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Alternative Complaint Objecting To Secured Debt Til Bankruptcy-2006 - Appendix - G
Alternative Complaint Objecting To Secured Debt Til Bankruptcy-2006 - Appendix - G
Alternative Complaint Objecting To Secured Debt Til Bankruptcy-2006 - Appendix - G
G.1 Introduction
This Appendix contains over one-hundred-sixty consumer bankruptcy pleadings and other forms. All captions have been deleted in favor of references to Official Forms 16A, 16B, and 16D, which are contained in Appendix D, supra. These pleadings are also found in both Adobe Acrobat (PDF) format and Microsoft Word format on the CD-Rom accompanying this manual. These pleadings should be edited using your word-processing program in order to t the particulars of an actual case.
Appx. G.1
Appx. G.1
Form 35 Motion Seeking Relief for Violations of the Automatic Stay by Governmental Agency Form 36 Motion for Expedited Hearing on Contempt Motion Form 37 Complaint Seeking Contempt Remedies and Recovery of Property from IRS Form 38 Answer to Motion for Relief from Automatic Stay Form 39 Motion for Sanctions Pursuant to Rule 9011 for Baseless Motion for Relief from Automatic Stay Form 40 Answer to Motion of Landlord for Relief from Automatic Stay Form 41 Debtors Certication in Support of Extension of Automatic Stay As to Pending Eviction Action Form 42 Answer to Motion for Relief from Automatic Stay Raising Avoidability of Transfer to Plaintiff Form 43 Debtors Answer to Motion for Relief from Codebtor Stay Form 44 Debtors Objection to Relief from the Codebtor Stay Form 45 Answer to Application for Abandonment of Real Estate Form 46 Motion for Continuation of Automatic Stay in Case Filed Within One Year After Dismissal of Prior Bankruptcy Case Form 47 Motion to Invoke Automatic Stay in Case Filed Within One Year After Dismissal of Two Prior Bankruptcy Cases Form 48 Motion for Relief from In Rem Order Entered in Prior Case Form 49 Motion to Reimpose Stay After Relief from Stay Has Been Granted
G.6 Utilities
Form 53 Letter to Utility Company Giving Notice of Stay and Requirements of 11 U.S.C. 366 Form 54 Letter to Utility Company Giving Notice of Conversion from Chapter 13 to Chapter 7 Form 55 Complaint to Enjoin Termination of Utility Service for Nonpayment of Deposit by Debtor Current on Her Utility Payments Form 56 Complaint Seeking Reconnection of Utility Service and Damages Form 57 Motion for Modication of Security Deposit for Utility Service
Appx. G.1
G.8 Claims
Form 69 Form 70 Form 71 Form 72 Form 73 Form 74 Form 75 Form 76 Form 77 Form 78 Form 79 Form 80 Form 81 Form 82 Form 83 Form 84 Form 85 Form 86 Form 87 Form 88 Form 89 Form 90 Priority Proof of Claim by Debtor Proof of Secured Claim by Debtor Proof of Unsecured Claim by Debtor Motion to Sell Property Free and Clear of Liens Debtors Motion to Redeem Property Pursuant to 11 U.S.C. 722 Agreement for Redemption of Property Objection to Proof of Claim Objection to Undocumented Credit Card Claim Order Disallowing Undocumented Claim Objection Seeking Reduction of Claim Amount Based on Creditors Refusal to Negotiate Repayment Plan Objection to Frivolous Priority Claim and Request for Sanctions Complaint Objecting to Secured Claims for Failure to Comply with Truth in Lending Act and HUD Mortgage Servicing Requirements Complaint Objecting to Secured Claim and Seeking to Enforce Truth in Lending Rescission Alternative Complaint Objecting to Secured Claim on the Basis of Truth in Lending Rescission Judgment Order Disallowing Secured Claim Complaint Objecting to Secured Claim on the Basis of Usury and Warranty Defenses Complaint or Motion to Determine Value of Security and Creditors Allowed Secured Claim Qualied Written Request Under RESPA to Obtain Mortgage Loan Information Motion for Order Directing Claimant to Appear for Rule 2004 Examination Order Directing Claimant to Appear for Rule 2004 Examination Complaint Objecting to Mortgage Servicers Claim Based on RESPA and FDCPA Violations Request for Approval of Postpetition Consumer Debt
G.10 Litigation
Form 98 Motion for Leave to Proceed In Forma Pauperis Form 99 In Forma Pauperis Order Form 100 Complaint: Class Action Adversary Proceeding Raising Claims Under Stay, Discharge, and Exemption Provisions As Well As 42 U.S.C. 1983 Form 101 Complaint to Prohibit Eviction from Public Housing Based upon Dischargeable Debt for Rent Form 102 Complaint Seeking Review of Administrative Action 4
Appx. G.1
Form 103 Complaint Seeking Restoration of Drivers License Form 104 Complaint Seeking Damages in Non-Core Adversary Proceeding Against a Non-Creditor for Unfair Debt Collection Practices Form 105 Motion for Abandonment of Property by Trustee Form 106 Debtors Motion for Expedited Discovery Form 107 Plaintiffs Request for Documents Form 108 Defendants Request for Admissions Form 109 Petition for Writ of Habeas Corpus Form 110 Application for Default Judgment Form 111 Order for Default Judgment Form 112 Request for Default Judgment by Clerk Form 113 Default Judgment by Clerk Form 114 Notice of Removal Form 115 Plaintiffs Motion for Withdrawal of Proceeding to the District Court Form 116 Motion for Determination That Proceeding Is a Core Proceeding Form 117 Stipulation That Matter May Be Determined by Bankruptcy Court Form 118 Plaintiffs Objections to Findings of Fact and Conclusions of Law Form 119 Motion for Leave to Appeal Interlocutory Order Form 120 Motion for Stay of Order Pending Appeal Form 121 Stipulation for Appeal to Bankruptcy Appellate Panel Form 122 Appellants Election Form
Appx. G.2
Appx. G.2
[ ] Pay check stubs for the last sixty (60) days, from [date] until [date]. [ ] Documents that show your rental income for the past six months. [ ] Documents that show the amount that someone else regularly contributes to your household expenses. [ ] Documents that show the amount of your spouses income that is paid for his or her separate expenses and not regularly paid towards your household expenses (such as child support payments your spouse makes to a former spouse or payments your spouse makes on separate debts). [ ] Copy of your auto loan or payment coupon showing when the last payment is due. [ ] Copies of your tax returns for the past [number] years. Your Home, Auto and Other Property [ [ [ [ ] ] ] ] Copies of any appraisals of your home. Copy of the recent tax assessment of your home. Copy of the deed for the property located at [address]. Copy of the loan and other closing documents for your mortgage with [lender]. Any payment and escrow account statements you have received from your mortgage company during the past [number] months. Copy of your auto insurance policy or a summary of the policy (certicate of insurance) showing that you have coverage. Copy of your home insurance policy or a summary of the policy (certicate of insurance) showing that you have coverage. Copy of a recent statement for your individual retirement account (IRA), 401K, or other pension plan. Copy of a recent statement for your education IRA or tuition credit program. Copy of a recent statement for your medical savings plan. Court Proceedings [ ] Copies of any family court orders requiring you to pay child support or alimony. [ ] Documents that show you are current on your child support and/or alimony payments. [ ] Copies of any family court orders showing that you are entitled to receive child support or alimony. [ ] Copy of the eviction complaint led against you by your landlord. [ ] Copy of the court complaint in the lawsuit you led against [defendant(s)]. If you have any questions concerning these requests, please contact this office. As soon as this information is provided we will complete your bankruptcy papers and schedule an appointment for you to sign them. [signature] Attorney
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Appx. G.2
4 Section 342(b) requires the clerk to give each consumer debtor, prior to the ling of the petition, a notice describing each chapter under which such individual may proceed, the services of credit counseling agencies, and the possible consequences of bankruptcy fraud. In addition, section 521(a)(1)(B)(iii) requires the debtors attorney to le a certication that the attorney delivered the notice to the debtor. This certication is part of Exhibit B in Official Form 1, the bankruptcy petition. Based upon these provisions, the debtors attorney should deliver the section 342(b) notice, which is reprinted in Appendix E, supra, to the debtor and sign the certication to comply with section 521(a)(1)(B)(iii). If the debtors attorney is not a debt relief agency, for example if the attorney works for a legal services organization, only this notice needs to be provided to the debtor. However, section 527 sets out a series of notices and disclosures that debt relief agencies must make to all assisted persons being provided bankruptcy assistance. This form contains the written notice required by section 527(a)(1) and (a)(2) and is combined with the section 342(b) notice so that they may be given at the same time. These items must be provided within three days of when the agency rst offers to provide bankruptcy assistance services to an assisted person. If the notice is not provided at the time the client signs an initial consultation agreement, see Form 4, Appx. G.2, supra, and with a copy attached thereto, the attorney should include the certicate of receipt and have the client sign it.
Appx. G.2
Chapter 11 is designed for the reorganization of a business but is also available to consumer debtors. Its provisions are quite complicated, and any decision by an individual to le a chapter 11 petition should be reviewed with an attorney. Chapter 12: Family Farmer or Fisherman ($200 ling fee, $39 administrative fee: Total fee $239) Chapter 12 is designed to permit family farmers and shermen to repay their debts over a period of time from future earnings and is similar to chapter 13. The eligibility requirements are restrictive, limiting its use to those whose income arises primarily from a family-owned farm or commercial shing operation. 3. Bankruptcy Crimes and Availability of Bankruptcy Papers to Law Enforcement Officials A person who knowingly and fraudulently conceals assets or makes a false oath or statement under penalty of perjury, either orally or in writing, in connection with a bankruptcy case is subject to a ne, imprisonment, or both. All information supplied by a debtor in connection with a bankruptcy case is subject to examination by the Attorney General acting through the Office of the United States Trustee, the Office of the United States Attorney, and other components and employees of the Department of Justice. WARNING: Section 521(a)(1) of the Bankruptcy Code requires that you promptly le detailed information regarding your creditors, assets, liabilities, income, expenses and general nancial condition. Your bankruptcy case may be dismissed if this information is not led with the court within the time deadlines set by the Bankruptcy Code, the Bankruptcy Rules, and the local rules of the court. In accordance with section 527(a)(2) of the Bankruptcy Code, be advised that: 1. All information you are required to provide with a bankruptcy petition and during a bankruptcy case must be complete, accurate, and truthful. 2. All assets and all liabilities must be completely and accurately disclosed in the documents led in your case, and the replacement value of each asset must be stated in those documents where requested after reasonable inquiry to establish such value. 3. Current monthly income, the amounts specied in the means test under section 707(b)(2), and disposable income in chapter 13 cases must be stated after reasonable inquiry. 4. Information that you provide during your bankruptcy case may be audited, and the failure to provide such information may result in dismissal of the case or other sanction, including a criminal sanction. Certicate of the Debtor I (We), the debtor(s), affirm that I (we) have received and read this notice. Date: Case No. (if known): [signature] Printed Name(s) of Debtor(s) [signature] Signature of Joint Debtor (if any)
Appx. G.3
Form 7 Debtors Certication in Support of Temporary Waiver of Credit Counseling Requirement Based on Exigent Circumstances6
[Caption: Offcial Form 16A] Debtors Certication in Support of Waiver of Credit Counseling Requirement
5 This form contains the written notice required by section 527(b) to be provided, to the extent applicable, by a debt relief agency to an assisted person. It must be provided in a single document separate from other documents and notices provided to the client. This form provides the notice copied verbatim from the statute, even though it includes information that may be incorrect. Attorneys are permitted under section 527(a)(2) to alter the language as long as the notice provided is one that is substantially similar. If the notice is not provided at the time the client signs an initial consultation agreement, see Form 4, Appx. G.2, supra, and with a copy attached thereto, the attorney should include the certicate of receipt and have the client sign it.
I/We, [debtor(s)], the debtor(s) in the above-styled case, hereby declare under penalty of perjury that:
6 This form may not be necessary if the court grants a request for deferral of the credit counseling requirement pursuant to section 109(h)(3)(A) based on the statement provided by the debtor on Exhibit D to the petition, Official Form 1. See Appx. D, supra. However, for courts that require the ling of a motion, this certication may be attached as an exhibit in support of the motion. Although section 109(h)(3)(A) refers to this certication as relating to a waiver or exemption from the requirements of section 109(h)(1), the certication provides only a
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Appx. G.3
with respect to her nancial responsibilities, which is the reason why the petition in this matter was led by her representative pursuant to Bankruptcy Rule 1004.1. 3. The Debtors condition prevents her from participating in an in-person, telephone, or Internet credit counseling session, or a nancial management course. [Alternate CActive Military Duty] 1. The Debtor led bankruptcy pursuant to chapter 7 of the Bankruptcy Code on [date]. 2. Shortly after ling the petition, the debtor was called to active military duty and is currently serving in Iraq. WHEREFORE, the Debtor requests that this motion be approved, and that the Debtor be exempted from the credit counseling and nancial education requirements pursuant to 11 U.S.C. 109(h)(4). Date: [signature] Attorney for Debtor
Form 8 Motion for Exemption from Credit Counseling and Financial Education Requirement Based on Incapacity, Disability, or Active Military Duty
[Caption: Offcial Form 16A] Motion to Exempt Debtor from Credit Counseling and Financial Education Requirement Debtor hereby requests that this Court, pursuant to 11 U.S.C. 109(h)(4), exempt her from the requirement under section 109(h)(1) that she receive budget and credit counseling, the requirement under 11 U.S.C. 521(b) that she le a certicate from an approved budget and credit counseling agency, and the requirement under 11 U.S.C. 727(a)(11) that she complete a course on personal nancial management. In support of this motion, the debtor states as follows: [Alternative ADisability] 1. The Debtor is a seventy-three-year-old disabled individual who led bankruptcy pursuant to chapter 7 of the Bankruptcy Code on [date]. 2. Due to a stroke suffered by the Debtor after ling bankruptcy, the Debtor is currently hospitalized, unable to travel, and has difficulty communicating. Upon release from the hospital, it is expected that she will be transferred to a nursing home. 3. The Debtors physical problems prevent her from participating in an in-person, telephone, or Internet credit counseling session, or a nancial management course. [Alternate BIncapacity] 1. The Debtor is an eighty-year-old disabled individual who led bankruptcy pursuant to chapter 7 of the Bankruptcy Code on [date]. 2. The Debtor suffers from advanced dementia, which has caused her to have loss of memory and difficulty performing complex tasks. This dementia renders the Debtor incapacitated
deferral of the requirements as the debtor must still obtain counseling within thirty days of the petition date. The court may, for cause, extend this period by an additional fteen days. See 7.3.5, supra.
Form 9 Motion and Order for Extension of Time to File Schedules and Other Required Documents7
[Caption: Offcial Form 16A]8 Motion for Extension of Time to File Schedules and Other Documents The Debtor moves this Court as follows: 1. On April 6, 2006, the Debtor led a voluntary petition in bankruptcy which halted an execution sale of his real property. 2. The schedules, statement of nancial affairs, payment advices, statement of current monthly income, and means test calculation are due on April 21, 2006. 3. The Debtor will need an additional twenty (20) days to prepare and gather these documents, because of the need to gather all the necessary information from creditors. WHEREFORE, the Debtor requests that this Court grant an extension of twenty (20) days, until May 11, 2006, to prepare and le his schedules, statement of affairs, payment advices, statement
7 This form may be used if the debtor can not le schedules, statement of affairs, payment advices, statement of current monthly income, and means test calculation within fteen days of the petition as required. The application is governed by Federal Rules of Bankruptcy Procedure 1007(c) and 3015. Any extension of time under those rules may be granted only on motion for cause shown, and on notice to the trustee. Use of this form should be adapted to reect any cause for delay in the particular case involved. 8 Official Form 16A is contained in Appendix D, supra. While this motion and several other pleadings in this Appendix may not be required to be served by the debtor on creditors pursuant to explicit provisions of the Code or Bankruptcy Rules, local rules may so require. Thus, in order to comply with 11 U.S.C. 342(c), it is advisable to use Official Form 16A, which includes the debtors address and the last four digits of the debtors Social Security Number. The legislative history of the amendment notes, however, that bankruptcy courts may waive the requirement in compelling circumstances such as the need of a domestic violence victim to conceal her residence for safety reasons. See 140 Cong. Rec. H10,764 (daily ed. Oct. 4, 1994) (remarks of Rep. Brooks).
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Appx. G.3
of current monthly income, and means test calculation pursuant to Rule 1007(c) of the Federal Rules of Bankruptcy Procedure. Date: [signature] Attorney for Debtor [Caption: Offcial Form 16A] Order Granting Additional Time to File Schedules and Other Documents9 It is ORDERED that the Debtor herein shall have until May 11, 2006, to le schedules, statement of affairs, payment advices, statement of current monthly income, and means test calculation. Date: [signature] United States Bankruptcy Judge
Form 11 Motion and Order for Additional Time to File Chapter 13 Schedules, Other Documents and Information Required Under 11 U.S.C. 521(a)(1)11
[Caption: Offcial Form 16A] Motion for Additional Time to File Chapter 13 Schedules, Other Documents and Information Required Under 11 U.S.C. 521(a)(1) Debtor, [debtor], by his attorney, respectfully represents: 1. Debtor led a voluntary petition under chapter 13 of the Bankruptcy Code on April 6, 2006. 2. Debtors petition was prepared and led in an expedited manner to stop a pending foreclosure sale of the Debtors home scheduled for April 7, 2006. The Debtor was therefore unable to gather all the necessary documents for completing the chapter 13 schedules, statement of affairs, plan, and other information and documents required under section 521(a)(1) when the petition was led. 3. Debtor led a Motion for Extension of Time to File Chapter 13 Schedules, Statement of Affairs and Chapter 13 Plan, and an extension of time was granted until May 11, 2006. 4. On April 23, 2006, Debtor was hospitalized following an automobile accident. Debtor is currently recovering from surgery and is not expected to be released from the hospital until May 15, 2006. 5. During the next few weeks, Debtor will have little ability or opportunity to take the steps necessary to complete the chapter 13 statement and plan on time. 6. It is requested that the Court grant the Debtor an additional period of forty-ve (45) days, pursuant to 11 U.S.C. 521(i)(3) and Rules 1007(c) and 3015(b) of the Federal Rules of Bankruptcy Procedure, so that the Debtor may assist counsel in submitting the necessary forms and information.
11 This form may be used to seek an additional forty-ve-day period to le the information required under section 521(a)(1). An extension of time under section 521(i)(3) may be granted on motion for cause shown, which must be led within forty-ve days after the ling of the petition. The granting of this motion will prevent the case from being automatically dismissed under section 521(i)(1) if the information required by section 521(a)(1) is not led within forty-ve days of the petition. If the motion seeks an extension of time to le documents in addition to those required by section 521(a)(1), it is also governed by Federal Rules of Bankruptcy Procedure 1007(c) and 3015(b). Any extension of time under those rules may be granted only on motion for cause shown, and on notice to the trustee. This form may be adapted for use in chapter 7 cases as well.
Form 10 Motion and Order for Extension of Time to File Chapter 13 Schedules and Other Required Documents10
[Caption: Offcial Form 16A] Motion for Extension of Time to File Chapter 13 Schedules and Other Documents The Debtor moves the Court as follows: 1. On April 6, 2006, the Debtor led a voluntary petition in bankruptcy which halted the execution sale of his real property. 2. The chapter 13 schedules, statement of affairs, payment advices, statement of current monthly income and disposable income calculation, and chapter 13 plan are due on April 21, 2006. 3. The Debtor will need an additional twenty (20) days to prepare the statement and plan, because of the need to gather all the necessary information from creditors. 4. The Debtor requests that this Court grant an extension of twenty (20) days, until May 11, 2006, to prepare and le his chapter 13 schedules, statement of affairs, payment advices, statement of current monthly income and disposable income calculation, and chapter 13 plan, pursuant to Rules 1007(c) and 3015 of the Federal Rules of Bankruptcy Procedure. Date: [signature] Attorney for Debtor
9 Most courts require a proposed order, such as this form, to accompany the Motion for Extension of Time to File Schedules and Statement of Affairs. In the many jurisdictions where the debtor does not serve copies of court orders, Official Form 16B may be acceptable as a caption. 10 This form may be used if the debtor can not le a chapter 13 statement and chapter 13 plan within fteen days of the petition as required. This application is governed by Federal Rules of Bankruptcy Procedure 1007(c) and 3015. Any extension of time under these rules may be granted only on motion for cause shown, and on notice to the trustee. Use of this form should be adapted to reect the cause of delay in the particular case involved.
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Appx. G.3
5. The Debtor was employed by the same employer for the entire sixty-day prepetition period. Included with the pay stubs attached as Exhibit A is the last pay stub received by the debtor before ling this bankruptcy. This pay stub is for the period ending [date], and it includes a year-to-date total of all income received by the Debtor prior to ling the petition. 6. This Court has authority pursuant to section 521(a)(1)(B) to modify the ling requirements under that section. WHEREFORE, the Debtor requests that he be permitted to complete this case without submitting all payment advices required by 11 U.S.C. 521(a)(1)(B)(iv). Date: [signature] Attorney for Debtor
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Appx. G.3
Form 15 Debtors Statement of Special Circumstances to Rebut Presumption of Abuse Under 11 U.S.C. 707(b)(2)16
[Caption: Offcial Form 16A] 1. Debtors Statement of Special Circumstances I, [debtor], the debtor in the above-styled case, hereby declare under penalty of perjury that the following is true and correct:17 1. On [date], I led a petition under chapter 7 of the Bankruptcy Code, and indicated on the Statement of Current Monthly Income and Means Test Calculation that my current monthly income is $3250. 2. This amount was determined by taking the monthly average of all income I had received during the six-month period ending on the last day of the month before my bankruptcy ling. 3. For the rst three months of this six-month period, I had worked at the local General Motors plant as an assembler earning approximately $30 per hour with overtime. In the fourth month, General Motors unexpectedly closed the local plant and I was laid off from my job. For the remaining three months of the six-month period, I received only $1500 per month as severance pay. 4. Given the current market for manufacturing jobs in the Baltimore area and the fact there are no longer any local auto industry jobs after the General Motors plant closing, I was fortunate to nd my current job. However, I am now earning only $1800 per month, and my new job requires a much longer commute. 5. The Statement of Current Monthly Income and Means Test Calculation that I led therefore incorrectly suggests that I have an extra $1450 per month that I am not actually receiving. 6. I also listed on the Statement of Current Monthly Income and Means Test Calculation, based on the IRS Transportation Standards, Operating Costs and Public Transportation Costs, an amount of $240 per month for my vehicle operation expense. 7. My new job requires me to travel an additional 120 miles every workday, for a total of 150 miles per workday. With the current cost of gas averaging $2.60 per gallon, I am spending approximately $500 per month on gas alone.
16 To rebut a presumption of abuse arising under the means test, section 707(b)(2)(B)(i) states that the debtor must demonstrate that special circumstances exist that justify additional expenses or adjustments of current monthly income for which there is no reasonable alternative. To establish special circumstances, the debtor must itemize each additional expense or adjustment of income and provide, accompanied by an oath as to the accuracy of any information provided, (1) documentation for such expense or adjustment to income; and (2) a detailed explanation of the special circumstances that make such expenses or adjustment to income necessary and reasonable. This form may be submitted to the trustee or United States trustee by debtors counsel in an attempt to convince them not to le a motion to dismiss under section 707(b), or it may be attached to a response led by the debtor if a motion to dismiss is led. 17 The oath requirement under section 707(b)(2)(B)(iii) applies only when the statement is used in a court proceeding, and need not be included if used informally before a proceeding.
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Appx. G.3
2. The debtors believe they are entitled to relief under chapter [number] . 3. The debtors are indigent and are unable to pay the miscellaneous administrative fee or give security therefor. 4. The debtors income consists of $[amount]. 5. The debtors have [number] children dependent upon them for support. 6. The debtors basic monthly expenses exceed their income. 7. The debtors do not have any stocks, bonds, bank accounts, or other liquid assets from which they can pay the miscellaneous administrative fee. 8. The debtors own no real estate other than their residence, in which they have no equity and which is subject to foreclosure. 9. The debtors do not own an automobile or any item of household furnishings worth more than $200. 10. There are no family or friends who could provide funds to the debtors for payment of the miscellaneous administrative fee. 11. The debtors rights under Title 11 will be prejudiced if the debtors petition and schedules are not accepted for ling or if their bankruptcy is dismissed for failure to pay the miscellaneous administrative fee. WHEREFORE, the debtors request that this Court waive payment of the miscellaneous administrative fee and permit them to proceed with their bankruptcy without payment of the fee or security therefor. [signature] Attorney for Debtors VERIFICATION I, [debtor], verify under penalty of perjury that the foregoing is true and correct. [signature] Debtor Executed on: [date] [Caption: Offcial Form 16B] Order to Waive Miscellaneous Administrative Fee AND NOW, this [date] day of [month], [year], upon consideration of the debtors application to waive the miscellaneous administrative fee for the ling of their bankruptcy petition, it is hereby ordered that the fee is waived and the debtors are permitted to proceed with their bankruptcy without payment of the miscellaneous administrative fee. Date: [signature] United States Bankruptcy Judge
1930(f), and to do so should le an Application on Official Form 3B. See Appx. D, supra; 13.6, supra. The form provided here may be used if the debtor is not eligible for a chapter 7 fee waiver to obtain a waiver of the $39 miscellaneous administrative fee normally payable upon the ling of a chapter 7 or chapter 13 case. The form can be modied to also seek waiver of the $15 trustee surcharge applicable in chapter 7 cases. These fee waivers should be available pursuant to 28 U.S.C. 1915. See 13.6, supra. Different courts may also have varying requirements regarding the specicity of the statement of the debtors nancial situation.
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large balloon payment at the end may well be questioned unless there is a basis for expecting such a payment is likely to be fullled. Payments may be made at such intervals as the debtor chooses. Payments must begin, however, within thirty days after the petition is led, unless the court orders otherwise. 11 U.S.C. 1326(a); see 8.3.12.1, 8.3.12.3, supra. Creditors, however, will be paid by the trustee according to the trustees own schedule. Many trustees make distributions only quarterly, except that they may disburse ongoing mortgage payments monthly if so provided under the plan or required by local rule. See 12.4, supra, for discussion of permissible classications in a chapter 13 plan. All priority claims must be paid in full under the plan. 11 U.S.C. 1322(a)(2). However, no interest need be provided unless necessary under the standards of 11 U.S.C. 1325(a)(4) or 1325(a)(5). This class will normally include the trustees fees and expenses of nine to ten percent of the amounts paid through the trustee, as well as the fee of the debtors attorney, if that fee is to be paid through the plan. Local practice may require the amount of this fee to be specied in the plan. The only exception to the general rule that priority claims must be paid in full is contained in section 1322(a)(4), which provides that support owed to the government need not be paid in full if the debtor proposes a ve-year plan committing all the debtors disposable income and the debtor can not pay the support obligation in full. See 12.3.6.1, supra. It is not totally clear that this sentence is permissible. A priority creditor must be paid in full unless it agrees to different treatment. See 12.3.6.1, supra. Silence may or may not constitute such an agreement, even with this provision in the plan. This class is basically that of creditors whose claims remain secured despite the debtors avoiding powers. Normally the debtor will want to pay these debts, because the liens thereon will otherwise remain after the bankruptcy. However, a chapter 13 plan need not provide for every secured claim.
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Appx. G.3
d. Class ve claims: The class ve claims are not being paid under this plan, and there shall be no distribution to the holders of such claims.39 6. The ongoing postpetition payments on the Debtors home mortgage will be paid by the Debtors directly40 to [creditor or mortgage servicer] beginning with the payment due on [rst due date under note for the month following the month in which petition led].41 The payments received by [creditor or mortgage servicer] from the Debtors for ongoing postpetition payments shall be applied and credited to the Debtors mortgage account as if the account were current and no prepetition default existed on the petition date and, if made timely under the terms of the note, shall be applied and credited without penalty to the months in which the payments are received and in the order of priority specied in the payment application provision contained in the note and mortgage. The [creditor or mortgage servicer] shall comply with all applicable provisions of the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) during the pendency of this plan, and shall make, upon notice to the Debtors, Debtors counsel, and the trustee, appropriate adjustments to the ongoing monthly mortgage payment amount to reect escrow account, adjustable mortgage interest rate, and other changes required by the note and mortgage. If there is a deciency or
creditors, because unless a creditor has a right to receive something under the plan, it may argue that it has not been provided for under the plan and that its claims therefore are not discharged pursuant to 11 U.S.C. 1328(a). These issues can be avoided altogether by proposing even minimal payments. See 12.3, supra. 39 This paragraph species that certain secured claims are not being provided for in the plan. The debtor is not required to provide for all secured claims in the plan. See 11.6.1.3.3.4, supra. 40 Payments outside the plan are those made directly to the creditors rather than through the trustee. They are especially advantageous to the debtor with respect to large debts such as mortgages because they save the trustees commission. For the same reason, they are sometimes opposed by trustees. See 12.4.4, supra. 41 This paragraph eshes out what it means to cure a mortgage default. It is intended to help prevent problems arising after completion of a chapter 13 plan in which a creditor alleges that the amount paid through the plan did not cure the default. See 11.6.2.8, supra. For chapter 13 cases led on or after October 17, 2005, section 524(i) provides that the creditors willful failure to credit payments received under a conrmed plan in accordance with the plan constitutes a violation of the injunction of section 524(a). This paragraph species how payments received by the mortgage lender are to be credited under the terms of the plan. To avoid any confusion, the plan should specify the date when the rst postpetition mortgage payment is due. The creditors proof of claim should be checked to make certain that the rst postpetition payment under the plan has not been included as part of the arrears to avoid the debtor paying the same monthly installment twice. Similarly, any escrow arrears listed on the proof of claim should be reviewed. Often, a problem occurs because mortgage servicers use the total amount of escrow arrears in annually reevaluating the borrowers escrow account. This annual review is then used as the basis for calculating the borrowers new escrow payment going forward during the plan. However, in most cases prepetition escrow arrears have already been included in the claim and are being paid through the chapter 13 plan. As a result, this practice can lead to double or sometimes triple payments by the debtor.
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Appx. G.3
surplus of funds held in escrow, as dened under RESPA, during the pendency of this plan, [creditor or mortgage servicer] shall notify the Debtors as required by RESPA, and shall also provide notice to Debtors counsel and the trustee.42 The Debtors will cure the default on the mortgage within a reasonable period of time by making payments on the arrears through the plan, which payments shall be disbursed by the trustee to [creditor or mortgage servicer].43 The payments disbursed by the trustee to [creditor or mortgage servicer] shall be applied and credited to the amount necessary to cure the default, which shall be referred to as the arrears for the purposes of this plan. The arrears shall consist of the following items, to the extent they are listed and separately itemized on the [creditor or mortgage servicer]s proof of claim and they are authorized and have been properly assessed under the terms of the note and mortgage: a) any unpaid prepetition monthly installment payments due; b) any unpaid prepetition late fees; c) any unpaid reasonable prepetition attorney fees and costs; d) any unpaid reasonable attorney fees and costs incurred postpetition but prior to conrmation; e) any unpaid escrow shortage or deciency, as dened under RESPA, to the extent not being recovered as part of the unpaid prepetition monthly installment payments provided in (a) above; and f) any postpetition interest on the arrears, if expressly provided for in the terms of the note and mortgage.44 The amounts required to be paid by the Debtors for the above listed items of arrears in order to cure the default shall be the amounts stated on the [creditor or mortgage servicer]s proof of claim, unless the debtors at any time dispute that amount, in which case the amount of arrears will be the amount ultimately decided by the Court or agreed to by the parties.45 The arrears may also include any postpetition arrears consisting of any of the items listed in the categories (a) to (f) noted above, but only to the extent these amounts are authorized by the note and mortgage and approved by the Court after notice to the Debtors, Debtors counsel, and the
42 In implementing RESPA, the United States Department of Housing and Urban Development (HUD) has promulgated a regulation providing that servicers are not required to provide borrowers who are in bankruptcy with annual escrow account statements. See 24 C.F.R. 3500.17(i)(2). However, a servicer is required to notify borrowers of escrow account shortages and deciencies because no bankruptcy exemption exists for that requirement under 24 C.F.R. 3500.17(f)(5). See Chase Manhattan Mortgage Corp. v. Padgett, 268 B.R. 309 (S.D. Fla. 2001); National Consumer Law Center, Foreclosures Ch. 5 (2005). 43 The cure of a mortgage default within a reasonable period of time is permitted by 11 U.S.C. 1322(b)(5). This paragraph may be objected to by creditors as it does not specify the amount of time for a cure. It is generally advantageous for the debtor not to bind herself to a specic payment schedule if that can be avoided. Often, however, such a schedule is negotiated to forestall or settle litigation seeking relief from the automatic stay. 44 Creditors are likely to seek interest on arrears following Rake v. Wade, 508 U.S. 464, 113 S. Ct. 2187, 124 L. Ed. 2d 228 (1993). The holding in the Rake case will not apply to mortgages made after October 22, 1994 so that no interest on arrears on those mortgages will be required unless it is authorized by the mortgage and state law. See 11.6.2.7, supra. Some courts may require that such interest be included as an element of the debtors plan. 45 This provision makes clear that the debtor may in most cases object to the creditors calculation of its arrearage. An objection is necessary in most cases, as often the creditors calculation is inconsistent with the amount provided for that creditor under the plan. See 13.4.3, supra.
