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Web posted and Copyright © 1/12/98, American Bankruptcy Institute.

Consumer: Discharge and Exceptions

ID	Name	Group	Other	Code Sec	Cross Ref	Problem Referenced	Proposed Solutions
NBRC- 0004	Edgar M. Rothschild	Rothschild, Bloom, Hoover, Allison & Ryan. Chapter 7 & 13 Debtors' Counsel	Oral Comments: May 17 Meeting	1328(a)	523(a)(8)	Stop erosion of dischargeable debts under section 1328(a).	Reinstate student loan discharge.
NBRC- 0018	Peter H. Arkison	Practitioner	Oral Presentation made at November meeting	523(a)(1)	507(a)	Too much time and money are spent on the costs of litigation and administration and special interest groups impose deleterious consequences for the process.	Many Code sections have substantial room for simplification. For example, §§ 507 and 523 (as read in conjunction with §§ 524, 1123, 1129, 1222, 1228, 1322, and 1328) should be simplified to provide a simple test for determining the dischargeability of taxes.
NBRC- 0018	Peter H. Arkison	Practitioner		523		A number of debts that could conceivably be declared nondischargeable can't be brought, or for that matter defended, because the amount involved does not justify the prosecution or the defense of an adversary proceeding. This effectively amounts to the denial of access to the doors of justice.	There should be a rule of procedure adopted for the "small claims adversary proceeding" in order to make it possible to have a quick, efficient, and economic resolution of dischargeability actions that involve insubstantial, albeit meritorious, claims.
NBRC- 0041	Billy R. McCoy	Ex-Husband of Ch. 7 debtor.		523(a)(15)		Confusion over non-dischargeability provisions permitted wife to avoid "hold harmless" provisions in divorce. Judge stated that confusion over section precluded non-dischargeability becaiuse ex-wife benefitted from divorce.	Make Provision clear and give rights to former non-bankruptcy filing spouses. Now left holding the bag and completely victimized by bankruptcy proceedings.
NBRC- 0098	Polly S. Higdon	Bankruptcy Judge; District of Oregon	Invited Participant to Consumer group - Santa Fe meeting.	1328(a)		Debtors who have not filed tax returns, or who have filed late or fraudulently, upon completion of their plan, may obtain a discharge from the tax debt represented by these years without any payment for those taxes. Due to the superdischarge provisions of section 1328(a)	Section 1328(a) should be amended to prohibit discharge from this form of debt.
NBRC- 0098	Polly S. Higdon	Bankruptcy Judge; District of Oregon	Invited Participant to Consumer group - Santa Fe meeting.	1328(a)		Due to the superdischarge provisions, I see a large number of civil tortfeasors in ch. 13, including child, spouse and elderly abusers. If they complete their plan, they will receive a discharge from such obligations, often with no payment towards the debt.	Cannot explain to the creditors why these people receive such a benefit from the bankruptcy system. I am embarrassed for the system. For this reason, I am in support of the complete repeal of the superdischarge.
NBRC- 0098	Polly S. Higdon	Bankruptcy Judge; District of Oregon	Invited Participant to Consumer group - Santa Fe meeting.	1325		Ch. 13 has many sections that are being applied without uniformity: 1. Common in OR for 0% plans, exemptions are not generous, in other parts of the country, higher % plans are required. 2. Some debtors are permitted to separately classify restitution or child support debt under 1325(b)(1), in others they cannot. 3. No guidelines for what is reasonable and necessary under section 1325(b)(2). 4. Debtors may or may not have to file overdue tax returns before plan confirmation. 5. Inconsistent results on whether to allow late filed claims. 6. Modification of the plan under 1329 is inconsistent. 7. What is cause under 1322(d), many debtors do not have resources to fulfill their obligations for a discharge in less than five years. 8. What is binding effect of ch. 13 plan 9. Upon confirmation, is their any property of the estate under 362(c)(1) 10. How many plan payments can the debtor miss before the case is dismissed 11. When is a case or plan filed in good faith under section 1325(a)(3) 12. Should the debtor exercise so-called "strong-arm" powers of sections 544, 545, 547 and 548	Some of these decisions are appropriately left to the judge. Without them, we would be without work. We should not be required to make certain other decisions. It is clear, that the fewer discretionary decisions the judge is required to make, the more uniform any application of law will be.
NBRC- 0100	Ike Schulman	President; National Association of Consumer Bankruptcy Attorneys	Invited Participant to numerous NBRC meetings.			Significant number of ch. 13 are dismissed leaving those debtors without a discharge. This may not be a problem, since a ch. 13 debtor who has only exempt assets and whose ch. 13 plan fails can achieve a discharge by converting to ch. 7. Others have told the commission that debtors whose cases are dismissed can still refile if a discharge is needed.	If after further study, NBRC concludes that all debtors should get a discharge, an automatic discharge provision cuold be added to ch. 13 cases which would otherwise be dismissed. It could be limited to those debtors that have met the "best interest of creditors test" An immediate discharge (as in the BBC) or an automatic discharge will both eliminate important protections for the debtor which exist under the current system. Once a discharge is received, a debtor cannot file for six years from the petition date. This would be a serious hardship for those debtors that incur post-filing debts such as medical bills that will not be discharged under either proposal.
NBRC- 0101	Ike Schulman	President; National Association of Consumer Bankruptcy Attorneys	Invited Participant to numerous NBRC meetings.			Ch. 13 has historically enabled debtors to discharge some types of debts which would not have been dischargeable in ch. 7. This has been a key incentive for debtors to seek ch. 13 relief. In exchange all of the creditors are provided a share of the debtors disposable income through an orderly repayment plan. It is important to note that eligibility for the super-discharge can be challenged by creditors if the ch. 13 plan is not filed in good faith.	NACBA recommends that there be no weakening of the superdischarge provisions of ch. 13.
NBRC- 0101	Ike Schulman	President; National Association of Consumer Bankruptcy Attorneys	Invited Participant to numerous NBRC meetings.			The ability to resolve tax debt problems has been a critical benefit for debtors electing ch. 13. Current law allows debtors to discharge most income taxes which are more than three years old while requiring full payment for income taxes for the last three years. This trade-off has been one of the most successful provisions of ch. 13. It ahs enabled tax debtors to overcome insurmountable tax debts which would rarely be collectible even by the taxing authorities. At the same time, taxing authorities are guaranteed a repayment plan for the recent tax years. In order to obtain their discharge, debtors must complete the repayment plan. The protection from garnishment allows ch. 13 debtors to maintain steady employment and gives them financial stability to once again pay their required withholding taxes to the government. Any erosion of these protections will lead to far fewer debtors electing ch. 13 protection and to reduced tax collections by tax authorities.	NACBA recommends that there be no change in the current law regarding the treatment of income tax debts in ch. 13.
NBRC- 0101	Ike Schulman	President; National Association of Consumer Bankruptcy Attorneys	Invited Participant to numerous NBRC meetings.			Currently, federal law allows credit reporting agencies to report chapter 7 or chapter 13 filings on debtors' credit reports for up to ten years. The failure to make a distinction in the reporting period between ch. 7 and ch. 13 discourages debtors from choosing ch. 13 when their credit will be damaged for the same length of time as in chapter 7.	NACBA recommends that the Fair Credit Reporting Act be amended to reduce the credit reporting period for ch. 13 cases to five years from the date of filing.
