| ID |
Name |
Group |
Other |
Code
Sec |
Cross
Ref |
Problem Referenced |
Proposed Solutions |
NBRC-
0223 |
Frank R. Kennedy |
Professor, Michigan Law School; former Executive Director, Commission on the Bankruptcy Laws of the United States (1973) |
List of additional recommended topics for consideration |
|
|
Immunity for farmers and
nonmoneyed corporations from involuntary relief under the bankruptcy laws
was discussed in the 1973 Commission's report. That Commission recommended
the repeal of immunity for nonmoneyed corporations as suggested in a cogent
article by Professor Mike Sovern, entitled "Section 4 of the Bankruptcy Act: The Excluded Corporations" (1957).
Excluded corporations do not include nonprofit corporations unless they are
charitable, religious, educational, or eleemosynary. Staff of the 1973 Commission
were persuaded by the logic and policy arguments of the Sovern article that
immunity granted to farmers ought to be repealed as well, but members of
the Commission recommended retention of this immunity. |
The NBRC should reconsider the issue of granting farmers immunity from involuntary relief. |
NBRC-
0223 |
Frank R. Kennedy |
Professor, Michigan Law School; former Executive Director, Commission on the Bankruptcy Laws of the United States (1973) |
Cover letter discussing various areas of concern |
|
|
Author provides a list
of 30 "Topics for Consideration by Commission on Bankruptcy Laws." The recommended
topic relating to Consumer Bankruptcy Miscellaneous issues is: Elimination
of immunity for farmers and nonmoneyed corporations. |
None. |
NBRC-
0303 |
Commercial Law League of America |
Commercial Law League of America (CLLA) |
|
|
|
The Commerical Law League of America believes that the following issue should be considered by the NBRC: should audits of debtors' financial backgrounds become a part of the consumer bankruptcy system |
The CLLA believes that this issue is a non-priority because the ultimate recommendation would probably be too costly and burdensome to implement. |
NBRC-
0303 |
Commercial Law League of America |
Commercial Law League of America (CLLA) |
|
707(b) |
|
The Commerical Law League
of America believes that the following issues should be considered by the
NBRC: (1) Should the bankruptcy system explictly permit or prohibit pre-bankruptcy
planning in consumer cases; and (2) Does § 707(b) in its current form
serve a useful function |
The CLLA believes that
the first issue is a "non-priority," and that the second issue is a top priority
(no additional details are provided). |
NBRC-
0303 |
Commercial Law League of America |
Commercial Law League of America (CLLA) |
|
|
|
The Commerical Law League of America believes that the following issue should be considered by the NBRC: should the bankruptcy system permit in forma pauperis filing of bankruptcy petitions |
The CLLA believes that this issue should receive moderate priority. The CLLA supports making access to the bankruptcy system as available as possible and suggests that the installment method of payment of the filing fee be the preferred method for making that access to the courts more available. |
NBRC-
0303 |
Commercial Law League of America |
Commercial Law League of America (CLLA) |
|
|
|
The Commerical Law League
of America believes that the following issue should be considered by the
NBRC: for consumer bankruptcies, is the § 341 meeting efficient and
effective |
The CLLA believes that this issue should receive top priority (no additional details are provided). |
NBRC-
0320 |
Robert M. Zinman, on behalf of the Bankruptcy Institute |
American Bankruptcy Institute
("ABI") |
Numerous position papers, memoranda and research material |
|
|
In this statement before
the NBRC, the author states that ABI members generally agree that: (1) Including
debtor audits in the consumer bankruptcy system would be a monemental and
expensive task; (2) Pre-bankruptcy planning is not necessary in most cases
because the debtor has no property, but as a practical matter it would be
difficult to prohibit such planning; (3) In forma pauperis filings, without
the benefit of a very good community legal aid program, usually result in
the bankruptcy petition being filed pro se. The debtor's lack of understaning
may lead to "problems, questions and corrections." |
Consumer audits shold only be conducted when the trustee believes an audit is necessary. Additional legislation is not necessary with regard to pre-bankruptcy planning. When a debtor files for bankrupcy, there is almost always a need for a lawyer. |
NBRC-
0320 |
Robert M. Zinman, on behalf of the Bankruptcy Institute |
American Bankruptcy Institute
("ABI") |
Numerous position papers, memoranda and research material |
|
|
The author attaches a
white paper by Joseph R. Prochaska entitled "What Rate of Interest for Secured Claims in Chapters 12 and 13".
