COMMENTS OF THE NACBA
them and what their rights are. Many of these lengthy passages are likely to be in violation of 28
U.S.C. § 2075 and FRBP 9029. These excessive notices are not, by any means, required by the
Supreme Court’s ruling in United Student Aid Funds v. Espinosa, 130 S.Ct. 1367 (2010), but that
decision appears to be the basis for many of the lengthier portions of these model plans. We
believe these notices are not only unnecessary, but are actually harmful to debtors, enlarge
creditors’ rights, and obscure the operative content of the plan.
NACBA urges that if the proposed rules are adopted, the comments include a reminder to avoid
notices that duplicate parts of the 341 notice, explanations of the law, and restatements of data
that are included in the petition or schedules.
3.
Adding to or deviating from model plan provisions
The mandatory model plans have several different methods of accommodating (or
not) the debtors’ right to propose their own plans pursuant to 11 U.S.C. § 1321. The most
glaring violation of § 1321 appears in four jurisdictions, where debtors are strongly admonished
against adding or changing any provisions in the model plan without first moving for and
obtaining a court order permitting them. Thirteen model plans allowed editing the text
throughout the plan, indicating the changes with boldface, underlines, or strike-outs. Four model
plans did not seem to have any place to add provisions. The vast majority of the plans used
language similar to the proposed National Plan, which limits the changes or additions to a
specific section and voids any other changes in the plan. The treatment of additional provisions
was unclear in seven plans. The ability of debtors to propose specific provisions and strike-out
or change provisions within model plans is crucial. To effectively prevent debtors from so doing
is an egregious violation of their basic bankruptcy rights.
Quite a few of the local rules mandating their model plans state that the debtor’s plan must
“substantially conform” to the model plan – which gives the impression that the debtor is still
allowed some leeway to propose his/her own plan, as provided in § 1321. In practice many
debtors’ attorneys find that this rule provision is of no effect and the judges and trustees are not
amenable to any deviation at all from the model plan.
As generally indicated in the Summary above, NACBA urges that if the proposed rules are
adopted, local model plans be required to permit the debtor to edit, add, delete, and change the
text of the plan, with clear notations of those changes; and to prohibit the court and trustee from
delaying plan confirmation or otherwise procedurally disadvantaging debtors who do this.
4.
Revesting provisions
Revesting provisions are, to some, among the least “interesting” of the types of
plan provisions; however, they are extremely important to the outcome of many debtors’ cases.
The Code provides that unless otherwise provided in the plan, property of the estate revests in
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CONSUMER BANKRUPTCY JOURNAL
6
Winter 2016
National Association of Consumer Bankruptcy Attorneys