NBRC- 0101	Ike Schulman	President; National Association of Consumer Bankruptcy Attorneys	Invited Participant to numerous NBRC meetings.			Until 1990, most student loans were dischargeable in ch. 13 cases although not in ch. 7 cases. This provided an incentive for persons to file ch. 13. In 1990, congress made most student loans nondischargeable in ch. 13 as in ch. 7. This has left many debtors in as impossible situations where they have neither the means to pay nor the likelihood of being able to pay in the future. Situation is most agregious where the debtor has incurred the loan to attend a trade school that has led to little improvement in a debtor's earning capacity and often result from overreaching sales practices by the trade schools.	NACBA recommends that the ch. 13 superdischarge should be extended to all trade school loans.
NBRC- 0101	Ike Schulman	President; National Association of Consumer Bankruptcy Attorneys	Invited Participant to numerous NBRC meetings.			NACBA agrees with the NBC that the time has come to eliminate reaffirmations of debt after bankruptcy. If debtors wish to pay their debts after they are discharged, the Code explicitly provides that they may do so without reaffirming. In fact, reaffirmations occur most frequently in two circumstances, neither of which justify reaffirmation. Many reaffirmations occur because unrepresented debtors are approached by creditors and reaffirm due to ignorance or misinformation. Most of the rest occur because a debtor feels that it is the only way to keep property subject to a lien after a ch. 7 case.	The better approach in that situation would be to permit the debtor to redeem the property by paying the value of the property in installments. If the payments were not made, the creditor would have the right to repossess or foreclose, but would not have the right to a deficiency judgment for the portion of the debt which had been undersecured at the time of the filing. Essentially, the same recommendation was made by the last bankruptcy commission in the 1970's. NACBA recommends that reaffirmations be eliminated and that debtors be permitted to redeem collateral through installment payments after bankruptcy.
NBRC- 0105	Gary Klein	Staff Attorney; National Consumer Law Center, Inc.	Invited participants - April Meeting			In order to encourage debtors to use chapter 13 is to anhance the relief that can be obtained. One of the most important features is the ability to cure defaults on mortgage indebtedness under a ch. 13 plan. Use of cure rights is a classic win-win situation in bankruptcy.	Everything possible should be done to encourage affordable chapter 13 cures of defaults. Appropriate changes would minimize trustee's payments on these expensive debts, ecourage consensual workouts by clarifying that payments on workouts may be made outside a ch. 13 plan. Expand the availability of stripdown in ch. 13 because it mimics the creditors best potential outcome, and eliminate interest on arrears which effectively functions as a tax on ch. 13 cures. Amendment to fair credit reporting act should clear a ch. 13 within seven years rather than ten years from the date of the petition. Superdischarge should include discharge of student loans. Ch. 13 debtors should continue to be allowed to separately classify claims.
NBRC- 0110	Peter H. Arkison	Law Offices of Peter H. Arkison	Made oral presentation to the NBRC on November 1, 1995	523		Resolution of "small claims" (less than $5,000) is too costly.	Amend the Bankruptcy Rules to provide a special adversary proceeding to resolve "small claims" litigation in Chapter 7 and 13 cases.
NBRC- 0109	Karen Gross	Professor of law; New York Law School		726	1328	Credit counseling is important.	A requirement should be added to the Code stipulating that all individual debtors be offered financial counseling prior to obtaining their discharge. Such counseling could take a wide range of forms, both public and private. This would require amendment of sections 726, 1141, 1228 and 1328.
NBRC- 0132	Steven D. Goldstein	President, Credit Department, Sears Roebuck & Co.	Heard Brady speak at National Retail Fed'n Credit Mangmnt Advisory Council	523(a)(2)(C)		Currently, debts incurred for luxury goods wihtin 60 days of petition date are presumed to be non0dischargeable. Often account holders run up bills on luxury items and then wait more than sixty days to file, thus making those debts dischargeable.	Section 523(a)(2)(C) should be amended to extend the "load-up" presumption for luxury goods and services purchases. Our recommendation is six months.
NBRC- 0132	Steven D. Goldstein	President, Credit Department, Sears Roebuck & Co.	Heard Brady speak at National Retail Fed'n Credit Mangmnt Advisory Council	524(c)		Debtors, often on the advice of counsel, sign reaffirmation agreements to retain merchandise in which Sears has a purchase money security interest or in order to maintain credit. Some courts will not allow reaffirmation agreements under any circumstances even when all of the interested parties agree and execute an agreement in compliance with the Code. This creates a hardship on the debtor and is an inconvenience for the creditor. Additionally, with regard to secured creditors, the debtor must either decide to surrender merchandise or hire an attorney to answer a state replevin action.	Sears recommends that when all of the Code requirements are satisfied, reaffirmation agreements must be automatically approved.
NBRC- 0116	Kenneth J. Doran	Law Offices of Kenneth J. Doran	Participated at Consumer Bankruptcy Working Group on July 19.			Discharge law is excessively burdened by special interests.	Liberalize student loan discharges. Allow discharge of "trust fund" payroll or sales tax claims on the same three-year rule as personal taxes.
NBRC- 0116	Kenneth J. Doran	Law Offices of Kenneth J. Doran	Participated at Consumer Bankruptcy Working Group on July 19.			Reaffirmations are bad bankruptcy policy.	Prohibit reaffirmations.
NBRC- 0119	William C. Whitford	Professor		523		Creditors overburden debtors' fresh start by successfully obtaining execptions to discharge under an "implied fraud" threory based on § 523(a)(2)(C).	Redraft § 523(a)(2)(C) to provide credit card issuers reasonable protection against credit card abuse and then prevent those issuers from seeking excpetions from discharge under an "implied fraud" theory.
NBRC- 0132	Steven D. Goldstein	President, Credit Department, Sears Roebuck & Co.	Heard Brady speak at National Retail Fed'n Credit Mangmnt Advisory Council	1325(b)(1)(B)		Ch. 13 plans can be too short.	Amend section 1325(b)(1)(B) to extend upon application by the trustee or objection to the plan by an unsecured creditor, the length of a chapter 13 plan to five years. The proposed amendment would partially remedy the disparate treatment of proposed plans under existing law, which permits a chapter 13 debtor making payments pursuant to a plan to commit to an auto loan for a period of time exceeding the length of the average repayment plan.
NBRC- 0120	Judith Elston	Chrysler Financial Services, Toyota Motor Credit Company, Ford Motor Credit Company, General Motors, and American Financial Services		1307		Chapter 13 debtors who fail to make payments under confirmed plans nonethless receive discharge benefits.	Amend § 1307 to include a provision which would require dismissal of a case when 2 consecutive payments, or 3 payments in the aggregate, have been missed, or when partial payments made by a debtor leave a past due amount equal to the sum of 3 missed payments. The Code should also make clear who should move for dismissal.