The paper summarizes and analyzes cases that address treatment of claims
secured by property other that the primary residence. |
None. |
NBRC-
0390 |
Mr. and Mrs. Fred Drake |
Landlords/Creditors |
Cover letter from Rep. Dan Burton enclosing this submission |
|
|
The authors are concerned about the Bankruptcy Code's treatment of landlords, specifically as it relates to utility payments when a tenant declares bankruptcy. |
Code should be amended to require tenants to pay their utilities before they are eligible to file for bankruptcy. |
NBRC-
0431 |
Barbara J. Sellers |
Bankruptcy Judge, U.S. Bankruptcy Court, Sourthern District of Ohio, Eastern Division |
|
|
|
The Commission appears concerned with a lack of uniformity in the application of the consumer bankruptcy remedy across the country and with certain abuses of the system. Author does not believe that a unitary consumer chapter approach would cure either of these problems. Author chaired a district-wide local rules committee to unify rules for Chapter 13 practice. Author feels Chapter 13 is the most difficult area. |
Chapter 13 statute needs
more "meat on its bones" to eliminate the need for so many local rules and
the practice in this area needs to be more uniform. |
NBRC-
0449 |
Henry J. Sommer |
Attorney |
Copy of Memorandum sent by Bill Binzel of MasterCard International dated 12/12/96 urging attendance at hearing. |
|
|
Author was concerned that hearings being held by the NBRC on issues of consumer credit have included many times more creditor representatives than consumer representatives. Author was also concerned about private meetings which he had heard about which included only Commission staff, Commissioners, and a few invited individuals. Again, author's concern was that consumer issues would not be adequately represented. |
Author was relieved by Brady Williamson's assurances that there will at some point be a chance for consumers to have approximately equal time to rebut the creditor's claims, but did want to reiterate his concerns. |
NBRC-
0449 |
Henry J. Sommer |
Attorney |
|
|
|
Author mentions clients who were only able to file their cases because his district is one in which the pilot in forma pauperis program exists. Author asserts that this program has run extremely smoothly and has not been controversial. |
Author strongly urges the Commission to expand the in forma pauperis program nationwide. |
NBRC-
0473 |
Eugene R. Wedoff |
Bankruptcy Judge, Northern District of Illinois |
Memorandum |
|
|
Consumer Bankruptcy Reform |
Author encloses a memorandum
outlining some of the ideas he found helpful from the ABI Consumer Bankruptcy
Forum. "...it struck me at the ABI forum that the issues need to be addressed
in the context of a consistent conceptual framework, and I hope that my memo
may help to point the discussion in that direction. |
NBRC-
0474 |
Norma Hammes |
President, National Association of Consumer Bankruptcy Attorneys |
Attached list of Government Issues Working Group recommendations which author believes should be reviewed by the Consumer Issues Working Group. |
|
|
Letter is a response to a request for the names of consumer debtor attorneys who would be able to offer a consumer debtor perspective to the Government Issues Working Group. The NACBA believes that the lack of representation of the interests of consumer debtors and their attorneys on the Working Group panels is a serious problem, and is encouraged that the NBRC is taking steps to address it. |
Letter contains names of four attorneys recommended for inclusion in future meetings of the Government Issues Working Group. Author requests that the number of government/creditor participants be matched by a like number of consumer debtor participants. |
NBRC-
0475 |
Vincent P. Zurzolo |
United States Bankruptcy Judge, Central District of California |
|
524 |
722 |
Author poses question: "May
an individual debtor retain personal property which is encumbered by a security
interest if that debtor is current on all obligations with the creditor holding
the security interest yet chooses not to reaffirm that obligation under 11
U.S.C. Section 524 or to redeem the collateral pursuant to 11 U.S.C. Section
722" |
Author hopes that the Commission will address this issue. |
NBRC-
0478 |
Norma Hammes |
Attorney; President, National Association of Consumer Bankruptcy Attorneys |
|
|
|
Copy of presentation to be made by Norma Hammes to the Commission on Friday, February 21, 1997. |
|
NBRC-
0489 |
Stephen Tsai |
Attorney, Bankruptcy trustee in the District of New Jersey |
Article by author, Repairs for a Broken System, New Jersey Law Journal, February 3, 1997. |
|
|
Author is forwarding an article he wrote for the New Jersey Law Journal suggesting various changes to the handling of consumer bankruptcy cases. |
|
NBRC-
0523 |
David V. Levy |
MindSpring Enterprises, Inc. (position in organization and address not given, fax) |
|
1301 |
362 |
"Many courts require a creditor to obtain relief fromt he codebtor stay of Section 1301, EVEN IF THE CREDITOR IS ALREADY GRANTED RELIEF FROM THE AUTOMATIC STAY OF SECTION 362..." "If
the Debtor has consented to relief from the automatic stary...it makes little
sense for the codebtor stay to remain in effect." |
"...I would urge the Commission
to recommend that Congress amend Section 1301(a) to include a provision that
the codebtor stay will automatically terminate or will not apply upon termination
of the automatic stay of Section 362." |
NBRC-
0524 |
Richard G. Lugar |
U.S. Senator |
Letter dated February 24, 1997 from Debra Voltz-Miller to Representative Henry Hyde |
|
|
Senator Lugar is forwarding a letter by Debra Voltz-Miller, an attorney who wrote to Senator Hyde concerning Senator Hyde's bill with improvements and corrections to the Bankruptcy Code. Ms. Voltz-Miller is concerned about a recent trend of insurance companies refusing to insure residential property if they discover that the owner has filed for bankruptcy. Ms. Voltz-Miller is concerned that if applicants are truly to have a fresh start under the Bankruptcy Code, they must have the ability to insure their homes and possessions. |
Ms. Voltz-Miller writes
to Sen. Hyde: "Although I understand that the insurance companies are in
business and base their decisions upon various risk factors, the ability
of insurers to deny coverage simply for filing of bankruptcy is patently
unfair. I respectfully request that, if possible, you consider this issue
in any further recommendations you may make concerning modifications to the
Bankruptcy Code." |
NBRC-
0532 |
Arthur J. Spector |
U.S. Bankruptcy Judge, Eastern District of Michigan |
|
|
|
Author raises several
issues without in-depth discussion or proposals, such as to "carefully consider the entire concept of property of a chapter 13 estate and what it means for the prpoperty to revest in the debtor" and "consider