18
Appx. G.3
the plan beyond three years. Conrmation shall also constitute approval of such extension. Such extension is essential to the success of the plan. Without it the plan would fail and no claims would be paid in full.52 14. Conrmation of this plan shall constitute a nding that all documents and information required by section 521(a)(1) have been led with the court or provided by the Debtors. 15. The Debtors qualied retirement or pension loan claim shall be paid directly by Debtors to [pension administrator]. 16. The current defaults by the Debtors on the class two and class three claims are waived and the defaults on the class two claims shall be cured by payments to this plan.53 17. The title to the property of the estate shall revest in the Debtors upon termination of this plan, and the Debtors shall have sole right to use and possession thereof during the pendency of this case,54 including the right to use, sell or lease such property in the ordinary course of the Debtors affairs. 18. Conrmation of this plan shall constitute a nding and order that due to the Debtors low income, the trustees fee should not exceed 10% of each monthly payment, even if that amount is less than $5.00 per month.55 19. Upon conrmation of this plan, no creditor may assess the Debtors or the Debtors estate for attorney fees and/or collection costs arising during the plan, except as authorized by contract and upon approval of the Court after notice to the Debtors. Unless approved by the Court for payment under this paragraph, the Debtors shall have no liability for any such fees and costs arising during the plan, and there shall be no in rem liability of property at any time held by the debtors estate. Any application for approval of fees or costs under this paragraph shall meet the requirements of Federal Rule of Bankruptcy Procedure 2016(a).56 20. Any money or property acquired by either the trustee or the Debtors or refunded from the trustees percentage fees,57 while this
52 The court must specically nd cause for and approve any plan over three years in length. 11 U.S.C. 1322(c). The rules are unclear as to whether the plan may provide for conrmation being deemed such a nding as provided in this clause. Some courts require a separate application for such an extended plan to be led. 53 This provision is based upon 11 U.S.C. 1322(b)(3). It is not totally clear whether any type of default, including a noneconomic default, may be waived under that subsection, although that appears to be its meaning. Nor is it certain that a plan can cure a default merely by stating, as here, that completion of the plan shall be a cure. 54 This paragraph is based upon 11 U.S.C. 1327(c), which states that except as otherwise provided in the plan, property of the estate revests in the debtor as of conrmation. In some cases it may be preferable to defer the revesting of certain property until the end of the plan. See 9.4.2, supra. This paragraph also specically deals with the issue of the right to use property of the estate, giving sole right to such use to the debtor. See generally discussion of use of property in 12.8, supra. 55 Unless the court orders otherwise, the trustee is entitled to a minimum fee of $5.00 per month. 11 U.S.C. 330(c). This paragraph will probably suffice as the court-ordered exception to the rule. 56 This language is intended to avoid the holding in Telfair v. First Union Mortgage Corp., 216 F.3d 1333 (11th Cir. 2000). 57 In some districts, when trustees nd they have collected an amount greater than that necessary to meet their compensation
19
Appx. G.3
case is pending shall be deemed exempt property of the debtors if exemptible, and shall be forthwith delivered to the Debtors.58 21. If the Debtors default after ling of the petition, on any payment to a utility entitled to adequate assurance under 11 U.S.C. 366, then that debt shall, upon application of said utility, become a class one claim under this plan. This priority shall be deemed adequate assurance of the utilitys future payments.59 22. The following executory contracts are rejected,60 with the refunds of prepaid charges claimed as exempt property: a. All credit life, disability, and property insurance contracts to which the Debtors is/are part(y)(ies).61 b. Membership in [name] Health Spa. 23. The following liens are avoided pursuant to section 522(f):62 a. Judicial lien arising out of judgment in favor of [name] Finance Company, at [name] Court, No. [number]. b. Non-possessory, non-purchase money security interest in Debtors household goods held by [name] Finance Company. 24. Upon completion of this plan, all debts listed in the Debtors schedules or provided for by this plan, except those excepted by 11 U.S.C. 1328(a) shall be discharged.63 25. If prior to the expiration of the period set forth in paragraph 3 of this plan all led claims entitled to payment under this plan are paid in full, this plan shall terminate on that date.64 Date: Acceptances may be sent to:65
and expenses, they refund those excess fees to the debtor. This paragraph makes clear that such refunds should be paid to the debtor rather than to creditors. This provision covers the problem of new property coming into the estate under 11 U.S.C. 1306(a). It also deals with the question of how property turned over to the trustee under 11 U.S.C. 542 can be obtained by the debtor. See 9.9, supra. This paragraph, at least in a well-funded plan, may be deemed to provide adequate assurance to a utility under 11 U.S.C. 366 without the payment of any security deposit. See 9.8, supra. The plan may assume or reject executory contracts. 11 U.S.C. 1322(b)(7). It is not totally clear that such contracts are executory. See 12.9, supra. Many courts allow avoidance of liens under section 522(f) in the chapter 13 plan. Most require that the individual liens be specied, as here. A few may allow a simple statement that all liens avoidable under 11 U.S.C. 522(f) are avoided. Under the Federal Rules of Bankruptcy Procedure, however, a separate motion may be necessary to avoid a lien. See Fed. R. Bankr. P. 4003(d); In re McKay, 732 F.2d 44 (3d Cir. 1984). This paragraph is probably unnecessary unless the plan has a possibility of no payments to unsecured creditors. In such cases, it may provide protection against later arguments that unsecured creditors were not discharged under 11 U.S.C. 1328(a) because they were not provided for in the plan. In some cases only a few creditors le claims and the payments originally contemplated exceed those necessary to pay all claims in full. This provision obviates the necessity of ling a motion to modify the plan by shortening the period of payments, in that it shortens the plan automatically. Acceptances are no longer a signicant part of the chapter 13 process, because creditors have no right to vote on the plan. Many debtors attorneys do not even bother to solicit acceptances in most cases. However, a plans acceptance by a priority or secured
[signature(s)] Debtors
58
59
60 61 62
63
64
65
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Appx. G.3
wages, earnings or income of the Debtor as may be needed to effectuate said plan, and that such an Order is necessary and proper, now therefore, IT IS ORDERED, that, for a period of [number] months, or until further Order of this Court, [debtors employer] deduct from the earnings or income of said Debtor the sum of $[amount] each [time period] pay period beginning on the next payday following the receipt of this Order and deduct a similar amount for each pay period thereafter, including any period for which the Debtor receives periodic or lump sum payment for or on account of vacation, termination or other benets arising out of present or past employment of the Debtor, and forthwith remit the sums so deducted to: [trustee] IT IS FURTHER ORDERED that all earnings, wages and income of the Debtor, except the amounts required to be withheld by the provisions of any laws of the United States, the laws of any state or political subdivision, or by any insurance, pension or union dues agreement between said entity and the Debtor, or by Order of this Court, be paid to the aforesaid Debtor in accordance with the entitys usual payroll procedure. IT IS FURTHER ORDERED that no deductions for or on account of any garnishment, wage assignment, credit union or other purpose not specically authorized by this Court be made from the earnings of said Debtor. IT IS FURTHER ORDERED that this Order supersedes previous orders, if any, made to the subject entity in this or any previous case. Date: [signature] United States Bankruptcy Judge
21
Appx. G.3
2. Under this plan the allowed unsecured claimants will receive not less than that amount. 3. The Debtor shall submit to the supervision and control of the trustee, the following sum: $10 per month for eighteen months. 4. The various claims of the Debtors creditors shall be classied as follows: a. Class one: Claims led and allowed which are entitled to priority under 11 U.S.C. 507. The administrative costs are the only priority claims contemplated by this plan. Any creditor entitled to priority under section 507 of the Bankruptcy Code contrary to the provisions of this plan shall be deemed to have waived any such priority, unless such entity objects to the plan. b. Class two: Claims led and allowed which are secured by a lien which is not avoidable by the Debtor under 11 U.S.C. 522. Class two creditors will retain their liens until either the full underlying debt is paid or the debtor receives a discharge, and they shall be deemed to have accepted this plan unless they object to the plan. c. Class three: All other claims against the debtor that are timely led. 5. The payments received by the trustee from the Debtor pursuant to this plan shall be distributed as follows: a. Class one claims: The amount paid by the Debtor to the trustee shall be distributed rst to the class one claims, pro rata, until they are paid in full. b. Class two claims: After the application of the appropriate amount each month to the class one claims, the entire amount of the payments remaining in the hands of the trustee shall be distributed in monthly installments, pro rata, to the holders of the class two claims until each such claimant shall receive 100% of the amount allowed on each such claim. c. Class three claims: After the application of the appropriate amount each month to the class one and class two claims, the entire amount of the monthly payment remaining in the hands of the trustee shall be distributed in monthly installments, pro rata, to the holders of the class three claims. 6. As part of this plan, and subject to court approval of the sale,70 the Debtor and her husband shall also liquidate the Debtors interest in her home at [address] paying creditors secured by that property in full. 7. The nonexempt value of the residence shall be paid to the trustee and applied to the claims of the class three creditors, after payment of the trustees fees. 8. By failing to object to this plan, or any modication thereof, all creditors holding claims agree not to make any effort to collect their claims from any co-signers that may exist, so long as this case remains pending. 9. Conrmation of this plan shall constitute a nding that the plan constitutes the Debtors best effort under all the circumstances to pay the creditors, within the meaning of 11 U.S.C. 727(a)(9). 10. Conrmation of this plan shall constitute a nding that all documents and information required by section 521(a)(1) have been led with the court or provided by the Debtor.
Form 23 Chapter 13 Plan Providing for Filing of Adversary Proceeding Involving Predatory Mortgage Lending Claims71
[Caption: Offcial Form 16A] Chapter 13 Plan of Debtors 1. If the instant estate were liquidated under Chapter 7 of the Bankruptcy Code, the allowed unsecured claimants would be paid $0.00. Under this Plan, the allowed unsecured claimants will receive not less than that amount. 2. The Debtors shall submit to the supervision and control of the trustee $150 per month for the thirty-six (36) months of the Plan. The total sum to be submitted is $5400. 3. The various claims of the Debtors creditors shall be classied as follows: a. CLASS 1Claims led and allowed which are entitled to priority under 11 U.S.C. 507. The administrative costs of the trustee are the only priority claims contemplated by this plan. Any creditor entitled to priority under section 507 of the Bankruptcy Code contrary to the provisions of this plan shall be deemed to have waived any such priority, unless such entity objects to the plan before conrmation. b. CLASS 2The allowed secured claim of [name of mortgage holder], as the holder of the mortgage on Debtors home, [address], dated [date].
71 This Chapter 13 plan may be used if the debtor intends to le an adversary proceeding against a mortgage holder seeking enforcement of the debtors rescission rights under the Truth in Lending Act. See 13.4.4, supra.
may be subject to a successful objection if all unsecured claims are not paid in full under the ability-to-pay test of 11 U.S.C. 1325(b). See 12.6.3, supra. 70 11 U.S.C. 363(b), 1303.
22
Appx. G.3
72 This language can be helpful in defeating a mortgage holders attempt to seek referral of the adversary proceeding to arbitration if an arbitration clause was included in the mortgage loan documents. See Ernst & Young, L.L.P. v. Baker ONeal Holdings, Inc., 304 F.3d 753 (7th Cir. 2002) (creditors right to enforce arbitration agreement superseded by terms of conrmed plan, which provided that court retained jurisdiction to adjudicate adversary proceeding). For a discussion of the bankruptcy courts discretion to deny referral to arbitration in core proceedings, see National Consumer Law Center, Consumer Arbitration Agreements 5.2.3 (4th ed. 2004 and Supp.).
5. The Debtors will be responsible for securing and maintaining home owners insurance and for the payment of real estate taxes as of the date of conrmation. These payments are not to be paid by any creditor of Debtors. 6. To the extent that any claim is fully or partially unsecured pursuant to 11 U.S.C. 506(a), that portion of the claim which is unsecured shall be provided for as a Class 3 (unsecured) claim under this Plan. Creditors holding such claims shall retain their liens only to the extent of their allowed secured claims. 7. To the extent that any claim is fully or partially unsecured pursuant to 11 U.S.C. 506(a), that portion of the claim which is unsecured shall be provided for as a class four (unsecured) claim under this plan. Creditors holding such claims shall retain their liens only to the extent of their allowed secured claims. To the extent that the allowed secured claim is paid during this case or thereafter, such creditors liens shall be reduced. Once the allowed secured claim has been paid in full and the debtor receives a discharge, or the full underlying debt is paid, the creditor holding such claim shall promptly mark any lien securing such claim as satised in the appropriate public records. The term allowed secured claim, for all purposes under this Plan, shall mean the amount of the total due stated in the proof of claim unless the Debtors at any time disputes that amount, in which case the allowed secured claim will mean the amount ultimately decided by the Court or agreed to by the parties. 8. By failing to object to this Plan, or any modication or amendment thereof, all creditors holding claims agree not to make any effort to collect their claims from any codebtors that may exist, so long as this case remains pending. 9. Conrmation of this plan shall constitute a nding that the plan constitutes the Debtors best effort under all the circumstances to pay creditors, within the meaning of 11 U.S.C. 727(a)(9). 10. The title to the property of the estate shall remain with the trustee and shall not revest in the Debtors until the termination of this plan. The Debtors shall have sole right to use and possession thereof during the pendency of this case, including the right to use, sell, or lease such property in the ordinary course of the Debtors affairs. 11. Conrmation of this plan shall constitute a nding and order that, due to the Debtors low income, the trustees fee should not exceed 10 percent of each monthly payment to the trustee, even if that amount is less than $5.00 per month. 12. Any money or property acquired by either the trustee or the Debtors or refunded from the trustees percentage fees, while this case is pending, shall be deemed exempt property of the Debtors, if exemptible, and shall be forthwith delivered to the Debtors. 13. Upon completion of this plan, all debts listed in the Debtors Schedules or provided for by this plan, except those excepted by 11 U.S.C. 1328(a), shall be discharged. 14. If, prior to the expiration of the period set forth in Paragraph 2 of this plan, all led claims entitled to payment under this plan are paid in full, this plan shall terminate on that date. Date: [signature(s)] Debtors
23
Appx. G.3
24
Appx. G.3
WHEREFORE, Debtor prays that her Motion to Assume the Lease be granted. Date: [signature] Attorney for Debtor
Form 26 Chapter 13 Bankruptcy Information Sheet and Checklist from Debtors Attorney to Debtor80
Re: Bankruptcy No. [number] Dear [name]: On [date] our office led a chapter 13 bankruptcy petition on your behalf. The court number of your bankruptcy case is [number]; please make a careful note of it and include it on all payments made to the bankruptcy trustee and the clerk of the bankruptcy court. Unless I have advised you otherwise, remember that the ling of your bankruptcy places an automatic stay upon the attempts of your creditors to collect debts owed by you. In order that you get the maximum benet from your bankruptcy, I am writing to make sure you understand exactly what is required by you during the months ahead.
Mortgage Payments
According to your chapter 13 plan, you must pay your current monthly mortgage payments directly to your mortgage company as they become due each month. Payments to your mortgage company should begin in [month]. If your current mortgage payment includes an escrow for taxes and insurance, you should notify this office of any escrow account statements or notices you receive from your mortgage company stating that your monthly payment has changed. If your current mortgage payment does not include an escrow for taxes and insurance, you must continue to keep your home insured and pay any tax bills that come due. Do not pay any past due mortgage amounts as that delinquency is being cured by your payments to the bankruptcy trustee. It is very important that you keep records of all of your mortgage payments, such as your bank statements and payment receipts, or copies of any statements you receive from your mortgage company listing the date and amount of your payments. If your mortgage company does not provide these statements, you must keep other payment records. This proof will be very useful if there is a dispute concerning your payments.
80 This letter serves to conrm and clarify for the debtor in a chapter 13 case the various payments that must be made and provides information about the meeting of creditors, including the documents the debtor will need to bring to that meeting. It can be adapted as circumstances of different cases require. Debtors are understandably confused by all of the payments they must make to different places. Payments in the wrong form or to the wrong party are not uncommon. A letter such as this one, to which the debtor can always refer, eliminates most problems. A similar, but shorter letter can also be sent in chapter 7 cases. See Form 27, Appx. G.3, infra. This form is adapted from one created by Eric Frank, Esq., Philadelphia, Pennsylvania.
25
Your chapter 13 plan states that you must make payments in the amount of $[amount] directly to your auto lender. These payments are referred to as adequate protection payments and will be required to be paid [frequency of payment] until your chapter 13 plan is conrmed. Once your plan is conrmed, you will no longer need to make these payments directly to the auto lender, because the amount needed to pay off your auto loan will be made through your payments to the bankruptcy trustee.
Court Costs
The cost of ling a bankruptcy petition is $274. This fee can not be waived. However, you have been allowed to pay this cost in four installments. These installments are due as follows: $68.50 $68.50 $68.50 $68.50 is is is is due due due due on on on on [date]; [date]; [date]; [date].
Make all payments for court costs in the form of a money order made payable to Clerk, U.S. Bankruptcy Court, and mail them to: Clerk, U.S. Bankruptcy Court U.S. Courthouse, Room [number] [address] Always place your name, address and bankruptcy number on each money order and remember to keep a receipt of each payment in a safe place in case any disputes arise.
81 This section is optional depending upon the plan or local rule treatment of the requirements found in section 1326(a)(1)(c). Some courts have provided by local rule that adequate protection payments, if required, shall be disbursed by the chapter 13 trustee. In that situation, this section would be unnecessary. 82 This provision assumes that the debtor will be making adequate protection payments directly to an auto lender or lessor, or that the debtors plan provides for a different payment amount for the pre-conrmation period.
26
Sample Bankruptcy Pleadings and Other Forms Other Things You Should Know
If you do not make all of the payments described above, your bankruptcy case may be dismissed or your mortgage company may be allowed to foreclose on its mortgage. Therefore, if you are unable to keep up with payments you should call me so I can advise you on whether there are any ways to deal with your problem. In the meantime, remember not to make payments to any other creditors for debts which arose prior to your bankruptcy unless instructed to do so by our office. Also, do not enter into any new credit transaction without rst checking with me. We understand that bankruptcy can be confusing. Therefore, if you have any questions at all or if you do not understand exactly what you must do, please call our office at [number]. We will be happy to answer all of your questions. [signature] Attorney to: Clerk, U.S. Bankruptcy Court U.S. Courthouse, Room [number] [address]
Appx. G.3
Utility Service
Your gas, electric, phone or water company may request a security deposit for service after the bankruptcy if you listed a debt to them in your bankruptcy papers. While your bankruptcy will wipe out any bills you owed them up until the date you led, the utilities are entitled to a deposit for continued service. If you receive a request for a deposit and feel it is too high, or if you will have difficulty paying it on time, please call our office right away.
Form 27 Chapter 7 Bankruptcy Information Sheet and Checklist from Attorney to Debtor86
Re: Bankruptcy No. [number] Dear [name]: On [date] our office led a chapter 7 bankruptcy petition on your behalf. The court number of your bankruptcy case is [number]; please make a careful note of it and include it on all payments made to the clerk of the bankruptcy court. Unless I have advised you otherwise, remember that the ling of this bankruptcy places an automatic stay upon the attempts of your creditors to collect debts owed by you. In order that you get the maximum benet from your bankruptcy, I am writing to make sure you understand exactly what is required by you during the months ahead.
Meeting of Creditors
The next thing to happen in your case will probably be a hearing called the meeting of creditors. You will soon receive a notice from the court of the date, time, and location of that hearing. Please call me when you receive that notice or any other legal papers. The meeting of creditors is conducted by the trustee assigned to your case. The meeting of creditors gives the trustee and others a chance to ask questions about your nancial affairs. Despite the name, few creditors appear at the meeting of creditors in a consumer bankruptcy. You, however, must attend. If you led jointly with your spouse, you must both attend. Usually, the best thing you can do to prepare for this meeting is to review the papers we have led with the bankruptcy court in your case.
Filing Fees
The bankruptcy court has approved our request to have you pay the mandatory $299 bankruptcy ling fee in installments. Your payments are due as follows: $75 $75 $75 $74 is is is is due due due due on on on on or or or or before before before before [date] [date] [date] [date]
All payments must be made by money order and they should be made payable to Clerk, U.S. District Court. Always place your name, address and bankruptcy number on each money order and remember to keep a receipt of each payment in a safe place in case any disputes arise. If you send a self-addressed stamped envelope the clerk will send you a receipt which will be absolute proof of your payment. If you miss a payment, the bankruptcy court may dismiss your case.
86 This letter serves to conrm and clarify information given to the debtor in a chapter 7 case. It can be adapted as circumstances require. Such a letter usually eliminates confusion about the various payments debtors must make and what will occur next. A similar letter can be sent in chapter 13 cases. See Form 26, Appx. G.3, supra.
27
Appx. G.3
Copies of all bank statements (checking, savings, and money market accounts, mutual funds, brokerage accounts, and so forth) you have received for the time period that includes the date your petition was led, which was [date]; Copies of bills, receipts, statements or other proof of the following expenses: [describe expenses];88 [Other documents].89 Please let me know if you can not provide any of these documents, so we can discuss how to meet the requirements.
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Appx. G.3
17. The following executory contracts are rejected, with the refunds of prepaid charges claimed as exempt property: a. All credit life, disability and property insurance contracts to which the Debtor is a party. b. Membership in [name] Health Spa. 18. The following liens are avoided pursuant to section 522(f): a. Judicial lien arising out of judgment in favor of [name] Finance Company, at [name] Court, No. [number]. b. Non-possessory, non-purchase money security interest in Debtors household goods held by [name] Finance Company. 19. Upon completion of this plan, all debts listed in the Debtors schedules or provided for by this plan, except those excepted by 11 U.S.C. 1328(a) shall be discharged. 20. If, prior to the expiration of the period set forth in paragraph 3 of this plan all led claims provided for in this plan are paid in full, this plan shall terminate on that date. Date: [signature] Debtor
93 Federal Rule of Bankruptcy Procedure 1009 allows amendment as a matter of course by ling the amendment (with the same number of copies as the original) and giving notice to the trustee and any entity affected thereby. A certicate of service listing parties in interest who are served is useful as record evidence of compliance with the rule. Any amendment to the schedules or statements must be veried by the debtor, Federal Rule of Bankruptcy Procedure 1008, and led in the same number of copies as required for the original, Federal Rule of Bankruptcy Procedure 1009.
29
Appx. G.3
Form 30 Application and Order for Waiver of Filing Fee to Amend Debtors Schedule of Creditors94
[Caption: Offcial Form 16A] Application for Waiver of Fee to Amend Debtors Schedules 1. Applicant led a voluntary chapter 7 petition bankruptcy on [date]. 2. Applicant has discovered additional creditors she wishes to list on her schedules. 3. The Applicants rights under title 11 will be prejudiced if the Debtors Schedules are not amended. 4. On [date], this Court granted the debtors Application for waiver of the chapter 7 ling fee pursuant to 28 U.S.C. 1930(f). 5. The Applicant is indigent and unable to pay the ling fee for the amendment of her schedules.95 WHEREFORE, Applicant prays that this Court waive payment of the fee as permitted by the Judicial Conference Schedule of Fees under 28 U.S.C. 1930(b). Date: [Caption: Offcial Form 16A] Order to Waive Filing Fees for the Amendment of Debtors Schedules The Debtor having applied for waiver of ling fees for the amendment of her schedules: It is ORDERED that the Debtor be permitted to le an amendment to her schedules without payment of the ling fee. Date: [signature] United States Bankruptcy Judge [signature] Debtor
30
Appx. G.4
Form 34 Complaint Seeking Damages for Violation of Automatic Stay and Unfair Trade Practices101
[Caption: Offcial Form 16D]102 Complaint 1. On August 21, 2006, the Plaintiff/Debtor commenced a voluntary case under chapter 7 of the Bankruptcy Code, by ling a petition which has been assigned No. [number] in this Court. 2. This Court has jurisdiction to hear this matter under 28 U.S.C. 1334, because it arises in that case and is related to it. This proceeding is a core proceeding. 3. The Defendant was named in Schedule A-3 of the petition as a creditor without security or priority. The Defendant is a creditor of the Debtor by virtue of [describe debt]. 4. The Defendant is also a creditor of the Debtor within the meaning of [cite provision(s) of state debt collection or unfair trade practices law]. 5. Within several days of May 28, 2006, the undersigned counsel for the Debtor telephoned the Defendant and informed its agent and employee, Ms. [name], that the Debtor was represented by counsel, that counsel was attempting to assist the Debtor in making satisfactory arrangements with creditors, and that the Defendant was not to have any further contact with the Debtor directly. 6. On or about July 15, 2006, an agent or employee of the Defendant, whose name sounded to the Debtor like Ms. [name] telephoned the Debtor personally, attempting to collect her debt to the Defendant.103 7. An order for relief was entered in this case on August 21, 2006, pursuant to 11 U.S.C. 301, thus triggering an automatic stay, pursuant to 11 U.S.C. 362(a), of all debt collection against the Debtor. 8. On August 25, 2006, the undersigned counsel for the Debtor sent a rst class letter to the Defendant, informing it of the ling of the petition and describing the provisions of section 362(a). A copy of that letter is attached hereto as Exhibit A [omitted], along with a return receipt showing receipt by Defendant.104 9. On September 10, 2006, the Defendant by its agent and employee, Ms. [name], sent a letter to the Debtor at her home address, a copy of which is attached as Exhibit B [omitted], attempting to collect the debt owing from the Debtor to the Defendant.
101 Although contempt might be sought by an application, it probably can also be sought by complaint, especially when other relief sought on the same facts requires an adversary proceeding. Federal Rule of Bankruptcy Procedure 7001 requires an adversary proceeding to seek all types of relief under nonbankruptcy law. For a general discussion of adversary proceeding complaints, see notes to Form 100, Appx. G.10, infra. For a general discussion of the automatic stay and remedies for violations, see Chapter 9, supra. 102 Official Form 16D is the caption for adversary proceedings. It can be found in Appendix D, supra. 103 Note that the creditors prepetition action in violation of the state unfair trade practices or debt collection laws gives rise to a cause of action which is property of the debtors bankruptcy estate. For the debtor to act on it, it must be listed on the debtors schedules and either exempted or abandoned. See Chs. 3, 12, 13, supra. 104 See Form 33, Appx. G.4, supra.
99 This letter should be sent to any creditor who may take action against the debtor, shortly after the bankruptcy is led and before the courts notice of ling and date of the rst meeting is sent. It should prevent repossessions, court actions, harassing collection activity, and so forth. The letter may be adapted for specic circumstances as needed. It should be sent by certied mail so there is evidence that the creditor has received notice of the stay for any later enforcement proceeding. Though not required by 11 U.S.C. 342(c), the debtors address and Social Security Number should be included so as to avoid any claim of confusion by creditor in the event enforcement proceedings are initiated. See 9.5, supra. In some localities a letter or other notice of this nature is led in courts where actions concerning the debtor are pending. Technically, no such notice should be required to effectuate the stay, which is automatic under federal law. However, in some cases, it may be wiser to follow local practice than to challenge it. 100 For purposes of proof, it may be advantageous to send this type of letter by certied mail.
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10. On September 12, 2006, at 3:00 P.M., Ms. [name] endeavored to collect the debt by telephoning the Debtor directly at her place of employment. Failing to reach her, she left the message: Personal. Please call. 11. At no time did any agent or employee of the Defendant communicate or attempt to communicate with the Debtors undersigned counsel, although the Defendant knew or had reason to know that the Debtor was represented by him as an attorney with respect to her debt, and the Defendant knew or could readily ascertain the address of the attorney. WHEREFORE, the Plaintiff/Debtor prays that this Court will enter an Order: a. Declaring the Defendant guilty of civil contempt by violating the automatic stay granted herein on August 21, 2004, for its actions on September 10 and 12, 2006;105 b. Declaring that the Defendant violated the rights of the Debtor as secured by [cite provision(s) of state law] by its actions on or about July 15, 2006, and September 10 and 12, 2006;106 c. Awarding the Plaintiff/Debtor damages in the amount of $100 for each violation, as provided in [cite provision(s) of state law]; and d. Awarding the Plaintiff compensatory and punitive damages, plus attorney fees and costs pursuant to 11 U.S.C. 362(k) and for contempt of Court; and e. Granting such additional relief as it deems necessary or proper. Date: [signature] Attorney for Plaintiff/Debtor
Form 35 Motion Seeking Relief for Violations of the Automatic Stay by Governmental Agency107
[Caption: Offcial Form 16A] Motion for Contempt for Violations of the Automatic Stay Debtor, [debtor], by his counsel, hereby requests that this Court hold Respondents [rst respondent], [second respondent], [third
105 Violation of the automatic stay by a party with actual notice constitutes contempt of court. Specic remedies including punitive damages are also provided by 11 U.S.C. 362(k) for willful violations. 106 Unlawful collection actions may be found to be unfair trade practices, under state unfair trade practice statutes and regulations, giving rise to a damage claim. In this case, contacting the debtor both after notice of representation by counsel and also after notice of the stay could be considered unfair practices. 107 A motion such as this one may be used to enforce the automatic stay in cases in which, after a petition has been led, a government agency refuses to cease recouping benets on account of a prebankruptcy overpayment. The debtor may also wish to request relief under 11 U.S.C. 362(k). A complaint is not normally necessary, because the injunction of the automatic stay is already in effect and no further injunction need be sought. The motion procedure has been held to meet the requirements of due process. See, e.g., In re Zumbrun, 88 B.R. 250 (B.A.P. 9th Cir. 1988). However, it may be advantageous in some cases to seek injunctive or declaratory relief and use the slightly greater formality of an adversary proceeding. Many courts will also
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Appx. G.4
Re: [debtor] [address] [Social Security Number] Dear Mr. [name]: Please be advised that I represent the above-captioned individual who has led a voluntary petition in bankruptcy in the [district name] District of [state]. The petition, Bankruptcy No. [number], was led on September 23, 2006 and a copy is enclosed. The Veterans Administration (VA), which has claimed that it overpaid [debtor], is listed as a creditor in this Petition. Pursuant to the automatic stay provisions of the Bankruptcy Code, 11 U.S.C. 362, the ling of a Petition operates as a stay of any action to collect or recover a claim against [debtor] that arose before the ling of the Petition. Accordingly, the VA is obligated to cease all efforts to recover the overpayment and may not reduce [debtor]s monthly benet check to recoup the overpayment. This means that the VA must reinstate his monthly benet check immediately. If you have any questions concerning your legal obligations set forth above, please contact me. [signature] Attorney for Debtor
108 Given that section 106(a)(3) prohibits an award of punitive damages, relief in this case might be limited to compensatory damages. However, because the exclusion for punitive damages found in this section should be given its normal meaning and not be read to prohibit all monetary sanctions that are not compensatory in nature, the debtor should still seek an award of sanctions for contempt. Also, if section 106(a)(3) is construed simply as an exception to the abrogation of sovereign immunity, an award of punitive damages may still be appropriate against some governmental units, such as municipalities, which never had immunity, or in actions for contempt, in which sovereign immunity is generally not implicated. Section 106(a)(3) also limits awards of attorney fees and costs to those available under 28 U.S.C. 2412(d)(2)(A) (Equal Access to Justice Act). Once again, it can be argued that this provision is simply an exception to the abrogation of sovereign immunity and therefore not applicable to entities which would not ordinarily have immunity or in situations such as contempt of court. Moreover, as 28 U.S.C. 2412(d)(2)(A) applies only to claims against the federal government, section 106(a)(3) would seem not to apply to fees awarded against state and local governments. See discussion of sovereign immunity in 9.6, 13.3.2.2, supra.
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Appx. G.4
5. The complete cessation of disability benets by the VA contravenes the automatic stay provisions of 11 U.S.C. 362(a); 6. The actions of the VA have forced the Debtor, his wife and her daughter to go on welfare which only provides them with two hundred sixty-two dollars ($262) per month; 7. These welfare benets are insufficient for the needs of the Debtor and his family; 8. The Debtor needs a prompt hearing on his Motion for Contempt so that, if the motion is granted, he can resume receiving his proper monthly benets. WHEREFORE, Debtor requests that he be granted an expedited hearing on his Motion for Contempt. Date: [signature] Attorney for Debtor
Form 37 Complaint Seeking Contempt Remedies and Recovery of Property from IRS110
[Caption: Offcial Form 16D] Complaint 1. This Complaint seeks to remedy a violation of the automatic stay due to the seizure of the Debtors income tax refund by Defendant to collect on a prepetition debt. 2. This Court has jurisdiction over this matter pursuant to 28 U.S.C. 1334. This matter is a core proceeding. 3. The Debtors led a petition under chapter 7 on March 10, 2006. 4. On May 28, 2006 the Debtors were sent a notice by defendant Internal Revenue Service (IRS) informing them that an income tax refund of $625 due to them had been seized by the IRS to partially satisfy a prepetition debt to the Department of Education.111 A copy of that notice is attached hereto as Exhibit A [omitted].
