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The New Bankruptcy Code
 

Changes in 704. Duties of trustee

Chapter 7 Trustee to File a Statement as to Whether the Case is an Abuse Under 707(b)

704(b)(1) requires the Chapter 7 trustee to file a statement with the court as to whether the debtor's case would be presumed to be an abuse under 707(b) within 10 days after the 341meeting.   Five days after receiving the statement, the court is to provide a copy to all creditors.

US Trustee to Move to Dismiss or Convert Case

704(b)(2) requires the US Trustee or bankruptcy administrator to move to convert or dismiss the case within 30 days after the Chapter 7 trustee has filed his statement, or to file a statement indicating why conversion or dismissal is not appropriate.  The US Trustee may decline to file the motion if the debtor's current monthly income is less than 150% of the state's median income, and the debtor's current monthly income less expenses times 60 is less than $6,000, or, if more than $6,000 but less than $10,000, less than 25% of unsecured claims.

Trustee to Give Notice regarding Domestic Support

704(c) requires the Chapter 7 trustee to notify holders of domestic support claims of the services of the the State child support enforcement agency, and upon discharge, notify the State agency of the Debtors address and creditors not discharged or reaffirmed.  Creditors are required to disclose the debtor's address on request by the holder of a support claim.

Other Duties

704(a)(11) makes requirements regarding the transfer of patients of health care debtors.

704(a)(12) of S.420 only requires trustee to continue to perform the duties of an employee benefit administrator debtor.

Text appearing below in blue is the same in H.R.333 and S.420. Text in maroon is only in H.R.333. Text in green is only in S.420.

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) 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; and

(10) if, with respect to an individual debtor, there is a claim for a domestic support obligation, provide the applicable notification specified in subsection (c); and

(11) 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.; and

(12) where, at the time of the time of the commencement of the case, the debtor served as the administrator (as defined in section 3 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002)) of an employee benefit plan, continue to perform the obligations required of the administrator;

(b)

(1) With respect to an individual debtor under this chapter--

(A) the United States trustee or bankruptcy administrator 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 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 bankruptcy administrator does not believe that such a motion would be appropriate, if the United States trustee or bankruptcy administrator 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 last reported by the Bureau of the Census; 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 last reported by the Bureau of the Census.

(3) In any case in which a motion to dismiss or convert, or a statement is required to be filed by this subsection, the United States trustee or bankruptcy administrator may decline to file a motion to dismiss or convert pursuant to section 704(b)(2) if the product of the debtor's current monthly income multiplied by 12 exceeds 100 percent, but does not exceed 150 percent of--

(A)

(i) in the case of a debtor in a household of 1 person, the median family income of the applicable State for 1 earner last reported by the Bureau of the Census; or

(ii) 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 last reported by the Bureau of the Census; and

(B) the product of the debtor's current monthly income, reduced by the amounts determined under section 707(b)(2)(A)(ii) (except for the amount calculated under the other necessary expenses standard issued by the Internal Revenue Service) and clauses (iii) and (iv) of section 707(b)(2)(A), multiplied by 60 is 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.

(c)

(1) In any case described in subsection (a)(10), the trustee shall--

(A)

(i) notify in writing the holder of the claim of the right of that holder to use the services of a State child support enforcement agency established under sections 464 and 466 of the Social Security Act (42 U.S.C. 664, 666) for the State in which the holder resides for assistance in collecting child support during and after the bankruptcy procedures;

(ii) include in the notice under this paragraph the address and telephone number of the child support enforcement agency; and

(iii) include in the notice an explanation of the rights of the holder of the claim to payment of the claim under this chapter; and

(B)

(i) notify in writing the State child support agency of the State in which the holder of the claim resides of the claim;

(ii) include in the notice under this paragraph the name, address, and telephone number of the holder of the claim; and

(iii) at such time as the debtor is granted a discharge under section 727, notify the holder of that claim and the State child support agency of the State in which that holder resides 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) with respect to the debtor's case, the name of each creditor that holds a claim that--

(aa) is not discharged under paragraph (2), (4), or (14A) of section 523(a); or

(bb) was reaffirmed by the debtor under section 524(c).

(2)

(A) A holder of a claim or a State child support agency may request from a creditor described in paragraph (1)(B)(iii)(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 to the debtor or any other person by reason of making that disclosure.


This page was last revised: 03/26/01