the question about whether confirmation hearings should occur before the
deadline for filing proofs of claim." |
"To accomodate the legitimate
demand that payments to creditors commence as early as possible, the Commission
should give serious consideration to shortening the time within which to
file proofs of claim in chapter 13 to something like 30 days after the meeting
of creditors. And governments should be given either no additional time or
a very short extension." |
NBRC-
0541 |
Dean S. Cooper |
Associate General Counsel,
Federal Home Loan Mortgage Corporation ("Freddie Mac") |
|
|
|
"While deficiencies cannot
be sought against debtors who receive discharges, our servicers need to be
able to call the debtors to determine why they did not make their monthly
mortgage payments." |
"Freddie Mac approves
of the Working Group's proposal to keep mortgage loans which are not delinquent
outside of the bankruptcy, allowing mortgage lenders to deal directly with
those debtors. Freddie Mac recommends that the scope of the discharge injunction
should not be so broad as to prevent servicers from telephoning debtors when
they fall behind in their home mortgage payments." |
NBRC-
0541 |
Dean S. Cooper |
Associate General Counsel,
Federal Home Loan Mortgage Corporation ("Freddie Mac") |
|
|
|
There are instances in which there is a legitimate dispute over valuation or defaults on mortgages, and it is not appropriate to penalize the secured creditor in the event the dispute is resolved against him. There is already suffient authority in Bankruptcy Rule 9011 for the court to impose fees and costs on a party or attorney which files a meritless or unjustified pleading. |
"Freddie Mac disagrees
with the Working Group's proposal to award the debtor or trustee reasonable
attorneys fees and costs against the secured creditor whenever the court
finds ther is equity in the collateral or that there was no prepetition default. |
NBRC-
0550 |
Charles D. Bixby II |
Collections Officer, AB&W
Credit Union |
|
|
|
Attorneys do not always act in debtors' best interests because they file bankruptcy and are no better off several months later. People should be made aware of the consequences of bankruptcy and of available alternatives. |
"I suggest the consideration of something along the lines of a "Bankruptcy Disclosure Act". This would require disclosure of all possible repercussions of a bankruptcy filing and allow people to make a more educated decision in regards to bankruptcy." Debtors
also need to be made aware of the option to reaffirm their debt. |
NBRC-
0562 |
Kenneth J. Doran |
Attorney |
|
|
|
"There is no persuasive evidence that a bankruptcy court can award a better credit rating." The
benefit which the proposal seeks to confer is illusory, and should not be
used to lure debtors into Chapter 13. |
|
NBRC-
0564 |
James P. Caher |
Attorney, Author |
|
|
|
Author notes problems raised by recent cases in which attorneys were found in contempt for violating the discharge injunction for cashing post dated checks post-petition. |
Chapter 7 should be made more accessible. |
NBRC-
0565 |
Gerard A Nieters |
Bankruptcy Chairman, NLA; House Counsel, American General Finance |
|
|
|
Author notes that he writes in his own capacity, not as representative of National Lawyers Association or American General Finance. Author is generally unhappy with the working of Chapter 13. He points out his objections to 15 subheadings in the March 15, 1997 memo of the NBRC. |
|
NBRC-
0572 |
Don R. Athearn |
President, SunState Federal Credit Union |
A second letter of the same date by the same author addressing Proposed Changes on Federal Exemptions. |
|
11 |
Author gives his comments
on various proposed changes to Chapters 7 & 13 of the United States Bankruptcy
Code. These are random, short observations with little or no discussion.
Some have more specific suggestions, others merely comment on proposals. |
"Random audits will deter fraud." Debtor education programs should not be mandatory, but should offer benefits for successful completion. "Super Discharge" helps
reduce the length and misunderstanding of the discharge process. Ten years
should be the minimum amount of time before an individual can re-file for
bankruptcy, except under extreme circumstances. A debtor shoul not be allowed
to voluntarily dismiss a plan under Chapter 13. Creditor should retain all
his contractual rights to collateral if debtor is unable to make payments
on the plan. Valuation of the property should be the median point between
wholesale and retail. All unsecured creditors should receive prorata distribution
in a Chapter 13 plan using established consistent guidelines. An internal
review of debtor's income is an appropriate measure to determine condition
of financial situation. Incentives such as reducing period to include bankruptcy
on credit report will most certainly encourage filings. Debtor should be
allowed to reaffirm. Purchase money loans on an individual residence should
be treated like other secured debt. |
NBRC-
0590 |
Brion Boyce |
Accounts Control Manager, King County Credit Union |
|
|
|
Author feels that bankruptcy "is
just another form of legalized theft." |
"I truly hope you will
revise the Bankruptcy Code to be more fair for the credit grantor and not
make it so orientated for the debtor." |
NBRC-
0597 |
Murray S. Lubitz and Louis Levine |
President and Chair, Consumer Subcommittee, of the Commercial Law League of American |
|
|
|
A Chapter 13 debtor who has paid all or a substantial protion of his unsecured debt deserves more favorable treatment in his credit report than a Chapter 7 debtor who made no repayment. |
CLLA favors the enactment of legislation which would ensure successful Chapter 13 debtors more favorable treatment in their credit reports. |
NBRC-
0598 |
William R. Mapother |
Attorney |
Chart of Mapother's Comments on Draft #1 Proposals; Memorandum on Draft #1 of Consumer Bankruptcy Working Group by author. |
|
|
Author states that, while
stated goal of Bankruptcy law is a balancing of rights of creditors and debtors,
the current laws, and the proposed changes by the Commission, is unbalanced
in favor of debtors. The "fresh start" for the debtor is in reality a "forgiveness" rather than a "rehabilitation." |
The law should reconcile the interests of protection of creditors and rehabilitation (not forgiveness) of the debtors. |
NBRC-
0605 |
Kenneth L. Robinson |
President, National Association of Federal Credit Unions (NAFCU) |
|
|
|
Audits are important to help detect fraud and abuse and can determine whether debtor's plan can withstand objections. |
NAFCU and members believe
that the Commission's proposal of random audits "is a positive step toward
preventing debtors from defrauding the bankruptcy system." |