110 A complaint for contempt may be pursued in a case against a government entity when there are still concerns, even after the 1994 amendments to section 106(a), that a sovereign immunity defense might limit the statutory remedies under 11 U.S.C. 362(k). Under section 106(a), sovereign immunity is expressly abrogated with respect to a broad range of statutory provisions, including virtually all of the provisions which normally give rise to claims against the government in bankruptcy. Both federal sovereign immunity and state Eleventh Amendment immunity were abrogated by the amendments, thus overruling Hoffman v. Connecticut Department of Income Maintenance and United States v. Nordic Village Inc. Because of the potential limitations on punitive damages and attorney fees when sovereign immunity is implicated, as discussed in the notes to Form 35, Appx. G.4, supra, it is advisable to include a contempt claim when appropriate. See also 13.3.2.2, supra. The ability of Congress to abrogate the states Eleventh Amendment immunity was severely limited by the Supreme Courts decision in Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 S. Ct. 1114, 134 L. Ed. 2d 252 (1996) so it is questionable whether the provisions of section 106 abrogating states immunity from suit are valid. There is another alternative for avoiding federal sovereign immunity under the Tucker Act and the Little Tucker Act, 28 U.S.C. 1491, 1346(a)(2). See 13.3.2.2, supra. 111 The debtor may seek to recover that amount as an unauthorized postpetition transfer. See 10.4.2.6.6, supra. It is now clear that such a claim for recovery of property using the trustees avoiding powers would not be barred by a sovereign immunity defense under section 106(a) of the Code. The sovereign immunity issues
112
113 114
115
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Appx. G.4
Eighth Defense
Movants motion is barred by laches.121 Ninth Defense Movant is not entitled to the relief it seeks because its lien is subject to avoidance under 11 U.S.C. 506 [or other applicable code provision].122 WHEREFORE, Debtors pray that the motion be dismissed. Date: [signature] Attorney for Debtors
Form 39 Motion for Sanctions Pursuant to Rule 9011 for Baseless Motion for Relief from Automatic Stay123
[Caption: Offcial Form 16A] Motion for Sanctions Against [name] Mortgage Company For Filing Baseless Motion for Relief124 Debtor, [debtor], hereby moves this Court for an order imposing sanctions on [name] Mortgage Company and its attorneys pursuant to Fed. R. Bankr. P. 9011. In support of this motion, Debtor states the following: 1. The Debtor led the instant voluntary petition under chapter 13 of the Bankruptcy Code on [date]. 2. [name] Mortgage Company is the current holder [or servicer] of the mortgage on the debtors home. 3. The Debtor has made all payments required under her chapter 13 Plan, which was conrmed on [date].
121 While laches is probably not a strong defense in most cases, pointing out the movants delay may vitiate the courts concern as to the urgency of the matter. 122 See 10.4.2, supra. Although counterclaims may not be asserted in response to a motion, it is often advisable to le a complaint raising the debtors claims and seek its consolidation with the stay litigation. Special care on these issues is required because of the time constraints placed upon the court by 11 U.S.C. 362(e). It may be critical to raise and/or prove that the lien could be avoided in response to the creditors motion for relief. See In re Munoz, 83 B.R. 334 (Bankr. E.D. Pa. 1988); Form 42, Appx. G.4, infra. 123 Attorneys and unrepresented creditors who le motions for relief without a proper legal or factual basis may be subject to sanctions under Fed. R. Bankr. P. 9011. A creditor may be subject to Rule 9011 sanctions without signing a pleading or court document if it has provided false information or failed to correct false information used by its attorney. See In re Kilgore, 253 B.R. 179 (Bankr. D.S.C. 2000). 124 This motion may be served along with an answer to the motion for relief (Form 38, Appx. G.4, supra), but may not be led earlier than twenty-one days before it has been served on the respondent, who may withdraw or correct the motion for relief during that time. See Fed. R. Bankr. P. 9011(c)(1)(A). It may be advisable for the debtor to seek a continuance of any hearing on the motion for relief scheduled during the twenty-one-day period to allow time for the safe-harbor period to pass. The creditors failure to provide discovery or responses to a qualied written request under RESPA (see Form 86, Appx. G.8, infra) may provide the grounds for requesting an extension.
116
120
35
Appx. G.4
4. [name] Mortgage Company led a motion for relief from the automatic stay on or about [date], alleging that the Debtor has failed to make her ongoing postpetition mortgage payments. Specically, [name] Mortgage Company alleged that the debtor failed to make the monthly payments due for [months]. 5. As will be proven by the Debtor at the hearing on the motion for relief, the allegations contained in [name] Mortgage Companys motion were made without evidentiary support and without conducting an inquiry reasonable under the circumstances. 6. As a result of [name] Mortgage Companys baseless motion, the Debtor has had to incur costs and attorney fees, and has had to take time from work to meet with her attorney, in order to respond to the motion and prepare for the upcoming hearing on stay relief. The Debtor has also suffered emotional distress based on the threatened loss of her home. WHEREFORE, based on this Courts authority under Fed. R. Bankr. P. 9011, section 105 of the Bankruptcy Code, and 28 U.S.C. 1927, the Debtor requests this Court impose sanctions against [name] Mortgage Company and its attorneys and award Debtor damages, costs, attorney fees, and such other relief as is just and proper. Date: [signature] Attorney for Debtors
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Appx. G.4
to house her family and herself. She will therefore not have the necessary resources to complete her chapter 13 plan successfully nor pay her moving expenses. Third Affrmative Defense: Implied Warranty of Habitability 28. Paragraphs 1 through 24 are incorporated herein by reference. 29. The subject premises contain material violations of the Movants implied warranty of habitability. Said violations, listed in Exhibit B attached hereto [omitted], render the premises uninhabitable and, accordingly, the amount of rent due should be reduced. 30. Said violations cause the liability of the Debtor for rent to be governed by the fair market value of the percentage of her leasehold interest that can be used, which is approximately forty percent (40%) of the original contract price. 31. Debtor has the right under [cite local code provision] law to withhold all rent and retain possession of the leasehold premises until the material breaches of the implied warranty of habitability are corrected. Fourth Affrmative Defense: Conditioning of the Stay 32. Paragraphs 1 through 24 are incorporated herein by reference. 33. If this Honorable Court nds that relief from the stay is in order, then it is proper for this Court to order relief insofar as conditioning of the stay to continue upon the Debtors providing adequate protection to the interest of the Movant. 34. The measure of the adequate protection should be the fair market value of the premises paid on a monthly basis pending disposition of the Debtors petition in bankruptcy. WHEREFORE, the Debtor prays that this Court: 1. Deny the motion for relief from the automatic stay; 2. Declare the fair rental value of the premises to be forty dollars per month; 3. Order Movant to correct all housing code violations at the premises forthwith; 4. Order any other relief that the Court deems just and proper. Date: [signature] Attorney for Debtor
Form 41 Debtors Certication in Support of Extension of Automatic Stay As to Pending Eviction Action129
[Caption: Offcial Form 16A] Debtors Certication in Support of Extension of Automatic Stay Pursuant to Section 362(l)(2) I, [debtor], the Debtor in the above-styled case, hereby declare under penalty of perjury that:
129 Section 362(l)(1) provides that the stay exception under section 362(b)(22) will not apply until thirty days after the case is led if the debtor certies on the petition, and serves on the landlord, that (1) circumstances exist under which the debtor would be permitted under applicable nonbankruptcy law to cure the entire monetary default that gave rise to the judgment for possession,
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Appx. G.4
1. On [date], I led a petition under chapter 13 of the Bankruptcy Code, and indicated on the petition that [landlord] had obtained a judgment for possession of my residence. 2. At the time of the ling of the petition, I certied that there were circumstances under which I would be permitted under applicable nonbankruptcy law to cure the entire monetary default that gave rise to the judgment for possession. I also deposited with the clerk of the court the sum of $[amount], which was the rent that would come due during the thirty-day period following the ling of the petition. 3. I have cured under applicable nonbankruptcy law, within the thirty-day period after the ling of the petition, the entire monetary default that gave rise to the judgment for possession by paying to [landlord] the sum of $[amount]. Date: [signature] Debtor
Form 42 Answer to Motion for Relief from Automatic Stay Raising Avoidability of Transfer to Plaintiff130
[Caption: Offcial Form 16A] Answer to Motion of [name] Mortgage Company for Relief from Automatic Stay 14. Admitted. 59. It is admitted that Movant led a complaint in mortgage foreclosure, obtained a snap default judgment, and that a sheriff
and (2) the debtor has deposited with the clerk any rent that would become due during the thirty-day period after the ling of the petition. See 9.4.5.6, supra. This form is the follow-up certication which would be led in order have the stay remain in force beyond the thirty-day period following the petition date. 130 A request for relief from the automatic stay is made by motion, Federal Rule of Bankruptcy Procedure 4001, 9014, and no answer is required unless the Court orders otherwise. In many jurisdictions, however, the court issues an order requiring an answer and indicates that relief will otherwise be ordered by default. Other jurisdictions require an answer by local rule. For these reasons an answer to a motion for relief is generally advisable. A counterclaim is not permissible but a companion offensive adversary proceeding by the debtor may be advisable. See 9.7.3, supra, for general discussion of defending against motions for relief from the automatic stay. The debtors defense to a motion for relief from the stay sometimes depends upon the outcome of other issues that must be litigated in the bankruptcy court, such as the avoidance of a transfer or defenses to a creditors claim. See generally In re Munoz, 83 B.R. 334 (Bankr. E.D. Pa. 1988). A useful strategy is to try to consolidate all of these issues, raising the debtors claims and defenses in the stay litigation and seeking consolidation with other cases that the debtor may have led with the bankruptcy court. This answer, for example, is adapted from the pleadings in In re Jones, 20 B.R. 988 (Bankr. E.D. Pa. 1982), a case in which the debtor avoided an earlier transfer of title to a creditor that had foreclosed on a mortgage. The avoidance of the transfer was raised by a complaint (see Form 97, Appx. G.9, infra). The debtor was able to successfully place before the court and litigate the complaint by consolidating that action with the stay litigation.
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Appx. G.4
132 The use of section 548(a) to avoid sheriffs or foreclosure sales for less than reasonably equivalent value was drastically curtailed by the Supreme Court in BFP v. Resolution Trust Co. For further discussion of this issue, see 10.4.2.6.5, supra.
133 The most common ground for creditors seeking relief from the codebtor stay is that the plan does not propose to pay their claims in full. 11 U.S.C. 1301(c)(2). On this ground only, if the debtor does not le and serve a written objection to the creditors motion within twenty days after it is led, relief from the codebtor stay is automatic, without the necessity of the creditor taking a default. 11 U.S.C. 1301(d). Although a formal answer may not be necessary, it is often a good idea to set forth the debtors case. But see Form 44, Appx. G.4, infra. 134 The most likely cause of a dispute over whether a claim will be paid in full is a dispute over the amount of the claim. Debtors defenses, such as recoupment under the Truth in Lending Act, will not be readily recognized by creditors. 135 It is usually good strategy to take the offensive against a creditor that has led or is likely to le for relief from the stay, by ling a proceeding against the creditor, which can usually then be consolidated with the stay proceeding. 136 If no formal answer to a motion for relief from the codebtor stay is ordered by the court or desired by debtors counsel, an objection such as this one, led and served on the creditor requesting relief within twenty days, will prevent the automatic relief from the stay otherwise provided by 11 U.S.C. 1301(d).
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Appx. G.4
Form 46 Motion for Continuation of Automatic Stay in Case Filed Within One Year After Dismissal of Prior Bankruptcy Case141
[Caption: Offcial Form 16A] Motion for Continuation of Automatic Stay The Debtor hereby moves this Court, pursuant to section 362(c)(3)(B), for an order continuing the automatic stay provided under section 362(a) as to all creditors [or insert names if limited to particular creditors]. In support of this motion, the Debtor states as follows: 1. The Debtor led a petition under chapter 13 on [date]. 2. The Debtor had previously led a chapter 13 case which was dismissed on [date]. This case was dismissed because the Debtor, through no fault of her own, was laid off from her job and therefore was unable to maintain payments under her chapter 13 plan.142
139 Property may be abandoned if it is burdensome to the estate or of inconsequential value to the estate. Because exempt property is property of the estate under the Bankruptcy Code (see Ch. 10, supra), a broad reading of value to estate should include value, as exempt property, to the debtors rehabilitation, particularly in a chapter 13 case. 140 If a necessary party is not joined to an adversary proceeding, the action may be dismissed. Fed. R. Bankr. P. 7019. Similar considerations can be applied here, because the trustee must ultimately be the party subject to the courts order to abandon under 11 U.S.C. 554(b). 141 Section 362(c)(3) provides for the termination of the automatic stay for actions taken with respect to the debtor thirty days after the petition is led if the debtor has had a case dismissed within the preceding one-year period. The stay may be extended beyond the thirty-day period, pursuant to section 362(c)(3)(B), if the debtor les a motion within the thirty-day period before the expiration of the stay and demonstrates that the new case has been led in good faith. See 9.3.3.2.2, supra. 142 Paragraphs 2 through 4 are intended to demonstrate that the case was led in good faith based on changed circumstances, and to rebut the presumption arising under section 362(c)(3)(C)(i) that the case was led in bad faith because the prior case had been dismissed due to the debtors failure to perform the terms of a conrmed plan.
137 As discussed in Chapters 9 and 11, supra, creditors sometimes try to avoid the requirements of 11 U.S.C. 362 by seeking the abandonment of property in which they claim an interest. An answer to such an application or motion may not always be required under Federal Rule of Bankruptcy Procedure 9014. Under Federal Rule of Bankruptcy Procedure 6007, when abandonment is sought by a creditor, a hearing is not required if it is not requested or if an answer or objection is not led. Thus, if the debtor wishes to raise specic defenses, it is often a good idea to le an answer in any case. Besides the general argument that abandonment can not be a substitute for the lifting of the stay (the debtor is usually still protected after abandonment by 11 U.S.C. 362(a)(5)) this pleading illustrates other defenses which may be raised. This form is adapted from litigation documents provided by Eric L. Frank, Esq., Philadelphia, Pennsylvania. 138 This defense is based upon the voidness of a lien under 11 U.S.C. 506(d). An unsecured creditor has no interest in seeking abandonment of property unless, perhaps, the property is burdensome to the estate so as to reduce that creditors potential dividend. Only a party in interest may seek abandonment under 11 U.S.C. 554(b). Counsel should note that this defense may no longer be available to the debtor in a chapter 7 case in light of the Supreme Courts decision in Dewsnup v. Timm. See 11.2, supra.
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Appx. G.4
Form 47 Motion to Invoke Automatic Stay in Case Filed Within One Year After Dismissal of Two Prior Bankruptcy Cases145
[Caption: Offcial Form 16A] Motion to Invoke Automatic Stay The Debtor hereby moves this Court, pursuant to section 362(c)(3)(B), for an order invoking the automatic stay provided under section 362(a) as to all creditors. In support of this motion, the Debtor states as follows: 1. The Debtor led a petition under chapter 13 on [date].
143 Paragraphs 5 through 7 are intended to establish that other grounds for the creation of a bad faith presumption under section 362(c)(3)(C)(i) do not apply. 144 If the judicial opinions in the district are not clear as to the extent of the stay termination under section 362(c)(3), this provision may be added seeking clarication that the stay does not terminate as to estate property. See 9.3.3, supra. 145 Section 362(c)(4) provides that the automatic stay does not take effect in a case if the debtor has had two or more prior cases dismissed within the preceding one-year period. The stay may be invoked, pursuant to section 362(c)(4)(B), if the debtor les a motion within thirty days after the petition date and demonstrates that the new case has been led in good faith. See 9.3.3.3, supra.
2. The Debtor had previously led a chapter 13 case which was dismissed on [date] because the Debtor had failed to le the schedules, statement of affairs, and plan. Three days after the petition had been led in that case, the Debtors daughter was seriously injured in an auto accident. In caring for her daughter, the Debtor was unable to gather all the necessary documents for her attorney to complete the required documents for ling.146 3. After the condition of the Debtors daughter had stabilized, she led a second chapter 13 case on [date], and her plan in that case was conrmed on [date]. However, this case was voluntarily dismissed by the Debtor on [date], because the Debtor, through no fault of her own, was laid off from her job and therefore was unable to maintain payments under her chapter 13 plan. 4. The Debtor has now been called back to work and she does not anticipate any further job interruptions. 5. The petition in this case has been led in good faith. The Debtor believes that the chapter 13 plan she has submitted will be conrmed and that she will be able to fully perform under the terms of the plan. 6. The Debtors two prior chapter 13 cases dismissed on [date] and [date] were the only previous cases by the debtor that were pending during the preceding year.147 7. The Debtors prior chapter 13 cases were not dismissed because the Debtor failed to provide adequate protection payments ordered by the court. 8. The Debtors prior chapter 13 cases were not dismissed at a time when there had been a motion for relief that was pending before the court or resolved with an order terminating, conditioning, or limiting the stay. WHEREFORE, the Debtor requests that this Court invoke the automatic stay under section 362(a) as to all creditors for the duration of this chapter 13 proceeding, or until such time as the stay is terminated under section 362(c)(1) or (c)(2), or a motion for relief is granted under section 362(d). Date: [signature] Attorney for Debtor
Form 48 Motion for Relief from In Rem Order Entered in Prior Case148
[Caption: Offcial Form 16A] Motion for Relief from In Rem Order The Debtor hereby moves this Court, pursuant to section 362(d)(4), for relief from the Order entered in Case No. [case
146 Paragraphs 2 through 5 are intended to demonstrate that the case was led in good faith based on changed circumstances, and to rebut the presumption arising under section 362(c)(4)(D)(i) that the case was led in bad faith because a prior case had been dismissed due to the debtors failure to le without substantial excuse any required documents, or to perform the terms of a conrmed plan. 147 Paragraphs 5 through 8 are intended to establish that other grounds for the creation of a bad faith presumption under section 362(c)(4)(D)(i) and (ii) do not apply. 148 Sections 362(b)(20) and 362(d)(4) create an exception from the stay for the enforcement of a security interest in real property following the entry of an order in a prior bankruptcy case prohibiting the application of the automatic stay as to that
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Appx. G.4
number] prohibiting the application of the automatic stay as to the Debtors property, and for an order invoking the automatic stay provided under section 362(a) as to that property. In support of this motion, the Debtor states as follows: 1. The Debtor led a petition under chapter 13 on [date]. 2. In [month, year], National Mortgage (hereinafter National), the servicer of the Debtors home mortgage, initiated foreclosure proceedings against the Debtors property. 3. Prior to this time, the Debtor had spent countless hours with Nationals collection and legal departments attempting to resolve a long-standing dispute with National over whether payments she had made to a former servicer just prior to the transfer of servicing to National had been properly credited to her account. Although the Debtor had provided proof that these payments had been accepted by the former servicer, National continued to treat the account as if it were in default. 4. In response to the legal advertisement listing her home for foreclosure, the Debtor was contacted by Foreclosure Rescue Co. (hereinafter Rescue). Rescue initially left a note in her mailbox stating that it could make [the Debtor] a loan to stop the foreclosure. An agent for Rescue later came to the Debtors home and stated that he was a mortgage broker and that Rescue could help the Debtor avoid foreclosure by providing her with a low-interest mortgage. 5. The Rescue agent then visited the Debtors home several times in the weeks prior to the scheduled foreclosure to complete what the Debtor believed was an application for mortgage renancing. The Debtor paid the sum of $750 to Rescue and provided information about her nancial situation for the loan application. 6. The Debtor was also asked to sign several documents and advised the Rescue agent that she had difficulty reading documents. The Rescue agent told her not to worry about reading the documents because they were all part of the loan application and would help her to save her home. 7. One week prior to the foreclosure sale, the Debtor was advised by Rescue that although it had not yet found a replacement mortgage, Rescue had negotiated a cancellation of the sale with National. The Debtor then paid an additional sum of $350 to Rescue which she was told would cover the cost of a home appraisal. 8. Approximately two months later, the Debtor received notice from National that it had reinstituted foreclosure proceedings. She then contacted Rescue and was told that it could no longer assist her. 9. Included with the documents Rescue had the Debtor sign was a deed conveying a partial interest in her home to Chuck Buyer. Rescue then prepared and led with this Court a chapter 7 bankruptcy petition in the name of Mr. Buyer (Case No. [case number]). Rescue also arranged for a copy of the petition to be sent National the day before the originally scheduled foreclosure sale, and advised National of the application of the automatic stay. 10. The Debtor had no knowledge of the conveyance to Mr. Buyer or that Rescue had arranged for him le a bankruptcy petition relating to her property.
property. Unless relief from the order is granted in a subsequent case, the in rem order shall remain in effect for a period of two years after entry. See 9.4.5.5.2, supra. Section 362(d)(4) provides that the debtor may move in a subsequent case for relief from an in rem order based upon changed circumstances or for good cause shown, after notice and a hearing.
Form 49 Motion to Reimpose Stay After Relief from Stay Has Been Granted149
[Caption: Offcial Form 16A] Debtors Motion for Reimposition of Stay As to Property of the Estate Debtor hereby moves for reimposition of a stay with respect to her residential property at [address] which is property of the estate, and in support thereof avers as follows: 1. On [date], this court entered an Order terminating the automatic stay with respect to the Debtors residence in favor of [name] Mortgage Company (Mortgage Company). 2. The Debtors residence is and at all times relevant to this case has been an asset included in the Debtors bankruptcy estate.
149 In some cases after stay relief has been granted, the debtor may have grounds to have the stay reimposed. Usually this means that the debtor will have remedied whatever problem served as grounds for relief from the stay in the rst instance. In some jurisdictions, courts will enter an order vacating the order granting relief from stay; others will simply enter an order reimposing the automatic stay, and nally some courts will enter a new non-automatic stay applicable to the creditor pursuant to 11 U.S.C. 105. These last courts recognize that the reimposed stay is not automatic and they generally look to general equitable standards for granting a stay. See 9.4.6, supra. Some courts may require debtors seeking to reimpose the stay to le an adversary proceeding under Federal Rule of Bankruptcy Procedure 7001.
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Appx. G.5
150 This letter may be used in situations such as when property has been repossessed or is being held pursuant to a possessory lien. It may lead to the possessor requesting adequate protection of its interest in the property. See generally the discussion of turnover requirements in 9.9, supra. Often the creditor will agree to return the property to the debtor rather than go through the trustee. It is clear in chapter 13 cases that the debtor has the right to possess the property while the case is pending. 11 U.S.C. 1306(b). 151 For purposes of proof, it may be advantageous to send this type of letter by certied mail.
43
Appx. G.6
c. Award Plaintiff, pursuant to 11 U.S.C. 105(a) and 362(k) damages, reasonable attorney fees, costs, and punitive damages for this complaint;158 and d. Order such other relief as is just and proper. Date: [signature] Attorney for Debtor
Form 52 Motion for Enforcement of Turnover Order and to Hold Defendant in Contempt of Court159
[Caption: Offcial Form 16D]160 Motion for Enforcement of Turnover Order and to Hold Defendant in Contempt of Court The Plaintiffs, [debtors], Debtors in the above-captioned bankruptcy case, hereby move for an Order that the United States Marshal enforce the earlier Order of this Court and that Defendant [name] Storage Company be held in contempt of Court. In support of this motion they aver: 1. This adversary proceeding was originally brought due to the failure of Defendant [name] to fulll its obligations to turn over the Plaintiffs household goods and clothing under 11 U.S.C. 542. 2. After proper service, on September 21, 2006, this Court entered a default judgment in the matter, due to Defendants failure to le a response to the Complaint, and ordered Defendant to turn over the Debtors possessions. A copy of that Order is attached hereto as Exhibit A [omitted]. 3. Since that time, the Plaintiffs/Debtors have attempted to have Defendant comply with the Order, with no success. 4. The Order was served on Defendant rst by regular mail on September 29, 2006, and then by certied mail, mailed by the Debtors, which was signed for and received on October 16, 2006. 5. Defendant has continued to refuse to comply with the Order of this Court since that time. 6. As a result, Plaintiffs have had to live for over two months without virtually all of their furniture and clothing, which Defendant is holding. WHEREFORE, Plaintiffs pray that this Court order:
G.6 Utilities
Form 53 Letter to Utility Company Giving Notice of Stay and Requirements of 11 U.S.C. 366164
[creditorutility] [address] RE: [debtor] Account No. [number] Bankruptcy No. [number] [address] [Social Security Number] Dear Sir/Madam: Please be advised that I represent [debtor]. On [date], the above-named individual led a voluntary petition under chapter [chapter number] of the Bankruptcy Code in the Bankruptcy Court for the [district name, if any] District of [state], at Bankruptcy No. [number]. Pursuant to the automatic stay provision of the Bankruptcy Code, 11 U.S.C. 362, the ling of a petition operates as a stay of
161 A separate notice procedure may be a prerequisite to a nding of contempt under Federal Rule of Bankruptcy Procedure 9020(b). 162 Because the bankruptcy court is a federal court, its orders are enforced by the United States Marshal Service. The U.S. Marshal charges fees which, ultimately, should be recoverable from the defendant. However, to expedite matters the plaintiff may have to pay them initially as other court costs are paid. 163 Damages and attorney fees may be awarded in contempt proceedings. See 9.6, supra. 164 This letter should be sent immediately after ling if a utility shutoff is imminent, or has already occurred. It should prevent any shutoff, at least for twenty days, after which, in some cases, the utility may demand a deposit. Because some courts have held that the burden is on the debtor to obtain an agreement from the utility on adequate assurance, or seek court intervention, within the twenty-day period to avoid termination of service, it is advisable for counsel to raise the issue in this letter. See discussion of 11 U.S.C. 362 and 366 in Chapter 9, supra.
tuating. Exercising control over property of the estate is a violation of the automatic stay, 11 U.S.C. 362(a)(3). See 9.9.2, supra. 158 Attorney fees may be awarded if it can be shown that defendant acted in bad faith or possibly if it acted in willful disregard of its obligations. 159 When a complaint seeking turnover of property (Form 51, Appx. G.5, supra) is led and an order for turnover is entered, the defendant usually complies with the order; occasionally, however, further enforcement proceedings are necessary. A motion to have the defendant held in contempt, such as this one, is appropriate. A motion for contempt is governed by Federal Rule of Bankruptcy Procedure 9020. For discussion of turnover requirements see 9.9, supra. For discussion of contempt, see 13.2.8, supra. 160 The motion should contain the caption of the adversary proceeding giving rise to the order of which the debtor is seeking enforcement.
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Appx. G.6
obliged to cease all collection efforts with respect to the current obligation on the debtors account and may not terminate service due to that obligation. If you have any questions concerning your legal obligations set forth above, please contact me. Thank you for your attention to the foregoing. [signature] Attorney for Debtor
Form 55 Complaint to Enjoin Termination of Utility Service for Nonpayment of Deposit by Debtor Current on Her Utility Payments166
[Caption: Offcial Form 16D] Complaint to Enjoin Termination of Utility Service for Nonpayment of Deposit by Debtor Current on Her Utility Payments 1. This action is brought by Plaintiff, [debtor], Debtor in the above-captioned bankruptcy case, to enforce her rights to continued electric service under the Bankruptcy Code and state law. 2. This Court has jurisdiction of this case under 28 U.S.C. 1334. This proceeding is a core proceeding. 3. On [date], Plaintiff led a voluntary petition in this Court seeking relief under chapter 7 of the Bankruptcy Code. 4. At the time she led her petition, Plaintiff was completely current in her payments for electric utility service from Defendant, as she has always been in the past, and therefore did not list a debt to Defendant in her schedules. 5. Nonetheless, shortly after she led her petition, Plaintiff received from Defendant a demand for a security deposit of $250, an amount which is many times greater than the $40 to $50 cost of her average monthly usage. A copy of this demand is attached hereto as Exhibit A [omitted]. 6. Plaintiffs counsel then spoke with Defendants counsel to determine whether there was any mistake in sending such a demand to a customer who has always been current in her bill and owed no overdue debt to Defendant at the time of the petition. 7. Defendants counsel stated that there had been no mistake and that it was Defendants policy to demand such a deposit from every bankruptcy debtor regardless of whether any overdue bill was owing.
166 Some utility companies have adopted a practice of demanding adequate assurance by way of a deposit from every bankruptcy debtor, regardless of whether that debtor had any unpaid bill at the time of ling. There are a number of reasons why this should be considered improper and enjoined. See 9.8, supra. The debtors counsel should seek assurance from the utility that service will not be terminated while an action such as this one is pending. If such assurance can not be obtained, a motion for a temporary restraining order may be necessary. The debtor could also pay the deposit under protest and litigate the matter of whether it should be refunded because the utility was not entitled to it. A proceeding for injunctive relief must be brought as an adversary proceeding. Fed. R. Bankr. P. 7001. For a general discussion of complaints in adversary proceedings, see notes to Form 100, Appx. G.10, infra. This form is adapted from pleadings in In re Demp, 22 B.R. 331 (Bankr. E.D. Pa. 1981).
Form 54 Letter to Utility Company Giving Notice of Conversion from Chapter 13 to Chapter 7165
[creditorutility] [address] Re: [debtor] Account No. [number] Bankruptcy No. [number] [address] [Social Security Number] Dear Sir/Madam: As you know, on [date] the above-named individual led a voluntary petition in bankruptcy under chapter 13 in the United States Bankruptcy Court for the [district name, if any] District of [state] at Bankruptcy No. [number]. I am writing to advise you that on [date] the debtor exercised his right to convert his case to a chapter 7 bankruptcy. Enclosed is a copy of the notice of conversion led with the court [omitted]. Under the Bankruptcy Code, any claim against the debtor that arose between the initial ling of the bankruptcy on [ling date] and the conversion of the case on [date] must now be treated as if the claim arose immediately before [ling date], pursuant to 11 U.S.C. 348(d). This means that the conversion of the bankruptcy case operates as a stay of any action to recover a claim against the debtor that arose after the initial ling of the chapter 13 petition, but before the conversion to chapter 7. Accordingly, you are
165 If a debtor who converts from chapter 13 to chapter 7 has utility arrearages which have accrued since the ling of the chapter 13 petition, it is important to notify the utility of the conversion, because those arrearages are dischargeable in the converted case. 11 U.S.C. 348(d). Presumably, the utility may again require adequate assurance under 11 U.S.C. 366(b). See discussion of conversion with respect to utilities at 9.8, supra. A converting debtor who is not in arrears may not wish to send a letter such as this one because it may trigger a demand for a deposit that she should not have to pay. See 9.8, supra. However, the utility should be notied of the conversion by the court, in any case, under 11 U.S.C. 348(c).
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Appx. G.6
8. Defendants demand of a deposit from Plaintiff is not authorized by 11 U.S.C. 366 because 11 U.S.C. 366(a) prohibits discrimination based solely upon a bankruptcy. 9. Defendants demand constitutes a form of discrimination against the Debtor solely on account of her bankruptcy, which impairs the fresh start Congress intended her to have.167 10. Defendants demand of a deposit from a ratepayer current in her bills is contrary to state public utility regulations at [cite state regulatory provision].168 11. Defendants demand of a deposit, which would have to be paid from the Plaintiffs savings, is an action to obtain possession of property of the estate in violation of 11 U.S.C. 362(a)(3). 12. Defendants demand for a deposit bears no rational relationship to Plaintiffs average monthly bill.169 Prayer for Relief WHEREFORE, Plaintiff prays that this Court enter a judgment: 1. Declaring that the Defendants demand of a security deposit from Plaintiff is not permitted by 11 U.S.C. 366; 2. Enjoining Defendant from terminating Plaintiffs electric service for failure to pay the security deposit; and 3. Ordering such other relief as is just and proper. Date: [signature] Attorney for Debtor
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Appx. G.7
[signature] Attorney for Debtor
Form 59 Statement Explaining Debtors Failure to Provide Tax Return to Trustee or Creditors176
[Caption: Offcial Form 16A] Debtors Statement Regarding Tax Return Required by 11 U.S.C. 521(E)(2)(A) I, [debtor], state as follows:177 I have not submitted to the trustee (or any creditors who have made a timely request)178 a copy of a tax return or transcript for the most recent tax year ending immediately before the commencement of the case because such a return or transcript does not exist. I did not le a tax return with the Internal Revenue Service for the tax year ending in [year], for the following reasons: 1. My gross income was less than the ling requirement amount shown on IRS Form 9452. 2. I did not have any taxable self-employment income for the tax year ending in [year], or it was less than the amount shown on IRS Form 9452. 3. I did not have any wages from a church or qualied churchcontrolled organization for the tax year ending in [year], or it was less than the amount shown on IRS Form 9452. 4. I do not owe any of the following for the tax year ending in [year]: (a) Alternative minimum tax; (b) Special tax on a qualied retirement plan;
176 Section 521(e)(2)(A) requires that, at least seven days before the section 341 meeting, the debtor must provide the trustee with a copy of the debtors federal income tax return (or tax transcript thereof) required under applicable law for the most recent tax year ending immediately before the commencement of the case and for which a federal income tax return was led. See 8.3.4, supra. Although the statutory language is somewhat unclear, the better view is that the section requires the debtor to provide a tax return or transcript only for the most recent year, and does not require it to be provided if no return was required or if no return was led in that year. In such cases some courts or trustees have required that the debtor submit a statement declaring that no return has been submitted to the trustee because the debtor did not le a return. Interim Bankruptcy Rule 4002(b)(3) also provides that the debtor may provide to the trustee at least seven days before the rst date set for the section 341 meeting a written statement that such tax documentation does not exist. The guidelines for determining whether a federal income tax return needs to be led are described in the Internal Revenue Services Form 9452, which is updated every tax year. 177 A separate form, if applicable, must be submitted by each debtor in a joint case. 178 Interim Bankruptcy Rule 4002(b)(4) requires the debtor to comply with a creditors request for a copy of the tax return to be provided to the trustee, pursuant to section 521(e)(2)(A)(ii), if the request is made at least fteen days before the rst date set for the section 341 meeting. Interim Bankruptcy Rule 4002(b)(4) also provides that the debtor may provide to the requesting creditor at least seven days before the rst date set for the section 341 meeting a written statement that such tax documentation does not exist.
