not object
to confirmation of such plan or issuance of such injunction; and
(2) for purposes of paragraph (1), if a trust
described in subsection (g)(2)(B)(i) is subject to a court order on the date
of the enactment of this Act staying such trust from settling or paying
further claims--
(A) the requirements of subsection (g)(2)(B)(ii)(V)
shall not apply with respect to such trust until such stay is lifted or
dissolved; and
(B) if such trust meets such requirements on
the date such stay is lifted or dissolved, such trust shall be considered
to have met such requirements continuously from the date of the enactment
of this Act.
(i) The willful failure of a creditor to credit
payments received under a plan confirmed under this title, unless the order
confirming the plan is revoked, the plan is in default, or the creditor has
not received payments required to be made under the plan in the manner
required by the plan (including crediting the amounts required under the
plan), shall constitute a violation of an injunction under subsection (a)(2)
if the act of the creditor to collect and failure to credit payments in the
manner required by the plan caused material injury to the debtor.
(j) Subsection
(a)(2) does not operate as an injunction against an act by a creditor that
is the holder of a secured claim, if--
(1) such creditor retains a security interest in
real property that is the principal residence of the debtor;
(2) such act is in the ordinary course of
business between the creditor and the debtor; and
(3) such act is limited to seeking or obtaining
periodic payments associated with a valid security interest in lieu of
pursuit of in rem relief to enforce the lien.
(k)
(1) The disclosures required under subsection
(c)(2) shall consist of the disclosure statement described in paragraph
(3), completed as required in that paragraph, together with the agreement
specified in subsection (c), statement, declaration, motion and order
described, respectively, in paragraphs (4) through (8), and shall be the
only disclosures required in connection with entering into such agreement.
(2) Disclosures made under paragraph (1) shall be
made clearly and conspicuously and in writing. The terms "Amount
Reaffirmed" and "Annual Percentage Rate" shall be disclosed
more conspicuously than other terms, data or information provided in
connection with this disclosure, except that the phrases "Before
agreeing to reaffirm a debt, review these important disclosures" and
"Summary of Reaffirmation Agreement" may be equally conspicuous.
Disclosures may be made in a different order and may use terminology
different from that set forth in paragraphs (2) through (8), except that the
terms "Amount Reaffirmed" and "Annual Percentage Rate"
must be used where indicated.
(3) The disclosure statement required under this
paragraph shall consist of the following:
(A) The statement: "Part A: Before
agreeing to reaffirm a debt, review these important disclosures:";
(B) Under the heading "Summary of
Reaffirmation Agreement", the statement: "This Summary is made
pursuant to the requirements of the Bankruptcy Code";
(C) The "Amount Reaffirmed", using
that term, which shall be--
(i) the total amount of debt that the
debtor agrees to reaffirm by entering into an agreement of the kind
specified in subsection
(c), and
(ii) the total of any fees and costs
accrued as of the date of the disclosure statement, related to such
total amount.
(D) In conjunction with the disclosure of
the "Amount Reaffirmed", the statements--
(i) "The amount of debt you have
agreed to reaffirm"; and
(ii) "Your credit agreement may
obligate you to pay additional amounts which may come due after the date
of this disclosure. Consult your credit agreement.".
(E) The "Annual Percentage Rate",
using that term, which shall be disclosed as--
(i) if, at the time the petition is
filed, the debt is an extension of credit under an open end credit plan,
as the terms "credit" and "open end credit plan" are
defined in section 103 of the Truth
in Lending Act, then--
(I) the annual percentage rate determined under paragraphs (5) and
(6) of section 127(b) of the Truth in Lending Act, as applicable, as
disclosed to the debtor in the most recent periodic statement prior to
entering into an agreement of the kind specified in subsection
(c) or, if no such periodic statement has been given to the debtor
during the prior 6 months, the annual percentage rate as it would have
been so disclosed at the time the disclosure statement is given to the
debtor, or to the extent this annual percentage rate is not readily
available or not applicable, then
(II) the simple interest rate applicable to the amount reaffirmed
as of the date the disclosure statement is given to the debtor, or if
different simple interest rates apply to different balances, the
simple interest rate applicable to each such balance, identifying the
amount of each such balance included in the amount reaffirmed, or
(III) if the entity making the disclosure elects, to disclose the
annual percentage rate under subclause (I) and the simple interest
rate under subclause (II); or
(ii) if, at the time the petition is
filed, the debt is an extension of credit other than under an open end
credit plan, as the terms "credit" and "open end credit
plan" are defined in section 103 of the Truth in Lending Act,
then--
(I) the annual percentage rate under section 128(a)(4) of the Truth
in Lending Act, as disclosed to the debtor in the most recent
disclosure statement given to the debtor prior to the entering into an
agreement of the kind specified in subsection (c) with respect to the
debt, or, if no such disclosure statement was given to the debtor, the
annual percentage rate as it would have been so disclosed at the time
the disclosure statement is given to the debtor, or to the extent this
annual percentage rate is not readily available or not applicable,
then
(II) the simple interest rate applicable to the amount reaffirmed
as of the date the disclosure statement is given to the debtor, or if
different simple interest rates apply to different balances, the
simple interest rate applicable to each such balance, identifying the
amount of such balance included in the amount reaffirmed, or
(III) if the entity making the disclosure elects, to disclose the
annual percentage rate under (I) and the simple interest rate under
(II).
(F) If the underlying debt transaction was
disclosed as a variable rate transaction on the most recent disclosure
given under the Truth in Lending Act, by stating "The interest rate
on your loan may be a variable interest rate which changes from time to
time, so that the annual percentage rate disclosed here may be higher or
lower.".
(G) If the debt is secured by a security
interest which has not been waived in whole or in part or determined to be
void by a final order of the court at the time of the disclosure, by
disclosing that a security interest or lien in goods or property is
asserted over some or all of the debts the debtor is reaffirming and
listing the items and their original purchase price that are subject to
the asserted security interest, or if not a purchase-money security
interest then listing by items or types and the original amount of the
loan.
(H) At the election of the creditor, a
statement of the repayment schedule using 1 or a combination of the
following--
(i) by making the statement: "Your
first payment in the amount of $XXX is due on XXX but the future payment
amount may be different. Consult your reaffirmation agreement or credit
agreement, as applicable.", and stating the amount of the first
payment and the due date of that payment in the places provided;
(ii) by making the statement:
"Your payment schedule will be:", and describing the repayment
schedule with the number, amount, and due dates or period of payments
scheduled to repay the debts reaffirmed to the extent then known by the
disclosing party; or
(iii) by describing the debtor's
repayment obligations with reasonable specificity to the extent then
known by the disclosing party.
(I) The following statement: "Note:
When this disclosure refers to what a creditor 'may' do, it does not use
the word 'may' to give the creditor specific permission. The word 'may' is
used to tell you what might occur if the law permits the creditor to take
the action. If you have questions about your reaffirming a debt or what
the law requires, consult with the attorney who helped you negotiate this
agreement reaffirming a debt. If you don't have an attorney helping you,
the judge will explain the effect of your reaffirming a debt when the
hearing on the reaffirmation agreement is held.".
(J)
(i) The following additional
statements:
"Reaffirming a debt is a serious financial decision. The law
requires you to take certain steps to make sure the decision is in
your best interest. If these steps are not completed, the
reaffirmation agreement is not effective, even though you have signed
it.
"1. Read the disclosures in this Part A carefully. Consider
the decision to reaffirm carefully. Then, if you want to reaffirm,
sign the reaffirmation agreement in Part B (or you may use a separate
agreement you and your creditor agree on).
"2. Complete and sign Part D and be sure you can afford to
make the payments you are agreeing to make and have received a copy of
the disclosure statement and a completed and signed reaffirmation
agreement.
"3. If you were represented by an attorney during the
negotiation of your reaffirmation agreement, the attorney must have
signed the certification in Part C.
"4. If you were not represented by an attorney during the
negotiation of your reaffirmation agreement, you must have completed
and signed Part E.
"5. The original of this disclosure must be filed with the
court by you or your creditor. If a separate reaffirmation agreement
(other than the one in Part B) has been signed, it must be attached.
"6. If you were represented by an attorney during the
negotiation of your reaffirmation agreement, your reaffirmation
agreement becomes effective upon filing with the court unless the
reaffirmation is presumed to be an undue hardship as explained in Part
D.
"7. If you were not represented by an attorney during the
negotiation of your reaffirmation agreement, it will not be effective
unless the court approves it. The court will notify you of the hearing
on your reaffirmation agreement. You must attend this hearing in
bankruptcy court where the judge will review your reaffirmation
agreement. The bankruptcy court must approve your reaffirmation
agreement as consistent with your best interests, except that no court
approval is required if your reaffirmation agreement is for a consumer
debt secured by a mortgage, deed of trust, security deed, or other
lien on your real property, like your home.
"Your right to rescind (cancel) your reaffirmation agreement.
You may rescind (cancel) your reaffirmation agreement at any time
before the bankruptcy court enters a discharge order, or before the
expiration of the 60-day period that begins on the date your
reaffirmation agreement is filed with the court, whichever occurs
later. To rescind (cancel) your reaffirmation agreement, you must
notify the creditor that your reaffirmation agreement is rescinded (or
canceled).
"What are your obligations if you reaffirm the debt? A
reaffirmed debt remains your personal legal obligation. It is not
discharged in your bankruptcy case. That means that if you default on
your reaffirmed debt after your bankruptcy case is over, your creditor
may be able to take your property or your wages. Otherwise, your
obligations will be determined by the reaffirmation agreement which
may have changed the terms of the original agreement. For example, if
you are reaffirming an open end credit agreement, the creditor may be
permitted by that agreement or applicable law to change the terms of
that agreement in the future under certain conditions.
"Are you required to enter into a reaffirmation agreement by
any law? No, you are not required to reaffirm a debt by any law. Only
agree to reaffirm a debt if it is in your best interest. Be sure you
can afford the payments you agree to make.
"What if your creditor has a security interest or lien? Your
bankruptcy discharge does not eliminate any lien on your property. A
"lien" is often referred to as a security interest, deed of
trust, mortgage or security deed. Even if you do not reaffirm and your
personal liability on the debt is discharged, because of the lien your
creditor may still have the right to take the security property if you
do not pay the debt or default on it. If the lien is on an item of
personal property that is exempt under your State's law or that the
trustee has abandoned, you may be able to redeem the item rather than
reaffirm the debt. To redeem, you make a single payment to the
creditor equal to the current value of the security property, as
agreed by the parties or determined by the court.".
(ii) In the case of a reaffirmation
under subsection (m)(2), numbered paragraph 6 in the disclosures
required by clause (i) of this subparagraph shall read as follows:
"6. If you were represented by an attorney during the
negotiation of your reaffirmation agreement, your reaffirmation
agreement becomes effective upon filing with the court.".
(4) The form of such agreement required under
this paragraph shall consist of the following:
"Part B: Reaffirmation Agreement. I (we) agree to reaffirm the
debts arising under the credit agreement described below.
"Brief description of credit agreement:
"Description of any changes to the credit agreement made as part
of this reaffirmation agreement:
"Signature: Date:
"Borrower:
"Co-borrower, if also reaffirming these debts:
"Accepted by creditor:
"Date of creditor acceptance:".
(5) The declaration shall consist of the
following:
(A) The following certification:
"Part C: Certification by Debtor's Attorney (If Any).
"I hereby certify that (1) this agreement represents a fully
informed and voluntary agreement by the debtor; (2) this agreement does
not impose an undue hardship on the debtor or any dependent of the
debtor; and (3) I have fully advised the debtor of the legal effect and
consequences of this agreement and any default under this agreement.
"Signature of Debtor's Attorney: Date:".
(B) If a presumption of undue hardship has
been established with respect to such agreement, such certification shall
state that in the opinion of the attorney, the debtor is able to make the
payment.
(C) In the case of a reaffirmation agreement
under subsection (m)(2), subparagraph (B) is not applicable.
(6)
(A) The statement in support of such
agreement, which the debtor shall sign and date prior to filing with the
court, shall consist of the following:
"Part D: Debtor's Statement in Support of Reaffirmation
Agreement.
"1. I believe this reaffirmation agreement will not impose an
undue hardship on my dependents or me. I can afford to make the payments
on the reaffirmed debt because my monthly income (take home pay plus any
other income received) is $XXX, and my actual current monthly expenses
including monthly payments on post-bankruptcy debt and other
reaffirmation agreements total $XXX, leaving $XXX to make the required
payments on this reaffirmed debt. I understand that if my income less my
monthly expenses does not leave enough to make the payments, this
reaffirmation agreement is presumed to be an undue hardship on me and
must be reviewed by the court. However, this presumption may be overcome
if I explain to the satisfaction of the court how I can afford to make
the payments here: XXX.
"2. I received a copy of the Reaffirmation Disclosure Statement
in Part A and a completed and signed reaffirmation agreement.".
(B) Where the debtor is represented by an
attorney and is reaffirming a debt owed to a creditor defined in section
19(b)(1)(A)(iv) of the Federal Reserve Act, the statement of support of
the reaffirmation agreement, which the debtor shall sign and date prior to
filing with the court, shall consist of the following:
"I believe this reaffirmation agreement is in my financial
interest. I can afford to make the payments on the reaffirmed debt. I
received a copy of the Reaffirmation Disclosure Statement in Part A and
a completed and signed reaffirmation agreement.".
(7) The motion that may be used if approval of
such agreement by the court is required in order for it to be effective,
shall be signed and dated by the movant and shall consist of the following:
"Part E: Motion for Court Approval (To be completed only if the
debtor is not represented by an attorney.). I (we), the debtor(s), affirm
the following to be true and correct:
"I am not represented by an attorney in connection with this
reaffirmation agreement.
"I believe this reaffirmation agreement is in my best interest
based on the income and expenses I have disclosed in my Statement in
Support of this reaffirmation agreement, and because (provide any
additional relevant reasons the court should consider):
"Therefore, I ask the court for an order approving this
reaffirmation agreement.".
(8) The court order, which may be used to approve
such agreement, shall consist of the following:
"Court Order: The court grants the debtor's motion and approves
the reaffirmation agreement described above.".
(l) Notwithstanding any other provision of this title
the following shall apply:
(1) A creditor may accept payments from a debtor
before and after the filing of an agreement of the kind specified in subsection
(c) with the court.
(2) A creditor may accept payments from a debtor
under such agreement that the creditor believes in good faith to be
effective.
(3) The requirements of subsections
(c)(2) and (k)
shall be satisfied if disclosures required under those subsections are given
in good faith.
(m)
(1) Until 60 days after an agreement of the kind
specified in subsection
(c) is filed with the court (or such additional period as the court,
after notice and a hearing and for cause, orders before the expiration of
such period), it shall be presumed that such agreement is an undue hardship
on the debtor if the debtor's monthly income less the debtor's monthly
expenses as shown on the debtor's completed and signed statement in support
of such agreement required under subsection
(k)(6)(A) is less than the scheduled payments on the reaffirmed debt.
This presumption shall be reviewed by the court. The presumption may be
rebutted in writing by the debtor if the statement includes an explanation
that identifies additional sources of funds to make the payments as agreed
upon under the terms of such agreement. If the presumption is not rebutted
to the satisfaction of the court, the court may disapprove such agreement.
No agreement shall be disapproved without notice and a hearing to the debtor
and creditor, and such hearing shall be concluded before the entry of the
debtor's discharge.
(2) This subsection does not apply to
reaffirmation agreements where the creditor is a credit union, as defined in
section 19(b)(1)(A)(iv) of the Federal Reserve Act.
[Rev. 5-10-05]
11
USC § 525. Protection against discriminatory treatment
(a) Except as provided in the Perishable Agricultural Commodities Act,
1930, the Packers and Stockyards Act, 1921, and section 1 of the Act entitled
“An Act making appropriations for the Department of Agriculture for the
fiscal year ending June 30, 1944, and for other purposes,” approved July 12,
1943, a governmental unit may not deny, revoke, suspend, or refuse to renew a
license, permit, charter, franchise, or other similar grant to, condition such
a grant to, discriminate with respect to such a grant against, deny employment
to, terminate the employment of, or discriminate with respect to employment
against, a person that is or has been a debtor under this title or a bankrupt
or a debtor under the Bankruptcy Act, or another person with whom such
bankrupt or debtor has been associated, solely because such bankrupt or debtor
is or has been a debtor under this title or a bankrupt or debtor under the
Bankruptcy Act, has been insolvent before the commencement of the case under
this title, or during the case but before the debtor is granted or denied a
discharge, or has not paid a debt that is dischargeable in the case under this
title or that was discharged under the Bankruptcy Act.
(b) No private employer may terminate the employment of, or discriminate
with respect to employment against, an individual who is or has been a debtor
under this title, a debtor or bankrupt under the Bankruptcy Act, or an
individual associated with such debtor or bankrupt, solely because such debtor
or bankrupt--
(1) is or has been a debtor under this title or a debtor or bankrupt
under the Bankruptcy Act;
(2) has been insolvent before the commencement of a case under this title
or during the case but before the grant or denial of a discharge; or
(3) has not paid a debt that is dischargeable in a case under this title
or that was discharged under the Bankruptcy Act.
(c)
(1) A governmental unit that operates a student grant or loan program and
a person engaged in a business that includes the making of loans guaranteed
or insured under a student loan program may not deny a grant, loan, loan
guarantee, or loan insurance to a person that is or has been a debtor under
this title or a bankrupt or debtor under the Bankruptcy Act, or another
person with whom the debtor or bankrupt has been associated, because the
debtor or bankrupt is or has been a debtor under this title or a bankrupt or
debtor under the Bankruptcy Act, has been insolvent before the commencement
of a case under this title or during the pendency of the case but before the
debtor is granted or denied a discharge, or has not paid a debt that is
dischargeable in the case under this title or that was discharged under the
Bankruptcy Act.
(2) In this section, "student loan program" means
any
program operated under title IV of the Higher Education Act of 1965
or a similar program operated under State or local law.
[Rev. 5-12-05]
11
USC § 526. Restrictions on debt relief agencies
(a) A debt relief agency shall not--
(1) fail to perform any service that such agency
informed an assisted person or prospective assisted person it would provide
in connection with a case or proceeding under this title;
(2) make any statement, or counsel or advise any
assisted person or prospective assisted person to make a statement in a
document filed in a case or proceeding under this title, that is untrue and
misleading, or that upon the exercise of reasonable care, should have been
known by such agency to be untrue or misleading;
(3) misrepresent to any assisted person or
prospective assisted person, directly or indirectly, affirmatively or by
material omission, with respect to--
(A) the services that such agency will provide to such person; or
(B) the benefits and risks that may result if such person becomes a
debtor in a case under this title; or
(4) advise an assisted person or prospective
assisted person to incur more debt in contemplation of such person filing a
case under this title or to pay an attorney or bankruptcy petition preparer
fee or charge for services performed as part of preparing for or
representing a debtor in a case under this title.
(b) Any waiver by any assisted person of any
protection or right provided under this section shall not be enforceable
against the debtor by any Federal or State court or any other person, but may
be enforced against a debt relief agency.
(c)
(1) Any contract for bankruptcy assistance
between a debt relief agency and an assisted person that does not comply
with the material requirements of this section, section
527, or section
528 shall be void and may not be enforced by any Federal or State court
or by any other person, other than such assisted person.
(2) Any debt relief agency shall be liable to an
assisted person in the amount of any fees or charges in connection with
providing bankruptcy assistance to such person that such debt relief agency
has received, for actual damages, and for reasonable attorneys' fees and
costs if such agency is found, after notice and a hearing, to have--
(A) intentionally or negligently failed to
comply with any provision of this section, section
527, or section
528 with respect to a case or proceeding under this title for such
assisted person;
(B) provided bankruptcy assistance to an
assisted person in a case or proceeding under this title that is dismissed
or converted to a case under another chapter of this title because of such
agency's intentional or negligent failure to file any required document
including those specified in section
521; or
(C) intentionally or negligently disregarded
the material requirements of this title or the Federal Rules of Bankruptcy
Procedure applicable to such agency.