NBRC-
0606 |
National Consumer Bankruptcy Coalition |
"The Coalition is comprised
of trade associations and other organizations representing virtually every
component of the consumer lending industry." |
|
|
|
The Coalition submits
a 9-page Memorandum responding to the Consumer Bankruptcy Draft No.1 dated
March 5, 1997 and Uniform Exemption Draft dated February 12, 1997. The Coalition
feels that "The Draft is not a workable framework for discussion of Bankruptcy Reform" and
discusses various objections to it. |
|
NBRC-
0631 |
Geoffrey L. Giles, Esq. |
Attorney |
|
|
|
Author read memorandum on contingent claims. Author feels that contingent claims are an issue in only a very limited number of cases, while the vast majority of cases are consumer chapter 7s, which seem to be where most of the real problems lie. Also, the meetings of the Commission seem to be patronized by a number of special interest groups.. While Congress has proclaimed loudly in legislative history that people should be in chapter 13 rather than chapter 7, it has cut back the rights of chapter 13 debtors and not enhanced them. |
Perhaps the NBRC should devote more time to the vast majority of cases, which are consumer chapter 7s, and less on esoteric issues like contingent claims. The NBRC should pay less attention to special interest groups, and more to practitioners in the field. |
NBRC-
0649 |
Elizabeth S. Petersen |
Attorney |
|
|
|
Author is concerned about how bankruptcy proceedings are reported. Often creditors will take the position that they are reporting against a debt and therefore they can report against the co-debtor as well as against the debtor. Also, many creditors maintain the account as an open account during the time of the Chapter 13 payment plan, and then report it to the credit bureau when the plan is completed after 4 or 5 years. This blindsides the debtor when, at the end of the plan, he gets a new bad mark. |
Nothing should be reported on the co-debtor at all, and if a charge off is the result of a bankruptcy, it should occur at the time that the bankruptcy is filed and not be allowed to be reported later on. |
NBRC-
0650 |
Samuel L. Bufford |
Bankruptcy Judge, Central District of California |
|
|
|
Author likes the idea
of credit rehabilitation for chapter 13 debtors who complete their plan payments. "Apparently
the credit reporting agencies are unwilling to change their practice of refusing
to distinguish between a completed chapter 13 and any other bankruptcy case,
unless compelled by law." |
|
NBRC-
0651 |
frank E. Berrish |
President/CEO, Visions Federal Credit Union |
|
|
|
Author makes random comments on proposed changes. He is in favor of random audits to detect fraud and abuse, and suggests increasing the petition filing fees to help fund this expense. Debtor education or counseling should be mandatory for those filing for bankruptcy. The minimum time before refiling should be at least ten (10) years. A creditor should be able to retain all of its normal contractual rights with respect to collateral which has been pledged in good faith. Finally, re-affirmation agreements should be utilized for all debts under a Chapter 7 plan for a debtor who is continuing to pay. |
|
NBRC-
0656 |
Celia Woodham |
Director of Compliance, Chartway Federal Credit Union |
|
|
|
Author writes about the credit union's likes and dislikes about the consumer bankruptcy proposals. They like random audits. Six years is acceptable before a refiling, but 10 would be better. They support financial education programs. They like the proposed provisions relating to the automatic stay. They are in favor of the annual review of a debtor's income by the trustee. They support incentives to debtors to file Chapter 13 instead of Chapter 7, such as reducing the period of time the bankruptcy stays on their credit report. They do not agree with not allowing reaffirmations. |
For the sake of uniformity, valuation of property in Chapter 13 should be the median between wholesale and retail. Unsecured creditors who knowingly extend credit when they know that the consumer is already overextended should not be afforded pro rata distribution in a Chapter 13 plan. Non-purchase money liens should have the same protection as other secured debts in bankruptcy. |
NBRC-
0657 |
John D. Leahy |
Chief Executive Officer, Cinfed Employees Federal Credit Union |
|
|
|
Author writes about the credit union's likes and dislikes about the consumer bankruptcy proposals. Same issues and views as in NBRC-0656 |
|
NBRC-
0661 |
Marilyn Shea-Stonum |
US Bankruptcy Judge |
Memorandum dated May 5, 1997 re: Response to Draft #1 Of Consumer Bankruptcy Issues Group |
|
|
Author encloses an initial draft memorandum of her responses to the March 5 consumer working group memorandum. The author's memorandum parallels that of the working group in its comments. |
|
NBRC-
0694 |
James H. Cossitt |
Attorney |
|
|
|
Author fully agrees that
uniformity is a desirable goal. "The adoption of uniform standards for federal exemptions, repayment templates, "ride through" of
secured debt and valuation disputes will be welcome changes." |
"In addition to the areas identified in the draft proposal, the Commission might also consider increased uniformity in the: 1) standards for hte willful and malicious exception to discharge under § 523(a)(6);
2) legal standards applicable to prebankruptcy planning, such as the conversion
of nonexempt into exempt property." |
NBRC-
0697 |
Jo White |
Law Clerk to Judge John C. Akard, U.S. Bankruptcy Court, Northern Distric of Texas |
|
|
|
Author expresses doubts about the ability to achieve uniformity in the bankruptcy system - judges will all interpret the law differently. |
None |
NBRC-
0697 |
Jo White |
Law Clerk to Judge John C. Akard, U.S. Bankruptcy Court, Northern Distric of Texas |
|
|
|
Author makes observations as to how costs could be reduced. |
|
NBRC-
0698 |
John K. Justin |
Attorney |
|
|
|
Author makes random observations
on various aspects of Draft No. 1 dated March 5, 1997. Author's basic attitude
is summed up as "I find your proposals unsound, improper, ill-advised and bad law." He
does, however, like the proposal for an accelerated discharge in Chapter
13, but doesn't know how it could be accomplished. |
"I would suggest further
review as to minor refinements rather than the substantial changes you are
currently proposing." |
NBRC-
0699 |
Edith H. Jones |
Bankruptcy Judge |
|
|
|
Judge Jones faxed these observations on the May 5 draft of the Proposed Consumer Bankruptcy Framework. In some cases these are merely questions, in some observations, in some concrete suggestions. |
|
NBRC-
0700 |
Edgar M. Rothschild, III |
Attorney |
|
|
|
Author comments on following
aspects of consumer bankruptcy: need for successive filing; superdischarge;