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Appx. G.7
(c) Social Security and Medicare tax on unreported tips; (d) Uncollected Social Security and Medicare or Tier 1 Railroad Retirement (RRTA) tax on reported tips or on groupterm life insurance; (e) Recapture taxes. [or] 5. My tax return for last year is not yet due. I declare under penalty of perjury that I have read the foregoing statement and that it is true and correct. Date: [signature] Debtor
Form 60 Statement That Documents Required to Be Brought to Meeting of Creditors Do Not Exist or Are Not In Debtors Possession179
[Caption: Offcial Form 16A] Debtors Statement to Trustee Regarding Unavailable Documents for Meeting Of Creditors I, [debtor], state as follows:180 [Check the box(es) that apply]. I have not brought to the section 341 meeting of creditors and made available to the trustee copies of the following documents, as required by Interim Bankruptcy Rule 4002(b)(2), because the documents do not exist or are not in my possession: [ ] Evidence of my current income. [ ] Statement for the depository and investment account with [bank or other institution] for the time period that includes the date of the petition. [ ] Evidence of the monthly expenses I have claimed on Official Form 22A or 22C for which documentation is required by section 707(b)(2)(A) or (B). I declare under penalty of perjury that I have read the foregoing statement and that it is true and correct. Date: [signature] Debtor
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Appx. G.7
Form 62 Section 341(a) Questions from United States Trustee Chapter 7 Handbook183
Required Statements/Questions 1. State your name and current address for the record. 2. Please provide your picture ID and Social Security card for review. a. If the documents are in agreement with the section 341(a) meeting notice, a suggested statement for the record is: I have viewed the original state of drivers license (or other type of original photo ID) and original Social Security card (or other original document used for proof) and they match the name and social security number on the section 341(a) meeting notice.
183 These questions were prepared by the United States Trustees office to be used by private trustees in conducting section 341(a) meetings. See Executive Office of the U.S. Trustees, United States Dept of Justice, Handbook for Chapter 7 Trustees (July 1, 2002, with technical amendments effective January 2005, and updated section 341 meeting questions, effective March 1, 2006). The handbook notes that the rst ten statements and questions are required. Trustees are instructed to ensure that the debtor answers the substance of each of the ten questions on the record. The trustee may exercise discretion and judgment in varying the wording of the statements and questions if the substance of the questions is covered.
b. If the documents are not in agreement with the section 341(a) meeting notice, a suggested statement for the record is: I have viewed the original Social Security card (or other original document used for proof) and the number does not match the number on the section 341(a) meeting notice. I have instructed the debtor (or debtors counsel) to submit to the court an amended veried statement by [date], with notice of the correct number to all creditors, the United States Trustee, and the trustee, and to le with the court a redacted copy of the notice, showing only the last four digits of the Social Security Number, and a certicate of service. c. When the documents do not match the petition, the trustee shall attempt to ascertain why, and shall report the matter to the United States trustee. d. If the debtor did not bring proof of identity and Social Security Number, the trustee shall determine why. 3. Did you sign the petition, schedules, statements, and related documents and is the signature your own? Did you read the petition, schedules, statements, and related documents before you signed them? 4. Are you personally familiar with the information contained in the petition, schedules, statements and related documents? To the best of your knowledge, is the information contained in the petition, schedules, statements, and related documents true and correct? Are there any errors or omissions to bring to my, or the courts, attention at this time? 5. Are all of your assets identied on the schedules? Have you listed all of your creditors on the schedules? 6. Have you previously led bankruptcy? (If so, the trustee must obtain the case number and the discharge information to determine the debtor(s) discharge eligibility.) 7. What is the address of your current employer? 8. Is the copy of the tax return you provided a true copy of the most recent tax return you led? 9. Do you have a domestic support obligation? To whom? Please provide to me the claimants address and telephone number, but do not state it on the record. 10. Have you read the Bankruptcy Information Sheet provided by the United States Trustee? Sample General Questions (to be asked when deemed appropriate) 1. Do you own or have any interest whatsoever in any real estate? If owned: When did you purchase the property? How much did the property cost? What are the mortgages encumbering it? What do you estimate the present value of the property to be? Is that the whole value or your share? How did you arrive at that value? If renting: Have you ever owned the property in which you live and/or is its owner in any way related to you? 2. Have you made any transfers of any property or given any property away within the last one year period (or such longer period as applicable under state law)? If yes: What did you transfer? To whom was it transferred? What did you receive in exchange? What did you do with the funds? 3. Does anyone hold property belonging to you? If yes: Who holds the property and what is it? What is its value?
49
Appx. G.7
4. Do you have a claim against anyone or any business? If there are large medical debts, are the medical bills from injury? Are you the plaintiff in any lawsuit? What is the status of each case and who is representing you? 5. Are you entitled to life insurance proceeds or an inheritance as a result of someones death? If yes: Please explain the details. If you become a beneciary of anyones estate within six months of the date your bankruptcy petition was led, the trustee must be advised within ten days through your counsel of the nature and extent of the property you will receive. FRBP 1007(h). 6. Does anyone owe you money? If yes: Is the money collectible? Why havent you collected it? Who owes the money and where are they? 7. Have you made any large payments, over $600, to anyone in the past year? 8. Were federal income tax returns led on a timely basis? When was the last return led? Do you have copies of the federal income tax returns? At the time of the ling of your petition, were you entitled to a tax refund from the federal or state government? If yes: Inquire as to amounts. 9. Do you have a bank account, either checking or savings? If yes: In what banks and what were the balances as of the date you led your petition? 10. When you led your petition, did you have: a. Any cash on hand? b. Any U.S. Savings Bonds? c. Any other stocks or bonds? d. Any Certicates of Deposit? e. A safe deposit box in your name or in anyone elses name? 11. Do you own an automobile? If yes: What is the year, make, and value? Do you owe any money on it? Is it insured? 12. Are you the owner of any cash value life insurance policies? If yes: State the name of the company, face amount of the policy, cash surrender value, if any, and the beneciaries. 13. Do you have any winning lottery tickets? 14. Do you anticipate that you might realize any property, cash or otherwise, as a result of a divorce or separation proceeding? 15. Regarding any consumer debts secured by your property, have you led the required Statement of Intention with respect to the exemption, retention, or surrender of that secured property? Please provide a copy of the statement to the trustee. Have you performed that intention? 16. Have you been engaged in any business during the last six years? If yes: Where and when? What happened to the assets of the business? In cases in which debtors are engaged in business, the following questions should be considered: 1. Who was responsible for maintaining nancial records? 2. Which of the following records were maintained? a. Cash receipts journal b. Cash disbursements journal c. General journal d. Accounts receivable ledger e. Accounts payable ledger f. Payroll ledger g. Fixed asset ledger
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Appx. G.7
economically feasible, all property you own that is not exempt from these actions. Chapter 11 is the reorganization chapter most commonly used by businesses, but it is also available to individuals. Creditors vote on whether to accept or reject a plan, which also must be approved by the court. While the debtor normally remains in control of the assets, the court can order the appointment of a trustee to take possession and control of the business. Chapter 12 offers bankruptcy relief to those who qualify as family farmers. Family farmers must propose a plan to repay their creditors over a three-to-ve year period and it must be approved by the court. Plan payments are made through a chapter 12 trustee, who also monitors the debtors farming operations during the pendency of the plan. Chapter 13 generally permits individuals to keep their property by repaying creditors out of their future income. Each Chapter 13 debtor writes a plan to repay their creditors over a three-to-ve year period and it must be approved by the court. The debtor must pay the Chapter 13 Trustee the amounts set forth in their plan. Debtors receive a discharge after they complete their chapter 13 repayment plan. AGAIN, PLEASE SPEAK TO AN ATTORNEY IF YOU NEED FURTHER INFORMATION OR EXPLANATION, INCLUDING HOW THE BANKRUPTCY LAWS RELATE TO YOUR SPECIFIC CASE.
51
Appx. G.7
Is your spouse present today? I have handed you a copy of your petition and ask whether you recognize this as the petition you executed and led with this court? Is that your signature at the bottom? When signing this petition did you review its contents and assure that all the information contained in the petition was true and correct? Have you ever led a bankruptcy proceeding before? If so, under what chapter and what was the result? Counsel, do you have any changes in this petition or plan? Were you employed on the date you led your petition? Are you still employed at the same job or profession? Has your income situation from that employment changed since you led the petition? Do your chapter 13 schedules provide an explanation of your current income before and after deductions? Do your chapter 13 schedules provide an explanation of your current monthly budget? I ask you if there are any changes in that? Do your chapter 13 schedules contain a list of the following: a. All your real property? If none, state none. b. Is this a list of all of your personal property? c. Is it a complete list? d. Does this statement show all of your bank accounts and safe deposit boxes? e. All your automobiles or automotive vehicles? Do your schedules show the relevant subsections of section 522 under which your property is claimed as exempt? Have you made any voluntary or involuntary transfers of real or personal property within the last year? Has your counsel led a disclosure of fee statement? Is that the amount you have agreed to pay your attorney in connection with the case? Do your schedules contain all of your creditors having priority? Are there any creditors holding security? Do they show all of your unsecured claims? Are any of these credit card claims? Have you returned the credit cards? Specically how does this plan propose to pay your creditors? Have you paid ling fees and costs? Are there any creditors or other parties in interest who wish to ask any questions? Thank you.
Form 65 Section 341(a) Questions from United States Trustee Chapter 13 Handbook186
Section 341(A) Meeting Of Creditors (Individual Debtors) Required Statements/Questions 1. State your name and current address for the record.
186 These questions were prepared by the United States Trustees office to be used by private trustees in conducting section 341(a) meetings. See Executive Office of the U.S. Trustees, United States Dept of Justice, Handbook for Chapter 13 Trustees (July 1, 2002, with technical amendments effective January 2005, and updated section 341 meeting questions, effective March 1,
52
Appx. G.7
Form 66 Debtors Motion to Excuse Appearance and to Conduct Meeting of Creditors by Interrogatories187
[Caption: Offcial Form 16B] Debtors Motion to Excuse Appearance and to Conduct Meeting of Creditors by Interrogatories Debtor, by her attorney, hereby requests this Court to excuse her appearance at a meeting of creditors in this case and to permit the meeting of creditors to be conducted by interrogatories and in support thereof avers as follows: 1. The Debtor is a seventy-three-year-old disabled individual who led bankruptcy pursuant to chapter 13 of the Bankruptcy Code on [date]. 2. Due to a stroke suffered by the Debtor after ling bankruptcy, the Debtor is hospitalized and unable to travel. 3. The Debtors physical problems prevent her from attending a section 341 meeting of creditors. 4. The meeting of creditors in this bankruptcy case was originally scheduled for [date], at which time counsel for the Debtor informed the trustee that the Debtor could not appear because of her physical problems. 5. No creditors appeared on [meeting date] at the scheduled meeting of creditors. 6. Written interrogatories are attached and labeled Exhibit B [omitted] regarding the Debtors bankruptcy schedules and nancial affairs. 7. The trustee has been contacted concerning this motion and she has stated that she has no objection.188 WHEREFORE, the Debtor requests that this motion be approved, that the requirement of an appearance at a meeting of creditors be waived and that in lieu thereof the Debtor be permitted to submit answers to the interrogatories in the form attached to this motion. Date: [signature] Attorney for Debtor
53
Appx. G.8
4. When signing the petition, did you review its contents and assure that all the information contained in the petition was true and correct? 5. Does your signature appear at the bottom of the petition? 6. Have you ever led a bankruptcy proceeding before? 7. Has your income situation changed since you led the petition? 8. Does your chapter 13 statement correctly list the following: a. All your real property? b. All your personal property? 9. Does your chapter 13 statement show the relevant subsections of section 522 under which your property is claimed as exempt? 10. Have you made any voluntary or involuntary transfers of real or personal property within the last year? 11. Does your schedule of debts contain a complete list of all your creditors having priority? 12. Does your schedule of debts contain a complete list of all your creditors having security? 13. Does your schedule of debts contain a complete list of all your unsecured creditors? 14. Are any of your debts credit card claims? 15. Have you returned the credit cards or destroyed them? 16. Has your attorney led a disclosure of fees? 17. Have you paid ling fees and costs? 18. Are you current in your payments to the chapter 13 standing trustee? I declare under penalty of perjury that the foregoing answers are true and correct to the best of my knowledge, belief and understanding. Date: [signature] Debtor
Report of Trustee and Order Approving Trustees Report Setting Aside Certain Property to the Debtor, Discharging Trustee and Closing Case AND NOW, this [date] day of [month], [year], the following Report is made: 1. The below-named person was duly appointed to serve as the interim trustee pursuant to section 701 of title 11, United States Code.
190 This form is former Official Form 33. The report of the trustee is generally the method by which the court is informed that the trustee does not object to the claim of exemptions. See 10.3, supra. As the Federal Rules of Bankruptcy Procedure no longer require a report of the trustees, there is no longer an official form for the report and in many districts none is led. Similarly there is no longer a rule requiring a debtor to answer any report led. Issues formerly raised in trustees reports are now litigated as objections to exemptions. See Fed. R. Bankr. P. 4003(b), (c). Probably, if a trustees report is led and it disagrees with the debtors exemption claim, it will be heard by the court as an objection to the debtors exemptions.
G.8 Claims
Form 69 Priority Proof of Claim by Debtor191
[Caption: Offcial Form 16A] Priority Proof of Claim by Debtor 1. The undersigned, who is ling this proof of claim, is the Debtor in this case.
191 This form is a proof of claim for a debt entitled to priority, such
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Appx. G.8
9. No security interest is held for this claim except that the holder of the claim holds a lien on the following property of debtor: [list property]. 10. Claimant asserts the security interest under the writing referred to in paragraph 5 hereof. 11. This claim is a general unsecured claim, except to the extent that the security interest described in paragraph 9 hereof is sufficient to satisfy the claim. Date: [Attach certicate of service on creditor] [signature] Attorney for Debtor
192
1. The undersigned, who is ling this proof of claim on behalf of the holder of claims against Debtor, is the Debtor in this case. 2. This claim is led in the name of [creditor], of [address], who asserts a secured claim against the Debtor in the amount of $[amount]. 3. The consideration for this debt or the basis of Debtors liability is as follows: [describe consideration]. 4. This claim consists of $[amountprincipal] in principal amount and $[amountadditional charges] in additional charges. 5. The writing upon which this claim is founded is attached hereto [omitted]. 6. No judgment has been rendered on this claim. 7. The amount of all payments on this claim has been credited and deducted for the purpose of making this proof of claim. 8. This claim is not subject to any setoff or counterclaim.
as taxes. See Official Form 11 (reprinted in Appx. D, supra). It should be led in a chapter 7 case when assets are to be distributed, for priority claimants holding claims which are otherwise nondischargeable. Most tax claims are nondischargeable. See 14.4.3.1, supra. It generally should not be led in chapter 13 cases in which most priority claims, including tax claims, are dischargeable. See 14.4.1, supra. When a creditor does not le a proof of claim before the rst date set for the meeting of creditors, the debtor may le a claim on that creditors behalf until thirty days after the creditors bar date for claims. Fed. R. Bankr. P. 3004. 192 This form is for a secured claim, which the debtor will usually want paid prior to unsecured claims in a chapter 13 case. Secured claims (and all other claims) must be led by ninety days after the rst date set for the section 341(a) meeting of the creditors. Fed. R. Bankr. P. 3002(c); see also Official Form 11 (reprinted in Appx. D, supra). When a creditor does not le a proof of claim before the rst date set for the meeting of creditors, the debtor may le a claim on that creditors behalf until thirty days after the bar date for claims. Fed. R. Bankr. P. 3004.
1. [Debtor], who is ling this proof of claim through her attorney, is the Debtor in this case and resides at [address]. 2. The claim is led in the name of [creditor], of [address], which asserts a claim against the Debtor in the amount of $5491.20. 3. The ground for this alleged liability is as follows: a personal loan advanced to the Debtor and her husband, on or about June 24, 2002. 4. A copy of the writing on which this claim is founded is attached hereto [omitted]. 5. No judgment has been rendered on this claim except: a default judgment entered against Debtors husband only, at [name] Court, Number [number]. 6. The amount of all payments on this claim has been credited and deducted for the purpose of making this proof of claim. 7. This claim is not subject to any setoff or counterclaim. 8. No security interest is held for this claim except: two (2) mortgages against [address of property], recorded in the Department of Records, [address] at [number] on October 17, 1994 and [number] on June 27, 2002. 9. The fair market value of the Debtors residence is $65,000. 10. The Debtors residence is also subject to a rst mortgage and a second mortgage which have priority over [creditors]s mortgage. The rst and second mortgages exceed the fair market value of the Debtors residence. 11. This claim is a general unsecured claim because the security interest described in Paragraph 8 above is not sufficient to satisfy the claim. Date: [Attach certicate of service on creditor] [signature] Attorney for Debtor
193 This can also be used in cases of undersecured claims, when the debtor seeks to have all or part of the lien declared void under 11 U.S.C. 506(d). However, if the creditors mortgage claim is partially secured solely by the debtors principal residence, an attempt to bifurcate the claim will fail under the Nobelman decision. See 11.7, supra; Form 85, Appx. G.8, infra; see also Official Form 11 (reprinted in Appx. D, supra).
55
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56
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be paid in full at the time of redemption, creditors may agree to permit payment in installments, for example, as part of a general compromise settlement on issues of value. See discussion of redemption in 11.5, supra. 198 For various reasons, debtors may wish to object to unsecured claims in some chapter 13 cases, especially if such claims are priority claims or if the creditor will cause problems by ling a motion under the ability to pay test. See 12.3.4, supra. The objection may raise any defense the debtor has (11 U.S.C. 506(b)(1)) or may raise noncompliance with the Code or the Federal Rules of Bankruptcy Procedure. See general discussion of objections to claims in 13.4.3, supra.
199 A proof of claim based on a writing that is not supported by attached documentation or otherwise fails to comply with Federal Rule of Bankruptcy Procedure 3001 is facially defective and not entitled to a presumption of validity. See 13.4.3.4, supra. 200 The failure to list a debt as disputed on the bankruptcy schedules should not bar a debtor from later ling a claim objection because the schedules are not led for the purposes of claim allowance, except in chapter 11 cases. However, to avoid a dispute on this issue, debtors may wish to mark debts as disputed, or to note that they have no way of verifying the amounts creditors have claimed on monthly statements.
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Form 78 Objection Seeking Reduction of Claim Amount Based on Creditors Refusal to Negotiate Repayment Plan
[Caption: Offcial Form 16A] Objection Seeking Reduction of Claim Amount Pursuant to Section 502(k) Debtors, by counsel, object to Proof of Claim Number Six, led by [claimant] in the amount of $4508, and seek a reduction of the claim amount pursuant to 11 U.S.C. 502(k). In support of this Motion, the Debtors state: 1. On [date], [claimant] led a Proof of Claim in the amount of $4508 on an unsecured credit card debt owed by the Debtors. 2. Prior to ling bankruptcy, the debtors sought the assistance of the nonprot budget and credit counseling agency, [agency], which is an approved agency pursuant to 11 U.S.C. 111. 3. On [date at least sixty (60) days before ling], [agency] proposed an alternative repayment schedule to [claimant] on behalf of the Debtors. 4. This repayment schedule provided for payments to be made by the Debtors in the amount of $76.50 per month for a period of three years. 5. The total amount proposed to be paid by the Debtors to the [claimant] under this repayment schedule was $2754, which was more than sixty percent of the amount of the debt owed to the [claimant]. 6. Based on the Debtors income and expenses at the time this offer was made, the payment amount represented the Debtors best effort to reasonably repay the debt.
201 Although this allegation is not required, it may assist the court in nding that the creditor unreasonably refused to negotiate the repayment plan. 202 A form such as this one may be used when an obviously frivolous claim is led. 203 If a party persists in ling frivolous pleadings, a record should be made of efforts to remedy the problem before seeking sanctions. 204 A separate motion for sanctions under Bankruptcy Rule 9011 may also be served on the claimant and led with the court together with this Objection no sooner than twenty-one days after service, provided that the claimant has not withdrawn the claim during the twenty-one-day period. See Fed. R. Bankr. P. 9011(c)(1)(A).
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Form 80 Complaint Objecting to Secured Claims for Failure to Comply with Truth in Lending Act and HUD Mortgage Servicing Requirements205
[Caption: Offcial Form 16D] Complaint 1. This adversary proceeding is brought by the Debtor pursuant to 11 U.S.C. 502, to object to the allowed secured claim of Defendant [creditor] on the basis that a portion of its claim is unenforceable against the Debtor under applicable law, and to assert counterclaims against Defendant. 2. This Court has jurisdiction in that this matter is a core proceeding, under 11 U.S.C. 1334 and 28 U.S.C. 157(b)(2)(B) and (C).206 3. On October 25, 2005, the Plaintiff/Debtor led a chapter 13 case in this Court. 4. On November 18, 2005, Defendant led a secured claim in the amount of $3744 which stated that this amount was the amount owed on the mortgage by the Debtor. 5. The amount claimed is excessive and should be disallowed to the extent that it is subject to the defenses and counterclaims set forth below. I. Truth in Lending Act 6. The transaction upon which this claim is based was a consumer credit transaction subject to the federal Truth in Lending Act, 15 U.S.C. 16011666j (Act), and Regulation Z thereunder, 12 C.F.R. 226. 7. At all times relevant hereto Defendant was a creditor within the meaning of the Truth in Lending Act (TILA), 15 U.S.C. 16011666j. 8. In the course of the transaction, Defendant failed to properly make all of the disclosures required by the Act and Regulation Z.207
205 This complaint illustrates a more abbreviated form with which to raise Truth in Lending violations than Form 65, Appx. G.8, infra. See generally notes to Form 82, Appx. G.8, infra, for discussion of the principles involved in such complaints. The complaint also raises a defense to costs and fees incurred in a foreclosure pursued in a manner prohibited by regulations governing the servicing of Federal Housing Administration (FHA) mortgages. Similar claims can be raised in regard to Veterans Administration mortgages. Numerous courts have held that equitable relief can be granted from such foreclosures. See, e.g., Bankers Life Co. v. Denton, 120 Ill. App. 576, 458 N.E.2d 203 (1983); Associated E. Mortgage Co. v. Young, 163 N.J. Super. 315 (Super. Ct. Ch. Div. 1978); Fed. Natl Mortgage Assn v. Ricks, 372 N.Y.S.2d 485 (Sup. Ct. 1975); see also Brown v. Lynn, 380 F. Supp. 986, 990 (N.D. Ill. 1974). Finally, the complaint challenges attorney fees sought in excess of the amount permitted by 11 U.S.C. 506(b), which allows only those provided for in the parties agreement, to the extent they are reasonable. See 11.6.2, supra. 206 A proceeding to allow or disallow a claim or raise counterclaims to a claim is a core proceeding. 28 U.S.C. 157(b)(2)(B), (C). 207 In some cases a debtor may have no recollection of receiving any Truth in Lending disclosures. In such cases, it is appropriate to allege that proper disclosures were not made. If a creditor then provides a copy of disclosures that appear to have been
9. As a result of this failure, Defendant is liable to Plaintiff in the amount of $2000 plus attorney fees and costs, which must be deducted from its claim by way of recoupment. II. Failure to Comply with HUD Regulations 10. The mortgage on which this action was brought is a mortgage insured by the Federal Housing Administration. 11. Due to that fact, Defendant was bound to comply with rules and regulations of the Department of Housing and Urban Development. 12. The applicable regulations required Defendant to service this mortgage, and to offer and accept reasonable forbearance arrangements to avoid foreclosure when Plaintiff became delinquent in her payments. 13. Defendant failed to comply with these obligations; it not only did not offer forbearance to Plaintiff, but also refused reasonable repayment proposals made by her. 14. As a result, the commencement of a foreclosure action by Defendant was improper, and all attorney fees and costs incurred in connection with the foreclosure can not be charged to Plaintiff. Therefore, the claim should be further disallowed, to the extent of these fees and costs of $1525. III. Unfair Trade Practices 15. The allegations of paragraphs 9 through 13 above are incorporated herein by reference. 16. The failure to reasonably forbear from foreclosure, as required by HUD regulations, constituted an unfair trade practice in violation of the Unfair Trade Practices Law, [cite provision(s) of state law] for which [creditor] is liable for triple the damages incurred by Plaintiff, that is, the attorney fees and costs for which she has been held liable.208 IV. Excessive Attorney Fees 17. The Defendants claim requests attorney fees and costs of $1525 These attorney fees and costs are unreasonably high, and exceed the amount due under the mortgage and note which place a ve percent (5%) limit on attorney fees. V. Prayer for Relief WHEREFORE, Plaintiff prays that: a. The claim of [creditor] be disallowed as currently led; b. The allowed secured claim be determined to be $219; c. She be awarded her attorney fees and costs herein; d. She be awarded triple damages in the amount of $4575 under the Unfair Trade Practices Law, [cite provision(s) of state law]; and e. The Court order such other relief as is just and proper. Date: [signature] Attorney for Debtor
provided the debtor, this allegation can be dropped. This allegation would also encompass a claim that the disclosures were decient. 208 The failure to follow applicable law or to disclose material facts about customers rights can be an unfair or deceptive practice. See generally National Consumer Law Center, Unfair and Deceptive Acts and Practices 4.2.14 (6th ed. 2004 and Supp.).
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Form 81 Complaint Objecting to Secured Claim and Seeking to Enforce Truth in Lending Rescission209
[Caption: Offcial Form 16D] Complaint to Determine Validity and/or Extent of Secured Claim Preliminary Statement 1. This is a complaint challenging the validity and/or extent of the Defendants proof of claim on the basis of the Truth in Lending Act, 15 U.S.C. 16011666j, and alternatively on the ground that it is excessive and without foundation. Debtor/Plaintiff seeks a determination that she has properly rescinded any security interest held on her property by Defendant and that Defendant has no valid secured or unsecured claim. In addition, Debtor/Plaintiff seeks damages for Defendants failure to rescind under the Truth in Lending Act. Jurisdiction 2. Jurisdiction of the Bankruptcy Court in this matter is provided by 28 U.S.C. 1334 and 157, as amended, and the Order of Reference made by the district court for this district dated July 25, 1984. 3. This is a core proceeding. Parties 4. Debtor/plaintiff, [debtor], is an adult individual residing at [address]. [Debtor] is a debtor in this Court, having led a petition pursuant to chapter 13 of the Bankruptcy Code on March 20, 2006. 5. Plaintiff, [trustee], is the Chapter 13 Standing Trustee for this case. [Trustee], as trustee, is listed as a nominal plaintiff at his request. 6. Defendant, [name], is a corporation whose principal place of business is at [address]. Factual Allegations 7. The Debtor/Plaintiff entered into a loan transaction with the Defendant on or about October 6, 2005 (the transaction). 8. A true and correct copy of the Truth in Lending disclosures given by Defendant to the Debtor/Plaintiff in the transaction is attached hereto and marked Exhibit A [omitted]. 9. Defendant obtained a mortgage on Debtor/Plaintiffs home in connection with the transaction. 10. On or about January 11, 2006, the Debtor/Plaintiff, through her attorney, notied Defendant that she was exercising her right to rescind the transaction pursuant to the Truth in Lending Act. A true and correct copy of the letter by which Debtor/Plaintiff exercised her rescission rights is attached hereto and marked Exhibit B [omitted].
209 This complaint form may be used to seek enforcement of Truth in Lending rescission claims. In some jurisdictions more specicity about the claimed violations may be necessary. Other consumer defenses to the mortgage or bankruptcy lien avoidance theories may also be joined to this complaint. It may make sense to mix and match appropriate theories from this and the other objections to claims in this appendix. Note also that whenever the defendant is an insured depository institution, special service requirements apply. Fed. R. Bankr. P. 7004(h).
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Form 82 Alternative Complaint Objecting to Secured Claim on the Basis of Truth in Lending Rescission210
[Caption: Offcial Form 16D] Complaint Objecting to Secured Claim 1. On December 26, 2006, Debtor herein led a voluntary petition under chapter 13 of the Bankruptcy Code. Therefore, this Court has jurisdiction over this proceeding pursuant to 28 U.S.C. 1334. This proceeding is a core proceeding. 2. Debtors rst modied plan provides for payment of 100% of the Debtors allowed secured and priority claims and for payment of 74% of the Debtors unsecured claims if sufficient funds are left over after payment of the secured and priority claims. 3. On or about August 4, 2004, the Debtor entered into a consumer loan transaction with [creditor], (hereinafter Defendant). 4. Defendant is a creditor within the meaning of the Truth in Lending Act and Regulation Z, 12 C.F.R. 226.2(17). 5. In connection with the transaction Defendant took a security interest in Debtors home at [address]. 6. In violation of 12 C.F.R. 226.23(b) Defendant did not, at the consummation of the loan transaction, give the Debtor two copies of a notice of her right to rescind the transaction. 7. In violation of 12 C.F.R. 226.23(c) Defendant did not delay the distribution of the proceeds of the loan until after the rescission period that had elapsed, but immediately distributed the proceeds of the loan.
210 An objection to a claim challenging the extent or validity of a lien must be led as an adversary proceeding. Fed. R. Bankr. P. 3007. For a general discussion of complaints in adversary proceedings, see notes to Form 100, Appx. G.10, infra. Such an objection may raise the validity of a lien under 11 U.S.C. 506(d), when the creditor is undersecured, subject to the limitations imposed by the Dewsnup and Nobelman decisions, or when there are other reasons why the lien is invalid, such as a rescission under the Truth in Lending Act. See Form 81, Appx. G.8, supra; Form 85, Appx. G.8, infra. For a discussion of section 506, see Chapter 11, supra. For a discussion of litigating other claims, see Chapter 13, supra. This complaint raises violations of the Truth in Lending requirements applicable after October 1, 1982, under the Truth in Lending Simplication and Reform Act. Title VI of Pub. L. No. 96-221, 94 Stat. 132 (1980). Prior to October 1, 1982, creditors were subject to different disclosure requirements. See National Consumer Law Center, Truth in Lending (5th ed. 2003 and Supp.). This form is adapted from pleadings by Irwin Trauss, Esq., Philadelphia, Pennsylvania.
8. In connection with the consumer loan transaction Defendant gave to Plaintiff two copies of the disclosure statement, a copy of which is attached hereto as Exhibit A [omitted]. 9. Said disclosure statement does not contain all of the material disclosures required by the federal Truth in Lending Act and by Regulation Z, and is missing, inter alia, the following material disclosures: a. The disclosure statement fails to include the cost of credit life and disability insurance in the nance charge even though: i. Such insurance was required by Plaintiff as a condition of the loan; and even though: ii. The Debtor did not give a separately signed indication of her desire for each insurance. 12 C.F.R. 226.4(d)(1)(iii). b. The notice fails to disclose the service charge as a prepaid nance charge as required by 12 C.F.R. 226.18(c). c. The notice fails to itemize the components of the amount nanced as required by 12 C.F.R. 226.18(c). d. As a result of the failure to properly disclose the abovementioned items as nance charges the notice misstates the amount nanced, the nance charge and the APR. e. In violation of 12 C.F.R. 226.17(a) the notice misleadingly states that credit insurance was not required by the lender when in fact it was a specic precondition of the loan, and Defendant would not extend credit if credit insurance was not purchased. 10. On or about October 28, 2005, Debtor, pursuant to 12 C.F.R. 226.23(a), rescinded the entire consumer loan transaction by sending to Defendant a Notice of Rescission, a copy of which is attached hereto as Exhibit B. 11. On or about April 23, 2006, Defendant led a proof of claim in the amount of $947.30. 12. In its proof Defendant claimed to be secured for the entire amount of its claim by an interest in [address of debtors home]. 13. Defendants claim against the Debtor is not secured as the Debtors exercise of her right of rescission rendered any security interest Defendant might have had in [address of debtors home] void. 14. Defendants claim is excessive and can not be allowed for more than $14.28 for the following reasons: a. After rescission, the Debtor is liable at most for the principal amount of the rescinded loan exclusive of nance charges, insurance charges and all other charges, 12 C.F.R. 226.23, 11 U.S.C. 502(b)(1), in this case not more than $675.62; b. Of this amount, $675.62, Debtor has already paid not less than $270.34, 11 U.S.C. 502(b)(1); c. Against the $405.28 remaining, Debtor has a recoupment in the amount of $391, or twice the nance charge, under section 130 of the Truth in Lending Act, 15 U.S.C. 1640, leaving a balance of not more than $14.28 owing to Defendant. WHEREFORE, Debtor prays that Defendants security interest in [address of debtors home] be declared void, that the claim of Defendant be classied as wholly unsecured, that the claim be allowed for not more than $14.28, that attorney fees and costs be awarded pursuant to 15 U.S.C. 1640 and that the Court order such additional relief as is necessary in the interest of justice. Date: [signature] Attorney for Debtor/Plaintiff
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[creditor] [address] RE: [debtor] [creditor] Date of Loan: 8/4/04 Total of payments: $912 Loan secured by mortgage on: [address of debtors home] Notice of Rescission Dear Sir or Madam: Please be advised that I represent [debtor]. On or about August 4, 2004, [debtor] entered into the above-referenced consumer loan transaction with [creditor]. A security interest in [debtor]s home at the captioned address was taken as security for this loan. At the time the loan transaction was consummated the proceeds of the loan were immediately distributed. In violation of 12 C.F.R. 226.23(c) the proceeds were not withheld in order to enable [debtor] to exercise her right of rescission. When the transaction was consummated [debtor] was not given two copies of her notice of her right to rescission. The disclosure form that was given to [debtor], in an attempt to comply with 12 C.F.R. 226.18, omitted several material disclosures required by the federal Truth in Lending Act. Following is a partial list of the material disclosures which were not made to [debtor] in connection with the transaction: a. The disclosure statement fails to include the cost of credit life and disability insurance in the nance charge even though: i. Such insurance was required by Plaintiff as a condition of the loan; and even though ii. [Debtor] did not give a separately signed indication of her desire for such insurance. 12 C.F.R. 226.4(d)(1)(iii). b. As a result of the failure to properly disclose the abovementioned items as nance charges the notice misstates the amount nanced, the nance charge and the APR. c. In violation of 12 C.F.R. 226.6 the notice misleadingly states that credit insurance was not required by the lender when in fact it was a specic precondition of the loan, and Plaintiff would not extend credit if credit insurance was not purchased. Please be advised that pursuant to section 125 of the federal Truth in Lending Act, 15 U.S.C. 1635, and pursuant to section 226.23(a) of Regulation Z, 12 C.F.R. 226.23, [debtor] is rescinding the above-referenced consumer loan transaction. This letter constitutes NOTICE OF RESCISSION. Please return to [debtor] all of the money which has been paid to [creditor] in connection with the above-referenced consumer loan transaction. This includes all payments of interest, all payments of principal, all discount charges, all service charges, and all charges for insurance taken out in connection with the loan. Under section 226.23(d) of Regulation Z, 12 C.F.R. 226.23(d), you have twenty days from the receipt of this notice in which to return this money to [debtor] and to take all action necessary to terminate the security interests which were created by the transaction. This includes, but is not limited to, the mortgage taken in [debtor]s residence at [address].