(3) In addition to such other remedies as are
provided under State law, whenever the chief law enforcement officer of a
State, or an official or agency designated by a State, has reason to believe
that any person has violated or is violating this section, the State--
(A) may bring an action to enjoin such
violation;
(B) may bring an action on behalf of its
residents to recover the actual damages of assisted persons arising from
such violation, including any liability under paragraph (2); and
(C) in the case of any successful action
under subparagraph (A) or (B), shall be awarded the costs of the action
and reasonable attorneys' fees as determined by the court.
(4) The district courts of the United States for
districts located in the State shall have concurrent jurisdiction of any
action under subparagraph (A) or (B) of paragraph (3).
(5) Notwithstanding any other provision of
Federal law and in addition to any other remedy provided under Federal or
State law, if the court, on its own motion or on the motion of the United
States trustee or the debtor, finds that a person intentionally violated
this section, or engaged in a clear and consistent pattern or practice of
violating this section, the court may--
(A) enjoin the violation of such section; or
(B) impose an appropriate civil penalty
against such person.
(d) No provision of this section, section
527, or section
528 shall--
(1) annul, alter, affect, or exempt any person
subject to such sections from complying with any law of any State except to
the extent that such law is inconsistent with those sections, and then only
to the extent of the inconsistency; or
(2) be deemed to limit or curtail the authority
or ability--
(A) of a State or subdivision or
instrumentality thereof, to determine and enforce qualifications for the
practice of law under the laws of that State; or
(B) of a Federal court to determine and
enforce the qualifications for the practice of law before that court.
[Rev. 5-12-05]
11
USC § 527. Disclosures
(a) A debt relief agency providing bankruptcy
assistance to an assisted person shall provide--
(1) the written notice required under section
342(b)(1); and
(2) to the extent not covered in the written
notice described in paragraph (1), and not later than 3 business days after
the first date on which a debt relief agency first offers to provide any
bankruptcy assistance services to an assisted person, a clear and
conspicuous written notice advising assisted persons that--
(A) all information that the assisted person
is required to provide with a petition and thereafter during a case under
this title is required to be complete, accurate, and truthful;
(B) all assets and all liabilities are
required to be completely and accurately disclosed in the documents filed
to commence the case, and the replacement value of each asset as defined
in section
506 must be stated in those documents where requested after reasonable
inquiry to establish such value;
(C) current monthly income, the amounts
specified in section
707(b)(2), and, in a case under chapter
13 of this title, disposable income (determined in accordance with section
707(b)(2)), are required to be stated after reasonable inquiry; and
(D) information that an assisted person
provides during their case may be audited pursuant to this title, and that
failure to provide such information may result in dismissal of the case
under this title or other sanction, including a criminal sanction.
(b) A debt relief agency providing bankruptcy
assistance to an assisted person shall provide each assisted person at the
same time as the notices required under subsection (a)(1) the following
statement, to the extent applicable, or one substantially similar. The
statement shall be clear and conspicuous and shall be in a single document
separate from other documents or notices provided to the assisted person:
"IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN
ATTORNEY OR BANKRUPTCY PETITION PREPARER.
"If you decide to seek bankruptcy relief, you can represent
yourself, you can hire an attorney to represent you, or you can get help in
some localities from a bankruptcy petition preparer who is not an attorney.
THE LAW REQUIRES AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A
WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION
PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. Ask to see the contract
before you hire anyone.
"The following information helps you understand what must be done in
a routine bankruptcy case to help you evaluate how much service you need.
Although bankruptcy can be complex, many cases are routine.
"Before filing a bankruptcy case, either you or your attorney should
analyze your eligibility for different forms of debt relief available under
the Bankruptcy Code and which form of relief is most likely to be beneficial
for you. Be sure you understand the relief you can obtain and its
limitations. To file a bankruptcy case, documents called a Petition,
Schedules and Statement of Financial Affairs, as well as in some cases a
Statement of Intention need to be prepared correctly and filed with the
bankruptcy court. You will have to pay a filing fee to the bankruptcy court.
Once your case starts, you will have to attend the required first meeting of
creditors where you may be questioned by a court official called a 'trustee'
and by creditors.
"If you choose to file a chapter 7 case, you may be asked by a
creditor to reaffirm a debt. You may want help deciding whether to do so. A
creditor is not permitted to coerce you into reaffirming your debts.
"If you choose to file a chapter 13 case in which you repay your
creditors what you can afford over 3 to 5 years, you may also want help with
preparing your chapter 13 plan and with the confirmation hearing on your
plan which will be before a bankruptcy judge.
"If you select another type of relief under the Bankruptcy Code
other than chapter 7 or chapter 13, you will want to find out what should be
done from someone familiar with that type of relief.
"Your bankruptcy case may also involve litigation. You are generally
permitted to represent yourself in litigation in bankruptcy court, but only
attorneys, not bankruptcy petition preparers, can give you legal
advice.".
[Printable 527(b) statement.]
(c) Except to the extent the debt relief agency
provides the required information itself after reasonably diligent inquiry of
the assisted person or others so as to obtain such information reasonably
accurately for inclusion on the petition, schedules or statement of financial
affairs, a debt relief agency providing bankruptcy assistance to an assisted
person, to the extent permitted by nonbankruptcy law, shall provide each
assisted person at the time required for the notice required under subsection
(a)(1) reasonably sufficient information (which shall be provided in a clear
and conspicuous writing) to the assisted person on how to provide all the
information the assisted person is required to provide under this title
pursuant to section
521, including--
(1) how to value assets at replacement value,
determine current monthly income, the amounts specified in section
707(b)(2) and, in a chapter 13 case, how to determine disposable income
in accordance with section
707(b)(2) and related calculations;
(2) how to complete the list of creditors,
including how to determine what amount is owed and what address for the
creditor should be shown; and
(3) how to determine what property is exempt and
how to value exempt property at replacement value as defined in section
506.
(d) A debt relief agency shall maintain a copy of the
notices required under subsection (a) of this section for 2 years after the
date on which the notice is given the assisted person.
[Rev. 5-12-05]
11
USC § 528. Requirements for debt relief agencies
(a) A debt relief agency shall--
(1) not later than 5 business days after the first date on which such
agency provides any bankruptcy assistance services to an assisted person,
but prior to such assisted person's petition under this title being filed,
execute a written contract with such assisted person that explains clearly
and conspicuously--
(A) the services such agency will provide to such assisted person; and
(B) the fees or charges for such services, and the terms of payment;
(2) provide the assisted person with a copy of the fully executed and
completed contract;
(3) clearly and conspicuously disclose in any advertisement of bankruptcy
assistance services or of the benefits of bankruptcy directed to the general
public (whether in general media, seminars or specific mailings, telephonic
or electronic messages, or otherwise) that the services or benefits are with
respect to bankruptcy relief under this title; and
(4) clearly and conspicuously use the following statement in such
advertisement: "We are a debt relief agency. We help people file for
bankruptcy relief under the Bankruptcy Code." or a substantially
similar statement.
(b)
(1) An advertisement of bankruptcy assistance services or of the benefits
of bankruptcy directed to the general public includes--
(A) descriptions of bankruptcy assistance in connection with a chapter
13 plan whether or not chapter
13 is specifically mentioned in such advertisement; and
(B) statements such as "federally supervised repayment plan"
or "Federal debt restructuring help" or other similar statements
that could lead a reasonable consumer to believe that debt counseling was
being offered when in fact the services were directed to providing
bankruptcy assistance with a chapter
13 plan or other form of bankruptcy relief under this title.
(2) An advertisement, directed to the general public, indicating that the
debt relief agency provides assistance with respect to credit defaults,
mortgage foreclosures, eviction proceedings, excessive debt, debt collection
pressure, or inability to pay any consumer debt shall--
(A) disclose clearly and conspicuously in such advertisement that the
assistance may involve bankruptcy relief under this title; and
(B) include the following statement: "We are a debt relief agency.
We help people file for bankruptcy relief under the Bankruptcy Code."
or a substantially similar statement.
[Rev. 5-12-05]
Subchapter III. The Estate
11
USC § 541. Property of the estate
(a) The commencement of a case under section
301, 302,
303
of this title creates an estate. Such estate is comprised of all the following
property, wherever located and by whomever held:
(1) Except as provided in subsections
(b) and (c)(2)
of this section, all legal or equitable interests of the debtor in property
as of the commencement of the case.
(2) All interests of the debtor and the
debtor’s spouse in community property as of the commencement of the case
that is--
(A) under the sole, equal, or joint management and control of the
debtor; or
(B) liable for an allowable claim against the debtor, or for both an
allowable claim against the debtor and an allowable claim against the
debtor’s spouse, to the extent that such interest is so liable.
(3) Any interest in property that the trustee
recovers under section
329(b), 363(n),
543,
550,
553,
or 723
of this title.
(4) Any interest in property preserved for the
benefit of or ordered transferred to the estate under section
510(c) or 551 of this
title.
(5) Any interest in property that would have been
property of the estate if such interest had been an interest of the debtor
on the date of the filing of the petition, and that the debtor acquires or
becomes entitled to acquire within 180 days after such date--
(A) by bequest, devise, or inheritance;
(B) as a result of a property settlement agreement with the debtor’s
spouse, or of an interlocutory or final divorce decree; or
(C) as a beneficiary of a life insurance policy or of a death benefit
plan.
(6) Proceeds, product, offspring, rents, or
profits of or from property of the estate, except such as are earnings from
services performed by an individual debtor after the commencement of the
case.
(7) Any interest in property that the estate
acquires after the commencement of the case.
(b) Property of the estate does not include--
(1) any power that the debtor may exercise solely
for the benefit of an entity other than the debtor;
(2) any interest of the debtor as a lessee under
a lease of nonresidential real property that has terminated at the
expiration of the stated term of such lease before the commencement of the
case under this title, and ceases to include any interest of the debtor as a
lessee under a lease of nonresidential real property that has terminated at
the expiration of the stated term of such lease during the case;
(3) any eligibility of the debtor to participate
in programs authorized under the Higher Education Act of 1965 (20
U.S.C. 1001 et seq.; 42
U.S.C. 2751 et seq.), or any accreditation status or State licensure of
the debtor as an educational institution;
(4) any interest of the debtor in liquid or
gaseous hydrocarbons to the extent that--
(A)
(i) the debtor has transferred or has agreed to transfer such
interest pursuant to a farmout agreement or any written agreement
directly related to a farmout agreement; and
(ii) but for the operation of this paragraph, the estate could
include the interest referred to in clause (i) only by virtue of section
365 or 544(a)(3)
of this title; or
(B)
(i) the debtor has transferred such interest pursuant to a written
conveyance of a production payment to an entity that does not
participate in the operation of the property from which such production
payment is transferred; and
(ii) but for the operation of this paragraph, the estate could
include the interest referred to in clause (i) only by virtue of section
365
or 542
of this title;
(5) funds placed in an education
individual retirement account (as defined in section
530(b)(1) of the Internal Revenue Code of 1986) not later than 365 days
before the date of the filing of the petition in a case under this title, but--
(A) only if the designated beneficiary of such account
was a child, stepchild, grandchild, or stepgrandchild of the debtor for
the taxable year for which funds were placed in such account;
(B) only to the extent that such funds--
(i) are not pledged or promised to any entity in
connection with any extension of credit; and
(ii) are not excess contributions (as described in section
4973(e) of the Internal Revenue Code of 1986); and
(C) in the case of funds placed in all such accounts
having the same designated beneficiary not earlier than 720 days nor later
than 365 days before such date, only so much of such funds as does not
exceed $5,000 [Adjusted
every 3 years by section
104.];
(6) funds used to purchase a
tuition credit or certificate or contributed to an account in accordance
with section
529(b)(1)(A) of the Internal Revenue Code of 1986 under a qualified
State tuition program (as defined in section
529(b)(1) of such Code) not later than 365 days before the date of the
filing of the petition in a case under this title, but--
(A) only if the designated beneficiary of the amounts
paid or contributed to such tuition program was a child, stepchild,
grandchild, or stepgrandchild of the debtor for the taxable year for which
funds were paid or contributed;
(B) with respect to the aggregate amount paid or
contributed to such program having the same designated beneficiary, only
so much of such amount as does not exceed the total contributions
permitted under section
529(b)(7) of such Code with respect to such beneficiary, as adjusted
beginning on the date of the filing of the petition in a case under this
title by the annual increase or decrease (rounded to the nearest tenth of
1 percent) in the education expenditure category of the Consumer Price
Index prepared by the Department of Labor; and
(C) in the case of funds paid or contributed to such
program having the same designated beneficiary not earlier than 720 days
nor later than 365 days before such date, only so much of such funds as
does not exceed $5,000 [Adjusted
every 3 years by section
104.];
(7) any amount--
(A) withheld by an employer from the wages of employees
for payment as contributions--
(i) to--
(I) an employee benefit plan that is subject to
title I of the Employee Retirement Income Security Act of 1974 or
under an employee benefit plan which is a governmental plan under section
414(d) of the Internal Revenue Code of 1986;
(II) a deferred compensation plan under section
457 of the Internal Revenue Code of 1986; or
(III) a tax-deferred annuity under section
403(b) of the Internal Revenue Code of 1986;
except that such amount under this subparagraph shall
not constitute disposable income as defined in section
1325(b)(2); or
(ii) to a health insurance plan regulated by State
law whether or not subject to such title; or
(B) received by an employer from employees for payment
as contributions--
(i) to--
(I) an employee benefit plan that is subject to
title I of the Employee Retirement Income Security Act of 1974 or
under an employee benefit plan which is a governmental plan under section
414(d) of the Internal Revenue Code of 1986;
(II) a deferred compensation plan under section
457 of the Internal Revenue Code of 1986; or
(III) a tax-deferred annuity under section
403(b) of the Internal Revenue Code of 1986;
except that such amount under this subparagraph shall
not constitute disposable income, as defined in section
1325(b)(2); or
(ii) to a health insurance plan regulated by State
law whether or not subject to such title;
(8) subject to subchapter
III of chapter
5, any interest of the debtor in property where the debtor pledged or
sold tangible personal property (other than securities or written or printed
evidences of indebtedness or title) as collateral for a loan or advance of
money given by a person licensed under law to make such loans or advances, where--
(A) the tangible personal property is in the possession
of the pledgee or transferee;
(B) the debtor has no obligation to repay the money,
redeem the collateral, or buy back the property at a stipulated price; and
(C) neither the debtor nor the trustee have exercised
any right to redeem provided under the contract or State law, in a timely
manner as provided under State law and section
108(b); or
(9)
any interest in cash or cash equivalents that constitute proceeds of a sale
by the debtor of a money order that is made--
(A) on or after the date that is 14 days prior to the date on which the
petition is filed; and
(B) under an agreement with a money order issuer that prohibits the
commingling of such proceeds with property of the debtor (notwithstanding
that, contrary to the agreement, the proceeds may have been commingled
with property of the debtor), unless the money order issuer had not taken
action, prior to the filing of the petition, to require compliance with
the prohibition.
Paragraph (4) shall not be construed to exclude from the estate any
consideration the debtor retains, receives, or is entitled to receive for
transferring an interest in liquid or gaseous hydrocarbons pursuant to a
farmout agreement.
(c)
(1) Except as provided in paragraph (2) of this
subsection, an interest of the debtor in property becomes property of the
estate under subsection
(a)(1), (a)(2),
or (a)(5)
of this section notwithstanding any provision in an agreement, transfer
instrument, or applicable nonbankruptcy law--
(A) that restricts or conditions transfer of such interest by the
debtor; or
(B) that is conditioned on the insolvency or financial condition of the
debtor, on the commencement of a case under this title, or on the
appointment of or taking possession by a trustee in a case under this
title or a custodian before such commencement, and that effects or gives
an option to effect a forfeiture, modification, or termination of the
debtor’s interest in property.
(2) A restriction on the transfer of a beneficial
interest of the debtor in a trust that is enforceable under applicable
nonbankruptcy law is enforceable in a case under this title.
(d) Property in which the debtor holds, as of the
commencement of the case, only legal title and not an equitable interest, such
as a mortgage secured by real property, or an interest in such a mortgage,
sold by the debtor but as to which the debtor retains legal title to service
or supervise the servicing of such mortgage or interest, becomes property of
the estate under subsection
(a)(1) or (2)
of this section only to the extent of the debtor’s legal title to such
property, but not to the extent of any equitable interest in such property
that the debtor does not hold.
(e) In determining whether any of the
relationships specified in paragraph
(5)(A) or (6)(A)
of subsection
(b) exists, a legally adopted child of an individual (and a child who is a
member of an individual's household, if placed with such individual by an
authorized placement agency for legal adoption by such individual), or a
foster child of an individual (if such child has as the child's principal
place of abode the home of the debtor and is a member of the debtor's
household) shall be treated as a child of such individual by blood.
(f) Notwithstanding any other provision of this title,
property that is held by a debtor that is a corporation described in section
501(c)(3) of the Internal Revenue Code of 1986 and exempt from tax under section
501(a) of such Code may be transferred to an entity that is not such a
corporation, but only under the same conditions as would apply if the debtor
had not filed a case under this title.
[Rev. 5-16-05]
11
USC § 542. Turnover of property to the estate
(a) Except as provided in subsection
(c) or (d)
of this section, an entity, other than a custodian, in possession, custody, or
control, during the case, of property that the trustee may use, sell, or lease
under section
363 of this title, or that the debtor may exempt under section
522 of this title, shall deliver to the trustee, and account for, such
property or the value of such property, unless such property is of
inconsequential value or benefit to the estate.
(b) Except as provided in subsection
(c) or (d)
of this section, an entity that owes a debt that is property of the estate and
that is matured, payable on demand, or payable on order, shall pay such debt
to, or on the order of, the trustee, except to the extent that such debt may
be offset under section
553 of this title against a claim against the debtor.
(c) Except as provided in section
362(a)(7) of this title, an entity that has neither actual notice nor
actual knowledge of the commencement of the case concerning the debtor may
transfer property of the estate, or pay a debt owing to the debtor, in good
faith and other than in the manner specified in subsection
(d) of this section, to an entity other than the trustee, with the same
effect as to the entity making such transfer or payment as if the case under
this title concerning the debtor had not been commenced.
(d) A life insurance company may transfer property of
the estate or property of the debtor to such company in good faith, with the
same effect with respect to such company as if the case under this title
concerning the debtor had not been commenced, if such transfer is to pay a
premium or to carry out a nonforfeiture insurance option, and is required to
be made automatically, under a life insurance contract with such company that
was entered into before the date of the filing of the petition and that is
property of the estate.
(e) Subject to any applicable privilege, after notice
and a hearing, the court may order an attorney, accountant, or other person
that holds recorded information, including books, documents, records, and
papers, relating to the debtor’s property or financial affairs, to turn over
or disclose such recorded information to the trustee.
[Rev. 5-17-05]
11
USC § 543. Turnover of property by a custodian
(a) A custodian with knowledge of the commencement of
a case under this title concerning the debtor may not make any disbursement
from, or take any action in the administration of, property of the debtor,
proceeds, product, offspring, rents, or profits of such property, or property
of the estate, in the possession, custody, or control of such custodian,
except such action as is necessary to preserve such property.
(b) A custodian shall--
(1) deliver to the trustee any property of the
debtor held by or transferred to such custodian, or proceeds, product,
offspring, rents, or profits of such property, that is in such custodian’s
possession, custody, or control on the date that such custodian acquires
knowledge of the commencement of the case; and
(2) file an accounting of any property of the
debtor, or proceeds, product, offspring, rents, or profits of such property,
that, at any time, came into the possession, custody, or control of such
custodian.