NBRC- 0132	Steven D. Goldstein	President, Credit Department, Sears Roebuck & Co.	Heard Brady speak at National Retail Fed'n Credit Mangmnt Advisory Council	727		The decreasing stigma of bankruptcy and the growing popularity of bankruptcy as a financial planning tool is beginning to spawn an ever increasing number of repetitive filings. Debtors, who, for one reason or another, return to court to seek a second or third discharge.	Amend section 727 to extend the period between bankruptcy discharges to 10 years. The proposed amendment would assist in reducing the burden on overworked bankruptcy courts, discourage reliance on the system as a means to avoid assuming any financial responsibility and preserve the benefit of a fresh start for deserving debtors. Additionally the time period would correspond with the reporting period under the fair credit reporting act.
NBRC- 0132	Steven D. Goldstein	President, Credit Department, Sears Roebuck & Co.	Heard Brady speak at National Retail Fed'n Credit Mangmnt Advisory Council	524(c)	524(c)(3)	The proposed amendment would explicitly overrule decisions in various districts that, contrary to the policies underlying the bankruptcy code, restric a creditor's ability to communicate with a debtor regarding the availability of a reaffirmation agreement as a debt-restructuring device and reject even demonstrably voluntary reaffirmation agreements as void due to the debtor's lack of capacity to make an agreement for the extension of future unsecured credit.	Amend section 524(c) to provide clear statutory authorization of communication with the debtor regarding reaffirmation and to require automatic approval of reaffirmation agreements filed with the court and bearing the declaration of the debtor's attorney provided for under section 524(c)(3).
NBRC- 0124	Wayne Johnson	Attorney; Brobeck, Phleger & Harrison, LLP		523(a)(2)		Ninth circuit has adopted the position that bankruptcy courts must apply the collateral estoppel law of the state that renders a pre-petition judgment when the bankruptcy court determines the preclusive effect of that judgment on a nondischargeability proceeding under section 523. In some states (CA & FL) the actually litigated component of collateral estoppel no longer exists. The rule does not extend to default judgments issued by a federal court. Then the bankruptcy court must apply federal collateral estoppel provisions. Is inappropriate for several reasons: 1. not a uniform standard; 2. a dischargeability proceeding being decided without any examination of the fraud elements because the bankruptcy court must defer to the state court judgment. Third, does not promote any of the traditional justifications of collateral estoppel except maybe judicial economy. Fourth, impacts a pro se debtor harder that those represented by counsel.	Section 523 should stand on its own and the doctrine of collateral estoppel should not be used to truncate proceedings under that section unless the issue sought to be given preclusive effect was "actually litigated" in a prior proceeding. Add a new subsection to 523 which provides that while the doctrine of collateral estoppel is applicable, the traditional federal test should be used.
NBRC- 0123	Henry J. Sommer	National Bankruptcy Conference	Submitted report entitled "Reforming the Bankruptcy Code"	525		There is confusion in the case law as to how far to extend the language in § 525(a) prohibiting discrimination with respect to a "license, permit, charter, franchise, or other similar grant."	Broaden and clarify § 525 (a) to encompass any benefit program administered or controlled by a governmental unit.
NBRC- 0123	Henry J. Sommer	National Bankruptcy Conference	Submitted report entitled "Reforming the Bankruptcy Code"	524		Reaffirmation laws are disparately applied, and allow creditors to threaten debtors and subject them to groundless dischargeability complaints.	The provisions of § 524 which premit reaffirmation of consumer debt should be repealed.
NBRC- 0124	Wayne Johnson	Attorney; Brobeck, Phleger & Harrison, LLP		523(a)(3)		Axiomatic that a debtor must inform creditors notice of the case. Section 523(a)(3) is pretty explicit, but it has some gaps, forcing the courts to improvise when confronting a debtor who intentionally provides inadequate notice. Cites In re Raanan and In re Potter.	While the doctrine of estoppel enables courts to handle these situations, the Code should provide clearer guidance. Section 523(a)(3) is the most likely candidate for reform.
NBRC- 0158	Melford L. Nichols	Individual, Fort Smith, AR	Letter from Rep. Tim Hutchinson, requesting reply to constituent.			Relative borrowed $25k and then filed bankruptcy and discharged the debt. The federal gov't is condoning the use of the bankruptcy system by crooks.	The government should amend the bankruptcy code to prohibit this type of thievery. Either that or the government should pay the money back to Mr. Nichols.
NBRC- 0161	Raymond P. Bell, Jr.	Nationsbank Card Services, Recovery Department				Court costs of processing claims that have to be filed even if the amount is accurately scheduled is an expensive burden. AO estimates that in ch. 13 alone, 12,026,040 are handled by the court clerks in a year.	Eliminate the requirement of unsecured creditors to file proofs of claim in a chapter 11 proceeding similar to section 1111(a) of the Code.
NBRC- 0161	Raymond P. Bell, Jr.	Nationsbank Card Services, Recovery Department				State and local taxes are currently discharged	Add state and local taxes to section 523(14).
NBRC- 0169	Patricia Barsalou on behalf of SABA	Assistant Attorney General - Texas		1328(a)	523	Superdischarge provides and avenue of abuse with respect to discharge of tax debt that is considered non-dischargeable in ch. 7 and ch. 11 cases. In ch. 7 and 11, the taxing authority is protected by section 523(a)(1)(B), which does not apply in ch. 13. Thus, Ch. 13 debtors receive unintended benefits that place them in a much better position than those debtors that file for ch. 7 or 11. This head start goes much further than any intended fresh start. Places burden on the taxing authorities.	One solution would be to make all of the section 523 exceptions to discharge applicable in ch. 13 cases, thereby eliminating the superdischarge. Section 523(a)(1) does not discharge any priority tax under 507(a)(2) or (8). If this provision aplied to chapter 13, the debtor would lose none of the intended benefit of that chapter and the tax authorities would be protected from abuse. Also all unfiled tax returns should be a prerequisite to confirmation of a ch. 13 plan.
NBRC- 0170	Patricia Barsalou	Assistant Attorney General - Texas		1328(a)	523	State tax issues related to section 523(a)(1) and the superdischarge are different than IRS issues. Policy reasons are different and the Commission should look at each tax issue separately.	Application of section 523(a)(1) to the superdischarge would be much more the elimination of an avenue of abuse than it would be the addition of a special interest provision. Honest debtors do not need the protection that section 1328(a) provides.
NBRC- 0175	Kenneth P. Childs, on behalf of the Bankruptcy Review Committee of the Oregon State Bar Debtor-Creditor Section	Attorney		727(d)(1)	727(e)(1)	One year time period in which trustees, creditors and US Trustees may seek revocation of a debtor's discharge where the discharge was obtained through fraud is too short. The fraud often involves concealment of assets and/or false statements, and is frequently discovered more than one year after the discharge was granted.	Extend the time period for filing a revocation action based on fraud to five years, making this period consistent with the five year criminal statute of limitations for bankruptcy fraud. Otherwise, it would be possible for a debtor to be criminally prosecuted for bankruptcy fraud but retain his bankruptcy discharge. If a five year time period is not adopted, the period should at least be consistent with the period allowed for revocation actions where acquired property is not reported (§ 727(d)(2)) and for refusals to obey a court order to testify (§ 727 (d)(3))--up to one year after discharge or one year after the case is closed, whichever occurs later.