Form 84 Complaint Objecting to Secured Claim on the Basis of Usury and Warranty Defenses211
[Caption: Offcial Form 16D] Complaint I. Preliminary Statement 1. This is an action by a consumer debtor against a nance company asserting usury claims under the state Unfair Trade Practices and Consumer Protection Act, [citation], and for breach of warranty. II. Jurisdiction 2. Jurisdiction is provided by 28 U.S.C. 1334. 3. This proceeding is a core matter.
211 This complaint raises state law usury and warranty claims against a mortgage holder in bankruptcy court. These issues may be raised in a complaint challenging a proof of claim or affirmatively to determine claims affecting the validity and extent of the mortgage. Consumer defenses may vary widely from state to state and therefore this complaint must be adapted to t applicable law.
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19. The representations made by the contractor regarding the quality of the carpet were not true. In fact, the carpet was of inferior quality, retained stains and wore down substantially within a few months. V. Statement of Claims First ClaimState Deceptive Practices Statute 20. The transaction described above constituted a home improvement sales nance transaction within the meaning of [cite provision of state law]. 21. By writing the transaction as a personal loan under the [state] Consumer Discount Company Act, [citation], a statute containing a substantially higher interest rate, Mortgage Co. committed an unfair and deceptive act within the meaning of UDAP. WHEREFORE, Debtor requests damages in an amount equal to three times the additional interest charged in the transaction and a reasonable attorney fee. Second ClaimBreach of Express Warranty 22. The contractor breached his express warranty to Debtor. 23. Under the terms of Debtors contract with Defendants, they are subject to all claims and defenses which Debtor could assert against the contractor. 24. As a proximate result of the breach of express warranty, Debtor has suffered actual damages. WHEREFORE, Debtor requests that the Court award him damages in an amount equal to the difference between the value of the carpet as warranted and the value as delivered, plus incidental and consequential damages. Third ClaimBreach of Implied Warranty of Merchantability 25. The contractor, as a merchant dealing in carpeting, warranted as a matter of law that the carpet was merchantable as t for ordinary purposes and could pass in the trade without objection. 26. The carpet was not merchantable at the time of delivery, could not pass in the trade without objection and was not t for ordinary purposes. 27. As a proximate result of the breach of the implied warranty of merchantability, Debtor has suffered actual damages. WHEREFORE, Debtor requests that the Court award him damages in an amount equal to the difference between the value of the carpet as warranted and the value as delivered, plus incidental and consequential damages. Fourth ClaimBreach of Implied Warranty of Fitness for Particular Purpose 28. The contractor impliedly warranted that the carpet was t for use in a property in which a family with small children reside. 29. The carpet was not t for that particular purpose. 30. As a result of the breach of the implied warranty of tness for particular purpose, Debtor has suffered actual damages. WHEREFORE, Debtor requests that the Court award him damages in an amount equal to the difference between the value of the carpet as warranted and the value as delivered, plus incidental and consequential damages. Date: [signature] Attorney for Debtor/Plaintiff
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Form 85 Complaint or Motion to Determine Value of Security and Creditors Allowed Secured Claim212
[Caption: Offcial Form 16D] Debtors Complaint Pursuant to 11 U.S.C. 506(a) and Bankruptcy Rule 3012 to Determine the Value of Security and Creditors Allowed Secured Claim The Debtor, by her attorney, requests that this Court, pursuant to 11 U.S.C. 506(a) and Bankruptcy Rule 3012 determine the value of the interest of the [name] Mortgage Company in the Debtors real estate and determine the amount of [name] Mortgage Company allowed secured claim. In support of this complaint the Debtor states as follows: 1. The Debtor led the instant voluntary petition under chapter 13 of the Bankruptcy Code on June 3, 2006. 2. The Court has jurisdiction over this proceeding pursuant to 28 U.S.C. 1334 and 157(b)(2)(K). This is a core proceeding. 3. At the time the Debtor led the instant bankruptcy petition and at the present time the value of the Debtors interest in the real estate was and is approximately $55,000. 4. The Debtors interest in the real estate is subject to a lien arising out of a mortgage dated January 31, 1996 in favor of [name] Bank in the amount of $48,000. 5. The Debtors interest in the real estate is further encumbered by a municipal lien in favor of the City of [city] for real estate taxes in the amount of $3500. The lien of the City of [city] is a statutory lien with rst priority, regardless of the date of its recording. 6. [Name] Mortgage Company led a secured proof of claim in the instant case on or about November 25, 2006, in the amount of $25,000 based on a mortgage dated January 10, 2000. 7. The lien securing the claim of [name] Mortgage Company is junior to the liens listed above, which liens total in excess of $51,500. 8. The value of the interest of [name] Mortgage Company in the estates interest in the real estate is no more than $3500. 9. Pursuant to 11 U.S.C. 506(a), the allowable secured claim of [name] Mortgage Company is no more than $3500. 10. The balance of any claim of [name] Mortgage Company is an allowable only as unsecured claim. 11. In addition to a security interest in the debtors residence [name] Mortgage Co. has a security interest in personal property belonging to the debtor [and/or] in rents payable to the debtor as
212 This is a complaint form to determine a creditors allowed secured claim under 11 U.S.C. 506(a) in light of the Supreme Courts decision in Dewsnup v. Timm, 502 U.S. 410, 112 S. Ct. 77, 116 L. Ed. 2d 903 (1992). See 11.2, supra. Whether this issue needs to be brought as a motion pursuant to Federal Rule of Bankruptcy Procedure 3012 or as an adversary proceeding will probably vary from jurisdiction to jurisdiction. Best practice, when any doubt exists, will be to le this action as an adversary proceeding subject to the adversary rules. Fed. R. Bankr. P. 70017087. This form is easily adaptable to either practice. The standard for valuation will be affected by the Supreme Courts decision in Associates Commercial Corp. v. Rash, 520 U.S. 953, 117 S. Ct. 1879, 138 L. Ed. 2d 148 (1997). See 11.2.2.3.2, supra; Resolving Valuation Issues After Rash, 16 NCLC REPORTS Bankruptcy and Foreclosures Ed. 1 (July/ Aug. 1997).
Form 86 Qualied Written Request Under RESPA to Obtain Mortgage Loan Information214
[date] [mortgage company or servicer] RE: [debtor] [debtors address] [Social Security Number] [bankruptcy number] [le date] [account number] To Whom It May Concern: Please treat this letter as a qualied written request under the Real Estate Settlement Procedures Act, 12 U.S.C. section 2605(e). I am making this request on behalf of my client, [debtor], based on her dispute of the amount alleged to be due and owing contained in the [mortgage companys] notice of default and/or proof of claim led in [debtors] chapter 13 bankruptcy. Specically, I am requesting the following prebankruptcy and postbankruptcy information: 1. The monthly principal and interest payment, and monthly escrow payment prior to [date of bankruptcy ling]. 2. The monthly principal and interest payment, and monthly escrow payment subsequent to [date of bankruptcy ling]. 3. The total unpaid principal, interest and escrow balances due and owing as of [date of bankruptcy ling]. 4. For each payment received during the eighteen (18) months prior to [date of bankruptcy ling], indicate the amount of the payment, the date received, the date posted to the account, how the
213 This additional paragraph may now be necessary in some jurisdictions when seeking bifurcation of a residential mortgage because of the Supreme Courts decision in Nobelman v. Am. Sav. Bank, 508 U.S. 324, 113 S. Ct. 2106, 124 L. Ed. 2d 228 (1993). It also may be possible to argue that the protections of 11 U.S.C. 1322 (b)(2) are an affirmative defense which must raised by the creditor. See generally 11.2.1, 11.7, supra. 214 This form letter may be used to conduct informal discovery on the elements of a creditors claim based on the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605. It can be helpful in uncovering hidden overcharges on mortgage claims. See 13.4.3.4, supra. For a detailed discussion of the RESPA servicing requirements, see Chapter 5 of NCLCs Foreclosures (2005).
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Form 87 Motion for Order Directing Claimant to Appear for Rule 2004 Examination215
[Caption: Offcial Form 16A] Motion for Order Directing [name] Mortgage Company to Appear for Examination and Produce Documents The Debtor hereby requests, pursuant to Federal Rule of Bankruptcy Procedure 2004, that [name] Mortgage Company be directed to designate an officer, agent, or other person to appear for examination with respect to the proof of claim it has led in this matter, and to produce the documents requested on Exhibit A attached hereto In support of this motion, Debtor states as follows: 1. The Debtor led the instant voluntary petition under chapter 13 of the Bankruptcy Code on [date]. 2. [Name] Mortgage Company is the current holder [or servicer] of the mortgage on the debtors home. 3. [Name] Mortgage Company led a secured proof of claim in the instant case on or about [date] in the amount of $105,037.85, claiming an arrearage owed of $26,315.11. The proof of claim does not include an itemization of the various charges comprising the arrearage amount, though it contains a notation that the amount includes corporate advances in excess of $8000. 4. The Debtor disputes the amount claimed as an arrearage on the mortgage account and believes that the amount includes charges that are not authorized by the mortgage contract or are otherwise unlawful. The Debtor also believes that the claim may include postpetition attorney fees that have not been properly disclosed or approved by this Court. 5. The Debtor has attempted to obtain information necessary to evaluate the claim by serving upon [name] Mortgage Company a qualied written request under the Real Estate Settlement Procedures Act, 12 U.S.C. section 2605(e), but [name] Mortgage Company has not responded. 6. It is necessary for the Debtor to examine a representative of [name] Mortgage Company to obtain an explanation of and documents related to the arrearage claim amount so as to determine whether sufficient grounds exist to object to the claim prior to the conrmation hearing presently scheduled for [date]. WHEREFORE, the Debtor requests that this motion be granted. Date: [signature] Attorney for Debtor Exhibit A Debtors Request for Production of Documents Directed to [name] Mortgage Company The Debtor, [name], by her counsel, and pursuant to Fed. R. Bankr. P. 2004, makes this request for production of documents directed to [name] Mortgage Company. Defendant is requested to
215 If the debtor disputes a mortgage arrearage or other creditor claim, and is unable to obtain necessary information or a response to a qualied written request (see Form 86, Appx. G.8, supra) prior to conrmation, this form may be used to seek an order to conduct an examination of a creditor representative under Fed. R. Bankr. P. 2004. If granted, the debtor should also have a subpoena issued and served in accordance with Fed. R. Bankr. P. 9016.
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produce the documents described below at the Rule 2004 examination to be held as ordered by the Bankruptcy Court. DEFINITIONS 1. The term person(s) means all entities, and, without limiting the generality of the foregoing, includes natural persons, joint owners, associations, companies, partnerships, joint ventures, corporations, trusts and estates. 2. The term document(s) means all written, printed, recorded or graphic matter, photographic matter or sound reproductions, video tapes and/or lms, however produced or reproduced, pertaining in any manner to the subject matter indicated, including computer tapes, discs, or other electronically stored data. 3. The terms you and your refer to [name] Mortgage Company and all agents, employees, officers, and other representatives acting on its behalf. 4. The term Debtor refers to [name]. 5. The term [name] law rm refers to [name], L.L.C. and all agents, employees, officers and other representatives acting on its behalf. 6. The terms mortgage and mortgages refer to residential mortgages owned or serviced by [name] Mortgage Company. 7. The term bankruptcy related fees refers to any fees or other charges billed, assessed or charged to mortgagors and/or their mortgage accounts in connection with or as a result of the bankruptcy ling of the mortgagor. 8. The terms and and or shall be interpreted conjunctively and disjunctively, to give the interrogatories the broadest interpretation. 9. The singular shall include the plural, and the plural shall include the singular. Document Requests 1. All documents that relate to your purchase or acquisition of the Debtors mortgage. 2. All documents that you received or sent relating to the Debtor and/or her mortgage account. 3. All documents, by type, that you sent or received on a regular periodic basis (weekly, monthly, annually, and so forth) relating to the Debtors mortgage. 4. All documents, including servicing guidelines, handbooks or other manuals, which evidence how you protected your security interest as a mortgagee in regard to the Debtors mortgage. 5. All documents that relate to or constitute a le maintained by you with respect to the mortgage and/or note signed by the Debtor, including, but not limited to, any account statements, correspondence, and other information with respect to the Debtors mortgage and/or loan. 6. Documents evidencing the application of each payment the Debtor made on her mortgage and/or loan. 7. Documents evidencing each assessment of interest, fees and/or other charges on the Debtors mortgage account. 8. Documents identifying all formulas and/or calculations used to determine the amount of any fees and/or other charges assessed, imposed or charged to the Debtor mortgage account to protect your security interest as a mortgagee.
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Irving, Texas. At all times material to this action, Defendant [name] regularly transacted business in the State of California. 7. Defendant [name] is a debt collector of the Debtors debt as those terms are dened in the FDCPA, 15 U.S.C. 1692a. 8. Defendant [name] is a loan servicer of the Debtors federally related mortgage loan as those terms are dened in the RESPA, 12 U.S.C. 2602(1) and 12 U.S.C. 2605(i)(2). Factual Allegations 9. On [date], the Debtor borrowed $50,000 for the purchase of her home from the Merchants Bank. The Note signed by the Debtor was secured by a mortgage on her home. 10. Defendant [name] subsequently became the owner of the subject Note and Mortgage (hereinafter referred to as the original Loan). At the time Defendant [name] obtained an interest in the Debtors original Loan, Defendant [name] deemed the mortgage account to be in default and serviced the account as a debt in default. 11. In March, 2000, Defendant [name] initiated foreclosure proceedings against the Debtor claiming that she was in default on the original Loan. 12. Prior to this time, the Debtor had attempted to resolve a long-standing dispute with Defendant [name] over whether payments she had made had been properly credited to her account. 13. Unable to resolve this dispute, the Debtor led a chapter 13 bankruptcy in the United States Bankruptcy Court on April 15, 2000. In the chapter 13 proceeding, the Debtor sought to obtain a determination of the proper balance owed on her account and to cure any default found to exist with payments through her chapter 13 plan. 14. On August 21, 2001, the Debtor and Defendant [name] entered into a consent order in the bankruptcy court resolving the Debtors objection to Defendant [name]s proof of claim. This consent order provided that parties would enter into agreement modifying the Debtors original Loan. 15. This agreement also provided that the parties would have a period of thirty (30) days before entering into the modication agreement in order to resolve any disputes concerning the outstanding balance owed under the original Loan. 16. The Debtor and Defendant [name] subsequently entered into a Modication Agreement, effective November 1, 2001. A copy of the Modication Agreement is attached as Exhibit A. 17. In the Recital section of the Modication Agreement, the parties acknowledged that the Debtor was in default on the original Loan and that Defendant [name] was entitled to demand payment of a principal balance on the original Loan of over $85,000, plus interest, and all other charges. 18. The parties further acknowledged that despite the default and based on the Debtors request to modify the original Loan, the Defendant [name] agreed to adjust the terms of the original Loan, including total amount due. 19. In accordance with these acknowledgments, the parties specically agreed in Paragraph 3(d) of the Modication Agreement that the New Principal Balance that the Debtor would now owe on her loan was $85,000. 20. The intention of the parties as evidenced by the terms of the Modication Agreement was that the Debtors loan was reinstated as current and that the total outstanding balance, including all
Form 89 Complaint Objecting to Mortgage Servicers Claim Based on RESPA and FDCPA Violations
[Caption: Offcial Form 16D] Complaint Preliminary Statement 1. This action is brought by the Debtor, [name], against the mortgage company that holds and services a mortgage on her home, the [name] Federal Bank. 2. Defendant [name] Federal Bank has refused to honor a Modication Agreement entered into between the parties and as a result has overcharged the Debtor and failed to properly credit payments on her mortgage account. In addition to its breach of contract, Defendant has engaged in abusive, deceptive and unfair debt collection practices in violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 16921692o. 3. Defendant [name] Federal Bank has also failed to make appropriate corrections to the mortgage account despite Debtors dispute of the overcharges and misapplication of payments, in violation of the mortgage servicer provisions of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605. Jurisdiction 4. This court has jurisdiction over this matter pursuant to 28 U.S.C. 1334 and 157. This action is a core proceeding. Parties 5. Debtor [name] is an individual who resides at [address] in Laguna Vista, California. 6. Defendant [name] Federal Bank (hereinafter Defendant [name]) is a corporation with its principal place of business in
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accrued interest, charges and fees owing on the loan as of the effective date, was stipulated to be $85,000. 21. Although the Debtor believed that she owed less than $85,000, she agreed to this amount and signed the Modication Agreement in order to achieve a nal resolution of her dispute with Defendant [name] over the amount owed on her mortgage account. 22. In Paragraph 12 of the Modication Agreement, the parties additionally agreed that the loan modication was a Final Agreement and that it constitutes the entire agreement between you and [name], supersedes all previous negotiations and discussions. 23. After the Modication Agreement became effective on November 1, 2001, the Debtor began making her new monthly payments of $671.73 as provided for under the Modication Agreement. 24. Despite the Debtors timely payments each month and her full compliance with the terms of the Modication Agreement, Defendant [name], through its attorneys, sent the Debtor a foreclosure notice on June 15, 2002 and on July 10, 2002. Copies of these Notices are attached as Exhibits B and C respectively. 25. In response, the Debtor, through her attorney, sent Defendant [name] a letter dated August 15, 2002, seeking information about the Debtors mortgage account and disputing that her account was in default. 26. On January 25, 2003, Defendant [name] sent the Debtor a response stating that sometime after the Modication Agreement was completed, Defendant [name] had received invoices from its attorneys for fees in the amount of $6701.92 relating to the Debtors earlier bankruptcy case. 27. The response further stated that upon receiving the invoices, Defendant [name] assessed the legal fees to the Debtors loan balance and then applied the Debtors payments made on the Modication Agreement to cover these pre-modication fees. 28. A history of the Debtors account provided with the response suggests that Defendant [name] paid some or all of the invoices and assessed the attorney fee charges to the Debtors account on November 11, 2001. 29. At no time prior to the execution of the Modication Agreement by the Debtor on October 14, 2001, or its effective date on November 1, 2001, did Defendant [name] advise the Debtor that, contrary to the plain terms of the Modication Agreement, it believed that the Debtor would be responsible for paying outstanding legal fees separate from her obligations under the Modication Agreement, or that Defendant [name] had not waived any claim for outstanding legal fees by signing the Modication Agreement. 30. At no time during the Debtors rst chapter 13 bankruptcy, or at any time thereafter, did Defendant [name] or its attorneys seek or obtain bankruptcy court approval of an award of attorney fees against the Debtor. 31. Defendant [name]s refusal to honor the terms of the Modication Agreement by charging and collecting extraneous fees not agreed to by the parties, and its actions in improperly declaring defaults and pursing a wrongful foreclosure of the Debtors home, have caused the Debtor to suffer severe emotional distress and mental anguish. Defendant [name]s actions have also damaged the Debtors credit rating and caused her to incur expenses in seeking redress against Defendants wrongful acts. 32. Unable to resolve her dispute with Defendant [name], the Debtor was forced to le this second chapter 13 bankruptcy to stop the foreclosure of her home.
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2. This motion is led pursuant to 11 U.S.C. 522(f) to avoid and cancel a judicial lien held by the [creditor] on real property used as the Debtors residence. 3. In January, 1998, Plaintiff/Debtors received a loan of $7216 from [creditor]. On or about May 30, 2004, [creditor] obtained a judicial lien in and on the real property used as Debtors residence at [address]. The said judicial lien is entered of record as follows: June Term, 2004, No. 851: $7216. 4. The Debtors interest in the property referred to in the preceding paragraph and encumbered by the lien does not exceed $15,000 in value and has been claimed as fully exempt in their bankruptcy case.218 5. The existence of [creditor]s lien on Debtors real property impairs exemptions to which the Debtors would be entitled under 11 U.S.C. 522(b). WHEREFORE, Debtors pray for an Order against [creditor] for the cancellation and avoidance of the judicial liens on their residential real estate, and for such additional or alternative relief as may be just and proper. Date: [signature] Attorney for Debtors
records to reect termination of the lien. However, it is often simpler for the debtors attorney to simply le the lien avoidance order in the records where the lien exists, and this order is suitable for ling in local records offices. The order also contemplates a case when the property is fully exemptible. If only some of the property is exemptible, the order must be modied to specify what portion of the lien is avoided. 220 See notes to Form 91, Appx. G.9, supra; see also 10.4.2.4, supra. 221 The 2005 amendments added a denition of household goods that is applicable only in section 522(f)(1) lien avoidance proceedings. 11 U.S.C. 522(f)(4)(B). However, the new denition should not pose a problem because no other changes were made to section 522(f)(1)(B) and some of the categories of items that continue to be listed in section 522(f)(1)(B) are broad and provide for overlapping coverage. See 10.4.2.4, supra.
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[signature] Attorney for Debtors
Date:
Form 96 Complaint to Set Aside Preference and/or Setoff by Governmental Agency Recouping Overpayments of Benets223
[Caption: Offcial Form 16D] Complaint to Set Aside Preference and/or Setoff I. Preliminary Statement 1. This is an action under the Bankruptcy Code, 11 U.S.C. 1011330, to set aside a preference and/or setoff which occurred when Defendants withheld veterans pension benets from the Debtor within ninety (90) days of his ling a voluntary petition in bankruptcy. II. Jurisdiction 2. This Court has jurisdiction pursuant to 28 U.S.C. 1334. This proceeding is a core proceeding. III. Parties 3. Plaintiff, [debtor], is an individual who resides at [address]. He is the Debtor in this bankruptcy case. 4. Defendant Veterans Administration is an agency of the United States whose principal offices are in Washington, DC, and which has the responsibility for administering veterans pension benets. 5. Defendant [defendantadministrator] is the current Administrator of Veterans Affairs, the chief administrative officer of the Veterans Administration. His office is located in Washington, DC. 6. Defendant [defendantdirector] is the Director of the Veterans Administration Regional Office and Insurance Center in Philadelphia, PA. As such, he is responsible for administering claims for veterans pension benets in the Philadelphia area. 7. Defendant [defendantchief] is Chief of the Finance Division of the Veterans Administration Regional Office in Philadelphia. As such he is responsible for administering the payment of claims for veterans pension benets in the Philadelphia area.
223 A proceeding by the debtor to set aside a preference or recover a setoff of otherwise exemptible property must be brought as an adversary proceeding. Fed. R. Bankr. P. 7001. For a general discussion of complaints in adversary proceedings, see notes to Form 100, Appx. G.10, infra. This complaint or one which is similar may be used to recover benets withheld by an agency within the three months prior to bankruptcy when benets have been withheld to recoup an alleged overpayment. It may be adapted for cases involving Social Security, welfare, unemployment or other benets, if those benets could have been exempted. See discussion of the debtors avoiding powers in 10.4, supra, and the discussion of cases holding such overpayments ordinarily to be dischargeable debts in Chapter 14, supra. However, one court of appeals has held that a prebankruptcy recovery of an overpayment by the Social Security Administration may not be reversed. See Lee v. Schweiker, 739 F.2d 870 (3d Cir. 1984). See also Forms 34 and 35, Appx. G.4, supra, which may be utilized to prevent recoupment after the petition is led. An additional issue which may arise is the extent of a governmental defendants sovereign immunity, but an action to recover a setoff under section 522 such as in this case is now clearly allowed under section 106(a), subject to the limitations discussed in 13.3.2.2, supra.
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8. Prior to May, 2004, Plaintiff [debtor] was receiving a monthly veterans disability pension. 9. The Veterans Administration subsequently determined that Plaintiff had been overpaid two thousand nine hundred fty-eight dollars and eighty-seven cents ($2958.87). 10. Beginning in May, 2004, Defendants withheld Plaintiffs entire monthly pension and intended to continue withholding the pension benets each month until the overpayment had been recouped. 11. Plaintiff received no pension benets in July, August, September, 2004. Had he received benets in those months, he would have received two hundred thirty-eight dollars and twenty-ve cents ($238.25) in July, two hundred thirty-eight dollars and twenty-ve cents ($238.25) in August, and two hundred forty-four dollars and ninety-one cents ($244.91) in September, totaling seven hundred twenty-one dollars and forty-one cents ($721.41). 12. On September 23, 2004, Plaintiff led a voluntary petition in bankruptcy under chapter 7 in this Court. 13. In Schedule F, accompanying his bankruptcy petition, Plaintiff listed the Veterans Administration as an unsecured creditor and listed the unsecured debt owed to the Veterans Administration in the amount of two thousand nine hundred fty-eight dollars and eighty-seven cents ($2958.87), the amount Plaintiff allegedly has been overpaid. 14. In Schedule B Plaintiff listed the amount of benets which Defendants withheld in July, August, and September, 2004, as a preference which was property of his estate.224 15. In Schedule C, Plaintiff listed as exempt, inter alia, the funds which the Defendants withheld for the months of July, August, and September, 2004. 16. The Veterans Administration has not objected to Plaintiffs exemption claim nor has it challenged the dischargeability225 of its unsecured debt. 17. This bankruptcy is a no-asset case. None of the unsecured creditors received any distribution from the property of the Debtors estate. V. Claims First Claim 18. The actions of Defendants in withholding benets in July, August, and September, 2004, to which Plaintiff was entitled, in order to recover a prior overpayment made to Plaintiff has enabled Defendants to obtain a preference226 under 11 U.S.C. 547 in that:
224 It is probably not necessary to list the benets to be recovered as property in the schedules or to claim them as exempt therein, because the statute allows avoidance when the benets could have been exempted but for the transfer. 11 U.S.C. 522(h). However, there is no harm in listing them or amending schedules to list them and claiming them as exempt, in order to be safe. 225 The dischargeability of the debt would not provide a defense to this complaint, but the fact that no objection on those lines was raised furthers the debtors arguments that this debt is an ordinary unsecured claim. 226 The recoupment of benets is more likely to be held a setoff than a preference, but a cautious approach would require pleading both theories in the alternative. A setoff recovery is not
Form 97 Complaint to Set Aside Foreclosure Sale for Less Than Reasonably Equivalent Value and to Remedy Mortgagees Contempt227
[Caption: Offcial Form 16D] Complaint to Avoid Transfer of Real Property for Contempt and for Relief from Defendants Contempt 1. [Debtor], Plaintiff and Debtor, led a petition under chapter 13 of the Bankruptcy Code on January 24, 2004. He resides at [address] and has resided there continuously since January 1983.
governed by the $600 minimum set by 11 U.S.C. 547(a)(7). 227 A proceeding to recover property must be brought as an adversary proceeding. Fed. R. Bankr. P. 7001. For a general discus-
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14. As a result of the aforementioned petition, an Order was issued staying any action (specically, the passing of the deed) by the Sheriff with respect to the September 10th sale. A copy of the Order was served on the Sheriff. 15. Debtors chapter 13 petition was led with this Court on January 24, 2004. As of that date, the terms of sale had not been complied with and Debtor had both record legal title and a possessory interest in his residence. The Debtors interest in his residence became part of his estate pursuant to 11 U.S.C. 541(a)(1). 16. Debtors counsel notied [creditor]s counsel of the chapter 13 petition by telephone and by letter. 17. On or about March 6, 2004, forty days after the ling of the chapter 13 petition, an Order was issued by Judge [name] of the Common Pleas Court, who was unaware of the proceedings in this Court, denying the Debtors Petition to Open Judgment, and affirming the sheriff sale and allowing a deed to transfer title of Debtors residence to the administrator of Veterans Affairs. 18. Shortly after receipt of Judge [name]s Order, Debtors counsel led a Motion to Vacate the Order. 19. In violation of the automatic stay provisions, [creditor]s attorney, acting as execution purchaser, paid all remaining sheriff costs and fees and obtained a sheriffs deed purporting to transfer all of Debtors interest in the property to the VA. 20. On or about March 31, 2004, in violation of the automatic stay provisions of the Bankruptcy Code, the Sheriff issued a deed purporting to transfer the property to the VA. 21. On or about April 23, 2004, the VA refused to accept the transfer of the property, thus rendering the transfer void under the state law. 22. [Creditor]s present counsel has indicated that the sheriffs deed is presently within his possession. Claims First Claim: Violation of Section 548 of Bankruptcy Code as Fraudulent Conveyance 23. At the sheriffs sale, [creditor] and VA paid $15,800 for Debtors residence, which was less than a reasonably equivalent value for Debtors interest in his residence, which interest was valued at $18,000. Based on the weather conditions, the sale was not regularly conducted within the meaning of the law. The Debtor was insolvent at the time of the transfer. This transaction is voidable pursuant to 11 U.S.C. 522(h) and 548(a)(2). Second Claim: Purported Transfer Is Void as Matter of State Law 24. Any transfer of Debtors interest in his residence is void as a matter of state law as the VA, the purported transferee, refused to accept the transfer. Third Claim: Violation of Section 549 of Bankruptcy Code, Postpetition Transaction 25. Any transfer of Debtors interest in his residence which was property of his chapter 13 estate that occurred after the ling of his chapter 13 petition and was not authorized by this Court is subject to avoidance by Debtor pursuant to 11 U.S.C. 522(h) and 549(a).
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Fourth Claim: Violation of Section 362 of Bankruptcy Code, Automatic Stay 26. Any attempted transfer by a creditor of Debtors interest in his residence, which was property of his chapter 13 estate, that occurred after the ling of his chapter 13 petition was in violation of the automatic stay provisions of the Bankruptcy Code, 11 U.S.C. 362(a). Prayer for Relief WHEREFORE, Plaintiff/Debtor requests that this Honorable Court: 1. Assume jurisdiction of this case. 2. Order that: a. The sheriffs sale of Debtors residence be avoided pursuant to 11 U.S.C. 522(h) and 549(a), or 11 U.S.C. 548(a)(2); b. Defendants take all necessary steps to reect the avoidance of the sale within thirty days to restore legal title to Debtor; c. The transfer be preserved for the benet of the Debtor; and d. The Debtors interest in the property is property of his estate that is exempt property pursuant to 11 U.S.C. 522(d)(1) and (5). 3. Declare that [creditor] has violated and is in contempt of the automatic stay under 11 U.S.C. 362, and order it to pay damages resulting from its contempt together with attorney fees and punitive damages pursuant to 11 U.S.C. 362(k); and 4. Grant any other relief which this Court deems necessary and proper. Date: [signature] Attorney for Debtor
G.10 Litigation
Form 98 Motion for Leave to Proceed In Forma Pauperis228
[Caption: Offcial Form 16D] Motion for Leave to Proceed In Forma Pauperis Plaintiff moves this Court, by his attorney, for an Order permitting him to le this action in forma pauperis without the prepayment of fees and costs or security therefor, pursuant to 28 U.S.C. 1915, because he is unable to pay such fees and costs or give security therefor, as is shown by the attached certication. Date: [signature] Attorney for Debtor
This matter, having come before the undersigned Judge on the motion of the Plaintiff for leave to proceed with this action in forma pauperis, and it appearing to the Court that Plaintiff is entitled to the relief she seeks through this motion, it is hereby ORDERED, that Plaintiff is authorized to proceed with this action in forma pauperis, without being required to pay any fees or costs or to give security therefor. Date: [signature] United States Bankruptcy Judge
228 The ling of adversary proceedings in forma pauperis is discussed in 13.6, supra. Fortunately, no ling fee is required of debtors ling such proceedings, so these forms are necessary only for non-debtor plaintiffs (except in rare cases in which defendants might have costs) and in cases in which debtors must le appeals. This form, or any similar forms used in the district court for obtaining in forma pauperis status under 28 U.S.C. 1915, should accomplish that result in bankruptcy courts as well. Local practice may vary to some extent as to the specicity required with respect to the plaintiffs nancial situation.