(c) The court, after notice and a hearing, shall--
(1) protect all entities to which a custodian has
become obligated with respect to such property or proceeds, product,
offspring, rents, or profits of such property;
(2) provide for the payment of reasonable
compensation for services rendered and costs and expenses incurred by such
custodian; and
(3) surcharge such custodian, other than an
assignee for the benefit of the debtor’s creditors that was appointed or
took possession more than 120 days before the date of the filing of the
petition, for any improper or excessive disbursement, other than a
disbursement that has been made in accordance with applicable law or that
has been approved, after notice and a hearing, by a court of competent
jurisdiction before the commencement of the case under this title.
(d) After notice and hearing, the bankruptcy court--
(1) may excuse compliance with subsection (a),
(b), or (c) of this section if the interests of creditors and, if the debtor
is not insolvent, of equity security holders would be better served by
permitting a custodian to continue in possession, custody, or control of
such property, and
(2) shall excuse compliance with subsections (a)
and (b)(1) of this section if the custodian is an assignee for the benefit
of the debtor’s creditors that was appointed or took possession more than
120 days before the date of the filing of the petition, unless compliance
with such subsections is necessary to prevent fraud or injustice.
[Rev. 5-17-05]
11
USC § 544. Trustee as lien creditor and as successor to certain
creditors and purchasers
(a) The trustee shall have, as of the commencement of the case, and without
regard to any knowledge of the trustee or of any creditor, the rights and
powers of, or may avoid any transfer of property of the debtor or any
obligation incurred by the debtor that is voidable by--
(1) a creditor that extends credit to the debtor at the time of the
commencement of the case, and that obtains, at such time and with respect to
such credit, a judicial lien on all property on which a creditor on a simple
contract could have obtained such a judicial lien, whether or not such a
creditor exists;
(2) a creditor that extends credit to the debtor at the time of the
commencement of the case, and obtains, at such time and with respect to such
credit, an execution against the debtor that is returned unsatisfied at such
time, whether or not such a creditor exists; or
(3) a bona fide purchaser of real property, other than fixtures, from the
debtor, against whom applicable law permits such transfer to be perfected,
that obtains the status of a bona fide purchaser and has perfected such
transfer at the time of the commencement of the case, whether or not such a
purchaser exists.
(b)
(1) Except as provided in paragraph (2), the trustee may avoid any
transfer of an interest of the debtor in property or any obligation incurred
by the debtor that is voidable under applicable law by a creditor holding an
unsecured claim that is allowable under section
502 of this title or that is not allowable only under section
502(e) of this title.
(2) Paragraph (1) shall not apply to a transfer of a charitable
contribution (as that term is defined in section
548(d)(3)) that is not covered under section
548(a)(1)(B), by reason of section
548(a)(2). Any claim by any person to recover a transferred contribution
described in the preceding sentence under Federal or State law in a Federal
or State court shall be preempted by the commencement of the case.
[Rev. 5-17-05]
11
USC § 545. Statutory liens
The trustee may avoid the fixing of a statutory lien on property of the
debtor to the extent that such lien--
(1) first becomes effective against the debtor--
(A) when a case under this title concerning the debtor is commenced;
(B) when an insolvency proceeding other than under this title
concerning the debtor is commenced;
(C) when a custodian is appointed or authorized to take or takes
possession;
(D) when the debtor becomes insolvent;
(E) when the debtor’s financial condition fails to meet a specified
standard; or
(F) at the time of an execution against property of the debtor levied
at the instance of an entity other than the holder of such statutory lien;
(2) is not perfected or enforceable at the time of the commencement of
the case against a bona fide purchaser that purchases such property at the
time of the commencement of the case, whether or not such a purchaser exists,
except in any case in which a purchaser is a purchaser described in section
6323 of the Internal Revenue Code of 1986, or in any other similar
provision of State or local law;
(3) is for rent; or
(4) is a lien of distress for rent.
[Rev. 5-17-05]
11
USC § 546. Limitations on avoiding powers
(a) An action or proceeding under section
544, 545,
547, 548,
or 553 of
this title may not be commenced after the earlier of--
(1) the later of--
(A) 2 years after the entry of the order for relief; or
(B) 1 year after the appointment or election of the first trustee under
section
702, 1104,
1163,
1202,
or 1302
of this title if such appointment or such election occurs before the
expiration of the period specified in subparagraph (A); or
(2) the time the case is closed or dismissed.
(b)
(1) The rights and powers of a trustee under section
544, 545,
and 549
of this title are subject to any generally applicable law that--
(A) permits perfection of an interest in property to be effective
against an entity that acquires rights in such property before the date of
perfection; or
(B) provides for the maintenance or continuation of perfection of an
interest in property to be effective against an entity that acquires
rights in such property before the date on which action is taken to effect
such maintenance or continuation.
(2) If--
(A) a law described in paragraph (1) requires seizure of such property
or commencement of an action to accomplish such perfection, or maintenance
or continuation of perfection of an interest in property; and
(B) such property has not been seized or such an action has not been
commenced before the date of the filing of the petition;
such interest in such property shall be perfected, or perfection of such
interest shall be maintained or continued, by giving notice within the time
fixed by such law for such seizure or such commencement.
(c)
(1) Except as provided in subsection
(d) of this section and in section
507(c), and subject to the prior rights of a holder of a security
interest in such goods or the proceeds thereof, the rights and powers of the
trustee under sections
544(a), 545,
547,
and 549
are subject to the right of a seller of goods that has sold goods to the
debtor, in the ordinary course of such seller's business, to reclaim such
goods if the debtor has received such goods while insolvent, within 45 days
before the date of the commencement of a case under this title, but such
seller may not reclaim such goods unless such seller demands in writing
reclamation of such goods--
(A) not later than 45 days after the date of receipt of
such goods by the debtor; or
(B) not later than 20 days after the date of
commencement of the case, if the 45-day period expires after the
commencement of the case.
(2) If a seller of goods fails to provide notice in the
manner described in paragraph (1), the seller still may assert the rights
contained in section
503(b)(9).
(d) In the case of a seller who is a producer of grain sold to a grain
storage facility, owned or operated by the debtor, in the ordinary course of
such seller’s business (as such terms are defined in section
557 of this title) or in the case of a United States fisherman who has
caught fish sold to a fish processing facility owned or operated by the debtor
in the ordinary course of such fisherman’s business, the rights and powers
of the trustee under sections
544(a), 545,
547, and
549
of this title are subject to any statutory or common law right of such
producer or fisherman to reclaim such grain or fish if the debtor has received
such grain or fish while insolvent, but--
(1) such producer or fisherman may not reclaim any grain or fish unless
such producer or fisherman demands, in writing, reclamation of such grain or
fish before ten days after receipt thereof by the debtor; and
(2) the court may deny reclamation to such a producer or fisherman with a
right of reclamation that has made such a demand only if the court secures
such claim by a lien.
(e) Notwithstanding section
544, 545,
547, 548(a)(1)(B),
and 548(b)
of this title, the trustee may not avoid a transfer that is a margin payment,
as defined in section
101, 741,
or 761
of this title, or settlement payment, as defined in section
101 or 741
of this title, made by or to a commodity broker, forward contract merchant,
stockbroker, financial institution, financial participant,
or securities clearing agency, that is made before the commencement of the
case, except under section
548(a)(1)(A) of this title.
(f) Notwithstanding section
544, 545,
547, 548(a)(1)(B),
and 548(b)
of this title, the trustee may not avoid a transfer that is a margin payment,
as defined in section
741 or 761
of this title, or settlement payment, as defined in section
741 of this title, made by or to a repo participant or
financial participant, in connection with a repurchase agreement and
that is made before the commencement of the case, except under section
548(a)(1)(A) of this title.
(g) Notwithstanding section
544, 545,
547, 548(a)(1)(B)
and 548(b)
of this title, the trustee may not avoid a transfer
or financial participant,
under
or in connection with any swap agreement and that is made before the
commencement of the case, except under section
548(a)(1)(A) of this title.
(h)
Notwithstanding the rights and powers of a trustee under sections
544(a), 545,
547, 549,
and 553, if
the court determines on a motion by the trustee made not later than 120 days
after the date of the order for relief in a case under chapter 11 of this
title and after notice and a hearing, that a return is in the best interests
of the estate, the debtor, with the consent of a creditor and
subject to the prior rights of holders of security interests in such goods or
the proceeds of such goods, may return goods shipped to the debtor by
the creditor before the commencement of the case, and the creditor may offset
the purchase price of such goods against any claim of the creditor against the
debtor that arose before the commencement of the case.
(i)
(1) Notwithstanding paragraphs (2) and (3) of section
545, the trustee may not avoid a warehouseman's lien for storage,
transportation, or other costs incidental to the storage and handling of
goods.
(2) The prohibition under paragraph (1) shall be applied
in a manner consistent with any State statute applicable to such lien that
is similar to section 7-209 of the Uniform Commercial Code, as in effect on
the date of enactment of the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005, or any successor to such section 7-209.
(j) Notwithstanding sections
544, 545,
547, 548(a)(1)(B)
and 548(b)
the trustee may not avoid a transfer made by or to a master netting agreement
participant under or in connection with any master netting agreement or any
individual contract covered thereby that is made before the commencement of
the case, except under section
548(a)(1)(A) and except to the extent that the trustee could otherwise
avoid such a transfer made under an individual contract covered by such master
netting agreement.
[Rev. 5-17-05]
11
USC § 547. Preferences
(a) In this section--
(1) "inventory" means personal property
leased or furnished, held for sale or lease, or to be furnished under a
contract for service, raw materials, work in process, or materials used or
consumed in a business, including farm products such as crops or livestock,
held for sale or lease;
(2) "new value" means money or
money’s worth in goods, services, or new credit, or release by a
transferee of property previously transferred to such transferee in a
transaction that is neither void nor voidable by the debtor or the trustee
under any applicable law, including proceeds of such property, but does not
include an obligation substituted for an existing obligation;
(3) "receivable" means right to
payment, whether or not such right has been earned by performance; and
(4) a debt for a tax is incurred on the day when
such tax is last payable without penalty, including any extension.
(b) Except as provided in subsections
(c) and (i)
of this section, the trustee may avoid any transfer of an interest of the
debtor in property--
(1) to or for the benefit of a creditor;
(2) for or on account of an antecedent debt owed
by the debtor before such transfer was made;
(3) made while the debtor was insolvent;
(4) made--
(A) on or within 90 days before the date of the filing of the petition;
or
(B) between ninety days and one year before the date of the filing of
the petition, if such creditor at the time of such transfer was an
insider; and
(5) that enables such creditor to receive more
than such creditor would receive if--
(A) the case were a case under chapter 7 of this title;
(B) the transfer had not been made; and
(C) such creditor received payment of such debt to the extent provided
by the provisions of this title.
(c) The trustee may not avoid under this section a
transfer--
(1) to the extent that such transfer was--
(A) intended by the debtor and the creditor to or for whose benefit
such transfer was made to be a contemporaneous exchange for new value
given to the debtor; and
(B) in fact a substantially contemporaneous exchange;
(2) to the extent that such
transfer was in payment of a debt incurred by the debtor in the ordinary
course of business or financial affairs of the debtor and the transferee,
and such transfer was--
(A) made in the ordinary course of business or
financial affairs of the debtor and the transferee; or
(B) made according to ordinary business terms;
(3) that creates a security interest in property
acquired by the debtor--
(A) to the extent such security interest secures new value that was--
(i) given at or after the signing of a security agreement that
contains a description of such property as collateral;
(ii) given by or on behalf of the secured party under such agreement;
(iii) given to enable the debtor to acquire such property; and
(iv) in fact used by the debtor to acquire such property; and
(B) that is perfected on or before 30
days after the debtor receives possession of such property;
(4) to or for the benefit of a creditor, to the
extent that, after such transfer, such creditor gave new value to or for the
benefit of the debtor--
(A) not secured by an otherwise unavoidable security interest; and
(B) on account of which new value the debtor did not make an otherwise
unavoidable transfer to or for the benefit of such creditor;
(5) that creates a perfected security interest in
inventory or a receivable or the proceeds of either, except to the extent
that the aggregate of all such transfers to the transferee caused a
reduction, as of the date of the filing of the petition and to the prejudice
of other creditors holding unsecured claims, of any amount by which the debt
secured by such security interest exceeded the value of all security
interests for such debt on the later of--
(A)
(i) with respect to a transfer to which subsection
(b)(4)(A) of this section applies, 90 days before the date of the
filing of the petition; or
(ii) with respect to a transfer to which subsection
(b)(4)(B) of this section applies, one year before the date of the
filing of the petition; or
(B) the date on which new value was first given under the security
agreement creating such security interest;
(6) that is the fixing of a statutory lien that
is not avoidable under section
545 of this title;
(7) to the extent such transfer
was a bona fide payment of a debt for a domestic support obligation;
(8) if, in a case filed by an individual debtor
whose debts are primarily consumer debts, the aggregate value of all
property that constitutes or is affected by such transfer is less than $600
; or
(9) if, in a case filed by a
debtor whose debts are not primarily consumer debts, the aggregate value of
all property that constitutes or is affected by such transfer is less than
$5,000 [Adjusted
every 3 years by section
104.].
(d) The trustee may avoid a transfer of an interest in
property of the debtor transferred to or for the benefit of a surety to secure
reimbursement of such a surety that furnished a bond or other obligation to
dissolve a judicial lien that would have been avoidable by the trustee under subsection
(b) of this section. The liability of such surety under such bond or
obligation shall be discharged to the extent of the value of such property
recovered by the trustee or the amount paid to the trustee.
(e)
(1) For the purposes of this section--
(A) a transfer of real property other than fixtures, but including the
interest of a seller or purchaser under a contract for the sale of real
property, is perfected when a bona fide purchaser of such property from
the debtor against whom applicable law permits such transfer to be
perfected cannot acquire an interest that is superior to the interest of
the transferee; and
(B) a transfer of a fixture or property other than real property is
perfected when a creditor on a simple contract cannot acquire a judicial
lien that is superior to the interest of the transferee.
(2) For the purposes of this section, except as
provided in paragraph (3) of this subsection, a transfer is made--
(A) at the time such transfer takes effect between the transferor and
the transferee, if such transfer is perfected at, or within
30
days after, such time, except as provided in subsection
(c)(3)(B);
(B) at the time such transfer is perfected, if such transfer is
perfected after such 30
days; or
(C) immediately before the date of the filing of the petition, if such
transfer is not perfected at the later of--
(i) the commencement of the case; or
(ii) 30
days after such transfer takes effect between the transferor and the
transferee.
(3) For the purposes of this section, a transfer
is not made until the debtor has acquired rights in the property
transferred.
(f) For the purposes of this section, the debtor is
presumed to have been insolvent on and during the 90 days immediately
preceding the date of the filing of the petition.
(g) For the purposes of this section, the trustee has
the burden of proving the avoidability of a transfer under subsection
(b) of this section, and the creditor or party in interest against whom
recovery or avoidance is sought has the burden of proving the nonavoidability
of a transfer under subsection
(c) of this section.
(h) The trustee may not avoid a
transfer if such transfer was made as a part of an alternative repayment
schedule between the debtor and any creditor of the debtor created by an
approved nonprofit budget and credit counseling agency.
(i) If the trustee avoids under subsection
(b) a transfer made between 90 days and 1 year before the date of the
filing of the petition, by the debtor to an entity that is not an insider for
the benefit of a creditor that is an insider, such transfer shall be
considered to be avoided under this section only with respect to the creditor
that is an insider.
[Rev. 5-17-05]
11
USC § 548. Fraudulent transfers and obligations
(a)
(1) The trustee may avoid any transfer (including
any transfer to or for the benefit of an insider under an employment
contract) of an interest of the debtor in property, or any obligation
(including any obligation to or for the benefit of an
insider under an employment contract) incurred by the debtor, that
was made or incurred on or within
2
years before the date of the filing of the petition, if the debtor
voluntarily or involuntarily--
(A) made such transfer or incurred such obligation with actual intent
to hinder, delay, or defraud any entity to which the debtor was or became,
on or after the date that such transfer was made or such obligation was
incurred, indebted; or
(B)
(i) received less than a reasonably equivalent value in exchange for
such transfer or obligation; and
(ii)
(I) was insolvent on the date that such transfer was made or such
obligation was incurred, or became insolvent as a result of such
transfer or obligation;
(II) was engaged in business or a transaction, or was about to
engage in business or a transaction, for which any property remaining
with the debtor was an unreasonably small capital;
(III) intended to incur, or believed that the debtor would incur,
debts that would be beyond the debtor's ability to pay as such debts
matured ;
or
(IV) made such transfer to or for the benefit of an
insider, or incurred such obligation to or for the benefit of an
insider, under an employment contract and not in the ordinary course
of business.
(2) A transfer of a charitable contribution to a
qualified religious or charitable entity or organization shall not be
considered to be a transfer covered under paragraph (1)(B) in any case in which--
(A) the amount of that contribution does not exceed 15 percent of the
gross annual income of the debtor for the year in which the transfer of the
contribution is made; or
(B) the contribution made by a debtor exceeded the percentage amount of
gross annual income specified in subparagraph (A), if the transfer was
consistent with the practices of the debtor in making charitable
contributions.
(b) The trustee of a partnership debtor may avoid any
transfer of an interest of the debtor in property, or any obligation incurred
by the debtor, that was made or incurred on or within 2
years before the date of the filing of the petition, to a general
partner in the debtor, if the debtor was insolvent on the date such transfer
was made or such obligation was incurred, or became insolvent as a result of
such transfer or obligation.
(c) Except to the extent that a transfer or obligation
voidable under this section is voidable under section
544, 545,
or 547
of this title, a transferee or obligee of such a transfer or obligation that
takes for value and in good faith has a lien on or may retain any interest
transferred or may enforce any obligation incurred, as the case may be, to the
extent that such transferee or obligee gave value to the debtor in exchange
for such transfer or obligation.
(d)
(1) For the purposes of this section, a transfer
is made when such transfer is so perfected that a bona fide purchaser from
the debtor against whom applicable law permits such transfer to be perfected
cannot acquire an interest in the property transferred that is superior to
the interest in such property of the transferee, but if such transfer is not
so perfected before the commencement of the case, such transfer is made
immediately before the date of the filing of the petition.
(2) In this section--
(A) "value" means property, or satisfaction or securing of a
present or antecedent debt of the debtor, but does not include an
unperformed promise to furnish support to the debtor or to a relative of
the debtor;
(B) a commodity broker, forward contract merchant, stockbroker,
financial institution, financial participant, or
securities clearing agency that receives a margin payment, as defined in section
101, 741,
or 761
of this title, or settlement payment, as defined in section
101 or 741 of this
title, takes for value to the extent of such payment;
(C) a repo participant or financial participant
that receives a margin payment, as defined in section
741 or 761
of this title, or settlement payment, as defined in section
741 of this title, in connection with a repurchase agreement, takes
for value to the extent of such payment;
(D) a swap participant or financial participant
that receives a transfer in connection with a swap agreement takes for
value to the extent of such transfer;
and
(E) a master netting agreement participant that
receives a transfer in connection with a master netting agreement or any
individual contract covered thereby takes for value to the extent of such
transfer, except that, with respect to a transfer under any individual
contract covered thereby, to the extent that such master netting agreement
participant otherwise did not take (or is otherwise not deemed to have
taken) such transfer for value.
(3) In this section, the term "charitable
contribution" means a charitable contribution, as that term is defined
in section
170(c) of the Internal Revenue Code of 1986, if that contribution--
(A) is made by a natural person; and
(B) consists of--
(i) a financial instrument (as that term is defined in section
731(c)(2)(C) of the Internal Revenue Code of 1986); or
(ii) cash.