NBRC- 0191	Ronald Barliant	Bankruptcy Judge, Northern District of Illinois		523(a)		Author recommends that NBRC members and staff read the opinion of Bankruptcy Judge Robert A. Mark of the Southern District of Florida in In re Chinchilla, Case No. 95-15445-BKC-RAM, Adv. No. 96-0158-BKC-RAM-A (12/3/96). In this opinion, Judge Mark reflects the frustration "many of us" feel with the current practices of the credit industry. Such creditors seem to routinely file complaints under § 523(a) with little or no investigation of the facts. What is most alarming about this trend is the likelihood that these creditors are coercing many debtors to pay all or part of debts that should be discharged. The author suspects that some credit card issuers are using the bankruptcy court as part of their collection apparatus. They file boilerplate complaints alleging fraud with no real investigation of the facts. Many debtors either cannot afford a lawyer, or realize that the fee to defend is more than the plaintiff is willing to accept in settlement. So, the debtor agrees to pay a debt that should have been discharged, and the credit card issuer in effect gets away with a violation of the automatic stay. If the debtor can't pay cash, the parties "agree" to judgment orders for installment payments, which "we judges" all too readily enter and sometimes enforce, all without any proof of wrongdoing on the part of the debtor. In cases where the debtor ignores the complaint beause he cannot afford a lawyer, judges often sign default judgments that again effectively sanction a violation of the stay and the fresh start policy. The Code provides tools to fight this abuse, such as § 523(d), Rule 9011, and use of judicial discretion, but these tools are of limited use in cases where debtors are poorly represented, or not represented at all. The author suspects that we are witnessing a massive abuse of the bankruptcy process, ironically by the very people who accuse others of the same thing.	Before adopting any recommendations of consumer credit industry representatives, the NBRC should investigate that industry's use of the current system. Additional protections may be necessary to prevent systemic violations of the most fundamental bankruptcy policies--a fresh start for honest debtors and equitable treatment of all creditors.
NBRC- 0192	Conrad H. Daum	Psychiatrist				Author is responding to an article by Commissioner Butler published in the Woods Rogers Insight regarding the dischargeability of child support arrearages. The author states that he has treated men who are destitute and/or mentally and physically handicapped, and who have enormous child support arrearages. These men have no conceivable way of paying off anything close to what they owe, and soemtimes must serve brief jail sentences because of their inability to pay. Simply stated, these men cannot reasonably be expected to pay child support arrearages and should be permitted to discharge this debt.	Provision should be established allowing truly impoverished spouses to discharge or reorganize payment of child support arrearages.
NBRC- 0205	A. Jay Cristol	Chief Bankruptcy Judge, S.D. Fla.	Copy of author's decision in In re Ramirez	523		Author states that recent credit card company actions seeking to have their debt declared non-dischargeable on the theory that debtors' use of a card is a representation of debtors' ability to repay, and thus subsequent non-payment constitutes a fraud which should deny dischargeability, "is pure garbage." Credit card companies are "obscene in their reckless issuance of 'pre-approved' credit without any review or underwriting. They are unconscionable in their greedy lust for profits, charging 21%, 22%, even 23% interest. (Not many years ago, interest above 10% in Florida, was a crime of usury.)" Author attaches a copy of his decision in In re Ramirez, a July 1995 case filed in the Southern District of Florida, where he held that: (1) credit card debts did not come within discharge exception for fraud, and (2) debtor could recover costs of defending company's unjustified claims. 184 B.R. 859 (Bankr. S.D. Fla. 1995).	Section 523 should be amended to provide that any credit extended, pre-approved, without request, and without submission of a financial statement, should be fully dischargeable in every instance.
NBRC- 0219	John W. Kozyak	Attorney				Last year's repeal of the stock-for-debt exception was a costly mistake.	Stock-for-debt exception should be reinstated.
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	524		Author provides a list of 30 "Topics for Consideration by Commission on Bankruptcy Laws." The recommended topic relating to Discharge is: Abolition of reaffirmations.	None.
NBRC- 0228	Vicent P. Zurzolo	Bankruptcy Judge (C.D. Cal.)	Article in "Bankruptcy Court Decisions" about a survey conducted by members of the American Bankruptcy Institute	524	722	"May an individual debtor retain personal property which is encumbered by a security interest in that debtor is current on all obligations with the creditor holding the security interest yet shooses not to reaffirm tha obligation under [§ 524] or to redeem the collateral pursuant to [§ 722]"	None provided.
NBRC- 0247	Marcia L. Goldstein and Paul M. Basta			524(e)		Authors provides a memorandum analyzing the case law relating to third-party releases. They conclude that the federal circuits have issued a widely divergent range of decisions on this topic.	Given the wide divergence of decisions regarding thrid-party releases, the NBRC should address this issue. In the event the NBRC determines that third-party releases may be appropriate in certain circumstances, the NBRC may want to consider suggesting an amendment adding a provision that authorizes the release of third-parties in particular instances. This new provision could be included in § 1123(b), which provides a non-exhaustive list of the types of provisions that a plan of reorganization may contain.
NBRC- 0262	Robert D. Martin	Chief Bankruptcy Judge (W.D. Wisc.)				Author attaches a recent case, Ir re Thrall, No. 95-19131 DEC (D. Col. May 28, 1996), which provides an articulate exposition of the background and arguments on whether there is specific authority for a bankruptcy court to render a money judgment in connection with a determination that a debt is not dischargeable.	Author does not recommend a specific solution, but suggests that the NBRC review this issue to determine whether an amendment and/or further study is necessary.
NBRC- 0274	Steven D. Goldstein	President, Credit - Sears, Roebuck and Co.		523(a)(2)(C)		Sears and other National Retail Federation members conclude that the 60-day load-up period for luxury goods and services purchases is too short. Often, account holders simply delay filing for bankruptcy for more than 60 days after purchasing luxury items, rendering the debt for these items dischargeable.	Presumption period for luxury goods should be extended to six months.
NBRC- 0274	Steven D. Goldstein	President, Credit - Sears, Roebuck and Co.		524(c)		Sears and other National Retail Federation conclude that bankruptcy judges should not be able to disallow reaffirmation agreements that are otherwise legitimately reached. Disallowing legitimate reaffirmations only serves to create hardship for the debtor and inconcenience for the creditor.	Code should be amended so that reaffirmation agreements are automatically approved if they are in compliance with Code requirements.
NBRC- 0274	Steven D. Goldstein	President, Credit - Sears, Roebuck and Co.		707(b), 1328(a)(2)		Sears and other National Retail Federation members state that while a fresh start is important, enforcement of the corollary policy to deny discharge to those who cynically manipulate the system has been delegated to the most overworked and often least motivated participants in the system--the trustees and judges. Creditors, on the other hand, have the motivation and resources to assist in enforcing this bankruptcy policy.	Amend § 707(b) to permit a creditor to file a motion for dismissal of a case on grounds of substantial abuse. Also, define substantial absue (suggested language provided). Section § 1328(a)(2) should be amended to extend applicability of the provision to chapter 13 cases.
NBRC- 0274	Steven D. Goldstein	President, Credit - Sears, Roebuck and Co.		362, 523		Sears and other National Retail Federation members state that a debtor's failure or refusal to state its intention, and likewise to perform its stated intention, with respect to secured debts at a time when the creditor's opportunities to initiate contact for the purpose of obtaining needed information are strictly limited deprives creditors of valuable time and any meaningful opportunity to protect their interests.	Amend §§ 362 and 523 to except a debt from automatic stay and discharge if the debtor fails to file a § 521 statement of intention for that debt within 10 days of filing and fails to perform the stated intention by the date of the first § 341(a) meeting of creditors.