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Form 100 Complaint: Class Action Adversary Proceeding Raising Claims Under Stay, Discharge, and Exemption Provisions As Well As 42 U.S.C. 1983229
[Caption: Offcial Form 16D] Complaint230 I. Preliminary Statement231 1. This is a class action brought under the Bankruptcy Code, 11 U.S.C. 1011330 (hereinafter the Code), and the emergency energy assistance provisions of the Economic Opportunity Act of 1964, as amended, 42 U.S.C. 2809(a)(5),232 seeking declaratory and injunctive relief for the individual Plaintiffs and the Class they represent. Plaintiffs also raise their claims under 42 U.S.C. 1983. II. Jurisdiction233 2. Jurisdiction is conferred on this Court by 28 U.S.C. 1334 in that this proceeding arises under title 11 of the United States Code,
229 This form is adapted from the complaint led in In re Maya, 8 B.R. 202 (Bankr. E.D. Pa. 1981). This note and the following notes to this form provide information that apply to practice in adversary proceedings generally, and should be consulted when reference is made to any of the adversary proceeding forms which follow this one. However, as should be clear from the differences in those forms, there is no single correct way to draft a pleading. As discussed in Chapter 13, supra, most signicant bankruptcy litigation is conducted in the form of adversary proceedings. See Federal Rule of Bankruptcy Procedure 7001 for the types of actions which must be commenced as adversary proceedings. These proceedings are governed by Federal Rules of Bankruptcy Procedure 70017087, which, with a few exceptions, are identical to the Federal Rules of Civil Procedure. As the adversary rules are so similar to the civil procedure rules, authorities discussing the civil procedure rules are generally excellent sources of information that may be cited as persuasive on the interpretation of the adversary rules. 230 Federal Rule of Bankruptcy Procedure 7008 incorporates Federal Rule of Civil Procedure 8, providing that all adversary proceedings originally led in bankruptcy court be commenced by a complaint. 231 In actions in which the issues are somewhat complex or the complaint is lengthy, a preliminary statement is useful to give the reader of the complaint an overview of the action. It is not required, however, by the rules. If included, it may state generally the actions challenged, the statutes relied upon, and the relief sought. 232 Note that the benet program which this complaint addresses no longer exists. 233 Federal Rule of Bankruptcy Procedure 7008 provides that the complaint shall contain a short and plain statement of the grounds on which the courts jurisdiction depends as well as a reference to the name, number and chapter of the case under the Bankruptcy Code to which the adversary proceeding relates and the district and division where the case is pending. It may be necessary in some courts to state all of this information more specically in this paragraph rather than simply referring to the caption as is done here. However, other than the substantive merits of the jurisdictional claims, courts rarely pay much attention to this paragraph. It also may not be necessary to spell out, as is done here, why the various jurisdictional provisions
arises in and is related to the above-captioned chapter 7 case under title 11, and concerns property of the Debtors in that case. This proceeding is a core proceeding. 3. Plaintiffs action for declaratory relief is authorized by 28 U.S.C. 2201 and 2202.234 III. Parties235 4. Plaintiffs [rst debtor] and [second debtor], husband and wife, are individuals who reside at [address], and are the Debtors in this bankruptcy case. 5. Defendant [name] Gas Works (hereinafter GW) is the brand name for real and personal property owned by the City of [city] which is used to furnish gas service to customers. GW is managed by Defendant [name] Facilities Management Company (hereinafter FMC). 6. Defendant FMC is a nonprot corporation organized by the City of [city] for the purpose of operating GW for the sole and exclusive benet of the City. 7. Defendant [name] Gas Commission (hereinafter GC) is an agency of the City236 of [city] charged with the duty of overseeing and regulating the general operations of GW by FMC including but not limited to determination of rates for gas and the establishment of standards for customer service. GC is the repository of all power not specically granted to FMC. 8. [Defendantassistant vice president] is the Assistant Vice President for Customer Activities of FMC and GW and is directly responsible, inter alia, for the operation of the Collection and Meter Reading Department of GW and FMC, including all collection activity carried out, the crediting of customer payments, and termination of service.237
234
235
236
237
apply. A statement of the applicable statutory provisions will normally suffice. Federal Rule of Bankruptcy Procedure 7008 requires every complaint, counterclaim, or third-party complaint to contain a statement that the proceeding is either core or non-core. If the proceeding is alleged to be non-core, the pleading must also state whether the party ling it consents to the entry of a nal order or judgment in the matter by the bankruptcy judge. See 13.2.4, supra, for discussion of these jurisdictional issues. This statement with respect to declaratory relief is not specically required because 28 U.S.C. 2201, 2202 are not jurisdictional provisions. The complaint should contain a set of paragraphs identifying each of the parties. These paragraphs may, as here, briey describe the parties relation to the lawsuit. If the addresses of parties are not stated in the caption, they should normally be stated in these paragraphs. In an action under 42 U.S.C. 1983, it is important to indicate that the entities sued are involved in state action through their relation to state or local governmental units. Defendants generally should include all entities whose presence in the case might be necessary to obtain the relief sought. For example, some courts require that the trustee be designated as a defendant whenever the debtor seeks to exercise the trustees avoiding powers. In addition, when designating defendants, plaintiffs should give consideration to problems which might be posed by sovereign immunity and/or the Eleventh Amendment in the case of state officials (see 13.3.2.2, supra), what parties may be necessary to facilitate discovery, and the requirements of 42 U.S.C. 1983 if that section is pleaded.
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9. [Defendantmanager] is the Manager of the Collection and Meter Reading Department of FMC and GW and is directly responsible for the operation of the department, including but not limited to all collection activity carried out by FMC and GW, the crediting of customer payments, and terminations of service. IV. Class Action Allegations238 10. This action is brought as a class action pursuant to Federal Rule of Bankruptcy Procedure 7023 and Federal Rule of Civil Procedure 23(b)(2) because Defendants have acted on grounds generally applicable to the Class, thereby making appropriate declaratory and injunctive relief for the Class as a whole.
To deal with Eleventh Amendment and/or sovereign immunity problems, it is usually desirable to sue named individual officials. If such officials have acted illegally, they are deemed to be stripped of their official character, because they are not authorized to so act. Ex Parte Young, 209 U.S. 123, 28 S. Ct. 441, 52 L. Ed. 714 (1908). 42 U.S.C. 1983, when applicable, authorizes relief against persons which clearly includes individual officials. In cases in which specic policies are challenged, persons can also include municipalities. Monell v. Dept of Social Services, 436 U.S. 658, 98 S. Ct. 2018, 56 L. Ed. 2d 611 (1978). By suing public officers in their official capacities as well, plaintiffs may insure that the action will continue if the original official sued is replaced by another. Federal Rule of Civil Procedure 25(d)(1) is incorporated in Federal Rule of Bankruptcy Procedure 7025, providing a very convenient mechanism for substitution of parties. In many cases it may be useful to designate organizational or agency defendants, as well as subordinate officials for discovery and enforcement purposes. If a corporation, partnership, association, or agency is a defendant, Federal Rule of Civil Procedure 30(b)(6) provides a mechanism for the opposing party to force that entity to locate a deponent best able to provide information on matters designated in a notice of deposition. In addition, parties generally do not have to be served with subpoenas or witness fees in order to secure their attendance at depositions. As statements of parties, their depositions may more easily be introduced into evidence. Finally, subordinate officials or entities may be more likely to obey a court order which is specically directed to them. If they do not, they can more easily be held in contempt than if the order is directed only at their superiors. 238 Federal Rule of Bankruptcy Procedure 7023 incorporates Federal Rule of Civil Procedure 23. In a class action it is generally advisable to identify the class specically and to allege compliance with the class action rules. The local rules of many courts require such allegations, sometimes in greater detail than they are made here. A class action has a number of advantages in some cases. It can serve the goal of efficiency by solving the problems of numerous clients in a single case. It also prevents the defendants from granting relief simply to the plaintiff in an individual action in order to moot his or her case while continuing the challenged practice with respect to others. See Deposit Guar. Natl Bank v. Roper, 445 U.S. 326, 100 S. Ct. 1166, 63 L. Ed. 2d 427 (1980). If relief is ordered on a class-wide basis, then a violation of the order with respect to any class member can be challenged as contempt of court. See generally the discussion of class actions in 13.7, supra. See also Newberg on Class Actions (3d ed.) for exhaustive treatment of virtually all class action issues, as well as National Consumer Law Center, Consumer Class Actions (6th ed. 2006).
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27. By applying the vendor payment made by ECAP on Plaintiffs behalf to satisfy the debt Plaintiffs had incurred before the ling of the bankruptcy petition, Defendants violated the discharge provision of the Code, 11 U.S.C. 524.244 Fourth Claim 28. By applying the vendor payment made by ECAP on Plaintiffs behalf and claimed as exempt by them, to satisfy the debt incurred by Plaintiffs before the ling of their bankruptcy petition, Defendants violated the exemption provision of the Code, 11 U.S.C. 522(c).245 Fifth Claim 29. By applying the vendor payment made by ECAP on Plaintiffs behalf to satisfy a debt which was dischargeable by their bankruptcy and thus not payable by them as part of their energy costs, Defendants misappropriated that payment in violation of the ECAP regulations, 45 C.F.R. 1601.70, which provide for payments only to respond to energy needs of poor households.246 Sixth Claim 30. By depriving Plaintiffs of their rights guaranteed to them by federal law as set forth above, Defendants, acting under color of law, have violated 42 U.S.C. 1983 and are subject to relief appropriate to remedy that violation.247 VII. Relief248 WHEREFORE, Plaintiffs request that this Court: 1. Take jurisdiction of this case; 2. Certify that plaintiff class as set forth in paragraphs 10 through 15 above;249 3. Enter judgment and grant relief declaring250 that Defendants practice of applying payments under ECAP or other government benet programs on behalf of a debtor who has led a bankruptcy
240 This kind of explanation of the law is sometimes helpful in explaining the case through the complaint but is not necessary. 241 Federal Rule of Civil Procedure 10(b), incorporated in Federal Rule of Bankruptcy Procedure 7010, requires each claim founded upon a separate transaction or occurrence to be stated in a separate count whenever a separation facilitates the clear presentation of the matters set forth. One way of doing this is by making each claim after the factual allegations, as in this example. 242 The automatic stay prohibits any act to collect a debt against the debtors, or to obtain possession of property of the estate. 11 U.S.C. 362(a); see Ch. 9, supra. 243 Municipal utilities are governmental units as dened in 11 U.S.C. 101(27), and are thus prohibited from discriminating against the debtor based upon a debt discharged in bankruptcy. 11 U.S.C. 525(a). In this case, by applying the vendor payment to the prebankruptcy debt, rather than giving the credit which would have been due if that debt had not been considered, defendants have discriminated. See Chs. 9, 14, supra.
244 Once the debtors debt is discharged, 11 U.S.C. 524(b) provides an injunction against any act to collect, recover, or offset the debt as a personal liability of the debtor. 245 Exempt property may not be pursued to collect any prepetition debt after bankruptcy unless that debt falls within the exceptions made by 11 U.S.C. 522(c). 246 Claims other than Bankruptcy Code claims may be raised in bankruptcy court, either by themselves or in conjunction with claims under the Code, so long as they arise in a bankruptcy case or are related to such a case, or to the property of the debtor as of the commencement of the case. 28 U.S.C. 1334. But see 13.2, supra, for limitations on bankruptcy court jurisdiction. 247 The availability of 42 U.S.C. 1983 to remedy state actions in violation of rights guaranteed by the Bankruptcy Code is discussed in 15.5.2, supra. 248 Normally, a complaint will end with a prayer for relief stating what action the court is requested to take. See Fed. R. Civ. P. 8(a) (incorporated in Fed. R. Bankr. P. 7008). This is often colloquially known as the Wherefore Clause. 249 Often a separate motion is required by local rule or practice specically requesting class certication. 250 This is one form of request for declaratory relief.
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petition that are received by Defendants after the ling of the debtors bankruptcy petition to satisfy a debt incurred before the ling of the petition violates: a. 11 U.S.C. 362; b. 11 U.S.C. 525; c. 11 U.S.C. 524; d. 11 U.S.C. 522(c); e. 45 C.F.R. 1601.70-1 et seq.; and f. 42 U.S.C. 1983. 4. Enjoin Defendants, their successors in office, agents, employees, and all other persons in active concert and participation with them251 from continuing their practice of crediting payments under ECAP or other government benet programs to satisfy debts incurred prior to the ling of a debtors bankruptcy petition. 5. Order Defendants, their successors in office, agents, employees, and all other persons in active concert and participation with them to credit payments received under ECAP or other government benet programs made on behalf of Plaintiffs and all Class members solely to debts incurred subsequent to the ling of the Class members bankruptcy petition. 6. Award Plaintiffs their attorney fees herein;252 and 7. Grant such other relief as shall be just and proper.253 Date: [signature] Attorney for Plaintiffs254
Form 101 Complaint to Prohibit Eviction from Public Housing Based upon Dischargeable Debt for Rent255
[Caption: Offcial Form 16D] Complaint 1. This is an action brought under section 525(a) of the Bankruptcy Code (11 U.S.C. 525(a)), seeking a declaration that the termination of the Plaintiffs tenancy by the Defendants is null and void, and an order directing the Defendants to continue to lease to Plaintiff and to enjoin the Defendants from discriminating against Plaintiff based upon any debt that is dischargeable or discharged under the Bankruptcy Code or attempting to evict Plaintiff on the basis of such a debt. 2. Jurisdiction is conferred on this Court by 28 U.S.C. 1471 in that this proceeding arises in and is related to the above-captioned chapter 7 case under title 11 and concerns the rights of the debtor in that case. This proceeding is a core proceeding. 3. Plaintiffs action for declaratory relief is authorized by 28 U.S.C. 2201 and 2202. 4. Plaintiff [debtor] resides at [address] and is the debtor in this bankruptcy case. 5. The [name] Housing Authority (hereinafter HA) is a public body, corporate and politic, with offices at [address]. It exercises the public powers of the Commonwealth as an agency and has the statutory right to sue and be sued. 6. [Defendantgeneral manager] is the General Manager of HA and is responsible for the management, direction, and administration of the affairs of HA and the acts of its agents and employees while acting within the scope of their employment. 7. [Defendantsite manager] is Manager of scattered sites of HA and is responsible for the direction and administration of the site in which the Plaintiff resides. 8. Plaintiff is and has been, prior to the ling of her bankruptcy petition, a resident of subsidized housing, a form of government grant. 9. On March 20, 2006, the Plaintiff led a voluntary petition for relief under the Bankruptcy Code. 10. In the bankruptcy case, Plaintiff listed as an unsecured debt an obligation to Defendant HA for rent owed prior to the ling of the bankruptcy petition. 11. On March 20, 2006, the date of the Plaintiffs petition, her debt to HA was $484. 12. The Defendants, by letter of February 29, 2006 from [defendantsite manager], notied the Plaintiff that her right to live in subsidized housing would be terminated effective April 2, 2006, and allowed her thirty days to vacate the premises.
255 A complaint such as this one may be used to seek declaratory and injunctive relief against a public housing lessors attempts to evict the debtor. The complaint seeks relief under 11 U.S.C. 525(a) which prohibits discrimination against bankruptcy debtors. See 14.5.5.3, supra. The complaint also seeks relief under 42 U.S.C. 1983. See 15.5.2, supra. An alternative method of proceeding would be to assume the public housing lease in a chapter 13 case. However, the debtor would have to promptly cure a rent default if the lease is assumed. See 12.9.2, supra. For a general discussion of complaints in adversary proceedings, see notes to Form 100, Appx. G.10, supra.
251 If an order specifying these persons is obtained, enforcement by contempt may be somewhat easier. However, normally enforcement proceedings will be brought against the officials named in the complaint or their successors. Agents of the defendants are generally bound by an injunction in any case under Federal Rule of Civil Procedure 65(d), incorporated in Federal Rule of Bankruptcy Procedure 7065, provided they receive actual notice of the order. 252 Under the American Rule, attorney fees are not normally awarded to prevailing parties, except in special circumstances. Here, fees are sought under 42 U.S.C. 1988. Certain provisions of the Bankruptcy Code also authorize the awarding of fees. See Ch. 15, supra. 253 This type of catch-all prayer is usually included in case other types of relief are later found appropriate. Case law on the subject generally permits the court to go beyond the prayer for relief even if this request is not included. 254 Federal Rule of Bankruptcy Procedure 9011 provides that every pleading led by a party represented by an attorney shall be signed by at least one attorney of record in his or her individual name, whose address shall be stated. The signature of an attorney to any pleading, motion, or application constitutes a certication that he or she has read the paper, that to the best of his or her knowledge, information and belief, there is good ground to support it, and that it is not interposed for delay or other improper purpose. The complaint need not be veried by the plaintiff or any other person.
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2. Defendants are the United States Department of Housing and Urban Development (HUD) and [defendantsecretary], the Secretary of Housing and Urban Development, who has responsibility for the operation and policies of HUD. He is sued in his individual and official capacities. 3. Plaintiff rst applied to HUD for assignment relief with respect to her problems on an FHA-insured mortgage in June, 1991, through her lender, who believed she met the requirements for assignment relief. 4. In July, 2006, Plaintiff received a letter preliminarily denying relief, and requesting further information, which is attached hereto as Exhibit A [omitted]. 5. Plaintiff provided the requested information to the best of her ability, giving ample evidence that she met the regulatory requirements for assignment relief. 6. Nonetheless, in August, 2004, Plaintiff was denied assignment relief, essentially because Plaintiff did not submit certain documents, by a letter attached as Exhibit B [omitted]. 7. The denial of assignment relief was erroneous as a matter of law, arbitrary and capricious, an abuse of discretion, and not supported by substantial evidence, and should be reversed by this Court.259 WHEREFORE, Plaintiff prays that: 1. Defendants be ordered to accept Plaintiffs request for an assignment. 2. Plaintiff be awarded attorney fees under 28 U.S.C. 2412.260 3. This Court order such other relief as is just and proper. Date: [signature] Attorney for Plaintiff
Complaint 1. Debtor brings this action to enjoin Defendant [state] Department of Transportation and Defendant: [defendantsecretary]
mortgage. 28 U.S.C. 157(b)(2)(O). However, a court might nd it to be a non-core proceeding. 259 Review of administrative actions, when applicable, is governed by the Administrative Procedures Act. 260 If the plaintiff prevails in an action against the federal government and the governments position was not substantially justied, attorney fees may be awarded under the Equal Access to Justice Act. See 15.5.4, supra. 261 This complaint may be used by chapter 13 debtors to seek restoration of drivers licenses revoked for failure to pay motor vehicle judgments or traffic tickets. Parking or traffic violations are dischargeable debts in chapter 13 if the violations are not deemed crimes under state law. See 11 U.S.C. 1328(a)(3); 14.4.3.7, supra. The complaint seeks relief under 11 U.S.C. 362(a) because the continued suspension is an effort to coerce payment of the debts, and 11 U.S.C. 525(a) because the defendants are discriminating against the debtor based solely upon the nonpayment of dischargeable debts. See 14.5.5.1, supra. The complaint also seeks relief under 42 U.S.C. 1983 because of the state action involved. See 15.5.2, supra. For a general discussion of complaints in adversary proceedings, see
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from suspending Debtors drivers license because of his nonpayment of prepetition debts, and to obtain sanctions for contempt. 2. This Court has jurisdiction of this case proceeding under 28 U.S.C. 1331 and 157(b)(2). This proceeding is a core proceeding. 3. Plaintiff is an individual residing in [city]. 4. Defendant [state] Department of Transportation is a state government agency.262 [Defendantsecretary] is the Secretary of Transportation, and has the duty of directing the issuance of drivers licenses in [state]. 5. In early 2006, Defendants suspended Plaintiffs drivers license solely because he had not paid a motor vehicle judgment in favor of [judgment-holder], entered in [city] Municipal Court, [number]. 6. On September 11, 2006, Defendants issued a second license suspension notice to Plaintiff this time because of failure to pay a Connecticut traffic ticket, incurred April 15, 2006. 7. On June 11, 2006, the Plaintiff led this bankruptcy petition under chapter 13. The Debtors statement lists both debts which are the basis for the license suspensions. 8. On June 26, 2006, and again on October 7, 2006, Debtors counsel wrote to Defendant requesting reinstatement of the Debtors drivers license (letters attached as Exhibits A and B). 9. Defendant [state] Department of Transportation has taken no action to restore Plaintiffs drivers license. 10. Plaintiff needs his license to obtain employment, and has suffered loss of wages because of Defendants wrongful refusal to reinstate his license. 11. Defendant is violating the automatic stay, 11 U.S.C. 362, by conditioning restoration of Plaintiffs license on his payment of prepetition debts. 12. Defendant is violating 11 U.S.C. 525(a) and 42 U.S.C. 1983 by denying Plaintiff his license solely because of his failure to pay debts which are dischargeable in this chapter 13 bankruptcy. WHEREFORE, Plaintiff [debtor] requests that this Court: 1. Assume jurisdiction of the case; 2. Order Defendants to restore Plaintiffs drivers license immediately; 3. Hold Defendants in contempt of the automatic stay; 4. Award Plaintiff damages263 and attorney fees;264 and 5. Grant such other relief as is just and proper. Date: [signature] Attorney for Plaintiff Exhibit A [attorney] Legal Department [state] Department of Transportation [address]
notes to Form 100, Appx. G.10, supra. This form is adopted from pleadings in Smith v. Pa. Dept of Transp., 66 B.R. 244 (E.D. Pa. 1986). 262 See 13.3.2.2, supra, for a discussion of applicable sovereign immunity issues. 263 Damages are available under 42 U.S.C. 1983, as well as for violations of the automatic stay, under 11 U.S.C. 362(b), and as a remedy for contempt. See 9.6, supra. 264 Award of attorney fees is mandatory when the plaintiff prevails on a claim under 42 U.S.C. 1983. See 15.5.2, supra.
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IV. Factual Allegations
Form 104 Complaint Seeking Damages in Non-Core Adversary Proceeding Against a Non-Creditor for Unfair Debt Collection Practices265
[Caption: Offcial Form 16D] Complaint I. Introduction 1. This is an action for actual and statutory damages brought by an individual consumer for Defendants violation of the Fair Debt Collection Practices Act, 15 U.S.C. 16921692o (hereinafter referred to as FDCPA) and the [state] Deceptive Practices Law, [state] General Laws [cite provision] (hereinafter referred to as state act), which prohibit debt collectors from engaging in abusive, deceptive and unfair practices.266 II. Jurisdiction267 2. Jurisdiction is conferred on this court by 28 U.S.C. 1334 in that this proceeding arises in and is related to the above-captioned chapter 13 case under title 11, and concerns property of the debtor in that case. This matter is a non-core proceeding; the Plaintiff consents to the entry of nal order in this proceeding by the Bankruptcy Judge.268 III. Parties 3. Plaintiff is a debtor under title 11 in the above-captioned case. 4. Defendant is a natural person engaged in the business of collecting debts in this state with his principal place of business in Pennsylvania. 5. Defendant, using the mails, regularly attempts to collect debts alleged to be due another.
265 As a proceeding to recover money an action against a party who is not a creditor asserting claims under state and federal nonbankruptcy law should be brought as an adversary proceeding. For a general discussion of complaints in adversary proceedings, see notes to Form 100, Appx. G.10, supra. See generally Chapter 13, supra, for discussion of litigation consumer claims of the debtor in bankruptcy court. 266 In addition to the federal Fair Debt Collection Practices Act, all states have unfair and deceptive practices statutes which limit debt collection practices. Damages may normally be sought under both state and federal law. See generally National Consumer Law Center, Fair Debt Collection (5th ed. 2004 and Supp.). 267 The debtor may pursue this action if it is exempt or abandoned by the trustee. If abandoned it would presumably have to be brought other than in bankruptcy court because it would not be related to the bankruptcy case. See Barletta v. Tedeschi, 121 B.R. 669 (N.D.N.Y. 1990). 268 Every pleading must allege whether the proceeding is a core or non-core proceeding. Fed. R. Bankr. P. 7008(a). In a non-core proceeding, every pleading must state whether the pleader consents to entry of nal orders by the bankruptcy judge. Id. A proceeding seeking damages for emotional distress due to unfair collection practices is not a personal injury or wrongful death claim which must be tried in district court under 28 U.S.C. 157(b)(5). Littles v. Lieberman, 75 B.R. 240 (Bankr. E.D. Pa. 1987). This form is adapted from pleadings drafted by Margaret E. Taylor, Esq. and Mary Jeffery, Esq., Philadelphia, Pennsylvania.
6. On [date], Plaintiff entered into a consumer loan transaction with [name] Consumer Discount Company (hereinafter referred to as Company). 7. Pursuant to this transaction, the Plaintiff gave Company a security interest in her residential real property at [address]. 8. On or about September 17, 2003, Defendant mailed to the Plaintiff a collection letter which is attached hereto as Plaintiffs Exhibit A [omitted] and incorporated herein. 9. The above-mentioned letter threatened suit within one week of the date of the letter unless Plaintiff made payment in full of $207.50. 10. Plaintiff was unable to make payment of the full amount of $207.50 within one week of the date of the letter and therefore made no payment. 11. No legal action was taken by Defendant within one week of the date of the Defendants letter. 12. As a result of the Defendants act, Plaintiff suffered extreme fright, became severely agitated, lost sleep, experienced episodes of crying, suffered an aggravation of preexisting physical inrmity, and incurred medical expenses. V. First Claim for Relief 13. Plaintiff realleges and incorporates by reference paragraphs 1 through 12 above as if fully set out herein. 14. Defendant violated the FDCPA. Defendants violations include but are not limited to: a. representation or implication that nonpayment of the debt would result in the imminent sale of property when such action would not have been lawful and the debt collector did not intend to take such action, 15 U.S.C. 1692e(4); b. threat to take legal action that could not have been legally taken and that was not intended to be taken, 15 U.S.C. 1692e(5); and c. failure to provide Plaintiff within ve days of the Defendants initial communication a validation notice as required by 15 U.S.C. 1692g. 15. As a result of the above violations of the FDCPA, the Defendant is liable to the Plaintiff in the sum of Plaintiffs actual damages, statutory damages of $1000 and attorney fees. VI. Second Claim for Relief 16. Plaintiff realleges and incorporates by reference paragraphs 1 through 15 above as if fully set out herein. 17. Defendant violated the state act. Defendants violations of the state act include, but are not limited to the following: a. representation or implication that nonpayment of the debt would result in the imminent sale of property when such action would not have been lawful and the debt collector did not intend to take such action; and b. threat to take legal action that could not have been legally taken and that was not intended to be taken. 18. Defendants act, as described above, was done intentionally with the purpose of coercing Plaintiff to pay the alleged debt. 19. As a result of the above violations of the state act, the Defendant is liable to the Plaintiff for triple the Plaintiffs actual damages.
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WHEREFORE, Plaintiff respectfully prays that judgment be entered against the Defendant in the amount of: a. triple her actual damages pursuant to [state] General Laws [provision]; b. $1000 statutory damages pursuant to 15 U.S.C. 1692k; c. costs and reasonable attorney fees pursuant to 15 U.S.C. 1692k; and d. for such other and further relief as may be just and proper. Date: [signature] Attorney for Debtor/Plaintiff
such as this one, is permitted under Federal Rules of Bankruptcy Procedure 7034 and 7035, which incorporate Federal Rules of Civil Procedure 34 and 35, and permit the court to allow a shorter time for answering discovery. It serves to put a good deal of pressure on the plaintiff in stay litigation to settle or agree to postponement of the hearing. Practitioners should note the changes to discovery practice imposed by amended Federal Rules of Civil Procedure 2637 which are applicable in some jurisdictions. In particular, note the new prerequisites to traditional formal discovery contained in amended Rule 26, including the duty of voluntary or automatic disclosure in Rule 26(a). These form discovery requests may need to be adjusted to reect these new rules and/or the results of automatic disclosures made pursuant to the rules when the amended discovery rules are applicable. 271 This request for documents form may be used in most consumer litigation both in and out of bankruptcy court. It seeks all of the documents typically involved in a consumer credit transaction, including those which may lead to further discovery or claims of the debtor against the creditor. Practitioners should note the changes to discovery practice imposed by amended Federal Rules of Civil Procedure 2637 which are applicable in some jurisdictions. In particular, note the new prerequisites to traditional formal discovery contained in amended Rule 26, including the duty of voluntary or automatic disclosure in Rule 26(a). These form discovery requests may need to be adjusted to reect these new rules and/or the results of automatic disclosures made pursuant to the rules.
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13. All of the above-enumerated documents with respect to any previous transactions between Plaintiffs and Defendant.280 Date: [signature] Attorney for Plaintiffs
272 Security agreements may sometimes be helpful in showing security other than a mortgage for purposes of 11 U.S.C. 1322(b)(2) so that a secured creditors rights may be modied. Insurance agreements may give rise to various claims by the debtor with respect to unfair practices in selling credit insurance. 273 Credit applications may show violations of the Equal Credit Opportunity Act, 15 U.S.C. 16911691f. Obtaining credit reports for improper purposes violates the Fair Credit Reporting Act, 15 U.S.C. 16811681t. 274 Disclosure statements may contain violations of the Truth in Lending Act, 15 U.S.C. 16011666j, or state statutes. 275 These materials may reveal improper charges or the failure to credit payments made. 276 These documents typically contain evidence of contacts with the debtor, some of which may constitute unfair collection practices. 277 These documents may be used to challenge claims for attorney fees as unreasonable or unfair. 278 If operating manuals or other internal documents are obtained, they will often suggest other avenues to explore with respect to the procedures followed by the creditor with respect to the debtors case. 279 Insurance agreements may give rise to various claims by the debtor with respect to unfair practices in selling credit insurance.
280 Many consumer transactions are preceded by a series of earlier transactions between the parties, and may be renancings of such transactions. The documents in the earlier transactions may show other violations of the debtors rights, or render disclosures made in the current transaction inaccurate, for example, when a security interest was taken in an earlier transaction as to all future transactions, but was not disclosed in the later transaction. 281 A request for admissions with respect to the valuation of property can be a useful tool in a variety of proceedings, including stay litigation, redemption proceedings, and proceedings concerning exemptions. If an opposing party fails to admit the truth of a matter requested and the party requesting the admission thereafter proves the truth of that matter, the court is required to award the requesting party expenses, including attorney fees, unless certain exceptions stated in Federal Rule of Civil Procedure 37(c), incorporated in Federal Rule of Bankruptcy Procedure 7037, apply. Thus, in many cases it may be possible to recover the costs of an appraisal or other proof of value which would otherwise be paid by the debtor. Not only facts but also statements of application of law to fact may be included in a request for admissions. Practitioners should note the changes to discovery practice imposed by amended Federal Rules of Civil Procedure 2637 which are applicable in some jurisdictions. In particular, note the new prerequisites to traditional formal discovery contained in amended Rule 26, including the duty of voluntary or automatic disclosure in Rule 26(a). These form discovery requests may need to be adjusted to reect these new rules and/or the results of automatic disclosures made pursuant to the rules.
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Plaintiffs hereby apply to this Court to enter default judgment in favor of Plaintiffs and against the Defendant granting all relief requested in Plaintiffs complaint on the ground that, without
282 This is one form of a petition for a writ of habeas corpus. For a discussion of the bankruptcy courts habeas corpus powers, see 13.4.5, supra. Because those powers are unclear at present, it may be advisable to le initially in the district court. The clerk of either court may be consulted if necessary. 283 The court may order release of a debtor imprisoned in a civil action. 284 The debtor may have been imprisoned for the collection of a debt that is dischargeable or provided for in a plan under the Bankruptcy Code. 285 Federal Rule of Bankruptcy Procedure 7055 incorporates Federal Rule of Civil Procedure 55, requiring a request to the court for entry of a default judgment in many adversary proceedings. If an answer has been required to a motion led under Federal Rule of Bankruptcy Procedure 9014, then Federal Rule of Bankruptcy Procedure 7055 would permit a default judgment in that type of proceeding as well. A default judgment may not be entered against the United States or an officer or agency thereof unless the claimant establishes her claim or right to relief by evidence satisfactory to the court.
286 Failure, without excuse, to respond to a complaint is grounds for a default judgment under Federal Rule of Bankruptcy Procedure 7055. 287 Attaching the complaint makes it easier for the court to ascertain readily that the order sought is warranted. 288 This certication is required by the Servicemembers Civil Relief Act, 50 U.S.C. app. 501596. 289 Federal Rule of Bankruptcy Procedure 7055, applicable in both adversary proceedings and contested matters (see Federal Rule of Bankruptcy Procedure 9014), fully incorporates Federal Rule of Civil Procedure 55. Under that rule a default judgment may be entered by the clerk if the claim is for a sum certain or a sum which can by computation be made certain and if the defendant is not an infant or incompetent person. In all other cases, application must be made to the court for a default judgment. See Forms 108, 109, Appx. G.10, supra. No default judgment may be entered against the United States unless the claim is established by evidence satisfactory to the court. Fed. R. Civ. P. 55(e).
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1. On [date], an action was led against the Debtor in the [name] Court of [state]. This action, now pending at docket number [number], is entitled [caption]. 2. In the above-referenced action the Plaintiff is seeking foreclosure of its mortgage on the Debtors home, possession of the premises, and attorney fees. 3. The Debtor has answered the complaint raising several defenses. 4. On [petition date], the Debtor led a petition for relief in this Court under chapter 13 of the Bankruptcy Code. 5. The Debtor has a right to remove the above-described state court action because it is a civil action over which this Court has jurisdiction and which is removable under 28 U.S.C. 1409. The removed action would be a core proceeding in the Bankruptcy Court.292 6. A copy of all process and pleadings in the state court action is attached hereto. WHEREFORE, the Debtor prays that the case of [caption] be removed to this Court. Date: [signature] Attorney for Debtor
Form 115 Plaintiffs Motion for Withdrawal of Proceeding to the District Court294
[Caption: Offcial Form 16D] Plaintiffs Motion for Withdrawal of Proceeding to the District Court Plaintiff [debtor] hereby moves, pursuant to 28 U.S.C. 157(d), for the withdrawal of this adversary proceeding from the Bankruptcy Court to the District Court. As grounds for this motion he avers:
The notice of removal should contain a short and plain statement of the facts that entitle the ling party to removal, together with a copy of all the pleadings. Filing of a notice of removal initiates an adversary proceeding. Fed. R. Bankr. P. 9027(g). The notice must be served on all parties to the removed claim pursuant to Federal Rule of Bankruptcy Procedure 9027(b) and must be led in the court from which removal is sought pursuant to Rule 9027(c). If a motion for remand is led, it is heard initially by the bankruptcy judge, unless the district court orders otherwise. The bankruptcy judge makes a report and recommendation to the district court, to which the parties are entitled to object in the manner provided in Federal Rule of Bankruptcy Procedure 9033(b). See Fed. R. Bankr. P. 9027(e). See generally 13.4.1, supra. 292 Federal Rule of Bankruptcy Procedure 9027(a)(1) requires a statement of whether the removed action is a core or non-core proceeding. If a non-core proceeding, the party seeking removal must state whether it would consent to a nal order or judgment being entered by the bankruptcy judge. 293 This certicate should also properly certify compliance with Federal Rule of Bankruptcy Procedure 9027(c), which requires ling in the non-bankruptcy court from which the action is removed. 294 Under 28 U.S.C. 157(d) the district court may withdraw all or part of a case or proceeding from the bankruptcy court, on its own motion or on motion of a party. Withdrawal on timely motion is mandatory when resolution of a proceeding requires
290 This statement is necessary under federal law to constitute an affidavit. 28 U.S.C. 1746. No additional verication or notarization is required. 291 A party may remove to the district court any pending action over which that court has jurisdiction, 28 U.S.C. 1452, provided a notice of removal is led within the time limits set by Federal Rule of Bankruptcy Procedure 9027. The 1984 bankruptcy amendments, in accordance with the jurisdictional scheme making the bankruptcy court a part of the district court, provide that removal is to the district court, which would normally then refer the matter to the bankruptcy court. Initially, then, the notice of removal is probably addressed to the district court. However, when a bankruptcy clerk has been appointed, ling with the bankruptcy court as a unit of the district court is contemplated. See In re Hendersonville Homes, 84 B.R. 510 (M.D. Tenn. 1988).