(4) In this section, the term "qualified
religious or charitable entity or organization" means--
(A) an entity described in section
170(c)(1) of the Internal Revenue Code of 1986; or
(B) an entity or organization described in section
170(c)(2) of the Internal Revenue Code of 1986.
(e)
(1) In addition to any transfer
that the trustee may otherwise avoid, the trustee may avoid any transfer of
an interest of the debtor in property that was made on or within 10 years
before the date of the filing of the petition, if--
(A) such transfer was made to a self-settled trust or
similar device;
(B) such transfer was by the debtor;
(C) the debtor is a beneficiary of such trust or
similar device; and
(D) the debtor made such transfer with actual intent to
hinder, delay, or defraud any entity to which the debtor was or became, on
or after the date that such transfer was made, indebted.
(2) For the purposes of this
subsection, a transfer includes a transfer made in anticipation of any money
judgment, settlement, civil penalty, equitable order, or criminal fine
incurred by, or which the debtor believed would be incurred by--
(A) any violation of the securities laws (as defined in
section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)(47))), any State securities laws, or any regulation or order issued
under Federal securities laws or State securities laws; or
(B) fraud, deceit, or manipulation in a fiduciary
capacity or in connection with the purchase or sale of any security
registered under section 12 or 15(d) of the Securities Exchange Act of
1934 (15 U.S.C. 78l and 78o(d)) or under section 6 of the Securities Act
of 1933 (15 U.S.C. 77f).
[Rev. 5-18-05]
11
USC § 549. Postpetition transactions
(a) Except as provided in subsection
(b) or (c)
of this section, the trustee may avoid a transfer of property of the estate--
(1) that occurs after the commencement of the
case; and
(2)
(A) that is authorized only under section
303(f) or 542(c)
of this title; or
(B) that is not authorized under this title or by the court.
(b) In an involuntary case, the trustee may not avoid
under subsection
(a) of this section a transfer made after the commencement of such case
but before the order for relief to the extent any value, including services,
but not including satisfaction or securing of a debt that arose before the
commencement of the case, is given after the commencement of the case in
exchange for such transfer, notwithstanding any notice or knowledge of the
case that the transferee has.
(c) The trustee may not avoid under subsection
(a) of this section a transfer of an interest in
real property to a good faith purchaser without knowledge of the commencement
of the case and for present fair equivalent value unless a copy or notice of
the petition was filed, where a transfer of an interest in
such real property may be recorded to perfect such transfer, before such
transfer is so perfected that a bona fide purchaser of
such
real property, against whom applicable law permits such transfer to be
perfected, could not acquire an interest that is superior to
such
interest of such good faith purchaser. A good faith purchaser without
knowledge of the commencement of the case and for less than present fair
equivalent value has a lien on the property transferred to the extent of any
present value given, unless a copy or notice of the petition was so filed
before such transfer was so perfected.
(d) An action or proceeding under this section may not
be commenced after the earlier of--
(1) two years after the date of the transfer
sought to be avoided; or
(2) the time the case is closed or dismissed.
[Rev. 5-18-05]
11
USC § 550. Liability of transferee of avoided transfer
(a) Except as otherwise provided in this section, to the extent that a
transfer is avoided under section
544, 545,
547, 548,
549,
553(b),
or 724(a)
of this title, the trustee may recover, for the benefit of the estate, the
property transferred, or, if the court so orders, the value of such property, from--
(1) the initial transferee of such transfer or the entity for whose
benefit such transfer was made; or
(2) any immediate or mediate transferee of such initial transferee.
(b) The trustee may not recover under section (a)(2) of this section from--
(1) a transferee that takes for value, including satisfaction or securing
of a present or antecedent debt, in good faith, and without knowledge of the
voidability of the transfer avoided; or
(2) any immediate or mediate good faith transferee of such transferee.
(c) If a transfer made between 90 days and one year before the filing of
the petition--
(1) is avoided under section
547(b) of this title; and
(2) was made for the benefit of a creditor that at the time of such
transfer was an insider;
the trustee may not recover under subsection
(a) from a transferee that is not an insider.
(d) The trustee is entitled to only a single satisfaction under subsection
(a) of this section.
(e)
(1) A good faith transferee from whom the trustee may recover under subsection
(a) of this section has a lien on the property recovered to secure the
lesser of--
(A) the cost, to such transferee, of any improvement made after the
transfer, less the amount of any profit realized by or accruing to such
transferee from such property; and
(B) any increase in the value of such property as a result of such
improvement, of the property transferred.
(2) In this subsection, "improvement" includes--
(A) physical additions or changes to the property transferred;
(B) repairs to such property;
(C) payment of any tax on such property;
(D) payment of any debt secured by a lien on such property that is
superior or equal to the rights of the trustee; and
(E) preservation of such property.
(f) An action or proceeding under this section may not be commenced after
the earlier of--
(1) one year after the avoidance of the transfer on account of which
recovery under this section is sought; or
(2) the time the case is closed or dismissed.
[Rev. 5-18-05]
11
USC § 551. Automatic preservation of avoided transfer
Any transfer avoided under section
522, 544,
545, 547,
548,
549,
or 724(a)
of this title, or any lien void under section
506(d) of this title, is preserved for the benefit of the estate but only
with respect to property of the estate.
[Rev. 5-18-05]
11
USC § 552. Postpetition effect of security interest
(a) Except as provided in subsection (b) of this
section, property acquired by the estate or by the debtor after the
commencement of the case is not subject to any lien resulting from any
security agreement entered into by the debtor before the commencement of the
case.
(b)
(1) Except as provided in sections
363, 506(c),
522,
544,
545,
547,
and 548
of this title, if the debtor and an entity entered into a security agreement
before the commencement of the case and if the security interest created by
such security agreement extends to property of the debtor acquired before
the commencement of the case and to proceeds,
products,
offspring, or profits of such property, then such security interest extends
to such proceeds, products,
offspring, or profits acquired by the estate after the commencement of the
case to the extent provided by such security agreement and by applicable
nonbankruptcy law, except to any extent that the court, after notice and a
hearing and based on the equities of the case, orders otherwise.
(2) Except as provided in sections
363, 506(c),
522,
544,
545,
547,
and 548
of this title, and notwithstanding section
546(b) of this title, if the debtor and an entity entered into a
security agreement before the commencement of the case and if the security
interest created by such security agreement extends to property of the
debtor acquired before the commencement of the case and to amounts paid as
rents of such property or the fees, charges, accounts, or other payments for
the use or occupancy of rooms and other public facilities in hotels, motels,
or other lodging properties, then such security interest extends to such
rents and such fees, charges, accounts, or other payments acquired by the
estate after the commencement of the case to the extent provided in such
security agreement, except to any extent that the court, after notice and a
hearing and based on the equities of the case, orders otherwise.
[Rev. 5-18-05]
11
USC § 553. Setoff
(a) Except as otherwise provided in this section and in sections
362 and 363
of this title, this title does not affect any right of a creditor to offset a
mutual debt owing by such creditor to the debtor that arose before the
commencement of the case under this title against a claim of such creditor
against the debtor that arose before the commencement of the case, except to
the extent that--
(1) the claim of such creditor against the debtor is disallowed;
(2) such claim was transferred, by an entity other than the debtor, to
such creditor--
(A) after the commencement of the case; or
(B)
(i) after 90 days before the date of the filing of the petition; and
(ii) while the debtor was insolvent (except for a
setoff of a kind described in section
362(b)(6), 362(b)(7),
362(b)(17),
362(b)(27),
555,
556,
559, 560,
or 561);
or
(3) the debt owed to the debtor by such creditor was incurred by such
creditor--
(A) after 90 days before the date of the filing of the petition;
(B) while the debtor was insolvent; and
(C) for the purpose of obtaining a right of setoff against the debtor (except
for a setoff of a kind described in section
362(b)(6), 362(b)(7),
362(b)(17),
362(b)(27),
555,
556,
559,
560,
or 561).
(b)
(1) Except with respect to a setoff of a kind described in section
362(b)(6), 362(b)(7), 362(b)(17),
362(b)(27),
555,
556,
559,
560,
561,
365(h),
546(h),
or 365(i)(2)
of this title, if a creditor offsets a mutual debt owing to the debtor
against a claim against the debtor on or within 90 days before the date of
the filing of the petition, then the trustee may recover from such creditor
the amount so offset to the extent that any insufficiency on the date of
such setoff is less than the insufficiency on the later of--
(A) 90 days before the date of the filing of the petition; and
(B) the first date during the 90 days immediately preceding the date of
the filing of the petition on which there is an insufficiency.
(2) In this subsection, “insufficiency” means amount, if any, by
which a claim against the debtor exceeds a mutual debt owing to the debtor
by the holder of such claim.
(c) For the purposes of this section, the debtor is presumed to have been
insolvent on and during the 90 days immediately preceding the date of the
filing of the petition.
[Rev. 5-18-05]
11
USC § 554. Abandonment of property of the estate
(a) After notice and a hearing, the trustee may abandon any property of the
estate that is burdensome to the estate or that is of inconsequential value
and benefit to the estate.
(b) On request of a party in interest and after notice and a hearing, the
court may order the trustee to abandon any property of the estate that is
burdensome to the estate or that is of inconsequential value and benefit to
the estate.
(c) Unless the court orders otherwise, any property scheduled under section
521(1) [sic--reference to previous subsection; now
521(a)(1)] of this title not otherwise administered at the time of the
closing of a case is abandoned to the debtor and administered for purposes of section
350 of this title.
(d) Unless the court orders otherwise, property of the estate that is not
abandoned under this section and that is not administered in the case remains
property of the estate.
[Rev. 5-19-05]
11
USC § 555. Contractual
right to liquidate, terminate, or accelerate a securities contract
The exercise of a contractual right of a stockbroker, financial institution, financial
participant, or securities clearing agency to cause the
liquidation,
termination, or acceleration of a securities contract, as defined in section
741 of this title, because of a condition of the kind specified in section
365(e)(1) of this title shall not be stayed, avoided, or otherwise limited
by operation of any provision of this title or by order of a court or
administrative agency in any proceeding under this title unless such order is
authorized under the provisions of the Securities Investor Protection Act of
1970 or any statute administered by the Securities and Exchange Commission.
As
used in this section, the term "contractual right" includes a right
set forth in a rule or bylaw of a derivatives clearing organization (as defined
in the Commodity Exchange Act), a multilateral clearing organization (as defined
in the Federal Deposit Insurance Corporation Improvement Act of 1991), a
national securities exchange, a national securities association, a securities
clearing agency, a contract market designated under the Commodity Exchange Act,
a derivatives transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the Commodity Exchange Act), or
in a resolution of the governing board thereof, and a right, whether or not in
writing, arising under common law, under law merchant, or by reason of normal
business practice.
[Rev. 5-19-05]
11
USC § 556. Contractual
right to liquidate, terminate, or accelerate a commodities contract or forward
contract
The contractual right of a commodity broker, financial
participant, or forward contract merchant to cause the
liquidation,
termination, or acceleration of a commodity contract, as defined in section
761 of this title, or forward contract because of a condition of the kind
specified in section
365(e)(1) of this title, and the right to a variation or maintenance margin
payment received from a trustee with respect to open commodity contracts or
forward contracts, shall not be stayed, avoided, or otherwise limited by
operation of any provision of this title or by the order of a court in any
proceeding under this title.
As
used in this section, the term "contractual right" includes a right
set forth in a rule or bylaw of a derivatives clearing organization (as defined
in the Commodity Exchange Act), a multilateral clearing organization (as defined
in the Federal Deposit Insurance Corporation Improvement Act of 1991), a
national securities exchange, a national securities association, a securities
clearing agency, a contract market designated under the Commodity Exchange Act,
a derivatives transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the Commodity Exchange Act) or
in a resolution of the governing board thereof and a right, whether or
not evidenced in writing, arising under common law, under law merchant or by
reason of normal business practice.
[Rev. 5-19-05]
11
USC § 557. Expedited determination of interests in, and abandonment
or other disposition of grain assets
(a) This section applies only in a case concerning a
debtor that owns or operates a grain storage facility and only with respect to
grain and the proceeds of grain. This section does not affect the application
of any other section of this title to property other than grain and proceeds
of grain.
(b) In this section--
(1) "grain" means wheat, corn,
flaxseed, grain sorghum, barley, oats, rye, soybeans, other dry edible
beans, or rice;
(2) "grain storage facility" means a
site or physical structure regularly used to store grain for producers, or
to store grain acquired from producers for resale; and
(3) "producer" means an entity which
engages in the growing of grain.
(c)
(1) Notwithstanding sections
362, 363,
365,
and 554
of this title, on the court’s own motion the court may, and on the request
of the trustee or an entity that claims an interest in grain or the proceeds
of grain the court shall, expedite the procedures for the determination of
interests in and the disposition of grain and the proceeds of grain, by
shortening to the greatest extent feasible such time periods as are
otherwise applicable for such procedures and by establishing, by order, a
timetable having a duration of not to exceed 120 days for the completion of
the applicable procedure specified in subsection (d) of this section. Such
time periods and such timetable may be modified by the court, for cause, in
accordance with subsection (f) of this section.
(2) The court shall determine the extent to which
such time periods shall be shortened, based upon--
(A) any need of an entity claiming an interest in such grain or the
proceeds of grain for a prompt determination of such interest;
(B) any need of such entity for a prompt disposition of such grain;
(C) the market for such grain;
(D) the conditions under which such grain is stored;
(E) the costs of continued storage or disposition of such grain;
(F) the orderly administration of the estate;
(G) the appropriate opportunity for an entity to assert an interest in
such grain; and
(H) such other considerations as are relevant to the need to expedite
such procedures in the case.
(d) The procedures that may be expedited under
subsection (c) of this section include--
(1) the filing of and response to--
(A) a claim of ownership;
(B) a proof of claim;
(C) a request for abandonment;
(D) a request for relief from the stay of action against property under
section 362 (a) of this title;
(E) a request for determination of secured status;
(F) a request for determination of whether such grain or the proceeds
of grain--
(i) is property of the estate;
(ii) must be turned over to the estate; or
(iii) may be used, sold, or leased; and
(G) any other request for determination of an interest in such grain or
the proceeds of grain;
(2) the disposition of such grain or the proceeds
of grain, before or after determination of interests in such grain or the
proceeds of grain, by way of--
(A) sale of such grain;
(B) abandonment;
(C) distribution; or
(D) such other method as is equitable in the case;
(3) subject to sections
701, 702,
703,
1104,
1202,
and 1302
of this title, the appointment of a trustee or examiner and the retention
and compensation of any professional person required to assist with respect
to matters relevant to the determination of interests in or disposition of
such grain or the proceeds of grain; and
(4) the determination of any dispute concerning a
matter specified in paragraph (1), (2), or (3) of this subsection.
(e)
(1) Any governmental unit that has regulatory
jurisdiction over the operation or liquidation of the debtor or the
debtor’s business shall be given notice of any request made or order
entered under subsection (c) of this section.
(2) Any such governmental unit may raise, and may
appear and be heard on, any issue relating to grain or the proceeds of grain
in a case in which a request is made, or an order is entered, under
subsection (c) of this section.
(3) The trustee shall consult with such
governmental unit before taking any action relating to the disposition of
grain in the possession, custody, or control of the debtor or the estate.
(f) The court may extend the period for final
disposition of grain or the proceeds of grain under this section beyond 120
days if the court finds that--
(1) the interests of justice so require in light
of the complexity of the case; and
(2) the interests of those claimants entitled to
distribution of grain or the proceeds of grain will not be materially
injured by such additional delay.
(g) Unless an order establishing an expedited
procedure under subsection (c) of this section, or determining any interest in
or approving any disposition of grain or the proceeds of grain, is stayed
pending appeal--
(1) the reversal or modification of such order on
appeal does not affect the validity of any procedure, determination, or
disposition that occurs before such reversal or modification, whether or not
any entity knew of the pendency of the appeal; and
(2) neither the court nor the trustee may delay,
due to the appeal of such order, any proceeding in the case in which such
order is issued.
(h)
(1) The trustee may recover from grain and the
proceeds of grain the reasonable and necessary costs and expenses allowable
under section 503 (b) of this title attributable to preserving or disposing
of grain or the proceeds of grain, but may not recover from such grain or
the proceeds of grain any other costs or expenses.
(2) Notwithstanding section
326(a) of this title, the dollar amounts of money specified in such
section include the value, as of the date of disposition, of any grain that
the trustee distributes in kind.
(i) In all cases where the quantity of a specific type
of grain held by a debtor operating a grain storage facility exceeds ten
thousand bushels, such grain shall be sold by the trustee and the assets
thereof distributed in accordance with the provisions of this section.
[Rev. 5-19-05]
11
USC § 558. Defenses of the estate
The estate shall have the benefit of any defense available to the debtor as
against any entity other than the estate, including statutes of limitation,
statutes of frauds, usury, and other personal defenses. A waiver of any such
defense by the debtor after the commencement of the case does not bind the
estate.
[Rev. 5-19-05]
11
USC § 559. Contractual
right to liquidate, terminate, or accelerate a repurchase agreement
The exercise of a contractual right of a repo participant or
financial participant to cause the
liquidation,
termination, or acceleration of a repurchase agreement because of a
condition of the kind specified in section
365(e)(1) of this title shall not be stayed, avoided, or otherwise limited
by operation of any provision of this title or by order of a court or
administrative agency in any proceeding under this title, unless, where the
debtor is a stockbroker or securities clearing agency, such order is authorized
under the provisions of the Securities Investor Protection Act of 1970 or any
statute administered by the Securities and Exchange Commission. In the event
that a repo participant or financial participant
liquidates one or more repurchase agreements with a debtor and under the terms
of one or more such agreements has agreed to deliver assets subject to
repurchase agreements to the debtor, any excess of the market prices received on
liquidation of such assets (or if any such assets are not disposed of on the
date of liquidation of such repurchase agreements, at the prices available at
the time of liquidation of such repurchase agreements from a generally
recognized source or the most recent closing bid quotation from such a source)
over the sum of the stated repurchase prices and all expenses in connection with
the liquidation of such repurchase agreements shall be deemed property of the
estate, subject to the available rights of setoff.
As
used in this section, the term "contractual right" includes a right
set forth in a rule or bylaw of a derivatives clearing organization (as defined
in the Commodity Exchange Act), a multilateral clearing organization (as defined
in the Federal Deposit Insurance Corporation Improvement Act of 1991), a
national securities exchange, a national securities association, a securities
clearing agency, a contract market designated under the Commodity Exchange Act,
a derivatives transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the Commodity Exchange Act) or
in a resolution of the governing board thereof and a right, whether or
not evidenced in writing, arising under common law, under law merchant or by
reason of normal business practice.
[Rev. 5-19-05]
11
USC § 560. Contractual
right to liquidate, terminate, or accelerate a swap agreement
The exercise of any contractual right of any swap participant or
financial participant to cause the
liquidation,
termination, or acceleration of one or more swap agreements because of a
condition of the kind specified in section
365(e)(1) of this title or to offset or net out any termination values or
payment amounts arising under or
in
connection with the termination, liquidation, or acceleration of one or more
swap agreements shall not be stayed, avoided, or otherwise limited by
operation of any provision of this title or by order of a court or
administrative agency in any proceeding under this title.
As
used in this section, the term "contractual right" includes a right
set forth in a rule or bylaw of a derivatives clearing organization (as defined
in the Commodity Exchange Act), a multilateral clearing organization (as defined
in the Federal Deposit Insurance Corporation Improvement Act of 1991), a
national securities exchange, a national securities association, a securities
clearing agency, a contract market designated under the Commodity Exchange Act,
a derivatives transaction execution facility registered under the Commodity
Exchange Act, or a board of trade (as defined in the Commodity Exchange Act) or
in a resolution of the governing board thereof and a right, whether or
not evidenced in writing, arising under common law, under law merchant, or by
reason of normal business practice.