automatic stay; the template idea; incentives to file Chapter 13; abusive
creditors; and , finally, regulation of the "rent-to-own" industry. |
|
NBRC-
0712 |
Daniel H. Brunner |
Chapter 13 Trustee, Eastern District of Washington |
|
507(a)(7), 523(a)(7) |
1322(a)(2) |
In the 1994 amendments,
Congress added child support as a §507(a)(7) priority. In doing so, Congress lifted the language out of §523(a)(5),
but left out the parenthetical exception to the exception dealing with assignments
to a state or political subdivision. This has permitted debtors whose back
child support has been assigned to a state child support collection agency
to claim and argue that to the extent the child support has been assigned,
it is not entitled to priority status. Consequently, in Chapter 13 the debtor
is not required to pay that child support in full during the life of the
plan as required by U.S.C. 1322(a)(2). |
"My suggestion is to amend §507(a)(7) to include the parenthetical language of §523(a)(5)(A),
which is the exception to the exception. This will mean that assignment of
a child support claim to a state agency will not cause that claim to lose
its priority status. |
NBRC-
0725 |
Jennie Deden Behles |
Attorney; Chairman of the Consumer Focus Group of the American College of Bankruptcy. |
Copy of Position Paper on Consumer Bankruptcy - Fellows. |
|
10 |
The American College of Bankruptcy is concerned that the voice of debtors and their representatives are not being heard in the debate over changes in consumer bankruptcy. They also are concerned that they have not yet seen specific proposals for changes in consumer bankruptcy law which they can comment on. |
Author asks that the American College of Bankruptcy be kept informed and be provided with proposals by the Consumer Working Group by fax or e-mail. |
NBRC-
0726 |
Ken Crone, Saul Eisen, Hank Hildebrand, Ike Shulman |
American Bankruptcy Institute Consumer Bankruptcy Reform Forum |
|
|
|
Reform in the way credit bureaus report bankruptcies could provide incentives for debtors to choose Chapter 13 over Chapter 7. Chapter 13 debtors who complete their plans should get a more favorable credit report. |
1) Bankruptcies must be reported by Chapter; 2) Completed Chapter 13 plans must be reported by the percentage of the unsecured debt which was repaid; 3) If the debtor completes a Chapter 13 and the credti reporting on all the debts included in the bankruptcy plan has expxired, the credit bureau should delete the reporting on various debts and delet the Chapter 13 bankruptcy as well; and, 4) Completion of a consumer finance education program would also be recorded int he credit bureau history. |
NBRC-
0727 |
Wendell J. Sherk |
Attorney, Eric Taylor & Associates,
P.C. |
|
|
|
Author discusses incentives
for debtors to file Chapter 13 instead of Chapter 7. He is upset that debtor's
attorneys are criticized for recommending that their clients file Chapter
7, but it is often the best deal for their clients, and that is their job.
Author sees the incentives for Chapter 13 as being the ability to deaccelerate
and cure defaults and the superdischarge. "Positive markings on a credit report would help some marginal cases choose Chapter 13 but the best offer you could make to them is that the bankruptcy notation would come off their report completely upon completion of a plan or very shortly thereafter. The creditor community may want you to push Chapter 13 but not that much, I suspect." "One last note on incentives: Judge Jones indicated that the Draft Proposal #1 envisioned the revised Chapter 13 plan curing mortgages and paying secured claims over the life of the plan, no front-loading so those claims are saatisfied come what may. This is an absolutely incredible disincentive." "Chapter
13 is actually very well designed right now to have reasonable incentives." |
Change the requirements on credit reporting so that Chapter 13 cases get a better report, or so that their report is wiped clean. Do not change Chapter 13 plans so that their is no front-loading. |
NBRC-
0728 |
John C. Akard |
U.S. Bankruptcy Judge, Northern District of Texas |
Copy of letter dated 5/2/97 to Susan Jane Darnold from office of United States Trustee; Copies of 4 letters dated 3/26/97 from Judge Akard to the Bankruptcy Commissioners on different topics. |
|
|
"Just as there is come
disparity between judges as to the percentage which must be paid to general
unsecured creditors in a Chapter 13 plan, ther is a dispaarity between judges
as to whether plans should be three or five years." |
"In order to provide a greater distribution to general unsecured creditors, it would be appropriate to consider a method to encourage five year plans particularly in view of the fact that car loans last 60 months." See
attached letter from Judge Akard dated 3/26/97 concerning length of Chapter
13 plans. |
NBRC-
0728 |
John C. Akard |
U.S. Bankruptcy Judge, Northern District of Texas |
Copy of letter dated 5/2/97 to Susan Jane Darnold from office of United States Trustee; Copies of 4 letters dated 3/26/97 from Judge Akard to the Bankruptcy Commissioners on different topics. |
|
|
As presently drafted, Chapter 13 is flexible enough to meet the particular problems of each individual debtor. Each debtor has different financial and different emotional problems. Thus, each plana needs to be tailored to the situation of the particular debtor. As the parameters of Chapteer 13 are narrowed, the number of people who can receive relief under it and the number of creditors who can be benefited by it are reduced. |
Great care should be taken before placing any restriction on Chapter 13. |
NBRC-
0730 |
Thomas C. Leduc |
Director of Regulatory Issues, Michigan Credit Union League |
|
|
|
"The Code currently allows
only the bankruptcy judge or the U.S. Trustee to raise objections to Chapter
7 filings based on the debtor's substantial abuse of the Code." |
"We suggest the Code be
amended to allow Creditors the right to (within reason) raise substantial
abuse objections." |
NBRC-
0730 |
Thomas C. Leduc |
Director of Regulatory Issues, Michigan Credit Union League |
|
|
|
"Not all creditors should
be given the same priority in a Chapter 13 bankruptcy, because certain creditors,
in a manner of speaking, play a larger role in contributing to the debtor's
financial condition than others." |
"The Task Force proposes
that creditors should somehow be ranked in relation to the extent to which
their loans contributed to the debtor's insolvency. The Taks Force had no
concrete formula for this ranking, however it was agreed that interest rate
should be one of the factors (for example, within the class of unsecured
creditors, those creditors charging higher interest rates would receive a
smaller percentage of repayment than those charging lower interest rates).
