BANKRUPTCY UPDATE
April 14, 2006
New Members
Please welcome Steven Sarbacker to the group and welcome James Simko back to the group (James, we lost you for a while, but a member of our systems staff tracked down your new e-mail address).
Steven, you can use the link provided in the “Link(s)” section below to view previous UPDates; James, you can use that link to catch up on any UPDates you missed while our e-mails to your old address were bouncing.
If there’s someone else in your office you’d like to receive these UPDates, just send an e-mail to chuck_nail@sdb.uscourts.gov with his/her name and e-mail address.
Compliance with 11 U.S.C. § 521(e)(2)(A)
We’ll give you a moment to review 11 U.S.C. § 521(e)(2)(A).
If you wish to document your compliance with § 521(e)(2)(A) – whether with respect to the trustee or a requesting creditor – please use the “Certificate of Service of Tax Information to Requestor (REFORM ACT CASES)” event (under “Other” under “Bankruptcy”), not the “Certificate of Service” event.
We may have told some of you not to use that event if you were only providing the tax return to the trustee. That was wrong. We apologize for any confusion.
Employee Income Records (a/k/a Pay Stubs) – A Request from the United States Trustee’s Office
The United States Trustee’s office has asked us to ask you not to file each of your client’s pay stubs as a separate exhibit.
You should still file separate exhibits for each joint debtor, but they would appreciate your filing each debtor’s pay stubs as a single exhibit.
For example, if Mr. Debtor has six pay stubs and Mrs. Debtor has four, you would file your cover sheet* with two attachments, one with all six of Mr. Debtor’s pay stubs and one with all four of Mrs. Debtor’s pay stubs. You would not file your cover sheet with 10 attachments.
*This is probably a good time to remind you of the March 24, 2006 UPDate, in which we provided guidance on preparing your cover sheets. You can use the link provided in the “Link(s)” section below to review that UPDate.
Electronic Public Access (EPA) Fee Schedule Changes
At its March 14, 2006 session, the Judicial Conference of the United States, amended the EPA fee schedule. The amendments establish two new fees and increase the existing fee for searches by the Public Access to Court Electronic Records (PACER) Service Center staff.
The first new fee is a $.50 per page fee for reproducing on paper any record pertaining to a PACER account.
The second new fee is a $45.00 fee for NSF checks returned to the PACER Service Center.
The fee for searches by the PACER Service Center staff is increased to $26.00 per name or item searched.
Each of these changes is effective July 1, 2006.
A copy of the new EPA Fee Schedule is attached.
Reaffirmation Agreements I - Who’s the Creditor?
Official Form B 240 – Reaffirmation Agreement has several parts, includes many disclosures, and provides a great deal of information. However, we discovered it is possible to complete and file a reaffirmation agreement using the official form without disclosing the identity of the creditor whose debt is being reaffirmed.
The only place on which the creditor’s name is likely to appear is in Part B, under “Accepted by creditor.” The problem is that in many cases, the individual signing the reaffirmation agreement on behalf of the creditor prints his/her name – not the creditor’s name – in the space provided.
This is not a terrible problem if the reaffirmation agreement is filed electronically, since the attorney filing it will be asked to identify the creditor. However, it can be a problem if, as is happening more and more often, the reaffirmation agreement is filed by the creditor, especially if there is no cover letter or other way of identifying the creditor.
All of which leads to the following requests.
Whether you are a debtors’ or a creditors’ attorney, if you prepare a reaffirmation agreement for a client, please be sure the creditor’s name appears on the reaffirmation agreement. (If you use our local reaffirmation agreement form – which we encourage you to do – the creditor’s name will appear in both the caption and Part B.)
If you are a creditors’ attorney, please ask your clients to include their names on any reaffirmation agreements they prepare themselves. (You might want to refer them to our local reaffirmation agreement form.)
If you are a debtors’ attorney, please be sure the creditor’s name appears on a reaffirmation agreement before you sign it.
Reaffirmation Agreements II – More on Part D (Debtor’s Statement in Support of Reaffirmation Agreement)
We’d like to share a few “lessons learned” regarding Part D of the new reaffirmation agreement form.
First, the monthly income shown in Part D should be the same as the monthly income shown on the debtor’s schedule I. If it is not, the difference should be explained in an attachment to the reaffirmation agreement.
Second, the monthly expenses shown in Part D should be the same as the monthly expenses shown on the debtor’s schedule J, with two exceptions. The amount to be paid on account of the debt being reaffirmed should not be included. However, the amount of any monthly payments on post-petition debt should be included. If the monthly expenses shown in Part D differ from those on the debtor’s schedule J, the difference should be explained in an attachment to the reaffirmation agreement.
Third, the difference between the monthly income and the monthly expenses should be sufficient to allow for payment of the amount to be paid on account of the debt being reaffirmed. If it is not, some explanation of how the debtor will nevertheless be able to make that payment should be included in an attachment to the reaffirmation agreement.
We’ve attached an example of such an attachment that gave the Court the information it needed to determine the reaffirmation agreement in question did not in fact represent an undue hardship on the debtor, as required by amended 11 U.S.C. § 523(m).
Kudos to Attorney Randy Blake, who drafted this particular attachment.
Returned Mail and Amendments to Mailing Lists
As you are aware, pursuant to LBR 2002-4, if mail is returned undeliverable, the debtor’s attorney must determine the creditor’s (or other addressee’s) correct address, re-serve the document on the creditor, file a certificate of service reflecting service of the document on the creditor, and amend the debtor’s mailing list of creditors.
In the past, we’ve permitted debtors’ attorneys to combine the last two steps by adding a line to the amendment to the mailing list indicating the returned document had been re-served on the creditor whose address was being corrected.
Chambers would like that practice to end.
Please begin filing a separate certificate of service and linking that certificate of service back to the document that was re-served on the creditor whose address was corrected by the amendment to the mailing list.
Scanning Tip
Please be sure your scanner is set to scan to PDF.
If it’s set to scan to some other format (e.g., JPEG), when you print your scanned document to PDF, it will be much larger than necessary and may be so large CM/ECF will time out before you can upload it.
If you’re not sure how to check your settings, you should first contact your vendor (who should be able to answer your questions).
If your vendor cannot help you, you can give either Harland ((605) 330-4541) or Charles ((605) 224-6013) a call.
Uncaptioned,* Unsigned Documents
Please do not file documents (e.g., pay stubs, the various parts of reaffirmation agreements, supplements, and addenda) that are not captioned or are unsigned, except as an attachment to a document that is captioned and signed.
* Yes, we know “uncaptioned” is not a word.
Link(s)
You may either click on the link(s) provided below or cut and paste it(them) into your browser.
Previous UPDates:
http://www.sdb.uscourts.gov/BankruptcyUpdates.htm
March 24, 2006 UPDate
http://www.sdb.uscourts.gov/BankruptcyUpdates/2006/20060324%20EMail.htm
As always, should you have questions regarding this UPDate or anything else having to do with your dealings with the Court or the Clerk’s office, please let us know.