[Rev. 5-19-05]
11
USC § 561. Contractual right to terminate, liquidate,
accelerate, or offset under a master netting agreement and across contracts;
proceedings under chapter 15
(a) Subject to subsection (b), the exercise of any contractual right,
because of a condition of the kind specified in section
365(e)(1), to cause the termination, liquidation, or acceleration of or to
offset or net termination values, payment amounts, or other transfer
obligations arising under or in connection with one or more (or the
termination, liquidation, or acceleration of one or more)--
(1) securities contracts, as defined in section
741(7);
(2) commodity contracts, as defined in section
761(4);
(3) forward contracts;
(4) repurchase agreements;
(5) swap agreements; or
(6) master netting agreements,
shall not be stayed, avoided, or otherwise limited by operation of any
provision of this title or by any order of a court or administrative agency in
any proceeding under this title.
(b)
(1) A party may exercise a contractual right described in subsection (a)
to terminate, liquidate, or accelerate only to the extent that such party
could exercise such a right under section
555, 556,
559,
or 560
for each individual contract covered by the master netting agreement in
issue.
(2) If a debtor is a commodity broker subject to subchapter IV of chapter
7--
(A) a party may not net or offset an obligation to the debtor arising
under, or in connection with, a commodity contract traded on or subject to
the rules of a contract market designated under the Commodity Exchange Act
or a derivatives transaction execution facility registered under the
Commodity Exchange Act against any claim arising under, or in connection
with, other instruments, contracts, or agreements listed in subsection (a)
except to the extent that the party has positive net equity in the
commodity accounts at the debtor, as calculated under such subchapter; and
(B) another commodity broker may not net or offset an obligation to the
debtor arising under, or in connection with, a commodity contract entered
into or held on behalf of a customer of the debtor and traded on or
subject to the rules of a contract market designated under the Commodity
Exchange Act or a derivatives transaction execution facility registered
under the Commodity Exchange Act against any claim arising under, or in
connection with, other instruments, contracts, or agreements listed in
subsection (a).
(3) No provision of subparagraph (A) or (B) of paragraph (2) shall
prohibit the offset of claims and obligations that arise under--
(A) a cross-margining agreement or similar arrangement that has been
approved by the Commodity Futures Trading Commission or submitted to the
Commodity Futures Trading Commission under paragraph (1) or (2) of section
5c(c) of the Commodity Exchange Act and has not been abrogated or rendered
ineffective by the Commodity Futures Trading Commission; or
(B) any other netting agreement between a clearing organization (as
defined in section 761) and another entity that has been approved by the
Commodity Futures Trading Commission.
(c) As used in this section, the term "contractual right"
includes a right set forth in a rule or bylaw of a derivatives clearing
organization (as defined in the Commodity Exchange Act), a multilateral
clearing organization (as defined in the Federal Deposit Insurance Corporation
Improvement Act of 1991), a national securities exchange, a national
securities association, a securities clearing agency, a contract market
designated under the Commodity Exchange Act, a derivatives transaction
execution facility registered under the Commodity Exchange Act, or a board of
trade (as defined in the Commodity Exchange Act) or in a resolution of the
governing board thereof, and a right, whether or not evidenced in writing,
arising under common law, under law merchant, or by reason of normal business
practice.
(d) Any provisions of this title relating to securities contracts,
commodity contracts, forward contracts, repurchase agreements, swap
agreements, or master netting agreements shall apply in a case under chapter
15, so that enforcement of contractual provisions of such contracts and
agreements in accordance with their terms will not be stayed or otherwise
limited by operation of any provision of this title or by order of a court in
any case under this title, and to limit avoidance powers to the same extent as
in a proceeding under chapter
7 or 11 of
this title (such enforcement not to be limited based on the presence or
absence of assets of the debtor in the United States).
[Rev. 5-19-05]
11
USC § 562. Timing of damage measurement in connection
with swap agreements, securities contracts, forward contracts, commodity
contracts, repurchase agreements, and master netting agreements
(a) If the trustee rejects a swap agreement, securities contract (as
defined in section
741), forward contract, commodity contract (as defined in section
761), repurchase agreement, or master netting agreement pursuant to section
365(a), or if a forward contract merchant, stockbroker, financial
institution, securities clearing agency, repo participant, financial
participant, master netting agreement participant, or swap participant
liquidates, terminates, or accelerates such contract or agreement, damages
shall be measured as of the earlier of--
(1) the date of such rejection; or
(2) the date or dates of such liquidation, termination, or acceleration.
(b) If there are not any commercially reasonable determinants of value as
of any date referred to in paragraph (1) or (2) of subsection (a), damages
shall be measured as of the earliest subsequent date or dates on which there
are commercially reasonable determinants of value.
(c) For the purposes of subsection (b), if damages are not measured as of
the date or dates of rejection, liquidation, termination, or acceleration, and
the forward contract merchant, stockbroker, financial institution, securities
clearing agency, repo participant, financial participant, master netting
agreement participant, or swap participant or the trustee objects to the
timing of the measurement of damages--
(1) the trustee, in the case of an objection by a forward contract
merchant, stockbroker, financial institution, securities clearing agency,
repo participant, financial participant, master netting agreement
participant, or swap participant; or
(2) the forward contract merchant, stockbroker, financial institution,
securities clearing agency, repo participant, financial participant, master
netting agreement participant, or swap participant, in the case of an
objection by the trustee,
has the burden of proving that there were no commercially reasonable
determinants of value as of such date or dates.
[Rev. 5-19-05]
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
§ 723. Rights of
partnership trustee against general partners
§ 724. Treatment of certain
liens
§ 725. Disposition of
certain property
§ 726. Distribution of
property of the estate
§ 727. Discharge
§ 728. Special tax
provisions
Subchapter III. Stockbroker Liquidation
Omitted
Subchapter IV. Commodity Broker Liquidation
Omitted
Subchapter I. Officers and Administration
11
USC § 701. Interim trustee
(a)
(1) Promptly after the order for relief under
this chapter, the United States trustee shall appoint one disinterested
person that is a member of the panel of private trustees established under section
586(a)(1) of title 28 or that is serving as trustee in the case
immediately before the order for relief under this chapter to serve as
interim trustee in the case.
(2) If none of the members of such panel is
willing to serve as interim trustee in the case, then the United States
trustee may serve as interim trustee in the case.
(b) The service of an interim trustee under this
section terminates when a trustee elected or designated under section
702 of this title to serve as trustee in the case qualifies under section
322 of this title.
(c) An interim trustee serving under this section is a
trustee in a case under this title.
[Rev. 5-20-05]
11
USC § 702. Election of trustee
(a) A creditor may vote for a candidate for trustee
only if such creditor--
(1) holds an allowable, undisputed, fixed,
liquidated, unsecured claim of a kind entitled to distribution under section
726(a)(2), 726(a)(3),
726(a)(4),
752(a),
766(h),
or 766(i)
of this title;
(2) does not have an interest materially adverse,
other than an equity interest that is not substantial in relation to such
creditor’s interest as a creditor, to the interest of creditors entitled
to such distribution; and
(3) is not an insider.
(b) At the meeting of creditors held under section
341 of this title, creditors may elect one person to serve as trustee in
the case if election of a trustee is requested by creditors that may vote
under subsection (a) of this section, and that hold at least 20 percent in
amount of the claims specified in subsection (a)(1) of this section that are
held by creditors that may vote under subsection (a) of this section.
(c) A candidate for trustee is elected trustee if--
(1) creditors holding at least 20 percent in
amount of the claims of a kind specified in subsection (a)(1) of this
section that are held by creditors that may vote under subsection (a) of
this section vote; and
(2) such candidate receives the votes of
creditors holding a majority in amount of claims specified in subsection
(a)(1) of this section that are held by creditors that vote for a trustee.
(d) If a trustee is not elected under this section,
then the interim trustee shall serve as trustee in the case.
[Rev. 5-20-05]
11
USC § 703. Successor trustee
(a) If a trustee dies or resigns during a case, fails
to qualify under section
322 of this title, or is removed under section
324 of this title, creditors may elect, in the manner specified in section
702 of this title, a person to fill the vacancy in the office of trustee.
(b) Pending election of a trustee under subsection (a)
of this section, if necessary to preserve or prevent loss to the estate, the
United States trustee may appoint an interim trustee in the manner specified
in section
701(a).
(c) If creditors do not elect a successor trustee
under subsection (a) of this section or if a trustee is needed in a case
reopened under section
350 of this title, then the United States trustee--
(1) shall appoint one disinterested person that is a member of the panel
of private trustees established under section
586(a)(1) of title 28 to serve as trustee in the case; or
(2) may, if none of the disinterested members of such panel is willing to
serve as trustee, serve as trustee in the case.
[Rev. 5-20-05]
11
USC § 704. Duties of trustee
(a) The trustee shall--
(1) collect and reduce to money the property of
the estate for which such trustee serves, and close such estate as
expeditiously as is compatible with the best interests of parties in
interest;
(2) be accountable for all property received;
(3) ensure that the debtor shall perform his
intention as specified in section
521(2)(B) [sic--reference to previous subsection; now
521(a)(2)(B)] of this title;
(4) investigate the financial affairs of the
debtor;
(5) if a purpose would be served, examine proofs
of claims and object to the allowance of any claim that is improper;
(6) if advisable, oppose the discharge of the
debtor;
(7) unless the court orders otherwise, furnish
such information concerning the estate and the estate’s administration as
is requested by a party in interest;
(8) if the business of the debtor is authorized
to be operated, file with the court, with the United States trustee, and
with any governmental unit charged with responsibility for collection or
determination of any tax arising out of such operation, periodic reports and
summaries of the operation of such business, including a statement of
receipts and disbursements, and such other information as the United States
trustee or the court requires;
(9) make a final report and file a final account
of the administration of the estate with the court and with the United
States trustee;
(10) if with respect to the
debtor there is a claim for a domestic support obligation, provide the
applicable notice specified in subsection
(c);
(11) if, at the time of the
commencement of the case, the debtor (or any entity designated by the
debtor) served as the administrator (as defined in section 3 of the Employee
Retirement Income Security Act of 1974) of an employee benefit plan,
continue to perform the obligations required of the administrator; and
(12) use all reasonable and best
efforts to transfer patients from a health care business that is in the
process of being closed to an appropriate health care business that--
(A) is in the vicinity of the health care business that
is closing;
(B) provides the patient with services that are
substantially similar to those provided by the health care business that
is in the process of being closed; and
(C) maintains a reasonable quality of care.
(b)
(1) With respect to a debtor who
is an individual in a case under this chapter--
(A) the United States trustee (or the bankruptcy
administrator, if any) shall review all materials filed by the debtor and,
not later than 10 days after the date of the first meeting of creditors,
file with the court a statement as to whether the debtor's case would be
presumed to be an abuse under section
707(b); and
(B) not later than 5 days after receiving a statement
under subparagraph (A), the court shall provide a copy of the statement to
all creditors.
(2) The United States trustee (or
bankruptcy administrator, if any) shall, not later than 30 days after the
date of filing a statement under paragraph (1), either file a motion to
dismiss or convert under section
707(b) or file a statement setting forth the reasons the United States
trustee (or the bankruptcy administrator, if any) does not consider such a
motion to be appropriate, if the United States trustee (or the bankruptcy
administrator, if any) determines that the debtor's case should be presumed
to be an abuse under section
707(b) and the product of the debtor's current monthly income,
multiplied by 12 is not less than--
(A) in the case of a debtor in a household of 1 person,
the median family income of the applicable State for 1 earner; or
(B) in the case of a debtor in a household of 2 or more
individuals, the highest median family income of the applicable State for
a family of the same number or fewer individuals.
(c)
(1) In a case described in subsection
(a)(10) to which subsection
(a)(10) applies, the trustee shall--
(A)
(i) provide written notice to the holder of the claim
described in subsection
(a)(10) of such claim and of the right of such holder to use the
services of the State child support enforcement agency established under
sections 464 and 466 of the Social Security Act for the State in which
such holder resides, for assistance in collecting child support during
and after the case under this title;
(ii) include in the notice provided under clause (i)
the address and telephone number of such State child support enforcement
agency; and
(iii) include in the notice provided under clause (i)
an explanation of the rights of such holder to payment of such claim
under this chapter;
(B)
(i) provide written notice to such State child
support enforcement agency of such claim; and
(ii) include in the notice provided under clause (i)
the name, address, and telephone number of such holder; and
(C) at such time as the debtor is granted a discharge
under section
727, provide written notice to such holder and to such State child
support enforcement agency of--
(i) the granting of the discharge;
(ii) the last recent known address of the debtor;
(iii) the last recent known name and address of the
debtor's employer; and
(iv) the name of each creditor that holds a claim
that--
(I) is not discharged under paragraph
(2), (4),
or (14A)
of section
523(a); or
(II) was reaffirmed by the debtor under section
524(c).
(2)
(A) The holder of a claim described in subsection
(a)(10) or the State child support enforcement agency of the State in
which such holder resides may request from a creditor described in paragraph
(1)(C)(iv) the last known address of the debtor.
(B) Notwithstanding any other provision of law, a
creditor that makes a disclosure of a last known address of a debtor in
connection with a request made under subparagraph (A) shall not be liable
by reason of making such disclosure.
[Rev. 5-20-05]
11
USC § 705. Creditors’ committee
(a) At the meeting under section
341(a) of this title, creditors that may vote for a trustee under section
702(a) of this title may elect a committee of not fewer than three, and
not more than eleven, creditors, each of whom holds an allowable unsecured
claim of a kind entitled to distribution under section
726(a)(2) of this title.
(b) A committee elected under subsection (a) of this section may consult
with the trustee or the United States trustee in connection with the
administration of the estate, make recommendations to the trustee or the
United States trustee respecting the performance of the trustee’s duties,
and submit to the court or the United States trustee any question affecting
the administration of the estate.
[Rev. 5-20-05]
11
USC § 706. Conversion
(a) The debtor may convert a case under this chapter to a case under chapter
11, 12,
or 13
of this title at any time, if the case has not been converted under section
1112, 1208,
or 1307
of this title. Any waiver of the right to convert a case under this subsection
is unenforceable.
(b) On request of a party in interest and after notice and a hearing, the
court may convert a case under this chapter to a case under chapter
11 of this title at any time.
(c) The court may not convert a case under this chapter to a case under chapter
12 or 13
of this title unless the debtor requests or consents to
such conversion.
(d) Notwithstanding any other provision of this section, a case may not be
converted to a case under another chapter of this title unless the debtor may
be a debtor under such chapter.
[Rev. 5-20-05]
11
USC § 707. Dismissal of a case or conversion to a
case under chapter 11 or 13
(a) The court may dismiss a case under this chapter
only after notice and a hearing and only for cause, including--
(1) unreasonable delay by the debtor that is
prejudicial to creditors;
(2) nonpayment of any fees or charges required
under chapter
123 of title 28; and
(3) failure of the debtor in a voluntary case to
file, within fifteen days or such additional time as the court may allow
after the filing of the petition commencing such case, the information
required by paragraph
(1) [sic--reference to previous paragraph number; now
paragraph (a)(1)] of section
521, but only on a motion by the United States trustee.
(b)
(1) After notice and a
hearing, the court, on its own motion or on a motion by the United States
trustee,
trustee
(or bankruptcy administrator, if any), or any party in interest, may
dismiss a case filed by an individual debtor under this chapter whose debts
are primarily consumer debts, or, with the debtor's consent,
convert such a case to a case under chapter 11 or 13 of this title,
if it finds that the granting of relief would be
an
abuse of the provisions of this chapter.
In
making a determination whether to dismiss a case under this section, the
court may not take into consideration whether a debtor has made, or
continues to make, charitable contributions (that meet the definition of
"charitable contribution" under section
548(d)(3)) to any qualified religious or charitable entity or
organization (as that term is defined in section
548(d)(4)).
(2)
(A)
(i) In considering under paragraph
(1) whether the granting of relief would be an abuse of the
provisions of this chapter, the court shall presume abuse exists if the
debtor's current monthly income reduced by the amounts determined under clauses
(ii), (iii),
and (iv),
and multiplied by 60 is not less than the lesser of--
(I) 25 percent of the debtor's
nonpriority unsecured claims in the case, or $6,000 [],
whichever is greater; or
(II) $10,000 [].
(ii)
(I) The debtor's monthly expenses
shall be the debtor's applicable monthly expense amounts specified
under the National
Standards and Local
Standards, and the debtor's actual monthly expenses for the
categories specified as Other
Necessary Expenses issued by the Internal
Revenue Service for the area in which the debtor resides, as in
effect on the date of the order for relief, for the debtor, the
dependents of the debtor, and the spouse of the debtor in a joint
case, if the spouse is not otherwise a dependent. Such expenses shall
include reasonably necessary health insurance, disability insurance,
and health savings account expenses for the debtor, the spouse of the
debtor, or the dependents of the debtor. Notwithstanding any other
provision of this clause, the monthly expenses of the debtor shall not
include any payments for debts. In addition, the debtor's monthly
expenses shall include the debtor's reasonably necessary expenses
incurred to maintain the safety of the debtor and the family of the
debtor from family violence as identified under section
309 of the Family Violence Prevention and Services Act, or other
applicable Federal law. The expenses included in the debtor's monthly
expenses described in the preceding sentence shall be kept
confidential by the court. In addition, if it is demonstrated that it
is reasonable and necessary, the debtor's monthly expenses may also
include an additional allowance for food and clothing of up to 5
percent of the food and clothing categories as specified by the
National Standards issued by the Internal Revenue Service.
(II) In addition, the debtor's
monthly expenses may include, if applicable, the continuation of
actual expenses paid by the debtor that are reasonable and necessary
for care and support of an elderly, chronically ill, or disabled
household member or member of the debtor's immediate family (including
parents, grandparents, siblings, children, and grandchildren of the
debtor, the dependents of the debtor, and the spouse of the debtor in
a joint case who is not a dependent) and who is unable to pay for such
reasonable and necessary expenses.
(III) In addition, for a debtor
eligible for chapter 13, the debtor's monthly expenses may include the
actual administrative expenses of administering a chapter 13 plan for
the district in which the debtor resides, up to an amount of 10
percent of the projected plan payments, as determined under schedules
issued by the Executive
Office for United States Trustees.
(IV) In addition, the debtor's
monthly expenses may include the actual expenses for each dependent
child less than 18 years of age, not to exceed $1,500 []
per year per child, to attend a private or public elementary or
secondary school if the debtor provides documentation of such expenses
and a detailed explanation of why such expenses are reasonable and
necessary, and why such expenses are not already accounted for in the National
Standards, Local
Standards, or Other
Necessary Expenses referred to in subclause
(I).
(V) In addition, the debtor's
monthly expenses may include an allowance for housing and utilities,
in excess of the allowance specified by the Local Standards for
housing and utilities issued by the Internal Revenue Service, based on
the actual expenses for home energy costs if the debtor provides
documentation of such actual expenses and demonstrates that such
actual expenses are reasonable and necessary.
(iii) The debtor's average monthly
payments on account of secured debts shall be calculated as the sum of--
(I) the total of all amounts
scheduled as contractually due to secured creditors in each month of
the 60 months following the date of the petition; and
(II) any additional payments to
secured creditors necessary for the debtor, in filing a plan under chapter
13 of this title, to maintain possession of the debtor's primary
residence, motor vehicle, or other property necessary for the support
of the debtor and the debtor's dependents, that serves as collateral
for secured debts;
divided by 60.