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1. This adversary proceeding is an objection to a secured claim raising questions under the federal Truth in Lending Act, 15 U.S.C. 16011666j. 2. As such, it requires consideration of both title 11 and other laws of the United States regulating activities affecting interstate commerce.295 3. There is also a proceeding already pending in this Court seeking rescission of the same credit transaction as that involved in this proceeding, and raising some of the same issues, at No. [number].296 WHEREFORE, Plaintiff prays that this proceeding be withdrawn from the Bankruptcy Court to this Court. Date: [signature] Attorney for Plaintiff
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[signature] Attorney for Debtor
302 Under Federal Rule of Bankruptcy Procedure 8005, this motion should ordinarily be led in the rst instance with the bankruptcy court. If denied by the bankruptcy court, this same motion may then be led with the district court or the bankruptcy appellate panel, and should indicate why the relief was not obtained from the bankruptcy court. 303 The applicable caption is that of the order appealed from. 304 Federal Rule of Bankruptcy Procedure 4001(a)(3) provides that an order granting relief from the automatic stay is stayed for ten days after entry unless the court orders otherwise. If an appeal is contemplated, the debtor should object to any language in the courts order shortening the normal ten-day period and ensure that this motion for stay is led before the order becomes effective.
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Date:
305 Consent to have an appeal heard by an appellate panel may be given in a stipulation such as this one or in separate statements by each party. The consent may also be contained in a notice of appeal or cross-appeal. In any case all necessary consents must be led before transmittal of the record or within thirty days of ling of the appeal, whichever is later. Fed. R. Bankr. P. 8001(e). Local rules pertaining to appellate panels may alter or add to these requirements. Fed. R. Bankr. P. 8001(e), 8018. 306 The applicable caption is that of the order appealed from. 307 In districts that have a Bankruptcy Appellate Panel (BAP), all appeals are determined by the BAP unless the appellant les with the notice of appeal a separate written statement indicating an election to have the appeal determined by the district court. See 11 U.S.C. 158(c)(1); Fed. R. Bankr. P. 8001(e). The appellee or any other party may le a similar written statement within thirty days of service of the notice of appeal.
308 Both debtors and creditors may seek determinations with respect to the dischargeability of debts, either during or after the bankruptcy (however, there are deadlines for certain creditor complaints; see Fed. R. Bankr. P. 4007(c); 11 U.S.C. 523(c)). Such determinations must be sought by way of adversary proceedings. Fed. R. Bankr. P. 7001. For a discussion of complaints in adversary proceedings see notes to Form 100, Appx. G.10, supra. Debtors may want such determinations to settle an issue likely to be disputed later, or to obtain an explicit court order enjoining a creditor with whom difficulties are anticipated. For a discussion of dischargeability in general as well as the law relating to student loans, see Chapter 14, supra. 309 If the student loan creditor is a governmental entity that may claim Eleventh Amendment immunity, it had previously been desirable to sue named individual officials rather than the entity itself. See Ex Parte Young, 209 U.S. 123, 28 S. Ct. 441, 52 L. Ed. 714 (1908). This procedure is no longer necessary as the Supreme Courts decision in Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440, 124 S. Ct. 1905, 158 L. Ed. 2d 764 (2004), now clearly establishes that the debtor may sue the state directly when seeking a dischargeability determination. See 13.3.2.2, supra. However, naming the head of the relevant agency may still be useful for other purposes.
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3. Awarding the Debtor compensatory and punitive damages on her counterclaim. Date: [signature] Attorney for Debtor
Form 125 Interrogatories Directed to Lender Regarding Debtors Alleged False Financial Statement(s)317
[Caption: Offcial Form 16D] Interrogatories Directed to Plaintiff Lender Regarding the Defendant Debtors Alleged False Financial Statement(s)318 Denitions319 As used herein the following terms shall have the following meaning: Document means and includes any printed, typewritten or handwritten matter of whatever character including specically, but not exclusively and without limiting the generality of the foregoing, letters, desk or other calendars, memoranda, telegrams, cables, reports, charts, business records, personal records, accountants statements, bank statements, handwritten notes, minutes of meetings, notes of meetings or conversations, catalogs, written agreements, checks, receipts, invoices, bills, and any carbon or other copies of such materials. Person means and includes natural persons, public and private corporations, associations and any other type of entity, and the agents, employees, officers, deputies and representatives thereof. Identify when used in reference to a contract, instrument, or other document means to: a. State the type of document, for example, installment contract, credit application, recourse agreement, letter, memorandum, or notes; b. State the date of document; c. State the name of the originator thereof; d. State the name of each signatory thereto; e. State the name and address of its present custodian; f. State the reason, in detail, for preparing the document or writing; g. State the subject or subjects covered by the document or writing; and
317 Interrogatories such as these seek much of the information which may be helpful in defending a false nancial statement case. Others may, of course, be added. See Ch. 14, supra. Practitioners should note the changes to discovery practice imposed by amended Federal Rules of Civil Procedure 2637 which are applicable in some jurisdictions. In particular, note the new prerequisites to traditional formal discovery contained in amended Rule 26, including the duty of voluntary or automatic disclosure in Rule 26(a). These form discovery requests may need to be adjusted to reect these new rules and/or the results of automatic disclosures made pursuant to the rules. This form is adapted from interrogatories drafted by Professor Philip Shuchman, Rutgers Law School. 318 This document may be entitled simply Defendants Interrogatories to Plaintiff if there are only two parties to the proceeding. 319 These denitions may be used generally in interrogatories or adapted as necessary.
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h. State the name(s), business address(es), and title(s) of the person or persons to whom the document or writing was directed. Interrogatories 1. State the gross amount of the loan to Defendants including interest and other charges. 2. State the net amount of the loan, less interest and any other charges. 3. State the amount of cash paid to Defendants. 4. State the amount paid to others, and identify each such entity. 5. State the amount paid on any other account with Plaintiff. 6. State the number of prior loans and other transactions with Defendant with details of all of them.320 7. State the frequency with which Plaintiff obtains credit reports.321 8. State whether the Plaintiff obtained credit reports on Defendants, and if so, when, from whom, and with regard to which transactions. 9. State the details of such credit reports. 10. State the number of Plaintiffs borrowers who led petitions in bankruptcy during this year and the preceding year. 11. State the number of section 523(a)(2) actions which were threatened and how many were actually brought by Plaintiff in that period. 12. State the names and addresses of the borrowers and docket numbers of both the preceding categories.322 13. Identify all other documents related to any loan from Plaintiff to Defendants. 14. Identify all persons present when the loan was consummated, giving name, position, and present address.323 Date: [signature] Attorney for Debtor
Form 126 Defendants Requests for Production of Documents in Dischargeability Case Based on Credit Card Fraud324
[Caption: Offcial Form 16D] Defendants First Requests for Production of Documents Defendant requests, pursuant to Bankruptcy Rule 7034 and Fed. R. Civ. P. 34, that plaintiff produce each of the following documents to be delivered to the office of defendants attorney for inspection and copying within the time limits set forth in the aforementioned rules. Denitions and Instructions A. Documents means all writings of any kind, including the originals and all non-identical copies, whether different from the originals by reason of any notation made on such copies or otherwise, including but not limited to correspondence, memoranda, notes, diaries, desk or other calendars, statistics, charts, summaries, pamphlets, books, interoffice and intraoffice communications, notations of any sort of conversations, written agreements, bulletins, printed matter, computer printouts, teletypes, telefax, invoices, worksheets, all drafts, alterations, modications, changes and amendments of any of the foregoing, graphic or oral records or representations of any kind (including, without limitation, tapes, cassettes, discs, recordings and computer memories). B. The word person(s) means all entities and, without limiting the generality of the foregoing, includes natural persons, joint owners, associations, companies, partnerships, joint ventures, corporations, trusts and estates. C. If your response to any request herein is that the documents are not in your possession or custody, describe in detail the unsuccessful efforts you made to locate the records. D. If your response to any request herein is that the documents are not in your control, identify who has control and location of the records. E. If a request herein for production seeks a specic document or an itemized category which is not in your possession, control or custody, provide any documents you have that contain all or part of the information contained in the requested document or category. F. All requests shall be deemed to include any documents made by, held by or maintained in the les of any predecessor, successor, employee, agent or assignee of either defendant.
320 If the loan is a renancing, the plaintiff may have relied on past dealings or information rather than the alleged false statement. Also, there are some arguments that only the new money is nondischargeable (hence questions 35). 321 A creditor who has obtained a credit report may have relied upon that rather than the alleged false statement. It may also have had information that should have put the creditor on notice that there were discrepancies between the two documents warranting further investigation or precluding reliance on the statement. Alternatively, if the creditor did not obtain a report, it may be found to have engaged in imprudent business practices which would have made any reliance unreasonable. 322 These questions go to the issue of whether the creditor makes a practice of deliberately obtaining false nancial statements in order to later bring dischargeability complaints. 323 This question is to determine what witnesses, if any, the creditor may produce to testify to the creditors version of the transaction. It may turn out that the creditor no longer employs the people who completed the transaction on its behalf.
324 These requests for production of documents are designed for a case in which a credit card lender has alleged that the debtor has committed fraud in the use of a credit card under 11 U.S.C. 523(a)(2). See generally Litigating the Dischargeability of Credit Card Debts, 14 NCLC REPORTS Bankruptcy and Foreclosures Ed. 10 (Nov./Dec. 1995). Practitioners should note the changes to discovery practice imposed by amended Federal Rules of Civil Procedure 2637 which are applicable in some jurisdictions. In particular, note the new prerequisites to traditional formal discovery contained in amended Rule 26, including the duty of voluntary or automatic disclosure in Rule 26(a). These form discovery requests may need to be adjusted to reect these new rules and/or the results of automatic disclosures made pursuant to the rules.
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18. All documents reecting plaintiffs policies related to revoking or terminating consumer credit accounts. 19. All documents reecting plaintiffs policies related to setting credit limits for consumer credit accounts. 20. All documents which were reviewed by plaintiff in making its decision concerning whether to le this adversary proceeding. 21. All documents which you intend to use or introduce in the trial of this proceeding. Date: [signature] Attorney for Debtor(s)
Form 127 Defendants Interrogatories in Dischargeability Case Based on Credit Card Fraud326
[Caption: Offcial Form 16D] Defendants First Set of Interrogatories Defendant requests that the plaintiff answer under oath, in accordance with Fed. R. Bankr. P. 7033 and Fed. R. Civ. P. 33, the following interrogatories within the time set forth in the foregoing rules. Denitions and Instructions As used herein the following terms shall have the following meaning: A. Document means all writings of any kind, including the originals and all non-identical copies, whether different from the originals by reason of any notation made on such copies or otherwise, including but not limited to correspondence, memoranda, notes, diaries, desk or other calendars, statistics, letters, telegrams, minutes, business records, personal records, accountants statements, bank statements, contracts, reports, studies, checks, statements, receipts, invoices, bills, return charts, summaries, pamphlets, books, interoffice and intra-office communications, notations of any sort of conversations or meetings, telephone call meetings or other communications, written agreements, bulletins, printed matter, computer printouts, teletypes, telefax, invoices, worksheets, all drafts, alterations, modications, changes and amendments of any of the foregoing, graphic or oral records or representations of any kind (including, without limitation, tapes, cassettes, discs, recordings, and computer memories). B. Act as used herein includes acts of every kind and description.
326 These interrogatories are designed for a case in which a credit card lender has alleged that the debtor has committed fraud in the use of a credit card under 11 U.S.C. 523(a)(2). See generally Litigating the Dischargeability of Credit Card Debts, 14 NCLC REPORTS Bankruptcy and Foreclosures Ed. 10 (Nov./Dec. 1995). Practitioners should note the changes to discovery practice imposed by amended Federal Rules of Civil Procedure 2637 which are applicable in some jurisdictions. In particular, note the new prerequisites to traditional formal discovery contained in amended Rule 26, including the duty of voluntary or automatic disclosure in Rule 26(a). These form discovery requests may need to be adjusted to reect these new rules and/or the results of automatic disclosures made pursuant to the rules.
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C. Identify or describe when used in reference to a contract, instrument, record or other document means to state: a. The type of document (for example, installment, letter, memorandum, notes, and so forth); b. The date of the document; c. The name of each signatory thereto; d. The name and address of its present custodian; e. The reason, in detail, for preparing the document; f. The subject or subjects covered by the document; g. The name(s), business address(es), and title(s), of the person(s) to whom the document writing was directed; and h. The name(s), business address(es), and title(s), of the person(s) who originated the document. D. Identify as used herein in connection with a person or persons means to state the names, titles, the present employers of such person or persons, the relationship of such person to Defendant, and such persons current business address and business telephone number. E. The term identify as used herein in connection with an act means: a. Furnish the date and place of the act; b. Identify the person acting, the person for whom the act was performed, and the person against whom the act was directed; and c. Describe, in detail, the act. F. The terms describe or state as used herein means: a. Describe or state fully by reference to underlying facts rather than by ultimate facts or conclusions of fact of law; b. Particularize as to: 1. Time; 2. Place; and 3. Manner. G. The term oral communication means and includes any face-to-face conversation, meeting, conference, telephone conversation or telephone conference. H. Person or persons means and includes all natural persons, public and private corporations, association and any other type of entity and the agents, employees, officers, deputies and representatives thereof. I. The term you or your shall refer to plaintiff. J. All requests shall be deemed to include any documents made by, held by or maintained in the les of any predecessor, successor, employee, agent or assignee of either defendant. K. The term the transaction(s) or the account(s) when used without qualication herein means the transactions and accounts between or among plaintiff and the defendant and all related activities. L. If the space provided at each Interrogatory for your answer is not sufficient, use additional sheets, numbered consecutively after each such Interrogatory, and inserted in proper order in all copies led and served. For example, in the case of Interrogatory No. 1, any additional sheet(s) for your answers should be numbered 1-A, 1-B, 1-C, and so forth. M. Each of the following Interrogatories is intended to be a continuing Interrogatory, and Debtors hereby demand that, in the event at any later date you obtain any additional facts, or forms any conclusions, opinions or contentions different from those set forth in the answers to these Interrogatories, you shall amend your answers to such Interrogatories promptly and sufficiently in advance of any trial, to fully set forth such differences.
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1. Plaintiff solicited the defendant to enter into credit contracts. 2. Plaintiff sent a credit application to the defendant in connection with each account. 3. Defendant returned credit applications to the plaintiff after which credit was approved. 4. Plaintiff has no specic basis on which to claim that any information contained in any credit application by the defendant was inaccurate. 5. Plaintiff did not independently verify any of the information contained in defendants credit application. 6. No employee or agent of the plaintiff had personal contact with the defendant by telephone or any other means of oral communication at any time with respect to the accounts. 7. The defendants right to use his accounts was not revoked before he led bankruptcy. 8. Plaintiff did not reject any charges or cash advances made by the defendant on his accounts. 9. Plaintiff does not individually review each use of an account by a customer, but rather routinely allows use until such time as that customer exceeds the applicable credit limit or until the account is revoked. 10. Plaintiff did not seek a credit report concerning the defendant at any time after the accounts were opened. 11. Plaintiff did not seek verication of income or employment concerning the defendant at any time after the accounts were opened. 12. Plaintiff did not attend the meeting of creditors in the defendants bankruptcy case and did not conduct a deposition of the defendant at any time prior to ling this adversary proceeding.328 13. One common use of credit is to obtain goods and services for which the borrower does not have the immediate ability to pay. Date: [signature] Attorney for Debtor(s)
Form 128 Defendants Requests for Admissions in Dischargeability Case Based on Credit Card Fraud327
[Caption: Offcial Form 16D] Defendants First Set of Requests for Admissions Defendant requests plaintiff to admit, pursuant to Fed. R. Bankr. P. 7036 and Fed. R. Civ. P. 36, for the purposes of this action only, the truth of the following statements of fact or application of law to fact:
327 These requests for admissions are designed for a case in which a credit card lender has alleged that the debtor has committed fraud in the use of a credit card under 11 U.S.C. 523(a)(2). See generally Litigating the Dischargeability of Credit Card Debts, 14 NCLC REPORTS Bankruptcy and Foreclosures Ed. 10 (Nov./Dec. 1995). Practitioners should note the changes to discovery practice imposed by amended Federal Rules of Civil Procedure 2637 which are applicable in some jurisdictions. In particular, note the new prerequisites to traditional formal discovery contained in amended Rule 26, including the duty of voluntary or automatic disclosure in Rule 26(a). These form discovery requests may need to be adjusted to reect these new rules and/or the results of automatic disclosures made pursuant to the rules. 328 This addresses the plaintiffs good faith basis for its claims and the right to attorney fees under 11 U.S.C. 523(d).
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Form 129 Debtors Certication Regarding Domestic Support Obligations Before Receiving Discharge329
[Caption: Offcial Form 16A] Certication Regarding Domestic Support Obligations I, [debtor], state as follows:
330
[Check the box that applies to you.] [ ] I have not been required by a judicial or administrative order, or by statute, to pay alimony, maintenance, support, or any other domestic support obligations as dened by section 101(14A) of the Bankruptcy Code, since the ling of this case, and no such obligations were due on or before the petition in this case was led; or [ ] I have paid all domestic support obligations required by a judicial or administrative order, or by statute, that were due on or before the date of this certication, except any amounts that were due before the petition in this case was led except as otherwise provided in my chapter 12 or 13 plan, or not required to be paid under section 1222(a) or 1322(a) of the Bankruptcy Code. I declare under penalty of perjury that I have read the foregoing statement and that it is true and correct. Date: [signature] Debtor
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Upon receipt of the above-requested information, I will consult with my client about her options. If you fail to respond to this letter, I shall assume that you have accepted my clients classication of your claim as unsecured. If you have any questions concerning the above, please give me a call. Sincerely, [signature] Attorney for Debtor(s)
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If a creditor does a credit check on you, it must disclose whether a denial of credit is based on information from a credit reporting agency, together with the name and address of that agency. The credit reporting agency must then disclose to you the nature and substance of all information in its les. The credit reporting agency may report your bankruptcy ling for ten (10) years; as to other debts, information may be reported for seven (7) years, except that any debts which have been discharged in bankruptcy should no longer be reported as having a balance owed and instead should be reported with a zero balance. You should check your credit report to make sure that the debts discharged in your bankruptcy are being reported correctly. You may get one free copy of your credit report per year from each of the national reporting agencies. The three nationwide consumer reporting agencies have set up one central website, toll-free telephone number, and mailing address through which free annual reports can be ordered. You can click on www.annualcreditreport.com, call (877) 322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Georgia 30348-5281. The Form can be printed at www.ftc.gov/credit. If you dispute the accuracy of any information which the credit reporting agency has in its le, you can ask the credit agency to reinvestigate. This request should be made in writing using the agencys dispute form or your own simple letter. You should keep a copy of whatever you send. The agency must reinvestigate by at least asking the source of the information to respond to your dispute. If the source can not or does not verify the disputed information, it should be removed from your credit report. If the reinvestigation does not resolve the dispute, you should contact our office. You may also submit a short statement in writing telling your side of the story. In all future reports, the credit agency must note your dispute. The credit agency will send out a corrected record to anyone who inquired about your credit within six (6) months before the correction. If you think you are going to have problems in applying for credit, you should take a witness with you to make sure that your rights, as outlined above, are being observed. The creditor has no right to insist that your witness cosign for you, and you should be sure that this does not happen. The discharge in bankruptcy completes the matter which we were handling for you. Unless we hear that you have some other legal problem, your case will be closed. I hope your bankruptcy succeeds in providing you with a new start and that you will be able to avoid future nancial difficulties. Date: [signature] Attorney
Form 133 Complaint to Recover SSI Benets Collected by State As Reimbursement for Prebankruptcy Welfare Debt339
[Caption: Offcial Form 16D] Complaint 1. Plaintiff [debtor] was a Debtor in the above-captioned voluntary petition under chapter 7 of title 11, United States Code. This Court therefore has jurisdiction under 28 U.S.C. 1334. This proceeding is a core proceeding. 2. This Complaint is led by Plaintiff under 11 U.S.C. 524 to remedy violations of that section by the Defendant State of [state] Department of Public Welfare, and [defendantadministrator], individually and in his official capacity as Secretary of that department. 3. Among the debts discharged by Order of [date] in Plaintiffs bankruptcy case was a debt to Defendant State of [state] Department of Public Welfare for public assistance received while he awaited a determination by the Social Security Administration as to his eligibility for Social Security and Supplemental Security Income benets. 4. This debt was never reaffirmed under the provisions of 11 U.S.C. 524(c).
339 A proceeding to recover property must be brought as an adversary proceeding. Fed. R. Bankr. P. 7001. For a general discussion of complaints in adversary proceedings see notes to Form 100, Appx. G.10, supra. A complaint such as this one may be necessary for a debtor who les a bankruptcy case during the pendency of an application for Supplemental Security Income benets (SSI). The SSI statute authorizes a state to obtain from the applicant a reimbursement authorization which permits the Social Security Administration to forward the initial SSI check, including retroactive benets, directly to the state, which then deducts its reimbursement and remits the balance to the recipient. 42 U.S.C. 1382(g)(I). Because the debt to the welfare department is dischargeable, such action to collect it by the state after a bankruptcy would violate 11 U.S.C. 362 if taken during the case, and 11 U.S.C. 524 if taken after the discharge. Technically, in each instance it is contempt of court. Because there is a preexisting court order staying collection action, there should not be any difficulty with state claims based on sovereign immunity or the Eleventh Amendment. See generally 13.3.2.2, supra. Nor should the fact that the SSI statute provides states with a method of collection make their debts any less dischargeable. There is no conict between that statute and the Bankruptcy Code, because the SSI statute states only that Social Security may honor the reimbursement authorization. See Ch. 14, supra. An additional claim that could be made in a case with these facts would be one under 11 U.S.C. 525 against the Social Security Administration for discrimination based upon a discharged debt. See 14.5.5.4, supra, for a discussion of prohibited discrimination. In this case, the Social Security Administration would not have sent the check to the state welfare department if the recipient had not owed any money to the welfare department. By sending it to someone other than the recipient, Social Security has treated the debtor with a discharged debt differently solely because he once owed money to the state. This complaint is adapted from papers in In re Coughlin, 48 B.R. 191 (Bankr. E.D. Pa. 1985).
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2. The Defendant received notice of Plaintiffs bankruptcy petition, a copy of which is attached and labeled as Exhibit A [omitted]. 3. After this case was led, Plaintiff requested his diploma and asked why he had not received it. Defendant indicated that plaintiff would be sent the diploma only if he paid a prepetition tuition debt. 4. Defendants failure to provide the diploma and its demand that the balance of the debt be paid in order to obtain the diploma constituted unlawful collection actions in willful violation of the automatic stay of 11 U.S.C. 362(a). 5. Plaintiffs debts were discharged in case number [number], by the Order of this Court on [date], pursuant to 11 U.S.C. 524. Defendants claims fall within the scope of that discharge. 6. Defendants continued attempts to collect the debt, through its refusal to release the diploma, constitute willful violations of the discharge injunction of 11 U.S.C. 524. WHEREFORE, Plaintiff prays that this Court: a. Order Defendant forthwith to deliver Plaintiffs diploma to him; b. Find that Defendant is in contempt of Court for violating 11 U.S.C. 362 and 524; c. Award Plaintiff damages, costs and attorney fees pursuant to 11 U.S.C. 362(k) and 11 U.S.C. 105(a); and d. Order such other relief as is just and proper. Date: [signature] Attorney for Debtor/Plaintiff
Form 134 Complaint Seeking Contempt Remedies for Violation of the Automatic Stay and Discharge Injunction343
[Caption: Offcial Form 16D] Complaint 1. This complaint is led by the Debtor in the above-captioned chapter 7 case. This Court thus has jurisdiction over this proceeding, which arises in a case under the Bankruptcy Code and concerns property of the Debtor, pursuant to 28 U.S.C. 1334. This proceeding is a core proceeding.
340 Violations of the Bankruptcy Code by state and local officials should be encompassed within 42 U.S.C. 1983. See 15.5.2, supra. 341 This particular complaint is pleaded cautiously, seeking only a return of the funds taken and no additional sanctions for contempt. Once debtors rights in this area become more wellestablished, such sanctions would be more appropriate. 342 Attorney fees are sought pursuant to 42 U.S.C. 1988. See Ch. 15, supra. They may also be available in some circumstances under the Equal Access to Justice Act. See 15.5.4, supra. 343 This complaint seeks remedies for the defendants violations of the discharge injunction. 11 U.S.C. 524(a); see 14.5, supra. In many cases a complaint of this type will require a separate motion to reopen the bankruptcy case. See Form 147, Appx. G.12, infra.
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4. Defendant HEAA is a public corporation and government instrumentality of the Commonwealth of [state] whose corporate purpose is to improve the higher education opportunities of [state] residents by granting scholarships and guaranteeing loans to such persons to assist them in meeting their expenses of higher education. [Cite provision(s) of state law.] 5. Defendant [defendantdirector] is the Executive Director of HEAA and is responsible for the overall operations of HEAA, including the enforcement of HEAA regulations codied at [cite provision(s) of state law].345 6. Defendant [defendantdeputy director] is the Deputy Director of HEAA and is responsible for the operation of HEAAs guaranteed student loan program, including the enforcement of HEAA regulations codied at [cite provision(s) of state law]. IV. Facts 7. Plaintiff attended undergraduate school at the University of [name] from the fall term of 1988 to the spring term of 1990. 8. During this period, Plaintiff received student loans guaranteed by HEAA in the total amount of approximately $5874. 9. After leaving school, Plaintiff was nancially unable to repay his student loans. 10. On March 12, 1996, Plaintiff led a voluntary petition in bankruptcy under chapter 13 of the Bankruptcy Code, Bkr. No. [number]. 11. By Order dated June 29, 2003, the Bankruptcy Court ordered Plaintiff released from all his dischargeable debts, including his obligation to HEAA.346 12. During the spring term of 2003 Plaintiff returned to the University of [name] to complete the twelve credits he needed for his undergraduate degree. 13. To nance his education, Plaintiff applied for an HEAA higher education grant. 14. HEAA denied Plaintiffs grant application based upon section [number] of its regulations, [cite provision of state law]. 15. In 2003, Plaintiff also applied for an HEAA guaranteed student loan. 16. Plaintiff graduated from the University of [name] in May 2004, with a B.A. in political science and philosophy. 17. When this action was led, Plaintiff had been accepted for admission into several law schools commencing the fall term of 2004. 18. On or about June 21, 2004, Plaintiff led an application through [name] Bank, [address], for an HEAA guaranteed student loan to assist the nancing of his law school education at University of [name] Law School. The application has been approved by [name] Bank and is pending before HEAA. 19. On August 11, 2004, Plaintiff was accepted for admission into the University of [name] Law School. 20. Plaintiff has applied for nancial aid from the University of [name] Law School.
345 In order to avoid any claims of sovereign immunity, it may be advisable to sue only the executive director or other officer and seek prospective injunctive relief. See Ex parte Young, 209 U.S. 123, 28 S. Ct. 441, 52 L. Ed. 714 (1908); 13.3.2.2, supra. 346 Although a bankruptcy court clearly has jurisdiction over a dispute such as this one, some bankruptcy judges require a complaint to be accompanied by a motion to reopen a bankruptcy case which has been concluded. 11 U.S.C. 350.
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Form 137 Proposed Order for Preliminary Relief in Complaint to Enjoin Discriminatory Denial of Guaranteed Student Loan
[Caption: Offcial Form 16D] Order350 AND NOW, this [date] day of [month], [year], upon consideration of Plaintiffs veried Motion for Temporary Restraining Order and/or Preliminary Injunction, veried Amended Complaint, and the evidentiary hearing held on August 20, 2004, it is hereby ORDERED and DECREED that the Motion is GRANTED. Defendants HEAA, [defendantdirector], and [defendant deputy director] are enjoined from enforcing Higher Education Assistance Agencys policy of denying Plaintiff guaranteed student loans, pursuant to [cite provision(s) of state law], due to Plaintiffs prior loans discharged in bankruptcy. Defendants HEAA, [defendantdirector] and [defendantdeputy director] are ordered to process Plaintiffs application for a guaranteed student loan in the ordinary course of business without consideration of or discrimination based upon Plaintiffs prior loans which have been discharged in bankruptcy. This Order shall continue in effect pending nal determination of this action by the Court. Date: [signature] United States Bankruptcy Judge
Form 136 Motion for Preliminary Relief in Complaint to Enjoin Discriminatory Denial of Guaranteed Student Loan348
[Caption: Offcial Form 16D] Plaintiffs Motion For Temporary Restraining Order and/or Preliminary Injunction Plaintiff [debtor], by his attorney, hereby moves this Court, pursuant to Federal Rule of Bankruptcy Procedure 7065 and Federal Rule of Civil Procedure 65 for a Temporary Restraining Order and/or Preliminary Injunction against Defendants Higher Education Assistance Agency, [defendantdirector], and [defendantdeputy director] on the basis of: 1. Plaintiffs veried Complaint. 2. Plaintiffs veried Motion for a Temporary Restraining Order and/or Preliminary Injunction against Defendant Higher Education Assistance Agency. 3. The evidentiary hearing held on August 20, 2004. Without immediate relief from this Court, Plaintiff will suffer irreparable harm. WHEREFORE, Plaintiff requests that this Court grant Plaintiffs Motion for Temporary Restraining Order and/or Preliminary Injunction. Date: [attach certicate of service]349 [signature] Attorney for Plaintiff
Form 138 Class Action Complaint Seeking Remedies for Coercive Collection Practices Involving Discharged Debt
[Caption: Offcial Form 16D] Class Action Complaint Introduction 1. This action seeks redress for the unlawful and deceptive practices committed by the Bankruptcy Collection Network and its
350 A proposed order should normally be presented to the court. Some courts prefer ndings of fact necessary for issuance of an order to be included (for example, that without the order specic types of irreparable harm will occur). This complaint and the accompanying papers are appropriate for use when a government agency refuses to process a guaranteed student loan because a previous student loan has been discharged. Similar complaints, modied as appropriate, could be used to remedy other types of governmental discrimination. Many such cases, involving benets or employment, may pose a pressing need for relief. The Federal Rules of Bankruptcy Procedure generally parallel the Federal Rules of Civil Procedure in this respect. Therefore, treatises and form books on federal practice may be consulted for further discussion of practice in seeking temporary restraining orders and preliminary injunctions. This complaint raises claims under both 11 U.S.C. 525 and the general doctrine of Perez v. Campbell, 402 U.S. 637, 91 S. Ct. 1704, 29 L. Ed. 2d 233 (1971). See generally 14.5, supra. The complaint seeks attorney fees under 42 U.S.C. 1988. See discussion of attorney fees in 15.5.2, supra. This complaint and the accompanying forms are adapted from those used in In re Richardson, 15 B.R. 925 (Bankr. E.D. Pa. 1981), revd in part, 27 B.R. 560 (E.D. Pa. 1982).
347 A veried complaint or affidavit is required as a prerequisite to a temporary restraining order. Fed. R. Civ. P. 65(b). In this case, a trial was held prior to the time when the need for preliminary relief arose, but that is not often true. Often, the court will schedule a special hearing to adduce the necessary facts if time permits. 348 This request for preliminary injunctive relief may be led with a complaint such as the one provided here in Form 135, Appx. G.11, supra. 349 A certicate of service or of efforts to notify opponents, or of why notice should not be required, is required prior to issuance of a temporary restraining order. Fed. R. Civ. P. 65(b).