Other factors include annual fees, grace periods, and perhaps the age of
the debt. If it is possible to quantify, the exten to which the credit application
was scrutinized prior to granting credit should also be considered (i.e.,
an unsolicited offer of pre-approved credit should receive a lower ranking
than credit that was granted as a result of the consumer's completion of
a credit application)." |
NBRC-
0730 |
Thomas C. Leduc |
Director of Regulatory Issues, Michigan Credit Union League |
Copy of In re Thena, Inc., U.S. District Court, District of Oregon. No. 95-6226-HO. October 6, 1995. Copied from Bankruptcy Law Reports, Commerce Clearing House, Inc., 1996, New Developments - Court Decisions. |
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"We note with concern
language in the case of In re Thena, Inc. (copy enclosed) whereby a governmental
unit ws allowed to retain forfeited property which, had it not been forfeited,
could well have been available for distribution to the creditors in a bankruptcy
proceeding. While the propriety of forfeiture laws in general is not our
concern, we do believe it to be a wrong result when a governmental entity
is allowed to retain what is in essence a windfall, while creditors in a
bankruptcy who would otherwise have access to the proceeds of the assets
involved are forced to bear an increased loss as a result of the forfeiture." |
"We recommend that the
Code be amended to change this result; the real burden of a forfeiture should
not fall on innocent creditors." |
NBRC-
0732 |
Janet E. Hinrichs |
CEO, Des Moines Metro Credit Union |
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"Collateral valuations
are a normal market risk in everyone's life. Why should bankrupts beceive
special consideration in this area, putting all of the risk on the creditor" |
Do not permit cramdowns on non-purchase mortgage loans under Chapter 13. |
NBRC-
0732 |
Janet E. Hinrichs |
CEO, Des Moines Metro Credit Union |
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"When creditors lose money
because of someone's misfortunes or mistakes, they should have a right to
historical information so that they con't help those same people to make
the same mistakes again. Bankruptcy should have some negative consequences
for those who use the system!" |
Do not legislate the removal of bankruptcy filings from credit reports after repayment of Chapter 13. |
NBRC-
0757 |
National Association of Consumer Bankruptcy Attorneys (NACBA) |
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Written record of Proposals
For Improving the Consumer Provisions of the Bankruptcy Code presented to
the NBRC on May 14, 1997 by the NACBA. "NACBA believes that the existing consumer bankruptcy system is fundamentally sound..." The
Proposal discusses various aspects of Chapter 13, Chapter 7, and the March
5, 1997 NBRC Draft Consumer Bankruptcy Proposals. In summary, the NACBA feels
that the present system is functioning well, that minor improvements can
be made, but that no major restructuring of consumer bankruptcy is warranted. |
The document contains proposals in its different sections. |
NBRC-
0759 |
Peter Fessenden |
Standing Chapter 13 trustee for the United States Bankruptcy Court for the District of Maine |
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Written Testimony of Peter
C. Fessenden to the NBRC on May 14, 1997. Speaker addresses three issues:
1) Should the "disposable income test" of § 1325(b)(2) be abolished in favor of a "template" approach; 2) Should § 1322(b)(2) be amended to permit the modification of junior non-purchase money mortgages securing real estate which is the debtor's principal residence; and, 3) Should § 109 and/or § 362
be amended to address problems of abusive filings |
1) No; 2) Yes; and, 3)
The amendment of § 362(d) to allow for in rem orders should be considered. |
NBRC-
0788 |
Kathleen A. McDonald |
President, National Association of Chapter 13 Trustees (NACTT) |
Copy of a Memorandum prepared fromthe comments of the NACTT membership on Draft #1 proposal of the Consumer Bankruptcy Working Group, with 3 exhibits attached relating to the creation of budget guideline templates. |
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Author is forwarding a memorandum prepared from the comments of NACTT members on various aspects of the Consumer Bankruptcy Working Group Proposals. These deal with a variety of issues. Author's letter mentions that a majority of Chapter 13 trustees oppose the template proposal. Most responses indicated that no threshhold distribution was required, but the most common minimum for those who had one is 10%. |
This is basically commentary on NBRC Consumer Working Group proposals. |
NBRC-
0790 |
Ed McKee |
Senior Loan Officer/Vice President, Whatcom Education Credit Union |
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"Chapter 13 plans seem
confusing and take a long time in some cases to actually reach confirmation." |
Streamline Chapter 13 cases. |
NBRC-
0791 |
Mallory B. Cuncan |
Vice President, General Counsel, National Retail Federation |
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The National Retail Federation desires to increase the share of Chapter 13 plans filed versus the Chapter 7 liquidations. To help do this, author proposes that those plans which have a higher success rate be studied, and transfer their procedures and ideas to other jurisdictions. Author categorizes the reasons for failure, and notes that not all cases where a plan is not completed are failures. In many instances, the purpose of the debtor will have been met. |