(iv) The debtor's expenses for payment
of all priority claims (including priority child support and alimony
claims) shall be calculated as the total amount of debts entitled to
priority, divided by 60.
(B)
(i) In any proceeding brought under
this subsection, the presumption of abuse may only be rebutted by
demonstrating special circumstances, such as a serious medical condition
or a call or order to active duty in the Armed Forces, to the extent
such special circumstances that justify additional expenses or
adjustments of current monthly income for which there is no reasonable
alternative.
(ii) In order to establish special
circumstances, the debtor shall be required to itemize each additional
expense or adjustment of income and to provide--
(I) documentation for such
expense or adjustment to income; and
(II) a detailed explanation of
the special circumstances that make such expenses or adjustment to
income necessary and reasonable.
(iii) The debtor shall attest under
oath to the accuracy of any information provided to demonstrate that
additional expenses or adjustments to income are required.
(iv) The presumption of abuse may only
be rebutted if the additional expenses or adjustments to income referred
to in clause
(i) cause the product of the debtor's current monthly income reduced
by the amounts determined under clauses
(ii), (iii),
and (iv)
of subparagraph (A) when multiplied by 60 to be less than the lesser
of--
(I) 25 percent of the debtor's
nonpriority unsecured claims, or $6,000 [],
whichever is greater; or
(II) $10,000 [].
(C) As part of the schedule of current
income and expenditures required under section
521, the debtor shall include a statement of the debtor's current
monthly income, and the calculations that determine whether a presumption
arises under subparagraph
(A)(i), that show how each such amount is calculated.
(D) Subparagraphs (A) through (C) shall not
apply, and the court may not dismiss or convert a case based on any form
of means testing, if the debtor is a disabled veteran (as defined in section
3741(1) of title 38), and the indebtedness occurred primarily during a
period during which he or she was--
(i) on active duty (as defined in section
101(d)(1) of title 10); or
(ii) performing a homeland defense
activity (as defined in section
901(1) of title 32).
(3) In considering under paragraph (1) whether
the granting of relief would be an abuse of the provisions of this chapter
in a case in which the presumption in subparagraph (A)(i) of such paragraph
does not arise or is rebutted, the court shall consider--
(A) whether the debtor filed the petition in
bad faith; or
(B) the totality of the circumstances
(including whether the debtor seeks to reject a personal services contract
and the financial need for such rejection as sought by the debtor) of the
debtor's financial situation demonstrates abuse.
(4)
(A) The court, on its own initiative or on
the motion of a party in interest, in accordance with the procedures
described in rule
9011 of the Federal Rules of Bankruptcy Procedure, may order the
attorney for the debtor to reimburse the trustee for all reasonable costs
in prosecuting a motion filed under section
707(b), including reasonable attorneys' fees, if--
(i) a trustee files a motion for
dismissal or conversion under this subsection; and
(ii) the court--
(I) grants such motion; and
(II) finds that the action of
the attorney for the debtor in filing a case under this chapter
violated rule
9011 of the Federal Rules of Bankruptcy Procedure.
(B) If the court finds that the attorney for
the debtor violated rule
9011 of the Federal Rules of Bankruptcy Procedure, the court, on its
own initiative or on the motion of a party in interest, in accordance with
such procedures, may order--
(i) the assessment of an appropriate
civil penalty against the attorney for the debtor; and
(ii) the payment of such civil penalty
to the trustee, the United States trustee (or the bankruptcy
administrator, if any).
(C) The signature of an attorney on a
petition, pleading, or written motion shall constitute a certification
that the attorney has--
(i) performed a reasonable
investigation into the circumstances that gave rise to the petition,
pleading, or written motion; and
(ii) determined that the petition,
pleading, or written motion--
(I) is well grounded in fact; and
(II) is warranted by existing
law or a good faith argument for the extension, modification, or
reversal of existing law and does not constitute an abuse under
paragraph (1).
(D) The signature of an attorney on the
petition shall constitute a certification that the attorney has no
knowledge after an inquiry that the information in the schedules filed
with such petition is incorrect.
(5)
(A) Except as provided in subparagraph (B)
and subject to paragraph (6), the court, on its own initiative or on the
motion of a party in interest, in accordance with the procedures described
in rule
9011 of the Federal Rules of Bankruptcy Procedure, may award a debtor
all reasonable costs (including reasonable attorneys' fees) in contesting
a motion filed by a party in interest (other than a trustee or United
States trustee (or bankruptcy administrator, if any)) under this
subsection if--
(i) the court does not grant the
motion; and
(ii) the court finds that--
(I) the position of the party
that filed the motion violated rule
9011 of the Federal Rules of Bankruptcy Procedure; or
(II) the attorney (if any) who
filed the motion did not comply with the requirements of clauses (i)
and (ii) of paragraph (4)(C), and the motion was made solely for the
purpose of coercing a debtor into waiving a right guaranteed to the
debtor under this title.
(B) A small business that has a claim of an
aggregate amount less than $1,000 []
shall not be subject to subparagraph (A)(ii)(I).
(C) For purposes of this paragraph--
(i) the term "small business"
means an unincorporated business, partnership, corporation, association,
or organization that--
(I) has fewer than 25 full-time
employees as determined on the date on which the motion is filed; and
(II) is engaged in commercial or
business activity; and
(ii) the number of employees of a
wholly owned subsidiary of a corporation includes the employees of--
(I) a parent corporation; and
(II) any other subsidiary
corporation of the parent corporation.
(6) Only the judge or United States trustee (or
bankruptcy administrator, if any) may file a motion under section 707(b), if
the current monthly income of the debtor, or in a joint case, the debtor and
the debtor's spouse, as of the date of the order for relief, when multiplied
by 12, is equal to or less than--
(A) in the case of a debtor in a household
of 1 person, the median family income of the applicable State for 1
earner;
(B) in the case of a debtor in a household
of 2, 3, or 4 individuals, the highest median family income of the
applicable State for a family of the same number or fewer individuals; or
(C) in the case of a debtor in a household
exceeding 4 individuals, the highest median family income of the
applicable State for a family of 4 or fewer individuals, plus $525 []
per month for each individual in excess of 4.
(7)
(A) No judge, United States trustee (or
bankruptcy administrator, if any), trustee, or other party in interest may
file a motion under paragraph (2) if the current monthly income of the
debtor, including a veteran (as that term is defined in section 101 of
title 38), and the debtor's spouse combined, as of the date of the order
for relief when multiplied by 12, is equal to or less than--
(i) in the case of a debtor in a
household of 1 person, the median family income of the applicable State
for 1 earner;
(ii) in the case of a debtor in a
household of 2, 3, or 4 individuals, the highest median family income of
the applicable State for a family of the same number or fewer
individuals; or
(iii) in the case of a debtor in a
household exceeding 4 individuals, the highest median family income of
the applicable State for a family of 4 or fewer individuals, plus $525 []
per month for each individual in excess of 4.
(B) In a case that is not a joint case,
current monthly income of the debtor's spouse shall not be considered for
purposes of subparagraph (A) if--
(i)
(I) the debtor and the debtor's
spouse are separated under applicable nonbankruptcy law; or
(II) the debtor and the debtor's
spouse are living separate and apart, other than for the purpose of
evading subparagraph (A); and
(ii) the debtor files a statement
under penalty of perjury--
(I) specifying that the debtor
meets the requirement of subclause (I) or (II) of clause (i); and
(II) disclosing the aggregate,
or best estimate of the aggregate, amount of any cash or money
payments received from the debtor's spouse attributed to the debtor's
current monthly income.
[Dollar amounts in subsection 707(b) are adjusted on
April 1 every 3 years by section
104. Adjusted amounts effective
are in brackets.]
(c)
(1) In this subsection--
(A) the term "crime of violence"
has the meaning given such term in section
16 of title 18; and
(B) the term "drug trafficking
crime" has the meaning given such term in section
924(c)(2) of title 18.
(2) Except as provided in paragraph (3), after
notice and a hearing, the court, on a motion by the victim of a crime of
violence or a drug trafficking crime, may when it is in the best interest
of the victim dismiss a voluntary case filed under this chapter by a
debtor who is an individual if such individual was convicted of such
crime.
(3) The court may not dismiss a case under
paragraph (2) if the debtor establishes by a preponderance of the evidence
that the filing of a case under this chapter is necessary to satisfy a
claim for a domestic support obligation.
[Rev. 5-20-05]
Subchapter II. Collection, Liquidation, and Distribution of the
Estate
11
USC § 721. Authorization to operate business
The court may authorize the trustee to operate the business of the debtor for
a limited period, if such operation is in the best interest of the estate and
consistent with the orderly liquidation of the estate.
[Rev. 5-20-05]
11
USC § 722. Redemption
An individual debtor may, whether or not the debtor has waived the right to
redeem under this section, redeem tangible personal property intended primarily
for personal, family, or household use, from a lien securing a dischargeable
consumer debt, if such property is exempted under section
522 of this title or has been abandoned under section
554 of this title, by paying the holder of such lien the amount of the
allowed secured claim of such holder that is secured by such lien in
full at the time of redemption.
[Rev. 5-20-05]
11
USC § 723. Rights of partnership trustee against general partners
(a) If there is a deficiency of property of the estate to pay in full all
claims which are allowed in a case under this chapter concerning a partnership
and with respect to which a general partner of the partnership is personally
liable, the trustee shall have a claim against such general partner to the
extent that under applicable nonbankruptcy law such general partner is
personally liable for such deficiency.
(b) To the extent practicable, the trustee shall first seek recovery of
such deficiency from any general partner in such partnership that is not a
debtor in a case under this title. Pending determination of such deficiency,
the court may order any such partner to provide the estate with indemnity for,
or assurance of payment of, any deficiency recoverable from such partner, or
not to dispose of property.
(c) Notwithstanding section
728(c) [sic--Section 728 was deleted by BAPCPA]
of this title, the trustee has a claim against the estate of each general
partner in such partnership that is a debtor in a case under this title for
the full amount of all claims of creditors allowed in the case concerning such
partnership. Notwithstanding section
502 of this title, there shall not be allowed in such partner’s case a
claim against such partner on which both such partner and such partnership are
liable, except to any extent that such claim is secured only by property of
such partner and not by property of such partnership. The claim of the trustee
under this subsection is entitled to distribution in such partner’s case
under section
726(a) of this title the same as any other claim of a kind specified in
such section.
(d) If the aggregate that the trustee recovers from the estates of general
partners under subsection (c) of this section is greater than any deficiency
not recovered under subsection (b) of this section, the court, after notice
and a hearing, shall determine an equitable distribution of the surplus so
recovered, and the trustee shall distribute such surplus to the estates of the
general partners in such partnership according to such determination.
[Rev. 5-20-05]
11
USC § 724. Treatment of certain liens
(a) The trustee may avoid a lien that secures a claim of a kind specified
in section
726(a)(4) of this title.
(b) Property in which the estate has an interest and that is subject to a
lien that is not avoidable under this title and that secures an allowed claim
for a tax, or proceeds of such property, shall be distributed--
(1) first, to any holder of an allowed claim secured by a lien on such
property that is not avoidable under this title and that is senior to such
tax lien;
(2) second, to any holder of a claim of a kind specified in section
507(a)(1), 507(a)(2),
507(a)(3),
507(a)(4),
507(a)(5),
507(a)(6),
or 507(a)(7)
of this title, to the extent of the amount of such allowed tax claim that is
secured by such tax lien;
(3) third, to the holder of such tax lien, to any extent that such
holder’s allowed tax claim that is secured by such tax lien exceeds any
amount distributed under paragraph (2) of this subsection;
(4) fourth, to any holder of an allowed claim secured by a lien on such
property that is not avoidable under this title and that is junior to such
tax lien;
(5) fifth, to the holder of such tax lien, to the extent that such
holder’s allowed claim secured by such tax lien is not paid under
paragraph (3) of this subsection; and
(6) sixth, to the estate.
(c) If more than one holder of a claim is entitled to distribution under a
particular paragraph of subsection (b) of this section, distribution to such
holders under such paragraph shall be in the same order as distribution to
such holders would have been other than under this section.
(d) A statutory lien the priority of which is determined in the same manner
as the priority of a tax lien under section
6323 of the Internal Revenue Code of 1986 shall be treated under
subsection (b) of this section the same as if such lien were a tax lien.
[Rev. 5-23-05]
11
USC § 725. Distribution of property of the estate
(a) Except as provided in section
510 of this title, property of the estate shall be distributed--
(1) first, in payment of claims of the kind specified in, and in the
order specified in, section
507 of this title, proof of which is timely filed under section
501 of this title or tardily filed before the date on which the trustee
commences distribution under this section;
(2) second, in payment of any allowed unsecured claim, other than a claim
of a kind specified in paragraph (1), (3), or (4) of this subsection, proof
of which is--
(A) timely filed under section
501(a) of this title;
(B) timely filed under section
501(b) or 501(c)
of this title; or
(C) tardily filed under section
501(a) of this title, if--
(i) the creditor that holds such claim did not have notice or actual
knowledge of the case in time for timely filing of a proof of such claim
under section
501(a) of this title; and
(ii) proof of such claim is filed in time to permit payment of such
claim;
(3) third, in payment of any allowed unsecured claim proof of which is
tardily filed under section
501(a) of this title, other than a claim of the kind specified in
paragraph (2)(C) of this subsection;
(4) fourth, in payment of any allowed claim, whether secured or
unsecured, for any fine, penalty, or forfeiture, or for multiple, exemplary,
or punitive damages, arising before the earlier of the order for relief or
the appointment of a trustee, to the extent that such fine, penalty,
forfeiture, or damages are not compensation for actual pecuniary loss
suffered by the holder of such claim;
(5) fifth, in payment of interest at the legal rate from the date of the
filing of the petition, on any claim paid under paragraph (1), (2), (3), or
(4) of this subsection; and
(6) sixth, to the debtor.
(b) Payment on claims of a kind specified in paragraph
(1), (2),
(3),
(4),
(5),
(6),
(7),
or (8)
of section
507(a) of this title, or in paragraph (2), (3), (4), or (5) of subsection
(a) of this section, shall be made pro rata among claims of the kind specified
in each such particular paragraph, except that in a case that has been
converted to this chapter under section
1009, 1112,
1208,
or 1307
of this title, a claim allowed under section
503(b) of this title incurred under this chapter after such conversion has
priority over a claim allowed under section
503(b) of this title incurred under any other chapter of this title or
under this chapter before such conversion and over any expenses of a custodian
superseded under section
543 of this title.
(c) Notwithstanding subsections (a) and (b) of this section, if there is
property of the kind specified in section
541(a)(2) of this title, or proceeds of such property, in the estate, such
property or proceeds shall be segregated from other property of the estate,
and such property or proceeds and other property of the estate shall be
distributed as follows:
(1) Claims allowed under section
503 of this title shall be paid either from property of the kind
specified in section
541(a)(2) of this title, or from other property of the estate, as the
interest of justice requires.
(2) Allowed claims, other than claims allowed under section
503 of this title, shall be paid in the order specified in subsection
(a) of this section, and, with respect to claims of a kind specified in a
particular paragraph of section
507 of this title or subsection (a) of this section, in the following
order and manner:
(A) First, community claims against the debtor or the debtor’s spouse
shall be paid from property of the kind specified in section
541(a)(2) of this title, except to the extent that such property is
solely liable for debts of the debtor.
(B) Second, to the extent that community claims against the debtor are
not paid under subparagraph (A) of this paragraph, such community claims
shall be paid from property of the kind specified in section
541(a)(2) of this title that is solely liable for debts of the debtor.
(C) Third, to the extent that all claims against the debtor including
community claims against the debtor are not paid under subparagraph (A) or
(B) of this paragraph such claims shall be paid from property of the
estate other than property of the kind specified in section
541(a)(2) of this title.
(D) Fourth, to the extent that community claims against the debtor or
the debtor’s spouse are not paid under subparagraph (A), (B), or (C) of
this paragraph, such claims shall be paid from all remaining property of
the estate.
[Rev. 5-23-05]
11
USC § 726. Distribution of property of the estate
(a) Except as provided in section
510 of this title, property of the estate shall be distributed--
(1) first, in payment of claims of the kind specified in, and in the
order specified in, section
507 of this title, proof of which is timely filed under section
501 of this title or tardily filed
on
or before the earlier of--
(A) the date that is 10 days after the mailing to
creditors of the summary of the trustee's final report; or
(B) the date on which the trustee commences final
distribution under this section;
(2) second, in payment of any allowed unsecured claim, other than a claim
of a kind specified in paragraph (1), (3), or (4) of this subsection, proof
of which is--
(A) timely filed under section
501(a) of this title;
(B) timely filed under section
501(b) or 501(c)
of this title; or
(C) tardily filed under section 501 (a) of this title, if--
(i) the creditor that holds such claim did not have notice or actual
knowledge of the case in time for timely filing of a proof of such claim
under section
501(a) of this title; and
(ii) proof of such claim is filed in time to permit payment of such
claim;
(3) third, in payment of any allowed unsecured claim proof of which is
tardily filed under section
501(a) of this title, other than a claim of the kind specified in
paragraph (2)(C) of this subsection;
(4) fourth, in payment of any allowed claim, whether secured or
unsecured, for any fine, penalty, or forfeiture, or for multiple, exemplary,
or punitive damages, arising before the earlier of the order for relief or
the appointment of a trustee, to the extent that such fine, penalty,
forfeiture, or damages are not compensation for actual pecuniary loss
suffered by the holder of such claim;
(5) fifth, in payment of interest at the legal rate from the date of the
filing of the petition, on any claim paid under paragraph (1), (2), (3), or
(4) of this subsection; and
(6) sixth, to the debtor.
(b) Payment on claims of a kind specified in paragraph
(1), (2),
(3),
(4),
(5),
(6),
(7),
or (8)
of section
507(a) of this title, or in paragraph (2), (3), (4), or (5) of subsection
(a) of this section, shall be made pro rata among claims of the kind specified
in each such particular paragraph, except that in a case that has been
converted to this chapter under
section
1112, 1208,
or 1307
of this title, a claim allowed under section
503(b) of this title incurred under this chapter after such conversion has
priority over a claim allowed under section
503(b) of this title incurred under any other chapter of this title or
under this chapter before such conversion and over any expenses of a custodian
superseded under section
543 of this title.
(c) Notwithstanding subsections (a) and (b) of this section, if there is
property of the kind specified in section
541(a)(2) of this title, or proceeds of such property, in the estate, such
property or proceeds shall be segregated from other property of the estate,
and such property or proceeds and other property of the estate shall be
distributed as follows:
(1) Claims allowed under section 503 of this title shall be paid either
from property of the kind specified in section
541(a)(2) of this title, or from other property of the estate, as the
interest of justice requires.
(2) Allowed claims, other than claims allowed under section
503 of this title, shall be paid in the order specified in subsection
(a) of this section, and, with respect to claims of a kind specified in a
particular paragraph of section
507 of this title or subsection (a) of this section, in the following
order and manner:
(A) First, community claims against the debtor or the debtor’s spouse
shall be paid from property of the kind specified in section
541(a)(2) of this title, except to the extent that such property is
solely liable for debts of the debtor.
(B) Second, to the extent that community claims against the debtor are
not paid under subparagraph (A) of this paragraph, such community claims
shall be paid from property of the kind specified in section
541(a)(2) of this title that is solely liable for debts of the debtor.
(C) Third, to the extent that all claims against the debtor including
community claims against the debtor are not paid under subparagraph (A) or
(B) of this paragraph such claims shall be paid from property of the
estate other than property of the kind specified in section
541(a)(2) of this title.
(D) Fourth, to the extent that community claims against the debtor or
the debtor’s spouse are not paid under subparagraph (A), (B), or (C) of
this paragraph, such claims shall be paid from all remaining property of
the estate.