NBRC- 0287	Billy R. McCoy	Petitioner		523(a)(15)		Author petitioned the Bankruptcy Court in the Western District of Wisconsin to enforce his divorce, and discovered that he had no "real rights" to enforce the divorce because his wife had subsequently filed for bankruptcy. He does not understand why the "hold harmless" clause in his divorce that required his ex-wife to "take care of certain debts" was not enforced.	Section 523(a)(15) should be clarified and amended to give former spouses of bankruptcy petitioners "some real rights."
NBRC- 0302	Brian L. Mc Donnell	President, Navy Federal Credit Union		523, 727	Rules 4004 and 4005	Bankruptcy is increasingly being perceived as an "easy way out" for debtors seeking to avoid responsibility for their actions. In addition, many people no longer consider bankruptcy to be a financial stigma. Bankruptcy filings represent significant time and money burdens for creditors and the courts, the costs of which are often passed on to customers of the creditors in the form of higher prices. It is imperative that bankruptcy procedures be revised to discourage financial irresponsibility in today's highly leveraged personal economic environment. One way of reducing the administrative burden of bankruptcy filings would be to enhance the "cost-effectiveness" of bankruptcy proceedings.	To enhance the "cost-effectiveness" of bankruptcy proceedings, § 523 should be amended to: (1) simplify the requirements and procedures for creditors to show false pretenses in connection with loans obtained within 60 days (author recommends 180 days) of the order for relief; (2) extend the period of obtaining a loan for luxury items from 60 days to 180 days of the order for relief and redusing the thresholds for cash advances and purchases of luxury items from $1000 to $100; and (3) stipulate that costs of a successful dischargeability challenge by the creditor will be borne by the debtor (§ 523(d)). Section 727 and Rule 4005 should be amended to stipulate that costs of a creditor's successful objection to the discharge will be borne by the debtor.
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: what are the consequences to debtors and creditors of decreasing the scope of the bankruptcy discharge Should it be further constrained Should it be restored to its original scope	The CLLA believes that this issue is a moderate 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			Increasing the scope of bankruptcy discharge in chapter 13 may be the only hope of rehabilitation for the debtor and payment for the creditor.	The scope of bankruptcy discharge should be increased in chapter 13. Conformation should require good faith and substantial payment. Substantial payment should mean the amount the debtor can afford to pay for a period of up to five years.
NBRC- 0324	Richard H. Walker	General Counsel, U.S. Securities and Exchange Commission		523(a)(7), 1129	1328	In this submission representing the preliminary views from SEC staff, the author states that: (1) the SEC has a strong interest in ensuring that the bankruptcy courts are not used as a "haven for wrongdoers" in subversion of congressional intent; (2) scare enforcement resources should not be diverted into unnecessary or duplicative litigation in bankruptcy court; and (3) the SEC also has an interest pursuant to § 1109(a) as a party-in-interest, in protecting the interest of public investors who hold securities in companies involved in the bankruptcy system, ensuring adequate disclosure of reorganization plans that provide for the issuance of unregistered securities, and preventing the misuse of the Bankruptcy Code's exemption from Securities Act Registration.	In furtherance of these interests, the author proposes that the Bankruptcy Code be amended to: (1) Amend § 523(a)(7) to include disgorgement so that different parts of the same governmental judgment are not subject to different discharge exceptions; (2) Apply the discharge exceptions of § 523(a)(7) to chapter 13 cases in order to make chapter 13 more attractive to debtors and encourage them to complete payments under their plans; and (3) Preclude nondebtor discharges under § 1129 because the Code, according to the author, does not permit nondebtor discharges, and because such discharges are bad public policy.
NBRC- 0331	Stephen W. Sather	Attorney		523(a)(1)(C)		Under § 523(a)(1)(C), a tax or customs duty "with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax" is nondischargeable. This statute is so broad that practitioners cannot accurately advise their clients as to whether their debts fall within its boundaries. In some instances, the statute implicates debtors who did not intentionally fail to comply with their legal duties. Some courts have found, and the author agrees, that § 523(a)(1)(C) does not apply to these debtors. Also, as the Code does not require the U.S. to assert this exception in the bankruptcy proceeding, the debtor must either bring an adversary proceeding at his own expense or seek an administrative decision from the I.R.S. The author attaches an article which discusses this issue and the "willfulness" standard in more detail.	Section 523(a)(1)(C) should be amended to apply only to tax or customs duties with respect to which the debtor made a fraudulent return or fraudulently attempted in any manner to evade or defeat such tax. Such a standard wold protect the government from dishonest debtors while allowing those debtors who had merely mispalced priorities the fresh start envisioned by the Code.
NBRC- 0334	Vicent P. Zurzolo	Bankruptcy Judge (C.D. Cal.)		524	722	The author poses the following 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"	None.
NBRC- 0341	George J. Wallace	Attorney, on behalf of the American Financial Services Association ("AFSA")		521(2)	524(c)	AFSA members have found that the Code's present regulation of chapter 7 reaffrimations is working well. However, certain "fine tuning" is needed. Some bankruptcy courts permit debtors to go through chapter 7 and keep the autombile collateral without reaffirming at the unpaid contract balance, despite the requirement of § 521(2) that the debtor's statement of intention either indicate that he or she will surrender, redeem or reaffirm. The result is "inappropriate, yet its economic significance is magnified by the new phenomenon of the "surprise bankruptcy" in which the debtor is not in default when chapter 7 is filed.	Section 521(2) should be amended to provide that the debtor is required to fulfill the statement of intention. His or her failure to do so should result in dismissal or other appropriate sanction. In the alternative, § 524(c) may be amended to clarify that consensual adjustment with the creditor through a reaffirmation is the only way other than redemption that the chapter 7 debtor can retain collateral.
NBRC- 0341	George J. Wallace	Attorney, on behalf of the American Financial Services Association ("AFSA")		521(c)		The § 521(c) statement of intention is limited to consumer debts and does not cover the financing of trucks which debtors use to earn their principal income. Although such financing is not considered "consumer debt," it involves many of the same problems as those associated with consumer debt--the debtor files chapter 7 and attempts to keep the collateral without reaffirming.	The § 521(c) statement of intention should be expanded to include small business debts.
NBRC- 0384	American Bankruptcy Institute	American Bankruptcy Institute ("ABI")				ABI presents this "Report on the State of the American Bankruptcy System," which is the capstone of ABI's three-year Bankruptcy Reform Study Project. The Project's efforts culminated with a 65-question survey covering a broad spectrum of possible areas of reform. The study indicates that: (1) in general, the Code of 1978 is working well; and (2) probelms of delay, excessive costs, unfairness, and abuse need to be addressed in the current round of reforms.	ABI recommnds: (1) strict deadlines for dismissal or appointment of trustees to help combat abuse; (2) reorganization of chapter 11 policy to provide stricter time limits, elimination of non-viable debtors, and reduction of excessive professional fees; (3) relaxing eligibility requirements for consumer reorganizations under chapter 13, and providing time limits, limited discharge and uniform national exemptions; (4) high standards of integrity for all professionals; (5) a balance between creditors' and debtors' rights, and equality of distribution; and (6) not adopting priority classes of claimants.