Author gives ten (10) suggestions for improving the success rate of Chapter 13 plans: 1) mandatory consumer education; 2) review budget under BLS standards; 3) annual review of income; 4) wage deduction; 5) allow higher attorney fees for Chapter 13; 6) teach legal community the preference for and benefits of Chapter 13 plans; 7) note chapter 13 plans and consumer education completed on credit reports; 8) offer credit rehabilitation to those who complete high percentage chapter 13 plans; 9) allow abatements for emergency situations; and, 10) have a needs based bankruptcy test and gatekeeper to determine who is eligible for Chapter 7 and Chapter 13. |
NBRC-
0806 |
Jill M. Sturtevant |
Assistant General Counsel, Bank of America |
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Bank of America questions
the necessity of the "false claim" provision of the consumer bankruptcy proposal
as it is unclear what type of abuse this provision seeks to remedy and it
is extremely punitive to creditors. |
If creditors are required
to pay debtors' attorneys' fees for mistaken or "false claims, then debtors
should be similarly required to pay creditor's fees when creditors are forced
to defend their claims and win. |
NBRC-
0806 |
Jill M. Sturtevant |
Assistant General Counsel, Bank of America |
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|
"Bank of America urges
the full Commission to give serious consideration to the proposals contained
in Judge Jones's May 23rd Memorandum on the Consumer framework." |
"The Bank of America stongly
supports these proposals." |
NBRC-
0807 |
Richard T. Wargo, Jr., Esq. |
Director, Compliance & Information, Pennsylvania Credit Union League & Pacul
Services, Inc. |
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PACUL was not pleased
with the March 5 draft from the Consumer Working Group. "The May 6th draft contains some encouraging proposals." However, author feels that the balance between debtor and creditor tips decidedly in favor of debtors, and that the new proposal increases the debtor's incentive to walk away from the debt through the super discharge granted at confirmation. "Meaningful
bankruptcy reform permits a debtor a fresh start while instilling responsibility." |
"[W]hen the debtor applies
for and obtains the privildege of a fresh start, his or her responsibility
to complete the plan or honor the reaffirmation agreement must be stressed.
In addition, creditors must be provided expedited relief where a debtor defaults." |
NBRC-
0807 |
Richard T. Wargo, Jr., Esq. |
Director, Compliance & Information, Pennsylvania Credit Union League & Pacul
Services, Inc. |
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"The proposal states that
it shall be an unlawful practice for a creditor to engage in postpetition
collection efforts or collect on a debt that has been discharged." |
"This language should
be clarified such that credit unions will not violate federal law by enforcing
the statutory lien on shares granted by the Federal Credit Union Act or the
Pennsylvania Credit Union Code." |
NBRC-
0831 |
David T. Sykes |
Attorney, Duane, Morris & Hecksher
LLP |
Six summaries of bankruptcy cases filed in forma pauperis in Philadelphia under a pilot project showing the effectiveness and importance of having in forma pauperis filing status. |
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Authro writes to urge the Commission to consider in forma pauperis status for deserving individual chapter 7 debtors. |
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NBRC-
0844 |
David C. Andersen |
Attorney |
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Chapter 13 strikes a balance
between payment of debts and ability to pay and should be the most attractive
of options for all employed debtors. "By changing the law in the correct
manner, Chapter 13 cases will become much more popular and will result in
much more money being paid on past debts." |
"FAVORABLE TREATMENT ON CREDIT REPORTING IS THE MOST IMPORTANT OF ALL SUGGESTIONS TO ENCOURAGE CHAPTER 13 OVER CHAPTER 7." "1)
Report Chapter 13 for only 3 years from the date of filing on credit reports;
2) Eliminate the requirement that a Chapter 13 debtor obtain permission of
the Court or Trustee in order to obtain financing for automobiles when the
debtor is represented by counsel. |
NBRC-
0846 |
Paula E. Langguth |
Author, Bounce Back From Bankruptcy, Pellingham Casper Communications, LLC. |
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Author is against the
establishment of a national filing system. "Such a system could be used by
creditors to unfairly apply higher interest rates to people who have filed
bankruptcy in the past. Such a system could wind up causing undue hardship
and pain to people attempting to file, when the database shows them ineligible
to file due to clerical errors or fraud from people using erroneous Social
Security numbers." |
"A simpler approach would
be to pull a person's credit report prior to discharging. Any previous bankruptcy
would be listed, eliminating the need for a national registry." |
NBRC-
0856 |
Ronald C. Sykstus |
Attorney, Bond, Botes,
Sykstus & Larsen, P.C. |
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11 |
"...if it is thegoal of
the commissin to increase chapter 13 filings, we believe that an amendment
to the credit reporting act such as the following would go a long way to
ensure successful chapter 13 filings, rather than chapter 7 filings." |
"The credit reporting
act should be amended to completely erase negative credit, to include the
bankruptcy filing, from a debtor's credit report upon completion of a sixty
month chapter 13 plan. The commission could require a certain minimum percentage
to be paid back under the chapter 13 plan on the order of 25%-50% of the
unsecured debt, which would greatly increase what unsecured creditors would
receive as compared to a chapter 7." |
NBRC-
0860 |
Melvin J. Kaplan |
Attorney |
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"Both Congress and the
Commission have made it clear that Chapter 13s are to be encouraged." |