[Rev. 5-23-05]
11
USC § 727. Discharge
(a) The court shall grant the debtor a discharge,
unless--
(1) the debtor is not an individual;
(2) the debtor, with intent to hinder, delay, or
defraud a creditor or an officer of the estate charged with custody of
property under this title, has transferred, removed, destroyed, mutilated,
or concealed, or has permitted to be transferred, removed, destroyed,
mutilated, or concealed--
(A) property of the debtor, within one year before the date of the
filing of the petition; or
(B) property of the estate, after the date of the filing of the
petition;
(3) the debtor has concealed, destroyed,
mutilated, falsified, or failed to keep or preserve any recorded
information, including books, documents, records, and papers, from which the
debtor’s financial condition or business transactions might be
ascertained, unless such act or failure to act was justified under all of
the circumstances of the case;
(4) the debtor knowingly and fraudulently, in or
in connection with the case--
(A) made a false oath or account;
(B) presented or used a false claim;
(C) gave, offered, received, or attempted to obtain money, property, or
advantage, or a promise of money, property, or advantage, for acting or
forbearing to act; or
(D) withheld from an officer of the estate entitled to possession under
this title, any recorded information, including books, documents, records,
and papers, relating to the debtor’s property or financial affairs;
(5) the debtor has failed to explain
satisfactorily, before determination of denial of discharge under this
paragraph, any loss of assets or deficiency of assets to meet the debtor’s
liabilities;
(6) the debtor has refused, in the case--
(A) to obey any lawful order of the court, other than an order to
respond to a material question or to testify;
(B) on the ground of privilege against self-incrimination, to respond
to a material question approved by the court or to testify, after the
debtor has been granted immunity with respect to the matter concerning
which such privilege was invoked; or
(C) on a ground other than the properly invoked privilege against
self-incrimination, to respond to a material question approved by the
court or to testify;
(7) the debtor has committed any act specified in
paragraph (2), (3), (4), (5), or (6) of this subsection, on or within one
year before the date of the filing of the petition, or during the case, in
connection with another case, under this title or under the Bankruptcy Act,
concerning an insider;
(8) the debtor has been granted a discharge under
this section, under section
1141 of this title, or under section 14, 371, or 476 of the Bankruptcy
Act, in a case commenced within 8
years before the date of the filing of the petition;
(9) the debtor has been granted a discharge under
section
1228 or 1328
of this title, or under section 660 or 661 of the Bankruptcy Act, in a case
commenced within six years before the date of the filing of the petition,
unless payments under the plan in such case totaled at least--
(A) 100 percent of the allowed unsecured claims in such case; or
(B)
(i) 70 percent of such claims; and
(ii) the plan was proposed by the debtor in good faith, and was the
debtor's best effort;
(10) the court approves a written waiver of
discharge executed by the debtor after the order for relief under this
chapter;
(11) after filing the petition,
the debtor failed to complete an instructional course concerning personal
financial management described in section
111, except that this paragraph shall not apply with respect to a debtor
who is a person described in section
109(h)(4) or who resides in a district for which the United States
trustee (or the bankruptcy administrator, if any) determines that the
approved instructional courses are not adequate to service the additional
individuals who would otherwise be required to complete such instructional
courses under this section (The United States trustee (or the bankruptcy
administrator, if any) who makes a determination described in this paragraph
shall review such determination not later than 1 year after the date of such
determination, and not less frequently than annually thereafter.); or
(12) the court after notice and
a hearing held not more than 10 days before the date of the entry of the
order granting the discharge finds that there is reasonable cause to believe
that--
(A) section
522(q)(1) may be applicable to the debtor; and
(B) there is pending any proceeding in which the debtor
may be found guilty of a felony of the kind described in section
522(q)(1)(A) or liable for a debt of the kind described in section
522(q)(1)(B).
(b) Except as provided in section
523 of this title, a discharge under subsection (a) of this section
discharges the debtor from all debts that arose before the date of the order
for relief under this chapter, and any liability on a claim that is determined
under section
502 of this title as if such claim had arisen before the commencement of
the case, whether or not a proof of claim based on any such debt or liability
is filed under section
501 of this title, and whether or not a claim based on any such debt or
liability is allowed under section
502 of this title.
(c)
(1) The trustee, a creditor, or the United States
trustee may object to the granting of a discharge under subsection (a) of
this section.
(2) On request of a party in interest, the court
may order the trustee to examine the acts and conduct of the debtor to
determine whether a ground exists for denial of discharge.
(d) On request of the trustee, a creditor, or the
United States trustee, and after notice and a hearing, the court shall revoke
a discharge granted under subsection (a) of this section if--
(1) such discharge was obtained through the fraud
of the debtor, and the requesting party did not know of such fraud until
after the granting of such discharge;
(2) the debtor acquired property that is property
of the estate, or became entitled to acquire property that would be property
of the estate, and knowingly and fraudulently failed to report the
acquisition of or entitlement to such property, or to deliver or surrender
such property to the trustee;
(3) the debtor committed an act specified in
subsection (a)(6) of this section;
or
(4) the debtor has failed to
explain satisfactorily--
(A) a material misstatement in an audit referred to in section
586(f) of title 28; or
(B) a failure to make available for inspection all
necessary accounts, papers, documents, financial records, files, and all
other papers, things, or property belonging to the debtor that are
requested for an audit referred to in section
586(f) of title 28.
(e) The trustee, a creditor, or the United States
trustee may request a revocation of a discharge--
(1) under subsection (d)(1) of this section
within one year after such discharge is granted; or
(2) under subsection (d)(2) or (d)(3) of this
section before the later of--
(A) one year after the granting of such discharge; and
(B) the date the case is closed.
[Rev. 5-23-05]
11
USC § 728. [Deleted]
[Rev. 5-23-05]
Chapter
13. Adjustment of Debts of an Individual with Regular Income
Subchapter I. Officers, Administration, and the Estate
§ 1301. Stay of action
against codebtor
§ 1302. Trustee
§ 1303. Rights and powers
of debtor
§ 1304. Debtor engaged in
business
§ 1305. Filing and
allowance of postpetition claims
§ 1306. Property of the
estate
§ 1307. Conversion or
dismissal
§ 1308. Filing
of prepetition tax returns
Subchapter II. The Plan
§ 1321. Filing of plan
§ 1322. Contents of plan
§ 1323. Modification of
plan before confirmation
§ 1324. Confirmation
hearing
§ 1325. Confirmation of
plan
§ 1326. Payments
§ 1327. Effect of
confirmation
§ 1328. Discharge
§ 1329. Modification of
plan after confirmation
§ 1330. Revocation of an
order of confirmation
Subchapter I. Officers, Administration, and the Estate
11
USC § 1301. Stay of action against codebtor
(a) Except as provided in subsections (b) and (c) of this section, after
the order for relief under this chapter, a creditor may not act, or commence
or continue any civil action, to collect all or any part of a consumer debt of
the debtor from any individual that is liable on such debt with the debtor, or
that secured such debt, unless--
(1) such individual became liable on or secured such debt in the ordinary
course of such individual’s business; or
(2) the case is closed, dismissed, or converted to a case under chapter
7 or 11 of
this title.
(b) A creditor may present a negotiable instrument, and may give notice of
dishonor of such an instrument.
(c) On request of a party in interest and after notice and a hearing, the
court shall grant relief from the stay provided by subsection (a) of this
section with respect to a creditor, to the extent that--
(1) as between the debtor and the individual protected under subsection
(a) of this section, such individual received the consideration for the
claim held by such creditor;
(2) the plan filed by the debtor proposes not to pay such claim; or
(3) such creditor’s interest would be irreparably harmed by
continuation of such stay.
(d) Twenty days after the filing of a request under subsection (c)(2) of
this section for relief from the stay provided by subsection (a) of this
section, such stay is terminated with respect to the party in interest making
such request, unless the debtor or any individual that is liable on such debt
with the debtor files and serves upon such party in interest a written
objection to the taking of the proposed action.
[Rev. 5-25-05]
11
USC § 1302. Trustee
(a) If the United States trustee appoints an
individual under section
586(b) of title 28 to serve as standing trustee in cases under this
chapter and if such individual qualifies under section
322 of this title, then such individual shall serve as trustee in the
case. Otherwise, the United States trustee shall appoint one disinterested
person to serve as trustee in the case or the United States trustee may serve
as a trustee in the case.
(b) The trustee shall--
(1) perform the duties specified in sections
704(2), 704(a)(3),
704(a)(4),
704(5),
704(6),
704(7),
and 704(9)
of this title; [sic--BAPCPA made each numbered
subsection part of subsection (a)]
(2) appear and be heard at any hearing that
concerns--
(A) the value of property subject to a lien;
(B) confirmation of a plan; or
(C) modification of the plan after confirmation;
(3) dispose of, under regulations issued by the
Director of the Administrative Office of the United States Courts, moneys
received or to be received in a case under chapter XIII of the Bankruptcy
Act;
(4) advise, other than on legal matters, and
assist the debtor in performance under the plan;
(5) ensure that the debtor commences making
timely payments under section
1326 of this title
; and
(6) if with respect to the
debtor there is a claim for a domestic support obligation, provide the
applicable notice specified in subsection
(d).
(c) If the debtor is engaged in business, then in
addition to the duties specified in subsection
(b) of this section, the trustee shall perform the duties specified in sections
1106(a)(3) and 1106(a)(4)
of this title.
(d)
(1) In a case described in subsection
(b)(6) to which subsection
(b)(6) applies, the trustee shall--
(A)
(i) provide written notice to the holder of the claim described in subsection
(b)(6) of such claim and of the right of such holder to use the
services of the State child support enforcement agency established under
sections
464 and 466
of the Social Security Act for the State in which such holder resides,
for assistance in collecting child support during and after the case
under this title; and
(ii) include in the notice provided under clause (i) the address and
telephone number of such State child support enforcement agency;
(B)
(i) provide written notice to such State child support enforcement
agency of such claim; and
(ii) include in the notice provided under clause (i) the name,
address, and telephone number of such holder; and
(C) at such time as the debtor is granted a
discharge under section
1328, provide written notice to such holder and to such State child
support enforcement agency of--
(i) the granting of the discharge;
(ii) the last recent known address of the debtor;
(iii) the last recent known name and address of the debtor's
employer; and
(iv) the name of each creditor that holds a claim that--
(I) is not discharged under paragraph
(2) or (4)
of section
523(a); or
(II) was reaffirmed by the debtor under section
524(c).
(2)
(A) The holder of a claim described in subsection
(b)(6) or the State child support enforcement agency of the State in
which such holder resides may request from a creditor described in
paragraph (1)(C)(iv) the last known address of the debtor.
(B) Notwithstanding any other provision of
law, a creditor that makes a disclosure of a last known address of a
debtor in connection with a request made under subparagraph (A) shall not
be liable by reason of making that disclosure.
[Rev. 5-25-05]
11
USC § 1303. Rights and powers of debtor
Subject to any limitations on a trustee under this chapter, the debtor shall
have, exclusive of the trustee, the rights and powers of a trustee under sections
363(b), 363(d),
363(e),
363(f),
and 363(l),
of this title.
[Rev. 5-25-05]
11
USC § 1304. Debtor engaged in business
(a) A debtor that is self-employed and incurs trade credit in the
production of income from such employment is engaged in business.
(b) Unless the court orders otherwise, a debtor engaged in business may
operate the business of the debtor and, subject to any limitations on a
trustee under sections
363(c) and 364
of this title and to such limitations or conditions as the court prescribes,
shall have, exclusive of the trustee, the rights and powers of the trustee
under such sections.
(c) A debtor engaged in business shall perform the duties of the trustee
specified in section
704(8) of this title. [sic--BAPCPA made each
numbered subsection part of subsection (a)]
[Rev. 5-25-05]
11
USC § 1305. Filing and allowance of postpetition claims
(a) A proof of claim may be filed by any entity that
holds a claim against the debtor--
(1) for taxes that become payable to a
governmental unit while the case is pending; or
(2) that is a consumer debt, that arises after
the date of the order for relief under this chapter, and that is for
property or services necessary for the debtor’s performance under the
plan.
(b) Except as provided in subsection (c) of this
section, a claim filed under subsection (a) of this section shall be allowed
or disallowed under section 502 of this title, but shall be determined as of
the date such claim arises, and shall be allowed under section
502(a), 502(b),
or 502(c)
of this title, or disallowed under section
502(d) or 502(e)
of this title, the same as if such claim had arisen before the date of the
filing of the petition.
(c) A claim filed under subsection
(a)(2) of this section shall be disallowed if the holder of such claim
knew or should have known that prior approval by the trustee of the debtor’s
incurring the obligation was practicable and was not obtained.
[Rev. 5-26-05]
11
USC § 1306. Property of the estate
(a) Property of the estate includes, in addition to
the property specified in section
541 of this title--
(1) all property of the kind specified in such
section that the debtor acquires after the commencement of the case but
before the case is closed, dismissed, or converted to a case under chapter
7, 11, or 12
of this title, whichever occurs first; and
(2) earnings from services performed by the
debtor after the commencement of the case but before the case is closed,
dismissed, or converted to a case under chapter
7, 11, or 12
of this title, whichever occurs first.
(b) Except as provided in a confirmed plan or order
confirming a plan, the debtor shall remain in possession of all property of
the estate.
[Rev. 5-26-05]
11
USC § 1307. Conversion or dismissal
(a) The debtor may convert a case under this chapter
to a case under chapter
7 of this title at any time. Any waiver of the right to convert under this
subsection is unenforceable.
(b) On request of the debtor at any time, if the case
has not been converted under section
706, 1112,
or 1208
of this title, the court shall dismiss a case under this chapter. Any waiver
of the right to dismiss under this subsection is unenforceable.
(c) Except as provided in subsection
(e) of this section, on request of a party in interest or the United
States trustee and after notice and a hearing, the court may convert a case
under this chapter to a case under chapter
7 of this title, or may dismiss a case under this chapter, whichever is in
the best interests of creditors and the estate, for cause, including--
(1) unreasonable delay by the debtor that is prejudicial to creditors;
(2) nonpayment of any fees and charges required under chapter
123 of title 28;
(3) failure to file a plan timely under section
1321 of this title;
(4) failure to commence making timely payments under section
1326 of this title;
(5) denial of confirmation of a plan under section
1325 of this title and denial of a request made for additional time for
filing another plan or a modification of a plan;
(6) material default by the debtor with respect to a term of a confirmed
plan;
(7) revocation of the order of confirmation under section
1330 of this title, and denial of confirmation of a modified plan under section
1329 of this title;
(8) termination of a confirmed plan by reason of the occurrence of a
condition specified in the plan other than completion of payments under the
plan;
(9) only on request of the United States trustee, failure of the debtor
to file, within fifteen days, or such additional time as the court may
allow, after the filing of the petition commencing such case, the
information required by paragraph
(1) of section
521;
(10) only on request of the United States trustee, failure to timely file
the information required by paragraph
(2) of section
521;
or
(11) failure of the debtor to pay any domestic support
obligation that first becomes payable after the date of the filing of the
petition.
(d) Except as provided in subsection
(e) of this section, at any time before the confirmation of a plan under section
1325 of this title, on request of a party in interest or the United States
trustee and after notice and a hearing, the court may convert a case under
this chapter to a case under chapter
11 or 12
of this title.
(e) Upon the failure of the debtor to
file a tax return under section
1308, on request of a party in interest or the United States trustee and
after notice and a hearing, the court shall dismiss a case or convert a case
under this chapter to a case under chapter
7 of this title, whichever is in the best interest of the creditors and
the estate.
(f)
The court may not convert a case under this chapter to a case under chapter
7, 11, or 12
of this title if the debtor is a farmer, unless the debtor requests such
conversion.
(g)
Notwithstanding any other provision of this section, a case may not be
converted to a case under another chapter of this title unless the debtor may
be a debtor under such chapter.
[Rev. 5-26-05]
11
USC § 1308. Filing of prepetition tax returns
(a) Not later than the day before the date on which
the meeting of the creditors is first scheduled to be held under section
341(a), if the debtor was required to file a tax return under applicable
nonbankruptcy law, the debtor shall file with appropriate tax authorities all
tax returns for all taxable periods ending during the 4-year period ending on
the date of the filing of the petition.
(b)
(1) Subject to paragraph (2), if the tax returns
required by subsection (a) have not been filed by the date on which the
meeting of creditors is first scheduled to be held under section
341(a), the trustee may hold open that meeting for a reasonable period
of time to allow the debtor an additional period of time to file any unfiled
returns, but such additional period of time shall not extend beyond--
(A) for any return that is past due as of the date of the filing of the
petition, the date that is 120 days after the date of that meeting; or
(B) for any return that is not past due as of the date of the filing of
the petition, the later of--
(i) the date that is 120 days after the date of that meeting; or
(ii) the date on which the return is due under the last automatic
extension of time for filing that return to which the debtor is
entitled, and for which request is timely made, in accordance with
applicable nonbankruptcy law.
(2) After notice and a hearing, and order
entered before the tolling of any applicable filing period determined under
this subsection, if the debtor demonstrates by a preponderance of the
evidence that the failure to file a return as required under this subsection
is attributable to circumstances beyond the control of the debtor, the court
may extend the filing period established by the trustee under this
subsection for--
(A) a period of not more than 30 days for returns described in
paragraph (1); and
(B) a period not to extend after the applicable extended due date for a
return described in paragraph (2).
(c) For purposes of this section, the term
"return" includes a return prepared pursuant to subsection (a) or
(b) of section
6020 of the Internal Revenue Code of 1986, or a similar State or local
law, or a written stipulation to a judgment or a final order entered by a
nonbankruptcy tribunal.
[Rev. 5-26-05]
Subchapter II. The Plan
11
USC § 1321. Filing of plan
The debtor shall file a plan.
[Rev. 5-27-05]
11
USC § 1322. Contents of plan
(a) The plan shall--
(1) provide for the submission of all or such
portion of future earnings or other future income of the debtor to the
supervision and control of the trustee as is necessary for the execution of
the plan;
(2) provide for the full payment, in deferred
cash payments, of all claims entitled to priority under section
507 of this title, unless the holder of a particular claim agrees to a
different treatment of such claim;
(3) if the plan classifies claims, provide the
same treatment for each claim within a particular class;
and
(4) notwithstanding any other
provision of this section, a plan may provide for less than full payment of
all amounts owed for a claim entitled to priority under section
507(a)(1)(B) only if the plan provides that all of the debtor's
projected disposable income for a 5-year period beginning on the date that
the first payment is due under the plan will be applied to make payments
under the plan.
(b) Subject to subsections (a) and (c) of this
section, the plan may--
(1) designate a class or classes of unsecured
claims, as provided in section
1122 of this title, but may not discriminate unfairly against any class
so designated; however, such plan may treat claims for a consumer debt of
the debtor if an individual is liable on such consumer debt with the debtor
differently than other unsecured claims;
(2) modify the rights of holders of secured
claims, other than a claim secured only by a security interest in real
property that is the debtor’s principal residence, or of holders of
unsecured claims, or leave unaffected the rights of holders of any class of
claims;
(3) provide for the curing or waiving of any
default;
(4) provide for payments on any unsecured claim
to be made concurrently with payments on any secured claim or any other
unsecured claim;
(5) notwithstanding paragraph (2) of this
subsection, provide for the curing of any default within a reasonable time
and maintenance of payments while the case is pending on any unsecured claim
or secured claim on which the last payment is due after the date on which
the final payment under the plan is due;
(6) provide for the payment of all or any part
of any claim allowed under section
1305 of this title;
(7) subject to section
365 of this title, provide for the assumption, rejection, or assignment
of any executory contract or unexpired lease of the debtor not previously
rejected under such section;
(8) provide for the payment of all or part of a
claim against the debtor from property of the estate or property of the
debtor;
(9) provide for the vesting of property of the
estate, on confirmation of the plan or at a later time, in the debtor or in
any other entity;
(10) provide for the payment of
interest accruing after the date of the filing of the petition on unsecured
claims that are nondischargeable under section
1328(a), except that such interest may be paid only to the extent that
the debtor has disposable income available to pay such interest after making
provision for full payment of all allowed claims; and
(11)
include any other appropriate provision not inconsistent with this title.