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attorney, in connection with their efforts to collect debts discharged by debtors in bankruptcy. Defendants conduct involves falsely threatening debtors with a wide array of legal actions which it has no intention of taking, ostensibly under the guise of enforcement of security interests, the sole purpose of which is to coerce the payment of discharged debts. Plaintiffs seek monetary, declaratory and injunctive relief for themselves and the class they represent based on Defendants violations of 11 U.S.C. 362(k) and 524, and the Fair Debt Collection Practices Act, 15 U.S.C. 1692 1692o. Jurisdiction 2. This court has jurisdiction over this matter pursuant to 28 U.S.C. 1334. This action is a core proceeding. Parties 3. Plaintiff A.J.A. is an individual who resides at [address]. 4. Plaintiff S.R.S. is an individual who resides at [address]. 5. Plaintiff E.T.E. is an individual who resides at [address]. 6. Defendant Bankruptcy Collection Network (BCN) is a Delaware corporation with its principal place of business located at [address]. BCN purchases from retailers of consumer goods and services the retail installment contracts and revolving charge accounts of consumers who have led bankruptcy. The accounts purchased by BCN are in default at the time of purchase. The principal purpose of BCN is the collection through the use of the mails and telephones of these delinquent accounts it has purchased from creditors to which the debts were originally owed. BCN also regularly collects or attempts to collect debts which are owed or due another, or alleged to be owed or due another. BCN is accordingly a debt collector as dened by 15 U.S.C. 1692a(6). 7. Defendant [rm name], is a California professional corporation with its principal place of business located at [address]. The principal purpose of Defendant attorneys is the collection through the use of the mails and telephones of debts which are owed or due another, or alleged to be owed or due another, by debtors in bankruptcy, and as such it is a debt collector as dened by 15 U.S.C. 1692a(6). Class Action Allegations 8. Plaintiffs bring this action on behalf of themselves and all others similarly situated pursuant to Fed. R. Civ. P. 23(a), 23(b)(1), (b)(2) and (b)(3) because Defendants, in regularly acting pursuant to the actions challenged herein, have acted on grounds generally applicable to the class, thereby making appropriate relief for the class as a whole. Further, prosecution of this case by individual class members could create the risk of inconsistent adjudications which could establish incompatible standards of conduct for defendants or impede the ability of other class members to protect their interests. Finally, there are questions of law and fact which predominate over those pertaining to individual class members only. 9. The Plaintiff class consists of all individuals: a. who led a petition for relief under the Bankruptcy Code; b. who listed as a debt a credit account which was subsequently assigned by the creditor to Defendant BCN, and; c. who, subsequent to the ling of the bankruptcy petition, were subjected to Defendants collection practices and were sent letters similar to those sent to Plaintiffs herein.
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36. Included with the letter as an attachment was a document having the appearance of a court complaint and was entitled COMPLAINT ON SECURITY AGREEMENT (PURCHASE MONEY) FOR POSSESSION OF SECURITY AFTER DISCHARGE IN BANKRUPTCY; 11 U.S.C. SECTION 362(C). The caption listed on the Complaint stated that it was intended to be led in a Municipal Court and left blank the state of ling creating the impression that the complaint may be led in a state other than the state where plaintiff resides. A copy of the Complaint is attached hereto and incorporated herein as Exhibit E [omitted]. 37. In the Complaint, Defendants allege that a written agreement which more fully describes and identies the security for the Circus City credit account is attached as an exhibit but no such agreement was included in the documents sent to S.R.S. 38. In the prayer for relief, the Complaint seeks a return of the alleged secured property or alternatively a money judgment against S.R.S. in the amount of $2505 based on the claimed value of the security, as well as a judgment for damages for detention of the security, interest, and costs of suit. 39. Although S.R.S. did not contact Defendant attorneys or BCN upon receipt of the correspondence, the draft Complaint was not led within the seven-day period as threatened and, upon information and belief, was not led in the courts of the state where plaintiff resides or any other court. 40. On May 6, 1997, Defendant attorneys sent S.R.S. a letter with attachments identical in form and substance to Exhibits AC sent to Plaintiff A.J.A. The legal action threatened in that letter was also not taken against S.R.S. 41. None of the correspondence received by A.J.A. from Defendants stated that it was being sent by a debt collector or contained a notice of the right to obtain validation of the debt. Facts Relating to E.T.E. 42. On June 19, 1996, Plaintiff E.T.E. sought protection from her creditors by ling a Chapter 7 bankruptcy in the [court]. 43. As part of the schedules led with her bankruptcy petition, E.T.E. listed an account due XXX Jewelers. 44. Sometime following E.T.E.s bankruptcy ling, her account with XXX Jewelers was assigned to Defendant BCN. 45. On August 13, 1996, Defendant attorneys sent E.T.E.s counsel a letter indicating that the attorneys rm had been retained by BCN. The letter demanded that debtors counsel amend E.T.E.s schedules to list the claim of XXX Jewelers as a secured claim. Defendant attorneys also stated that a motion to force surrender of the property would be led within seven days if debtors counsel did not contact BCN. Finally, the letter also threatened that Bankruptcy Rule 11 sanctions would be sought if debtors counsel did not comply. A copy of the letter is attached hereto and incorporated herein as Exhibit F [omitted]. 46. On November 24, 1996, E.T.E. was granted a discharge of all dischargeable debts pursuant to 11 U.S.C. 524, including her obligation to XXX Jewelers and its assignee, Defendant BCN. 47. On October 25, 1996, E.T.E. was sent a letter from Defendant BCN stating that if she intended to retain the property, she would either need to make a lump-sum cash payment for its fair market value, or enter into an agreement for monthly payments on the remaining amount owed. A copy of the letter is attached hereto and incorporated herein as Exhibit G [omitted].
101
Appx. G.11
48. Included with the letter as an attachment was a document entitled POST DISCHARGE PROPERTY RETENTION AGREEMENT. Under the proposed agreement, E.T.E. would be required to pay the sum of $1613.86, the claimed value of the collateral, together with interest at 18%, by making payments of $65 per month until paid in full. The agreement required that E.T.E. acknowledge that the agreement was not to be considered a reaffirmation agreement. A copy of the Agreement is attached hereto and incorporated herein as Exhibit H [omitted]. 49. On September 12, 1996, E.T.E.s counsel was sent a second letter from Defendant attorneys stating that because E.T.E.s bankruptcy schedules had not been amended and as she failed to comply with 11 U.S.C. 521 (2)(A) and (B), Defendant attorneys would le a complaint seeking a revocation of E.T.E.s discharge and sanctions if she did not contact BCN within ten days. A copy of the letter is attached hereto and incorporated herein as Exhibit I [omitted]. 50. Included with the letter as an attachment was a document having the appearance of a court complaint and was entitled COMPLAINT FOR: 1. DECLARATORY RELIEF; 2. TO REVOKE DEBTORS DISCHARGE (11 U.S.C. 727(d)); AND REQUEST FOR SANCTIONS AGAINST DEBTOR. The caption listed on the Complaint represented that it would be led in this court. A copy of the Complaint is attached hereto and incorporated herein as Exhibit J [omitted]. 51. Although neither E.T.E. or her counsel contacted Defendant attorneys or BCN upon receipt of the correspondence, the draft Complaint was not led after the ten-day period expired as threatened or at any subsequent time. 52. None of the correspondence received by E.T.E. or her counsel from Defendants stated that it was being sent by a debt collector or contained a notice of the right to obtain validation of the debt. First ClaimWillful Violation of the Automatic Stay 53. The allegations of paragraphs 152 above are realleged and incorporated herein by reference. 54. The actions of Defendants in this case, in seeking and collecting payments from Plaintiffs and class members to satisfy debts incurred before the ling of their bankruptcy cases and by falsely and deceptively threatening various forms of legal action, are in violation of the automatic stay entered in Plaintiffs and class members bankruptcy cases, entitle Plaintiffs and class members to the relief afforded under 11 U.S.C. 362(k), and additionally constitute contempt of bankruptcy court orders. WHEREFORE, Plaintiffs respectfully request that this Court enter judgment in favor of Plaintiffs and the class and against the Defendants as follows: (1) Declaring that Defendants policies and practices are unlawful and in willful violation of 11 U.S.C. 362, and in contempt of court; (2) Enjoining Defendants from continuing its policies and practices; (3) Ordering Defendants to refund all monies collected pursuant to its policies and practices with interest thereon at the lawful rate; (4) Awarding exemplary or punitive damages against Defendants in an amount sufficient to deter further unlawful conduct;
102
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1. That the debtors mortgage loan has been cured so that it is current as of the effective date of the debtors discharge and the debtors remaining balance due is the amount that would have existed if their default had never occurred. 2. That any amounts for charges, fees, or expenses that [mortgage holder or servicer] may allege the debtors to owe as of the date of the discharge in connection with any default on their mortgage or otherwise, that have not been approved by this Court through the allowance of the claim of [mortgage holder or servicer] or otherwise, be deemed cured by completion of the plan and therefore canceled and discharged by the discharge order. 3. That any attempt to collect any of these discharged charges, fees, or expenses be deemed to be a willful violation of the discharge injunction and 11 U.S.C. 524(i), and contempt of the orders of this Court. 4. That the debtors be afforded such other and further relief as is just and proper. Date: [signature] Attorney for Debtors
352 After this order has been entered, practitioners may wish to send the mortgage holder or servicer a request for a pay-off statement or a qualied written request under the Real Estate Settlement Procedures Act, 12 U.S.C. 2605, to determine whether any improper charges have been assessed to the mortgage account. See Form 86, Appx. G.8, supra, for a sample qualied written request.
103
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104
Appx. G.12
26. The allegations of paragraphs 119 above are realleged and incorporated herein by reference. 27. Defendant obtained money from the Plaintiff in a manner contrary to equity and good conscience and under circumstances constituting unjust enrichment. 28. Defendant obtained money from the Plaintiff in a manner contrary to and in breach of the Note and Mortgage entered into between the parties. Fifth Claim 29. The allegations of paragraphs 119 above are realleged and incorporated herein by reference. 30. Defendant violated 11 U.S.C. 524(i) and 524(a)(2) by its willful failure to credit Plaintiffs payments made through her conrmed plan. WHEREFORE, Plaintiff prays that this Court enter a Judgment in her favor and against the Defendant as follows: (a) Declaring that Defendants actions are unlawful, and in violation of sections 524(i) and 524(a)(2); (b) Ordering Defendant to refund to the Plaintiff all monies unlawfully collected pursuant to its actions; (c) Awarding actual damages, reasonable attorney fees and litigation expenses, costs of suit, and punitive damages pursuant to 11 U.S.C. 105(a); (d) Granting such other or further relief as is appropriate. Date: [signature] Attorney for Plaintiff
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difficult to catch up and maintain payments over the next year at the level originally called for by the plan. 3. The Debtors anticipate that Ms. Debtor will soon be employed, adding to the income of the family. 4. A proposed modied plan is attached hereto and labeled Exhibit A [omitted]. 5. Under the modied plan the Debtors would reduce their payments to $150 monthly for the next year and then resume payments of $400 monthly in the nal year of the plan. The plan as modied meets the requirements of the Bankruptcy Code. WHEREFORE, the Debtors pray that they be permitted to amend their plan to conform to the attached amended plan pursuant to 11 U.S.C. 1329, reducing their payments by $150 for the next year and increasing their payments in the nal year of the plan. Date: [signature] Attorney for Debtor
Form 145 Motion to Modify Plan to Permit Mortgage Renancing to Pay Off Plan
[Caption: Offcial Form 16A] Motion to Modify Plan to Permit Mortgage Renancing to Pay Off Plan The Debtor, [name], hereby moves to modify her chapter 13 plan on the following grounds: 1. The Debtors chapter 13 plan was conrmed by this Court on [date], providing for sixty monthly payments of varying amounts. 2. The Debtor has made the payments to the trustee under her plan for over thirty-six months.
case-by-case basis rather than adopting a general rule that such modications are never permitted. See In re Jock, 95 B.R. 75 (Bankr. M.D. Tenn. 1989). It is therefore important that the modication be proposed in good faith.
106
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Form 146 Debtors Amended Plan Permitting Mortgage Renancing to Pay Off Plan
[Caption: Offcial Form 16A] Amended Chapter 13 Plan Permitting Mortgage Renancing to Pay Off Plan 1. If the instant estate were liquidated under chapter 7 of the Bankruptcy Code, the allowed unsecured claimants would be paid $0.00. 2. Under this plan the allowed unsecured claimants will receive not less than that amount. 3. The Debtor shall submit to the supervision and control of the trustee the following sums: a. During the rst year of the plan: $500 monthly; b. During the 13th through 15th months of the plan: $600 monthly; c. During the 16th through 24th months of the plan: $700 monthly; d. During the third year of the plan: $840 monthly; e. During the fourth year of the plan: $1255 monthly; f. During the fth year of the plan: $1505 monthly. 4. After the thirty-sixth month of this plan, the Debtor shall have the option of renancing her mortgage and using funds obtained through such renancing to make the payments set forth above that have not yet been made, as well as any postpetition arrears on the mortgage. The remaining payments due from the trustee at the time of any such renancing on the allowed secured claim of [mortgage company] may be paid directly to [mortgage company] at the closing on the renancing loan, and the amount due to be paid by the Debtor under the plan shall be reduced by that amount plus the trustees anticipated commission on that amount. If there is any dispute regarding the amount necessary to complete the plan and pay off the mortgage, the Debtor may pay the amount demanded by the mortgage holder and thereafter seek in the bankruptcy court a refund of any overpayment and a determination of whether the mortgage holder has complied with the plans terms and the terms of the earlier stipulation settling the adversary proceeding between
the Debtor and the mortgage company. [Mortgage company]s failure to comply with the binding terms of the plan and stipulation shall be deemed contempt of court. 5. The various claims of the Debtors creditors shall be classied as follows: a. Class one: Claims led and allowed which are entitled to priority under 11 U.S.C. 507(a)(1). b. Class two: The prepetition arrearages on the allowed secured claim held by [mortgage company]. c. Class three: All other priority claims. d. Class four: All other claims against the debtors that are timely led except for the rst mortgage held by [mortgage company], priority claims, and any allowed secured claim of the City of Philadelphia. e. Class ve: The allowed secured claims of the City of Philadelphia. f. Class six: All other claims against the debtor that are not timely led. 6. The payments received by the trustee from the Debtor pursuant to this plan shall be distributed as follows: a. Class one claims: The amount paid by the Debtor to the trustee shall be distributed rst to the class one administrative claims, pro rata, until they are paid in full. Any other priority claimants shall be paid only after the class two claims are paid in full. b. Class two claims: After the application of the appropriate amount each month to the class one administrative claims, the entire amount of the monthly payment remaining in the hands of the trustee shall be distributed, pro rata, to the holders of the class two claims until each such claimant shall have received 100% of the amount allowed on each claim for arrears. c. Class three claims: After the application of the appropriate amount each month to the class one and class two claims, the entire amount of the monthly payment remaining in the hands of the trustee shall be distributed, pro rata, to the holders of the class three claims. d. Class four claims: After the application of the appropriate amount each month to the class one, class two, and class three claims, the entire amount of the monthly payment remaining in the hands of the trustee shall be distributed, pro rata, to the holders of the class four claims. e. The class ve claims are not provided for by this plan, and there shall be no distribution to the holders of such claims. f. Class six claims: The class six claims are provided for by this plan as follows: There shall be no distribution to the holders of class six claims. 7. The current payments on the rst mortgage on the Debtors home, held by [mortgage company], will be paid by the Debtor directly to that creditor and will not be paid under the plan, except as provided above for postpetition arrears. The Debtor will cure the prepetition defaults on that mortgage within a reasonable period of time by making payments on the arrears through the trustee. Upon completion of the payment of the arrears, the Debtor will be reinstated on the original payment schedule for the mortgage as if no default had ever occurred, except for the amount of any default in current payments to be made after commencement of this case which has not been cured by that date. The term arrears, for all purposes under this plan, shall mean the amount of arrears stated in the aforesaid mortgage holders amended proof of claim.
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8. To the extent that any claim is fully or partially unsecured pursuant to 11 U.S.C. 506(a), that portion of the claim which is unsecured shall be provided for as a class four (unsecured) claim under this plan. Creditors holding such claims shall retain their liens only to the extent of their allowed secured claims. To the extent that the allowed secured claim is paid during this case or thereafter, such creditors liens shall be reduced. Once the allowed secured claim has been paid in full, either during or after the pendency of this case, the creditor holding such claim shall promptly mark any lien securing such claim as satised in the appropriate public records. 9. By failing to object to this plan, or any modication thereof, all creditors holding claims agree not to make any effort to collect their claims from any cosigners that may exist, so long as this case remains pending. 10. Conrmation of this plan shall constitute a nding that the plan constitutes the Debtors best effort under all the circumstances to pay their creditors, within the meaning of 11 U.S.C. 727(a)(9). 11. Conrmation of this plan shall constitute a nding in accordance with 11 U.S.C. 1322 that there is cause for extending the plan beyond three years. The Debtor shall have until sixty months from the date of conrmation to complete payments under this plan. Conrmation shall also constitute approval of such extension. Such extension is essential to the success of the plan. Without it the plan would fail and no claims would be paid in full. 12. Conrmation of this plan shall constitute a nding that all documents and information required by 11 U.S.C. 521(a)(1) have been led with the court or provided by the debtor. 13. The current defaults by the Debtor on the class two claims shall be cured by payments under this plan. 14. The title to the property of the estate shall revest in the Debtors upon termination of this plan, and the Debtor shall have sole right to use and possession thereof during the pendency of this case, including the right to use, sell, or lease such property in the ordinary course of the Debtors affairs. 15. Any money or property acquired by either the trustee or the Debtor or refunded from the trustees percentage fees, while this case is pending shall be deemed exempt property of the Debtor if exemptible, and shall be forthwith delivered to the Debtor. 16. Upon completion of this plan, all debts listed in the Debtors schedules or provided for by this plan, except those excepted by 11 U.S.C. 1328(a), shall be discharged. 17. If prior to the expiration of the period set forth in paragraph 3 of this plan all led claims entitled to payment under this plan are paid in full, this plan shall terminate on that date. Date: [signature] Debtor
Form 147 Debtors Notice to Convert Case From Chapter 13 to Chapter 7356
[Caption: Offcial Form 16A] Debtors Notice to Convert Case from Chapter 13 to Chapter 7 The Debtors, pursuant to 11 U.S.C. 1307(a), hereby elect to convert the above-captioned chapter 13 case to a case under chapter 7 of the Bankruptcy Code. The Debtors are entitled to convert their case because: 1. This case, led on [date], is a case under chapter 13 of the Bankruptcy Code. 2. The Debtors are eligible to be debtors under chapter 7 of the Bankruptcy Code. WHEREFORE, the Debtors pray for relief under chapter 7 of the Bankruptcy Code. Date: [signature] Attorney for Debtors
Form 148 Supplemental Schedule of Debts Arising After Filing of the Petition, But Prior to Conversion to Chapter 7357
[Caption: Offcial Form 16A] Supplemental Schedule of Debts Arising After Filing of the Petition, But Prior to Conversion to Chapter 7 Pursuant to Federal Rule of Bankruptcy Procedure 1019(5), the following debts arose subsequent to the ling date of the petition in this matter, and prior to the date on which this case was converted to a case under chapter 7:
356 The debtor has an absolute one-time right to convert a case led under chapter 7 to a chapter 13 case and may always convert from chapter 13 to chapter 7. 11 U.S.C. 706(a), 1307(a). The ling of this form effectuates conversion of the case without a court order. Fed. R. Bankr. P. 1017(d). However, some courts may require an application procedure or some other formalities such as submission of a proposed order. If a case is converted to chapter 13, Federal Rule of Bankruptcy Procedure 3015(b) requires that the debtor le a plan fteen days after conversion, which deadline may only be extended upon motion for cause shown. Amendments to Federal Rule of Bankruptcy Procedure 1017(d) also clarify that the date of the ling of a notice of conversion from chapter 13 to chapter 7 is treated as the date of the conversion order. Supplemental schedules should always be led in any case in which new debts have arisen since the chapter 13 petition, which would be dischargeable in the chapter 7 case. 11 U.S.C. 348(d); see Form 148, Appx. G.12, infra. As a conversion terminates the trustees duties in the case, 11 U.S.C. 348(e), a copy of the form led should be mailed to the trustee. After a debtor has converted from chapter 13 to chapter 7, court permission is required for further conversion. 357 This schedule is required when a debtor converts a case from chapter 11, 12, or 13 to chapter 7. Fed. R. Bankr. P. 1019(5). It is useful to the debtor to le this schedule particularly when it will include debts which will be dischargeable under 11 U.S.C. 348(d). Often forgotten are new utility arrearages arising postpetition. See also Form 54, Appx. G.6, supra.
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2. This case has not been previously converted under section 706 or 1112 of the Bankruptcy Code. Date: [signature] Attorney for Debtors
109
Appx. G.13
1. The Debtor led bankruptcy pursuant to chapter 7 of the Bankruptcy Code on May 1, 2005, and received a discharge pursuant to 11 U.S.C. 727 on September 10, 2005. 2. Among the debts listed in the Debtors petition and discharged in this bankruptcy case was a debt in the amount of $550 to [hospital]. 3. [Hospital] received notice of the discharge on or about September 10, 2005. 4. In January, 2006, the Debtor began receiving calls from [collection agency] which represented that it was collecting the [hospital] debt. 5. The Debtor informed [collection agency] of the discharge by telephone and by letter, but nevertheless continued to receive collection calls and letters. 6. The Debtor has prepared an action against [hospital] and [collection agency] for contempt for violation of the discharge injunction applicable to this case by virtue of 11 U.S.C. 524(a). A copy of that action is attached hereto and labeled Exhibit A [omitted]. WHEREFORE, the Debtor requests that this case be reopened to allow the Debtor to le and prosecute an action against [hospital] and [collection agency] for violation of the discharge injunction. Date: [signature] Attorney for Debtor
110
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[Caption: Offcial Form 16A or 16D]366 Memorandum in Support of Motion of Movant for Leave to Proceed In Forma Pauperis367 I. Indigents May Proceed in Bankruptcy Court In Forma Pauperis Under 28 U.S.C. 1915 A. 28 U.S.C. 1915 applies to proceedings in Bankruptcy Court. 28 U.S.C. 1915(a)(1) permits Any court of the United States to: authorize the commencement, prosecution or defense of any suit, action or proceeding, civil or criminal or appeal therein, without prepayment of fees and costs or security therefor, by a person who makes affidavit that includes a statement of all assets such prisoner possesses that the person is unable to pay such fees or give security therefor. Courts have regularly held that 28 U.S.C. 1915 applies to fees for proceedings in bankruptcy court other than ling fees for the bankruptcy petition itself. Thus in In re Shumate, 91 B.R. 23 (Bankr. W.D. Va. 1988), in which a debtor sought leave to appeal a court order in forma pauperis, the court held that a bankruptcy court was a court of the United States for the purposes of 28 U.S.C. 1915. The court held further that the limitation of 28 U.S.C. 1930(a), requiring payment notwithstanding, section 1915, applies only, as the statutory language sets out, to parties commencing a case. The court in Shumate followed similar holdings in In re Moore, 86 B.R. 249 (W.D. Okla. 1988) (leave to appeal); In re Palestino, 4 B.R. 721 (Bankr. M.D. Fla. 1980) (leave to initiate adversary proceeding); In re Sarah Allen Home, Inc., 4 B.R. 724 (Bankr. E.D. Pa. 1980) (same). Other courts have reached the same conclusion. See, e.g., In re Melendez, 153 B.R. 386 (Bankr. D. Conn. 1993) (court has power to waive fees); In re McGinnis, 155 B.R. 294 (Bankr. D. N.H. 1993) (same); In re Jackson, 86 B.R. 251 (Bankr. N.D. Fla. 1988) (appeal in forma pauperis permitted); In re Weakland, 4 B.R. 115 (Bankr. D. Del. 1980) (fee in adversary proceeding, holding that section 1930(a) limitation on section 1915 applies only to ling fees). Most of the few cases denying a right to proceed in forma pauperis have been cases on which clear independent grounds for denial existed. For example, in In re Broady, 96 B.R. 221 (Bankr. W.D. Mo. 1988) the court found the appellant was not indigent and that her appeal was plainly frivolous. Cf. In re Odessa Mfg. Corp., 97 B.R. 1000 (Bankr. W.D. Mo. 1989) (no showing of indigency of appellant); In re Ghermann, 105 B.R. 712 (Bankr. S.D. Fla. 1989) (fees requested to be waived not subject to section 1915). But see In re Perroton, 958 F.2d 889 (9th Cir. 1992) (bankruptcy court lacks power to grant in forma pauperis motion).
364 There is normally a charge for a motion for relief from stay or to le an adversary proceeding. See Appx. C.2, supra. This is an application to waive those fees on behalf of an indigent creditor. 365 This form may be used in connection with a motion for relief from stay or an adversary proceeding. It should be captioned accordingly (that is, Official Form 16D should be used for adversary proceedings).
366 This form may be used in connection with a motion for relief from stay or an adversary proceeding. It should be captioned accordingly (that is, Official Form 16D should be used for adversary proceedings). 367 Obviously, this memorandum should be updated with current law as well as with cases from the relevant jurisdiction.
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B. The limitations of 28 U.S.C. 1930(a) apply only to fees for commencing a case. While 28 U.S.C. 1930(a) expressly makes the in forma pauperis statute, 28 U.S.C. 1915, inapplicable to the initial petition ling fees, and 28 U.S.C. 1930(f) establishes a separate procedure for a waiver of the initial petition ling fees, the sections dealing with other fees contain no such proviso. Thus, 28 U.S.C. 1930 does not prohibit other bankruptcy proceedings to be in forma pauperis. In re Shumate, 91 B.R. 23 (Bankr. W.D. Va. 1988); In re Weakland, 4 B.R. 115 (Bankr. D. Del. 1980). Other parts of the Bankruptcy Reform Act of 1978 which enacted 28 U.S.C. section 1930 and the legislative history of the Act show that the section 1930(a) limitation on in forma pauperis actions is not intended to go beyond the fee for commencing a case. 28 U.S.C. 773(c) dealing with appeals from the bankruptcy court expressly contemplates appeals in forma pauperis. The House Report on the 1978 Act specically included, as a subject as to which procedural rules would have to be drafted, provisions for in forma pauperis proceedings. H.R. Rep. No. 95-595, at 307 (1977). Finally, the current version of 28 U.S.C. 1915(a)(1), amended by the Prison Litigation Reform Act of 1996 (PLRA), refers to assets such prisoner possesses. Courts agree that this is a typographical error; the word prisoner should be person. See Floyd v. U.S. Postal Service, 105 F.3d 274, 275 (6th Cir. 1997) (superseded on other grounds) (concluding that the term prisoner possesses was erroneously substituted for person possesses). See also Haynes v. Scott, 116 F.3d 137, 139140 (5th Cir. 1997) (concluding that section 1915(a)(1) applies both to prisoners and non-prisoners); Leonard v. Lacy, 88 F.3d 181, 183 (2d Cir. 1996) (indicating that prisoner possesses is an error by use of the phrase sic); Martinez v. Kristi Kleaners, 364 F.3d 1305, 1306 (11th Cir. 2004) (acknowledging that individuals not incarcerated may proceed in forma pauperis). In summary, courts have noted that revisions to 28 U.S.C. 1915 under PLRA do not preclude in forma pauperis proceedings by non-prisoners. II. Movant is Unable to Afford the Fee But Must Have the Right to Raise Counterclaims to Defend Her Eviction Movants affidavit demonstrates her indigency in that her sole income consist of AFDC benets. She seeks only the right to proceed in a court proceeding not initiated by her and in which she has meritorious defenses and counterclaims. Success on any of her counterclaims will provide a defense to her eviction in state court. State law provides that: There shall be no recovery of possession under this chapter if the amount found by the court to be due the landlord equals or is less than the amount found to be due the tenant or occupant by reason of any counterclaim or defense under this section. If the amount found to be due the landlord exceeds the amount to be due the tenant or occupant, there shall be no recovery of possession if the tenant or occupant, within one week after having received written notice from the court of the balance due, pays the clerk the balance due the landlord, together with interest and costs of suit.
368 This complaint seeks an accounting of a tenants security deposit payments, or in the alternative that claims arising from failure to return the security deposits are nondischargeable. These nondischargeability issues under section 523 are applicable only to individual debtors. See generally 17.8.5, supra. 369 If the landlord has led a chapter 13 case, a modied version of this complaint may be used. Debts that are nondischargeable under section 523(a)(4), but not section 523(a)(6), are made nondischargeable in chapter 13 pursuant to section 1328(a)(2). 370 This allegation may depend on state statutory law, the terms of the lease, or the common law related to escrow in the applicable jurisdiction.
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6. The interests of the tenants are not being adequately represented in this proceeding. These interests must be protected to assure the safety and well-being of the tenants. The tenants have several claims against the Debtor which are stayed pursuant to 11 U.S.C. 362(a). The conditions at the building have been in substantial violation of the state Sanitary Code, and in breach of the warranty of habitability at least since September, 2003, due to conscious neglect by the Debtor. The tenants have sought injunctive relief and compensatory and consequential damages in a state court proceeding. On May 27, 2004, the state court allowed the tenants motion for provisional certication of class and for preliminary injunctive relief. The court has ordered the Debtor to perform numerous repairs at the building. 7. The tenants interests differ substantially from those of other creditors in this proceeding. In addition to a nancial interest in the estate of the Debtor, the tenants interests are related to their basic need for safe, sanitary, and decent housing at the building. 8. A committee of tenants is needed also to aid in the formulation of a plan, to protect their interests as creditors of the Debtor, and to assure that the Debtors residential property is operated in accord with applicable state law. Without a plan to adequately address the egregious conditions at the building, the tenants will continue to be subject to unsanitary, unsafe, and life threatening conditions. WHEREFORE, the moving parties herein pray that this Court order the appointment of a Committee of Tenants in this case, and for such other relief as is just. Date: [signature] Attorney for Movants
113
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7. At the meeting of creditors held on February 5, 2004, the Debtors attorney stated that the names and addresses of all the consumer claimants were not identied because the Debtors records have been seized by law enforcement authorities. 8. According to the schedules led by the Debtor, there are no assets in the bankruptcy estate available for distribution to unsecured creditors. 9. The U.S. Trustee has not appointed a committee of general unsecured creditors or a committee of consumer creditors. 10. Presently, the interests of the consumer creditors are not represented in this case. 11. In the apparent absence of any unencumbered assets in this bankruptcy estate and the absence of any creditors committee, a committee of consumer creditors is necessary to protect the interests of consumer creditors. Many consumer creditors paid their deposits as many as six months before the Debtor ceased operating its business, thus raising serious questions about propriety of the conduct of the Debtor and its principals. A committee of consumer creditors will be of material assistance in conducting an investigation into the affairs of the Debtor and in pursuing any appropriate legal actions to recover funds which may have been wrongfully diverted from the estate or which may otherwise be subject to recovery by the estate. 12. The consumer creditors require their own committee as their claims are entitled to priority, at least in part, and their interests are diverse from those of the general unsecured creditors. 13. The appointment of a committee of consumer creditors will not drain the estate of assets which would otherwise be available for distribution to creditors as it appears no such assets presently exist. In essence, there will be no estate unless the Court appoints the committee and the committee can create an estate. 14. Due to the possible misconduct on the part of the Debtor and/or its principals or others, the public interest and the integrity of the bankruptcy process requires that there be a meaningful inquiry into the facts of this case. Such inquiry may not take place unless this Court appoints a committee of consumer creditors. WHEREFORE, Movant requests that the Court order the appointment of a committee of consumer creditors in this case. Reasons for Expedited Treatment of This Motion 15. Movant, by her counsel, learned on Wednesday, February 13, 2004, at 4:45 p.m. that the U.S. Trustee would not be appointing a creditors committee of any kind. 16. A hearing on a Motion for Relief from Stay Filed which has been led by a secured creditor is presently scheduled for February 27, 2004. 17. From the information presently available, it appears that the secured creditors motion seeks relief to proceed against the principal assets of the Debtor. The outcome of the February 27, 2004, hearing may substantially affect the ability of the consumer creditors to recover the furniture which, pursuant to the Uniform Commercial Code, they purchased and which they own free and clear of any interest of the secured creditor or the Debtor. 18. It is critical to the interests of the consumer creditors that they be represented at the February 27, 2004, hearing. Therefore, expedited treatment of this motion is needed. 19. Due to the hearing scheduled for February 27, 2004, Movant requests that a hearing be scheduled by the Court no later than Wednesday, February 20, 2004.
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WHEREFORE, the Official Committee of Consumer Creditors prays that the Debtors disclosure statement be disapproved. Date: [signature] Attorney for Creditors
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Appx. G.13
secured creditor knew or should have known of the past history of questionable business practices on the part of the Debtor and/or its principals, and under principles of the Uniform Commercial Code, Plaintiffs rights in the property of the Debtor should be found to have priority over those of the secured creditor. 2. This Court has jurisdiction over this proceeding under 28 U.S.C. 1334. This proceeding is a core proceeding. 3. Plaintiffs are individuals who made prepetition deposit payments to the Debtor for furniture or other household goods which the Debtor never delivered. 4. Subsequent to their dealings with the Debtor, in trying to obtain delivery of the furniture they had ordered, Plaintiffs learned that the Debtor had engaged in a variety of unfair and deceptive practices in the course of its business before closing down its operation. 5. Among other practices, the Debtor had taken deposits from numerous consumers without the ability or intent to deliver the merchandise ordered by those consumers. In the course of so doing, the Debtor made numerous false statements to Plaintiffs and others about their furniture orders. 6. Plaintiffs have learned that the Debtor never even ordered the furniture for which some consumers paid deposits amounting to thousands of dollars. 7. Plaintiffs have also learned that the principals of the Debtor operated a very similar business several years earlier, which similarly took deposits from numerous consumers for merchandise and then abruptly closed down and led a bankruptcy case without ever delivering that merchandise. 8. The secured creditor knew or should have known of the Debtors prior business practices when it extended credit to the Debtor. 9. The secured creditor knew or should have known of the Debtors practices in operating because it extended credit and was in a position to police the Debtors behavior. First Claim 10. Some of the furniture specically ordered by Plaintiffs may be presently stored in a warehouse containing some of the Debtors property, which is under the control of the secured creditor.
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