NBRC- 0386	National Association of Credit Management	National Association of Credit Management ("NACM")				In this statement entitled "Issues Involving Governmental Agencies and Bankruptcy," the NACM expresses the following conerns about government agencies in the bankruptcy process: "consideration should be given for the ability of a reorganizaed debtor to have the use of net operating loss carried forwards, unaffected by forgiveness of debt or the transfer of ownership pursuant to a confirmed plan of reorganization."	No additional discussion provided.
NBRC- 0414	Edward D. Jellen	Chief Judge, U.S. Bankruptcy Court, Northern District of California		523(a)		Whether "findings" made at the state court default hearing should be given collateral estoppel effect in subsequent dischargeability litigation under Bankruptcy Code § 523 (a). Author is concerned that debtors at default hearings in state court may allow judgement to be entered against them, or the court may enter judgement, without the debtor having the opportunity to speak, and with the court merely adopting the creditor's pre-packaged "findings", which may include allegations of fraud. Author is concerned that, under the broad reading of the "actually lititgated" requirement for collateral estoppel in some states, this may act as "a trap for unwary and ignorant debtors that cannot afford counsel" and that "they may lose any chance that they might have for a real day in court or a "fresh start in life" because they have no idea that default fraud judgments are not dischargeable in bankruptcy..."	No specific recommendation made, but author seems to suggest that changes be made to the applicability of collateral estoppel of state default judgement hearings in states where the "actually litigated" requirement is broadly construed.
NBRC- 0421	Kenneth C. Weil	Attorney		507(a)(8)(C)		Author argues against proposals which would expand "tax purgatory", i.e.: tax obligations that cannot be discharged with the passage of time in Chapter 7 or with a partial payment in Chapter 13. He specifically argues against efforts to constrict the availability of Chapter 13 by expanding the list of nondischargeable items to include taxes that are nondischargeable in Chapter 7, and to expand nondischargeable taxes in Chapter 7 by interpreting the phrase "willful intent to evade or defeat" tax so that any nonpayment of tax would result in the underlying obligation being nondischargeable. Such proposals lose sight of the balancing process inherent in bankruptcy.	"I recommend that willful intent to evade or defeat tax require some act of wrongdoing; 11 U.S.C. § 507(a)(8)(C) be amended to allow debtors out of tax purgatory ten years after assessment; and the listof nondischargeable items in Chapter 13 not be expanded.
NBRC- 0422	John Charles Heekin	Attorney	Copy of Collier's 1996 Bankruptcy Code Section 525 with annotations.	525	11	Although §525 prohibits retaliation against employees, and the U.S. Supreme Court has stated that states may not frustrate comgressional policy of the debtor's fresh start through state action, more and more people have been squeezed out of the institutional employment structure and into self-employment or employment in small firms either as sole proprietors or partners with one or two others. Banks routinely retaliate for the fact of bankruptcy against these persons.	11 USC Sec. 525 should be extended, as inititally proposed in 1975, to provide that any retaliation, public or private, for the fact of filing bankruptcy, would be prohibited.
NBRC- 0427	Raymond P. Bell, Jr.	Bankruptcy Manager, NationsBank	Copy of letter dated 10/15/96 which is already in the database, copy of letter dated 12/13/96, and cover letter dated 1/15/97.	523(a)(2)(A)		NationsBank does not file adversary proceedings under Section 523 (a)(2)(A) without the most stringent administrative and legal review of the facts of the case. Over 200 potential cases of fraud are reviewed monthly out of 5,000 bankruptcy cases, and approximately 15 adversary cases are filed, which is less than .3%.	No specific solution proposed to the problem raised above. "One of our main proposals for reform of the Code is to eliminate the requirement of unsecured creditors to file proofs of claim in Chapter 13 cases, similar to the procedure under Chapter 11.
NBRC- 0427	Raymond P. Bell, Jr.	Bankruptcy Manager, NationsBank	Letter dated 10/15/96 from Mr. Bell to Elizabeth Warren, letter dated 12/13/96 from Mr. Bell to Elizabeth Warren, cover memo dated 1/15/97 from Mr. Bell to Susan Jensen-Conklin	523(a)(2)(c)		Creditor is required to file actions even when pre-filing abuse by debtor clearly falls under the presumption of non-dischargeability provision in the Code. The presumptions of 11 U.S.C. §523(a)(2)(c) is wholly inadequate given the fact that some bankruptcy courts do not accord proper weight to the presumption. As there are no provisions in the Bankruptcy Code which allows creditors to settle these cases without filing suit, additional legal expenses are incurred. This does not seem equitable as compared to the trustee's power to settle preference payments made to an unsecured creditor, without litigation, as provided in the Code.	Eliminate the requirement of unsecured creditors to file proofs of claim in Chapter 13 cases, similar to the procedure under Chapter 11.
NBRC- 0431	Barbara J. Sellers	Bankruptcy Judge, U.S. Bankruptcy Court, Sourthern District of Ohio, Eastern Division				If the bankruptcy statute is to reflect the policy of the legislature, and if one policy of the legislature is to encourage and support the retraining of workers for evolving jobs, the bankruptcy discharge should reflect that.	If we want people to take risks and try to better themselves by retraining, perhaps we shold not except such loans from discharge if the retraining turns out not to be beneficial.
NBRC- 0457	Wendell J. Sherk	Attorney, Eric Taylor & Associates, P.C.				If the Commission wants to encourage more Chapter 13 filings by debtors who would otherwise be in Chapter 7, it should provide more incentives, especially in allowing the debtor to rebuild credit without three years in a debt "purgatory" in Chapter 13, when a Chapter 7 completes in six months or less.	FHA/FNMA guarantees could be made readily available for new home purposes within six months of a Chapter 13 discharge. Credit reports should carry the fact of a Chapter 13 instead of "Bankruptcy" and the final distribution percentage upon discharge. The de-acceleration/cure and superdischarge provisions of Chapter 13 are the great motivators. Flexibility in plan construction could very well increase the probability of a Chapter 13 filing.
NBRC- 0490	Joseph A. Chrystler	Chapter 13 Standing Trustee, Western District of Michigan, Southern Division	Letter dated January 31, 1997 from author to creditors in bankruptcy case.			Author is concerned with the abuse of credit cards, and encloses a letter he sent to nineteen seperated credit card creditors in a recent case he had, representing over 30 credit cards issued to the debtors. "To me, all of this points out that there is a level of misguided greed on both sides in this situation, and others like it."	Author, and other trustees in Chapter 13 cases, can be a tremendous resource to the NBRC.
NBRC- 0502	Donald M. Hill	President, Creditors Bankruptcy Service	Memo from Janna L. Countryman, The Brice Legal Group, P.C., dated January 20, 1997	521	524,722	Author is forwarding copy of Memo from Janna L. Countryman of The Brice Legal Group, P.C. on Reaffirmation Agreements. The problem presented is the split between the circuits on the issue of whether the debtor has a "fourth option" with regard to property, namely, the option to retain the collateral without either reaffirming under §524 or redeeming under §722. The memo contains a synopsis of court opinions from the different circuits on this issue.	No specific recommendation is made. "Hopefully, this is another area where the National Bankruptcy Review Commission will have a positive impact."