"To increase Chapter 13
filings, all debts should be made dischargeable, confirmation standards should
be relaxed, reasonable attorneys' fees must be allowed (comparable to what
attorneys practicing in non-bankruptcy areas are paid) and attorneys' fees
must be paid on a priority basis, before distribution to other creditors." |
NBRC-
0884 |
Norma Hammes |
President, National Association of Consumer Bankruptcy Attorneys |
NACBA Review of NBRC Consumer Bankruptcy Working Group May 6 Draft Proposal |
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Author is forwarding copy of NACBA Review of NBRC Consumer Bankruptcy Working Group Draft of May 6, 1997. |
N/A |
NBRC-
0908 |
Randy Osherow |
Editor, Minutes, San Antonio Bankruptcy Bar Association |
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|
Author sent copy of minutes of meeting of San Antonio Bankruptcy Bar Association which contained random comments in an open letter to the NBRC. |
Keep what works and improve it; Keep it simple; Privatize, Privatize, Privatize. |
NBRC-
0925 |
C. Michael Stilson |
Bankruptcy Judge, Northern District of Alabama, Western Division |
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11 |
Author feels that the "substantial" changes
proposed to the Bankruptcy Code are not necessary, and that remedies already
exist for most of the problems addresed by the Consumer Bankruptcy Working
Group. Author addresses each proposal of the Working Group. |
Author agrees with the proposal on different credit reports for those who choose Chapter 13 payment plans and those who complete them. |
NBRC-
0933 |
Wendell J. Sherk |
Attorney |
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Author's thoughts on various consumer bankruptcy working group proposals while he recovers from back surgery at home. |
See letter |
NBRC-
0934 |
Jean Braucher |
Professor of Law, University of Cincinnati College of Law |
Jean Braucher, "Counseling Consumer Debtors to Make Their Own Informed Choices--A Question of Professional Responsibility",
5 Am. Bankr. Inst. L. Rev. 165 (1997). |
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Author supports the proposed automatic conversion from chapter 13 to chapter 7 upon plan failure because it would save many debtors the expense of paying a new attorney's fee. |
NBRC-
0937 |
Frank Hallum, Jr. |
Sr. Vice President, Community Educators Credit Union |
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11 |
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Author believes that debtors should receive mandatory counseling before filing bankruptcy, that they should have the ability to reaffirm debts, that debtors having the ability to repay part of their debt be required to file chapter 13 instead of chapter 7, that cramdowns of second mortgages should not be permitted, and that debtors should not be permitted to retain collateral without a reaffirmation. |
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NBRC-
0955 |
ABI Consumer Bankruptcy Reform Forum |
American Bankruptcy Institute |
Letter from Jill M. Sturtevant, Assistant General Counsel, Bank of America Re: ABI Consumer Forum Contribution dated June 4, 1997; Letter from Dean S. Cooper, Associate General Counsel, Freddie Mac, Re: Freddie Mac's Comments on ABI Consumer Bankruptcy Working Group's Proposal on Repeat Filings dated May 21, 1997. |
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The ABI sponsored a Consumer Bankruptcy Reform Forum which met twice. The goal was to create a process, rather than to produce a spedific set of proposals. This report was prepared by four members to summarize the events of the second meeting held May 15, 1997. It contains options considered for and discussions of the following issues: 1. Default Discharge Option for Failing Chapter 13 Cases; 2. Chapter 13 Superdischarge; 3. Credit Report Forum; 4. Option on Repeat Filings; 5. Disposable Income; 6. Treatment of Rent-to-Own Contracts; and, 4. Stripdown of Mortgages/Interest on Arrears. |
Solutions are proposed for each issue mentioned above. |
NBRC-
0959 |
Norma Hammes |
Attorney; President, National Association of Consumer Banakruptcy Attorneys |
Copy of letter dated July 18, 1997 to The Hon. Orrin G. Hatch from the NACBA. |
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Author is forwarding copy of letter sent to all members of the Senate and House Judiciary and Banking Committees in response to the letter from the National Consumer Bankruptcy Coalition letter of July 14, 1997. The letter makes two main points: 1) NACBA wants to point out misleading statements made by the credit industry; and, 2) to point out several important elements of the Commission's tentatively-adopted Consumer Bankruptcy Framework about which NACBA has grave concerns. |
N/A |
NBRC-
0961 |
Janice W. Welch |
Executive Vice President, Kimberly-Clark Credit Union |
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"I am against the approved
changes to the bankruptcy laws recommended at your meeting in Detroit in
June. Credit Unions do not need any recommendations made that will make filing
bankruptcy more attractive." |
"Please consider an alternative
that will help everyone involved instead of hurting other consumers and lending
institutions." |
NBRC-
0962 |
Eddie Gentry |
V.P. Loan Services, Educators Credit Union |
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"At a time when bankruptcy
filings are increasing at an alarming rate, it would seem prudent to be conservative
in any changes that would allow or encourage more people to file for bankruptcy
protection." |
"We wish to appeal to
you not to recommend such proposals as a ban on reaffirmations, 'cramdowns'
of second mortgages in chapter 13 and the discontinuation of the 'needs-based
test' to determine who can afford
|