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§ 524. Effect of discharge
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(a)
A discharge in a case under this title—
(1)
voids any judgment at any time obtained, to the extent that
such judgment is a determination of the personal liability
of the
debtor with respect to any
debt discharged under section
727, 944,
1141,
1228, or
1328 of this title, whether or not discharge of such
debt is waived;
(2)
operates as an injunction against the commencement or continuation
of an action, the employment of process, or an act, to collect,
recover or offset any such
debt as a personal liability of the
debtor, whether or not discharge of such
debt is waived; and
(3) operates as an injunction against the commencement
or continuation of an action, the employment of process,
or an act, to collect or recover from, or offset against,
property of the
debtor of the kind specified in section
541(a)(2) of this title that is acquired after the commencement
of the case, on account of any allowable
community claim, except a
community claim that is excepted from discharge under
section
523,
1228(a)(1), or
1328(a)(1), or that would be so excepted, determined
in accordance with the provisions of sections
523(c) and
523(d) of this title, in a case concerning the
debtor's spouse commenced on the date of the filing
of the
petition in the case concerning the
debtor, whether or not discharge of the
debt based on such
community claim is waived.
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(b)
Subsection
(a)(3)
of this section does not apply if—
(1)(A)
the
debtor's spouse is a
debtor in a case under this title, or a bankrupt or
a
debtor in a case under the Bankruptcy Act, commenced
within six years of the date of the filing of the
petition in the case concerning the
debtor; and
(B)
the court does not grant the
debtor's spouse a discharge in such case concerning
the
debtor's spouse; or
(2)(A) the court would not grant
the
debtor's spouse a discharge in a case under chapter
7 of this title concerning such spouse commenced on
the date of the filing of the
petition in the case concerning the
debtor; and
(B)
a determination that the court would not so grant such discharge
is made by the bankruptcy court within the time and in the
manner provided for a determination under section
727 of this title of whether a
debtor is granted a discharge.
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(c)
An agreement between a holder of a
claim and the
debtor, the consideration for which, in whole or in
part, is based on a
debt that is dischargeable in a case under this title
is enforceable only to any extent enforceable under applicable
nonbankruptcy law, whether or not discharge of such
debt is waived, only if—
(1)
such agreement was made before the granting of the discharge
under section
727,
1141,
1228, or
1328 of this title;
(2) the
debtor received the disclosures described in subsection
(k) at
or before the time at which the
debtor signed the agreement;
(3)
such agreement has been filed with the court and, if applicable,
accompanied by a declaration or an affidavit of the
attorney that represented the
debtor during the course of negotiating an agreement
under this subsection, which states that—
(A)
such agreement represents a fully informed and voluntary
agreement by the
debtor;
(B)
such agreement does not impose an undue hardship on the
debtor or a
dependent of the
debtor; and
(C)
the
attorney fully advised the
debtor of the legal effect and consequences of—
(i) an agreement of the
kind specified in this subsection; and
(ii) any default under
such an agreement;
(4)
the
debtor has not rescind such agreement at any time prior
to discharge or within sixty days after such agreement is
filed with the court, whichever occurs later, by giving
notice of rescission to the holder of such
claim;
(5)
the provisions of subsection
(d) of
this section have been complied with; and
(6)(A) in a case concerning
an individual who was not represented by an
attorney during the course of negotiating an agreement
under this subsection, the court approves such agreement
as—
(i) not imposing an undue
hardship on the
debtor or a
dependent of the
debtor; and
(ii) in the best interest
of the
debtor.
(B)
Subparagraph
(A)
shall not apply to the extent that such
debt is a
consumer debt secured by real property.
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(d)
In a case concerning an individual, when the court has determined
whether to grant or not to grant a discharge under section
727,
1141,
1228(a), or
1328 of this title, the court may hold a hearing at
which the
debtor shall appear in
person. At any such hearing, the court shall inform
the
debtor that a discharge has been granted or the reason
why a discharge has not been granted. If a discharge has
been granted and if the
debtor desires to make an agreement of the kind specified
in subsection
(c) of
this section and was not represented by an
attorney during the course of negotiating such agreement,
then the court shall hold a hearing at which the
debtor shall appear in
person and at such hearing the court shall—
(1)
inform the
debtor—
(A)
that such an agreement is not required under this title,
under nonbankruptcy law, or under any agreement not made
in accordance with the provisions of subsection
(c) of
this section; and
(B)
of the legal effect and consequences of—
(i) an agreement of the
kind specified in subsection
(c) of
this section; and
(ii) a default under such
an agreement; and
(2)
determine whether the agreement that the
debtor desires to make complies with the requirements
of subsection
(c)(6)
of this section, if the consideration for such agreement
is based in whole or in part on a
consumer debt that is not secured by real property of
the
debtor.
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(e)
Except as provided in subsection
(a)(3)
of this section, discharge of a
debt of the
debtor does not affect the liability of any other
entity on, or the property of any other
entity for, such
debt.
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(f)
Nothing contained in subsection
(c) or
(d) of
this section prevents a
debtor from voluntarily repaying any
debt.
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(g)(1)(A) After notice and hearing,
a court that enters an order confirming a plan of reorganization
under chapter
11 may issue, in connection with such order, an injunction
in accordance with this subsection to supplement the injunctive
effect of a discharge under this section.
(B)
An injunction may be issued under subparagraph
(A)
to enjoin entities from taking legal action for the purpose
of directly or indirectly collecting, recovering, or receiving
payment or recovery with respect to any
claim or demand that, under a plan of reorganization,
is to be paid in whole or in part by a trust described in
paragraph
(2)(B)(i),
except such legal actions as are expressly allowed by the
injunction, the confirmation order, or the plan of reorganization.