NBRC- 0506	William Hillman	Bankruptcy Judge, California		523(a)(4)		Regarding Chapter 13 superdischarge, author questions whether "the carrot is too large."	"Perhaps there should be a minimum payment requirement."
NBRC- 0532	Arthur J. Spector	U.S. Bankruptcy Judge, Eastern District of Michigan				"I am disturbed by what (I hope) is an oversight of major proportions. As I understand the newly prpoposed chapter 13, all dischargeable debts will be discharged upon confirmationof the plan. Anad there will be no conversion to chapter 7 after plan confirmation. Under these premises it seems that creditors holding dischargeable unsecured claims could be cheated out of dividends which they otherwise would be entitled to in chapter 7 if the debtor defaults and the case is closed after confirmation." In the event of a default by the debtor, the stay as to secured debts is lifted and the case is closed (not converted to chapter 7). The group's proposal says that only those creditors holding nondischargeable claims would be free to pursue the debtor. "I submit that this unfairly disables the general unsecured creditors from collecting the balance of their claims for no good policy reason. (Actually, I surmise that this result was not intended acn can be easily corrected.)"	No specific solution proposed.
NBRC- 0534	William C. Whitford	Professor of Law, University of Wisconsin, Madison				Author feels that greater uniformity in the practice of consumer bankruptcy law is very important. In parts of the country a majority of bankruptcy filers elect, or are effectively forced to elect, chapter 13, and a majorityof those never receive a discharge.	An "up front" discharge in chapter 13 will effectively address this problem.
NBRC- 0534	William C. Whitford	Professor of Law, University of Wisconsin, Madison				Discharge in bankruptcy can be severely compromised if too many exceptions to discharge are established.	Do not endorse the proposal to establish a section 523(a)(2) exception from discharge for all credit card charges incurred when there was no objective ability to repay. That proposal fails to take account of the psychology of the overburdened debtor and would deprive too many debtors of the benefits of a meaningful fresh start.
NBRC- 0538	Randall J. Newsome	U.S. Bankruptcy Judge	Copy of 10/10/96 letter from Judge Newsome to Prof. Warren.			"The March 5 draft proposes to grant a discharge in Chapter 13 cases at or near the plan confirmation date. Why Won't this eliminate one of the greatest incentives for completing the plan"	Do not change the time of discharge in Chapter 13 cases.
NBRC- 0546	Donal D. Sullivan	Chief Bankruptcy Judge, District of Oregon	Copy of opinion In Re Nourbakhsh and Nieman v. Hodges.			In In Re Nourbakhsh the Ninth Circuit, on a full faith and credit theory, gave collateral estoppel effect to default judgments according to the law of the state where entered. This ruling appears to invite mischief and lack of uniformity.	No specific solution proposed. Author is responding to invitation for comments by Prof. Warren at San Diego meeting of Chief Bankruptcy Judges regarding abuses under the current bankruptcy dischargeability law.
NBRC- 0562	Kenneth J. Doran	Attorney				Author feels that the proposed immediate discharge in Chapter 13 is not worth the six year bar that goes with it, and is not necessary.	If there are problems with "discharges at risk", other portions of the proposal would deal with the problem.
NBRC- 0585	Thomas P. Schneider	United States Attorney, Eastern District of Wisconsin	Amendement to Section 523(b) of the Bankruptcy Act.	42 U.S.C. 292(f)(g)	523(b)	In 1981, Congress added a specific provision to the law concerning the dischargeability of HEAL (Health Education Assistance Loans, made to graduate level health profession students) loans at 42 U.S.C. 292f(g) which made the dischargeability more difficult. Three elements had to be established for discharge: seven years must have passed since the loan became due; it would be unconscionable not to discharge the debt; and, the Secretary of Health and Human Services has not waived her right to set-off. Case law, however, has reasoned that in a second bankruptcy Section 523(b) applies, and a HEAL loan may be discharged if the loan has been in repayment for seven year without regard to unconscionability.	Section 523(b) should be amended to delete certain language referring to health service loans.
NBRC- 0597	Murray S. Lubitz and Louis Levine	President and Chair, Consumer Subcommittee, of the Commercial Law League of American		1328(a)	1328(b)	One of the primary differences between Chapters 11 and 13 is the timing of the granting of the discharge. This is because the success of business or commercial entities brings benefits to the community in terms of jobs and income. In Chapter 11, the confirmation of the plan constitutes the discharge itself. Under existing law, in a Chapter 13 the discharge is granted only after the debtor has made all payments required under the plan. If Chapter 13 is changed to permit granting of discharge at the time of confirmation, administration of the case would be difficult, and the incentive to complete the plan and receive discharge would disappear.	CLLA opposes modification of 11 USC 1328(a) to permit granting of the discharge at the time of confirmation.
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.			Some (relatively few) debtors incur debts criminally, fraudulently or greedily (such as through excessive gambling).	The Bankruptcy Code should make all of such debts nondischargeable in Chapter 7 and Chapter 13.
NBRC- 0604	Richard H. Walker	General Counsel, Securities and Exchange Commission	Document entitled "Issues Identified by Division of Enforcement and Office of General Counsel of Securities and Exchange Commission for Consideration by Bankruptcy Review Commission.	523(a)(7)	1328	"Disgorgement is not a fine, penalty or forfeiture subject to §523(a)(7). It does, however, serve regulatory purposes (deterrence and prevention of unjust enrichment) as important as the regulatory purpose served by the punitive sanctions. Why should the Bankruptcy Code make it more costly and time-consuming to determine the dischargeability of a debt for the disgorgement of proceeds derived from unlawful activity than of a debt for fines, penalties or forfeitures arising fromt he same unlawful activity"	Amend §523(a)(7) to include disgorgement, and §1328 to include §523(a)(7) discharge exceptions.
NBRC- 0605	Kenneth L. Robinson	President, National Association of Federal Credit Unions (NAFCU)					Discharge should be delayed until all payments under plan are completed. If debtor is unable to make payments on plan, creditor should be able to retrieve the collateral. A uniform system for valuation of property needs to be selected.
NBRC- 0610	Heidi Heitkamp, et al.	Attorney General of North Dakota and Chair, Bankruptcy and Taxation Working Group, National Association of Attorneys General; and, Attorneys General of member states.	Specific Proposal Recommendations	1328		By a gradual process of amendment, the Chapter 13 superdischarge has now come to apply almost entirely only to exceptions applicable to debtor misconduct, such as fraud, larceny, embezzlement, willful and malicious conduct, and the like. Moreover, because of the absence of any minumum standards, it is possible for the debtor to complete a plan, retain his home, pension, and all of his assets, and pay literally nothing to unsecured creditors.	The current discharge provisions of Chapter 13 should be amended to make them consistent with Chapters 7 and 11.