(c) Notwithstanding subsection (b)(2) and applicable
nonbankruptcy law--
(1) a default with respect to, or that gave rise
to, a lien on the debtor’s principal residence may be cured under
paragraph (3) or (5) of subsection (b) until such residence is sold at a
foreclosure sale that is conducted in accordance with applicable
nonbankruptcy law; and
(2) in a case in which the last payment on the
original payment schedule for a claim secured only by a security interest in
real property that is the debtor’s principal residence is due before the
date on which the final payment under the plan is due, the plan may provide
for the payment of the claim as modified pursuant to section
1325(a)(5) of this title.
(d)
(1) If the current monthly
income of the debtor and the debtor's spouse combined, when multiplied by
12, is not less than--
(A) in the case of a debtor
in a household of 1 person, the median family income of the applicable
State for 1 earner;
(B) in the case of a debtor
in a household of 2, 3, or 4 individuals, the highest median family income
of the applicable State for a family of the same number or fewer
individuals; or
(C) in the case of a debtor
in a household exceeding 4 individuals, the highest median family income
of the applicable State for a family of 4 or fewer individuals, plus $525 []
per month for each individual in excess of 4,
the plan may not provide for payments over a period that
is longer than 5 years.
(2) If the current monthly
income of the debtor and the debtor's spouse combined, when multiplied by
12, is less than--
(A) in the case of a debtor
in a household of 1 person, the median family income of the applicable
State for 1 earner;
(B) in the case of a debtor
in a household of 2, 3, or 4 individuals, the highest median family income
of the applicable State for a family of the same number or fewer
individuals; or
(C) in the case of a debtor
in a household exceeding 4 individuals, the highest median family income
of the applicable State for a family of 4 or fewer individuals, plus $525 []
per month for each individual in excess of 4,
the plan may not provide for payments over a period that
is longer than 3 years, unless the court, for cause, approves a longer
period, but the court may not approve a period that is longer than 5 years.
[Dollar amounts in subsections 523(a)(2)(C)(i) and (ii)
are adjusted on April 1 every 3 years by section
104. Adjusted amounts effective
are in brackets.]
(e) Notwithstanding subsection (b)(2) of this section
and sections
506(b) and 1325(a)(5)
of this title, if it is proposed in a plan to cure a default, the amount
necessary to cure the default, shall be determined in accordance with the
underlying agreement and applicable nonbankruptcy law.
(f) A plan may not materially alter
the terms of a loan described in section
362(b)(19) and any amounts required to repay such loan shall not
constitute "disposable income" under section
1325.
[Rev. 5-27-05]
11
USC § 1323. Modification of plan before confirmation
(a) The debtor may modify the plan at any time before confirmation, but may
not modify the plan so that the plan as modified fails to meet the
requirements of section 1322 of this title.
(b) After the debtor files a modification under this section, the plan as
modified becomes the plan.
(c) Any holder of a secured claim that has accepted or rejected the plan is
deemed to have accepted or rejected, as the case may be, the plan as modified,
unless the modification provides for a change in the rights of such holder
from what such rights were under the plan before modification, and such holder
changes such holder’s previous acceptance or rejection.
Rev. 5-27-05]
11
USC § 1324. Confirmation hearing
(a)
Except as provided in subsection (b) and after notice, the court shall
hold a hearing on confirmation of the plan. A party in interest may object to
confirmation of the plan.
(b) The hearing on confirmation of the plan may be held not
earlier than 20 days and not later than 45 days after the date of the meeting
of creditors under section 341(a), unless the court determines that it would
be in the best interests of the creditors and the estate to hold such hearing
at an earlier date and there is no objection to such earlier date.
Rev. 5-27-05]
11
USC § 1325. Confirmation of plan
(a) Except as provided in subsection (b), the court
shall confirm a plan if--
(1) The plan complies with the provisions of
this chapter and with the other applicable provisions of this title;
(2) any fee, charge, or amount required under chapter
123 of title 28, or by the plan, to be paid before confirmation, has
been paid;
(3) the plan has been proposed in good faith and
not by any means forbidden by law;
(4) the value, as of the effective date of the
plan, of property to be distributed under the plan on account of each
allowed unsecured claim is not less than the amount that would be paid on
such claim if the estate of the debtor were liquidated under chapter 7 of
this title on such date;
(5) with respect to each allowed secured claim
provided for by the plan--
(A) the holder of such claim has accepted
the plan;
(B)
(i) the
plan provides that--
(I) the holder of such claim retain the lien
securing such claim until the earlier of--
(aa) the payment of the underlying debt
determined under nonbankruptcy law; or
(bb) discharge under section
1328; and
(II) if the case under this chapter is dismissed or
converted without completion of the plan, such lien shall also be
retained by such holder to the extent recognized by applicable
nonbankruptcy law;
(ii) the value, as of the effective
date of the plan, of property to be distributed under the plan on
account of such claim is not less than the allowed amount of such claim; and
(iii) if--
(I) property to be distributed pursuant to this
subsection is in the form of periodic payments, such payments shall be
in equal monthly amounts; and
(II) the holder of the claim is secured by personal
property, the amount of such payments shall not be less than an amount
sufficient to provide to the holder of such claim adequate protection
during the period of the plan; or
(C) the debtor surrenders the property
securing such claim to such holder;
(6) the debtor will be able to make all payments
under the plan and to comply with the plan;
(7) the action of the debtor in
filing the petition was in good faith;
(8) the debtor has paid all
amounts that are required to be paid under a domestic support obligation and
that first become payable after the date of the filing of the petition if
the debtor is required by a judicial or administrative order, or by statute,
to pay such domestic support obligation; and
(9) the debtor has filed all
applicable Federal, State, and local tax returns as required by section
1328.
For purposes of paragraph (5), section
506 shall not apply to a claim described in that paragraph if the creditor
has a purchase money security interest securing the debt that is the subject
of the claim, the debt was incurred within the 910-day preceding the date of
the filing of the petition, and the collateral for that debt consists of a
motor vehicle (as defined in section
30102 of title 49) acquired for the personal use of the debtor, or if
collateral for that debt consists of any other thing of value, if the debt was
incurred during the 1-year period preceding that filing.
(b)
(1) If the trustee or the holder of an allowed
unsecured claim objects to the confirmation of the plan, then the court may
not approve the plan unless, as of the effective date of the plan--
(A) the value of the property to be
distributed under the plan on account of such claim is not less than the
amount of such claim; or
(B) the plan provides that all of the
debtor's projected disposable income to be received in the applicable
commitment period beginning on the date that the first payment is
due under the plan will be applied to make payments to
unsecured creditors under the plan.
(2) For purposes of this
subsection, the term "disposable income" means current monthly
income received by the debtor (other than child support payments, foster
care payments, or disability payments for a dependent child made in
accordance with applicable nonbankruptcy law to the extent reasonably
necessary to be expended for such child) less amounts reasonably necessary
to be expended--
(A)
(i) for the maintenance or support of the debtor or a
dependent of the debtor, or for a domestic support obligation, that
first becomes payable after the date the petition is filed; and
(ii) for charitable contributions (that meet the
definition of "charitable contribution" under section
548(d)(3) to a qualified religious or charitable entity or
organization (as defined in section
548(d)(4)) in an amount not to exceed 15 percent of gross income of
the debtor for the year in which the contributions are made; and
(B) if the debtor is
engaged in business, for the payment of expenditures necessary for the
continuation, preservation, and operation of such business.
(3) Amounts reasonably necessary
to be expended under paragraph (2) shall be determined in accordance with
subparagraphs (A) and (B) of section
707(b)(2), if the debtor has current monthly income, when multiplied by
12, greater than--
(A) in the case of a debtor
in a household of 1 person, the median family income of the applicable
State for 1 earner;
(B) in the case of a debtor
in a household of 2, 3, or 4 individuals, the highest median family income
of the applicable State for a family of the same number or fewer
individuals; or
(C) in the case of a debtor
in a household exceeding 4 individuals, the highest median family income
of the applicable State for a family of 4 or fewer individuals, plus $525 []
per month for each individual in excess of 4.
(4) For purposes of this
subsection, the "applicable commitment period"--
(A) subject to subparagraph
(B), shall be--
(i) 3 years; or
(ii) not less than 5 years, if the current monthly
income of the debtor and the debtor's spouse combined, when multiplied
by 12, is not less than--
(I) in the case of a debtor in a household of 1
person, the median family income of the applicable State for 1 earner;
(II) in the case of a debtor in a household of 2,
3, or 4 individuals, the highest median family income of the
applicable State for a family of the same number or fewer individuals;
or
(III) in the case of a debtor in a household
exceeding 4 individuals, the highest median family income of the
applicable State for a family of 4 or fewer individuals, plus $525 []
per month for each individual in excess of 4; and
(B) may be less than 3 or 5
years, whichever is applicable under subparagraph (A), but only if the
plan provides for payment in full of all allowed unsecured claims over a
shorter period.
[Dollar amounts in subsections 523(a)(2)(C)(i) and (ii) are
adjusted on April 1 every 3 years by section
104. Adjusted amounts effective
are in brackets.]
(c) After confirmation of a plan, the court may order
any entity from whom the debtor receives income to pay all or any part of such
income to the trustee.
Rev. 5-27-05]
11
USC § 1326. Payments
(a)
(1) Unless the court orders
otherwise, the debtor shall commence making payments not later than 30 days
after the date of the filing of the plan or the order for relief, whichever
is earlier, in the amount--
(A) proposed by the plan to
the trustee;
(B) scheduled in a lease of
personal property directly to the lessor for that portion of the
obligation that becomes due after the order for relief, reducing the
payments under subparagraph (A) by the amount so paid and providing the
trustee with evidence of such payment, including the amount and date of
payment; and
(C) that provides adequate
protection directly to a creditor holding an allowed claim secured by
personal property to the extent the claim is attributable to the purchase
of such property by the debtor for that portion of the obligation that
becomes due after the order for relief, reducing the payments under
subparagraph (A) by the amount so paid and providing the trustee with
evidence of such payment, including the amount and date of payment.
(2) A payment made under
paragraph (1)(A) shall be retained by the trustee until confirmation or
denial of confirmation. If a plan is confirmed, the trustee shall distribute
any such payment in accordance with the plan as soon as is practicable. If a
plan is not confirmed, the trustee shall return any such payments not
previously paid and not yet due and owing to creditors pursuant to paragraph
(3) to the debtor, after deducting any unpaid claim allowed under section
503(b).
(3) Subject to section 363, the
court may, upon notice and a hearing, modify, increase, or reduce the
payments required under this subsection pending confirmation of a plan.
(4) Not later than 60 days after
the date of filing of a case under this chapter, a debtor retaining
possession of personal property subject to a lease or securing a claim
attributable in whole or in part to the purchase price of such property
shall provide the lessor or secured creditor reasonable evidence of the
maintenance of any required insurance coverage with respect to the use or
ownership of such property and continue to do so for so long as the debtor
retains possession of such property.
(b) Before or at the time of each payment to
creditors under the plan, there shall be paid--
(1) any unpaid claim of the kind specified in
section
507(a)(2) of this title;
(2) if a standing trustee appointed under section
586(b) of title 28 is serving in the case, the percentage fee fixed for
such standing trustee under section
586(e)(1)(B) of title 28;
and
(3) if a chapter 7 trustee has
been allowed compensation due to the conversion or dismissal of the debtor's
prior case pursuant to section
707(b), and some portion of that compensation remains unpaid in a case
converted to this chapter or in the case dismissed under section
707(b) and refiled under this chapter, the amount of any such unpaid
compensation, which shall be paid monthly--
(A) by prorating such
amount over the remaining duration of the plan; and
(B) by monthly payments not
to exceed the greater of--
(i) $25 [Adjusted
every 3 years by section
104.]; or
(ii) the amount payable to unsecured nonpriority
creditors, as provided by the plan, multiplied by 5 percent, and the
result divided by the number of months in the plan.
(c) Except as otherwise provided in the plan or in
the order confirming the plan, the trustee shall make payments to creditors
under the plan.
(d) Notwithstanding any other
provision of this title--
(1) compensation referred to in
subsection (b)(3) is payable and may be collected by the trustee under that
paragraph, even if such amount has been discharged in a prior case under
this title; and
(2) such compensation is payable
in a case under this chapter only to the extent permitted by subsection
(b)(3).
Rev. 5-27-05]
11
USC § 1327. Effect of confirmation
(a) The provisions of a confirmed plan bind the debtor and each creditor,
whether or not the claim of such creditor is provided for by the plan, and
whether or not such creditor has objected to, has accepted, or has rejected
the plan.
(b) Except as otherwise provided in the plan or the order confirming the
plan, the confirmation of a plan vests all of the property of the estate in
the debtor.
(c) Except as otherwise provided in the plan or in the order confirming the
plan, the property vesting in the debtor under subsection (b) of this section
is free and clear of any claim or interest of any creditor provided for by the
plan.
Rev. 5-27-05]
11
USC § 1328. Discharge
(a)
Subject
to subsection (d), as soon as practicable after completion by the
debtor of all payments under the plan, and in the case of a
debtor who is required by a judicial or administrative order, or by statute,
to pay a domestic support obligation, after such debtor certifies that all
amounts payable under such order or such statute that are due on or before the
date of the certification (including amounts due before the petition was
filed, but only to the extent provided for by the plan) have been paid,
unless the court approves a written waiver of discharge executed by the debtor
after the order for relief under this chapter, the court shall grant the
debtor a discharge of all debts provided for by the plan or disallowed under section
502 of this title, except any debt--
(1) provided for under section
1322(b)(5);
(2) of the kind specified in section
507(a)(8)(C) or in paragraph (1)(B),
(1)(C),
(2),
(3),
(4),
(5),
(8),
or (9)
of section
523(a);
(3) for restitution, or a criminal fine, included in a
sentence on the debtor's conviction of a crime; or
(4) for restitution, or damages, awarded in a civil
action against the debtor as a result of willful or malicious injury by the
debtor that caused personal injury to an individual or the death of an
individual.
(b) Subject
to subsection (d), at any time after the confirmation of the plan and
after notice and a hearing, the court may grant a discharge to a debtor that
has not completed payments under the plan only if--
(1) the debtor’s failure to complete such payments is due to
circumstances for which the debtor should not justly be held accountable;
(2) the value, as of the effective date of the plan, of property actually
distributed under the plan on account of each allowed unsecured claim is not
less than the amount that would have been paid on such claim if the estate
of the debtor had been liquidated under chapter
7 of this title on such date; and
(3) modification of the plan under section
1329 of this title is not practicable.
(c) A discharge granted under subsection (b) of this
section discharges the debtor from all unsecured debts provided for by the
plan or disallowed under section
502 of this title, except any debt--
(1) provided for under section
1322(b)(5) of this title; or
(2) of a kind specified in section
523(a) of this title.
(d) Notwithstanding any other provision of this
section, a discharge granted under this section does not discharge the debtor
from any debt based on an allowed claim filed under section
1305(a)(2) of this title if prior approval by the trustee of the
debtor’s incurring such debt was practicable and was not obtained.
(e) On request of a party in interest before one year
after a discharge under this section is granted, and after notice and a
hearing, the court may revoke such discharge only if--
(1) such discharge was obtained by the debtor through fraud; and
(2) the requesting party did not know of such fraud until after such
discharge was granted.
(f) Notwithstanding subsections (a) and (b), the
court shall not grant a discharge of all debts provided for in the plan or
disallowed under section
502, if the debtor has received a discharge--
(1) in a case filed under chapter
7, 11, or 12
of this title during the 4-year period preceding the date of the order for
relief under this chapter, or
(2) in a case filed under chapter
13 of this title during the 2-year period preceding the date of such
order.
(g)
(1) The court shall not grant a discharge under this section to a debtor
unless after filing a petition the debtor has completed an instructional
course concerning personal financial management described in section
111.
(2) Paragraph (1) shall not apply with respect to a debtor who is a
person described in section
109(h)(4) or who resides in a district for which the United States
trustee (or the bankruptcy administrator, if any) determines that the
approved instructional courses are not adequate to service the additional
individuals who would otherwise be required to complete such instructional
course by reason of the requirements of paragraph (1).
(3) The United States trustee (or the bankruptcy administrator, if any)
who makes a determination described in paragraph (2) shall review such
determination not later than 1 year after the date of such determination,
and not less frequently than annually thereafter.
(h) The court may not grant a discharge under this
chapter unless the court after notice and a hearing held not more than 10 days
before the date of the entry of the order granting the discharge finds that
there is no reasonable cause to believe that--
(1) section
522(q)(1) may be applicable to the debtor; and
(2) there is pending any proceeding in which the debtor may be found
guilty of a felony of the kind described in section
522(q)(1)(A) or liable for a debt of the kind described in section
522(q)(1)(B).
Rev. 5-27-05]
11
USC § 1329. Modification of plan after confirmation
(a) At any time after confirmation of the plan but
before the completion of payments under such plan, the plan may be modified,
upon request of the debtor, the trustee, or the holder of an allowed unsecured
claim, to--
(1) increase or reduce the amount of payments on
claims of a particular class provided for by the plan;
(2) extend or reduce the time for such payments;
(3) alter the amount of the distribution to a
creditor whose claim is provided for by the plan to the extent necessary to
take account of any payment of such claim other than under the plan;
or
(4) reduce amounts to be paid
under the plan by the actual amount expended by the debtor to purchase
health insurance for the debtor (and for any dependent of the debtor if such
dependent does not otherwise have health insurance coverage) if the debtor
documents the cost of such insurance and demonstrates that--
(A) such expenses are
reasonable and necessary;
(B)
(i) if the debtor previously paid for health
insurance, the amount is not materially larger than the cost the debtor
previously paid or the cost necessary to maintain the lapsed policy; or
(ii) if the debtor did not have health insurance, the
amount is not materially larger than the reasonable cost that would be
incurred by a debtor who purchases health insurance, who has similar
income, expenses, age, and health status, and who lives in the same
geographical location with the same number of dependents who do not
otherwise have health insurance coverage; and
(C) the amount is not
otherwise allowed for purposes of determining disposable income under section
1325(b) of this title;
and upon request of any party in interest, files proof that
a health insurance policy was purchased.
(b)
(1) Sections
1322(a), 1322(b),
and 1323(c)
of this title and the requirements of section
1325(a) of this title apply to any modification under subsection (a) of
this section.
(2) The plan as modified becomes the plan
unless, after notice and a hearing, such modification is disapproved.
(c) A plan modified under this section may not
provide for payments over a period that expires after
the
applicable commitment period under section
1325(b)(1)(B) after the time that the first payment under the
original confirmed plan was due, unless the court, for cause, approves a
longer period, but the court may not approve a period that expires after five
years after such time.
Rev. 5-28-05]
11
USC § 1330. Revocation of an order of confirmation
(a) On request of a party in interest at any time within 180 days after the
date of the entry of an order of confirmation under section
1325 of this title, and after notice and a hearing, the court may revoke
such order if such order was procured by fraud.
(b) If the court revokes an order of confirmation under subsection (a) of
this section, the court shall dispose of the case under section
1307 of this title, unless, within the time fixed by the court, the debtor
proposes and the court confirms a modification of the plan under section
1329 of this title.
Rev. 5-28-05]
|
|
Doney
& Associates PLC Home Page