NBRC- 0632	Joe Belew, Timothy G. Greene, and Edward Yingling	President, Consumer Bankers Association; Exec. V.P. and Assoc. General Counsel, Sallie Mae; and, Excutive Director Government Relations, American Bankers Association, respectively.	Attachment to letter entitled "Adapting the Bankruptcy Code to the Changing Realities of College Borrowing"			Section 528(a)(8) excepts from discharge in bankruptcy educational loans made, insured or guaranteed by a governmental unit. At the time this section was adopted, most educational loans were in this category. Today, students are increasingly looking to private credit sources fo finance their education, but the reason for the exceptions still applies. The educational loan is an investment in the future of the borrower, made to create the borrower's ability to repay them. Unlike a business loan, security for the lender is not available. To keep the monies for these loans from drying up, security for the lender must come through protection from unscrupulous borrowers who would take the money, get their degree, and then file bankruptcy to avoid paying it back.	Extend the protection of §528(a)(8) to all education loans.
NBRC- 0646	Royce E. Wallace	Attorney, Chapter 13 standing trustee	Memorandum by the author on the Functions		10	Chapter 13 proceedings should not be turned into a collection process.	There should not be periodic income review because it impairs the very essence of fresh start and turns the process into a collection procedure similar to repeated judgment execution, or garnishment of wages. Reaffirmation of any debt should be prohibited. Secondary access to Chapter 13 should be maintained simply because life is not so certain that economic failure cannot reoccur.
NBRC- 0650	Samuel L. Bufford	Bankruptcy Judge, Central District of California				"I also like very much the elimination of reaffirmations." Most reaffirmations appear to the author to be an abuse of the bankruptcy system by creditors.
NBRC- 0650	Samuel L. Bufford	Bankruptcy Judge, Central District of California		523		In its present form, section 523 is so poorly drafted that author questions whether any portion should be retained.	Section 523 needs to be reworked altogether.
NBRC- 0659	Scott A. Guerin	Treasurer/Manager, Leominster Employees Federal Credit Union				Author feels that reaffirmations are important and necessary to the credit unions. Credit unions responsibly assess their member's credit status before making loans. "Why should the credit union be punished along with the irresponsible credit card company who will write off in a day what we loan out in a year"	Do not abolish reaffirmations.
NBRC- 0660	Andrena MacLeod-Rock	Manager, United Credit Union				"To prohibit a consumer from reaffirming a debt would not be in the consumers best interest."	"The consumer should have the right to choose whether or not they want to reaffirm a debt."
NBRC- 0669	J. Michael Combs	Attorney				For many years student loans were dischargeable in Chapter 13, now they are not. This is of critical importance to Chapter 13 filers, because student loans have become a vital part of the American education system.	"We feel that it would failitate an increase in Chapter 13 filings if student loans were once again made dischargeable without full payment. Likewise, it is the consensus of the group that taxes, which are presently dischargeable in Chapter 13, should so remain."
NBRC- 0680	Samuel L. Bufford	Bankruptcy Judge, Central District of California	Proposed Changes to Selected Portions of § 523 by Judge Samuel L. Bufford; Copies of pages from Bankruptcy Litigation (1989).	523		Author submits text of specific changes to selected portions of § 523. The letter explains the rational for the different changes.	Contained in "Proposed Changes to Selected Portions of § 523" attached to letter.
NBRC- 0687	A. Stevens Quigley	Attorney, panel Chapter 7 trustee				Author is "very concerned that student loans, tax debt, delinquent support, intentional tort claims, traffic tickets, gambling debt, co-signed debt, etc. have become totally unaffordable in a lifetime and ruinous for many families. Some relief by way of separate classification and superdischarge is necessary in those regards."
NBRC- 0693	Bud Stephen Tayman	Attorney		362(a)(6)		Author writes about his concern over creditor's practice of sending copies of correspondence intended to solicit a reaffirmation agreement directly to debtors "for information purposes only" while sending the original correspondence to the debtor's attorney. Such correspondence may induce the debtor to reaffirm without seeking advice of counsel, or when it would not be in debtor's best interest to do so.	Prohibit creditors from soliciting reaffirmation agreements at all, or, if they want to solicit reaffirmation agreements, that they do so only through an attorney who represents the debtor.
NBRC- 0696	Jeff Olson	Collection manager, US Federal Credit Union				Author feels that Draft #1 of March 1997 does not balance debtor and creditor issues, but shifts the bankruptcy law to pro-debtor, anti-creditor. "Prohibiting reaffirmation's in Chapter 7 bankruptcies puts the debt unilaterally in favor of the debtor. The debtor would be able to abuse the collateral, lower its value as compared to the loan balance, and simply turn it in and walk away."	No specific solution proposed.
NBRC- 0696	Jeff Olson	Collection manager, US Federal Credit Union				Author is concerned by the proposal to grant the debtor a discharge at confirmation. This leaves the unsecured creditor with no recourse if the debtor defaults in his payments. "Again I must ask, how is this favorable towards a creditor"	No specific solutions proposed.
NBRC- 0697	Jo White	Law Clerk to Judge John C. Akard, U.S. Bankruptcy Court, Northern Distric of Texas				Author makes observations on various aspects of repayment of debt.
NBRC- 0703	Steven J. Abelson	Attorney		1328		"One of the greatest inequities and disincentives of Chapter 13 is the delay of discharge in §1328. If Chapter 13 were to allow for discharge upon confirmation for no-asset cases, or the allowance for debtors to retain some portion of their post petition earnings in order to rehabilitate themselves post filing...then the idea of partial repayment would be more appealing to most debtors. Given the above, and the failure of credit agencies to look any more favorably upon a Chapter 13 as opposed to a Chapter 7, it in essence penalizes the Chapter 13 debtor for their efforts."	Modify §1328 to provide for discharge upon confirmation in no asset cases.
NBRC- 0711	Neal R. Allen	Attorney specializing in consumer bankruptcy				"The Commission has stated that it would like to create more incentives for use of Chapter 13. In my opinion, the best way to do this is to make the "supserdischarge" earned in Chapter 13 really super." Author gives several suggestions as to how to do this.	1) Simplify the rules for determining priority and secured status of taxes with a simple three year rule, which would make them priority only if they became due within three years of the Petition date. "Secured" taxes should only be secured in two instances outlined by the author. 2) With regard to student loans, author suggests that the period for dischargeability of old student loans be reduced from over seven years to over four years, and that any non-dischargeable student loans be made priority expenses, so that Debtors could pay them under their Chapter 13 Plans.
NBRC- 0711	Neal R. Allen	Attorney specializing in consumer bankruptcy				The home lender is unfairly preferred. On all other types of secured claims, Debtors need only pay the value of the security, and my modify payment terms. Home lenders must be paid arrearages of principal, interest, and claimed expenses such as attorney's fees, inspection fees, etc. under the Plan, and also continue to be paid his regular installments of principal and interest accruing during the Plan period outside of the Plan.	Eliminate the exception to modification of rights of secured claims for home lenders prpovided in 11 U.S.C. §1322(b)(2).
NBRC- 0717	Albert H. Hartwell, Jr.	Consumer bankruptcy attorney				Author agrees with the testimony of the National Consumer Law Center on 2/21/97. He is especially concerned about the expansion of the list of exceptions to discharge that has occurred already and the prospect of further additions. Author is most concerned about student loans and abuse by the for-profit trade school operators.	Student loans should be made easier to discharge.
NBRC- 0720	James F. Queenan, Jr.	U.S. Bankruptcy Judge, District of Massachusetts	Copy of In re Cox, 182 B.R. 626 (Bkrtcy. D. Mass. 1995)	523(a)(2)(A)<