(2)(A) Subject to subsection
(h), if
the requirements of subparagraph
(B)
are met at the time an injunction described in paragraph
(1)
is entered, then after entry of such injunction, any proceeding
that involves the validity, application, construction, or
modification of such injunction, or of this subsection with
respect to such injunction, may be commenced only in the
district court in which such injunction was entered, and
such court shall have exclusive jurisdiction over any such
proceeding without regard to the amount in controversy.
(B)
The requirements of this subparagraph are that—
(i)
the injunction is to be implemented in connection with a
trust that, pursuant to the plan of reorganization—
(I) is to assume the liabilities
of a
debtor which at the time of entry of the
order for relief has been named as a defendant in personal
injury, wrongful death, or property-damage actions seeking
recovery for damages allegedly caused by the presence of,
or exposure to, asbestos or asbestos-containing products;
(II) is to be funded in
whole or in part by the
securities of 1 or more
debtors involved in such plan and by the obligation
of such
debtor or
debtors to make future payments, including dividends;
(III) is to own, or by the exercise of rights granted
under such plan would be entitled to own if specified contingencies
occur, a majority of the voting shares of—
(aa) each such
debtor;
(bb) the parent
corporation of each such
debtor; or
(cc) a subsidiary of each such
debtor that is also a
debtor; and
(IV) is to use its assets or income to pay
claims and demands; and
(ii) subject to subsection
(h),
the court determines that—
(I) the
debtor is likely to be subject to substantial future
demands for payment arising out of the same or similar conduct
or events that gave rise to the
claims that are addressed by the injunction;
(II) the actual amounts, numbers, and timing of such
future demands cannot be determined;
(III) pursuit of such demands outside the procedures
prescribed by such plan is likely to threaten the plan's
purpose to deal equitably with
claims and future demands;
(IV) as part of the process
of seeking confirmation of such plan—
(aa) the terms of the injunction
proposed to be issued under paragraph
(1)(A),
including any provisions barring actions against third parties
pursuant to paragraph
(4)(A),
are set out in such plan and in any disclosure statement
supporting the plan; and
(bb) a separate class or
classes of the claimants whose
claims are to be addressed by a trust described in clause
(i)
is established and votes, by at least 75 percent of those
voting, in favor of the plan; and
(V) subject to subsection
(h), pursuant
to court orders or otherwise, the trust will operate through
mechanisms such as structured, periodic, or supplemental
payments, pro rata distributions, matrices, or periodic
review of estimates of the numbers and values of present
claims and future demands, or other comparable mechanisms,
that provide reasonable assurance that the trust will value,
and be in a financial position to pay, present
claims and future demands that involve similar
claims in substantially the same manner.
(3)(A) If the requirements of
paragraph
(2)(B)
are met and the order confirming the plan of reorganization
was issued or affirmed by the district court that has jurisdiction
over the reorganization case, then after the time for appeal
of the order that issues or affirms the plan—
(i)
the injunction shall be valid and enforceable and
may not be revoked or modified by any court except through
appeal in accordance with paragraph
(6);
(ii)
no
entity that pursuant to such plan or thereafter becomes
a direct or indirect transferee of, or successor to any
assets of, a
debtor or trust that is the subject of the injunction
shall be liable with respect to any
claim or demand made against such
entity by reason of its becoming such a transferee or
successor; and
(iii)
no
entity that pursuant to such plan or thereafter makes
a loan to such a
debtor or trust or to such a successor or transferee
shall, by reason of making the loan, be liable with respect
to any
claim or demand made against such
entity, nor shall any pledge of assets made in connection
with such a loan be upset or impaired for that reason;
(B)
Subparagraph
(A)
shall not be construed to—
(i)
imply that an
entity described in subparagraph
(A)(ii)
or (iii)
would, if this paragraph were not applicable, necessarily
be liable to any
entity by reason of any of the acts described in subparagraph
(A);
(ii)
relieve any such
entity of the duty to comply with, or of liability under,
any Federal or
State law regarding the making of a fraudulent conveyance
in a transaction described in subparagraph
(A)(ii)
or (iii);
or
(iii)
relieve a
debtor of the
debtor's obligation to comply with the terms of the
plan of reorganization, or affect the power of the court
to exercise its authority under sections
1141 and
1142 to compel the
debtor to do so.
(4)(A)(i) Subject to subparagraph
(B),
an injunction described in paragraph
(1)
shall be valid and enforceable against all entities that
it addresses.
(ii)
Notwithstanding the provisions of section
524(e),
such an injunction may bar any action directed against a
third party who is identifiable from the terms of such injunction
(by name or as part of an identifiable group) and is alleged
to be directly or indirectly liable for the conduct of,
claims against, or demands on the
debtor to the extent such alleged liability of such
third party arises by reason of—
(I) the third party's ownership
of a financial interest in the
debtor, a past or present
affiliate of the
debtor, or a predecessor in interest of the
debtor;
(II) the third party's
involvement in the management of the
debtor or a predecessor in interest of the
debtor, or service as an officer, director or employee
of the
debtor or a related party;
(III) the third party's
provision of insurance to the
debtor or a related party; or
(IV) the third party's
involvement in a transaction changing the corporate structure,
or in a loan or other financial transaction affecting the
financial condition, of the
debtor or a related party, including but not limited
to—
(aa) involvement in providing
financing (debt
or equity), or advice to an
entity involved in such a transaction; or
(bb) acquiring or selling
a financial interest in an
entity as part of such a transaction.
(iii)
As used in this subparagraph, the term "related party" means—
(I) a past or present
affiliate of the
debtor;
(II) a predecessor in interest
of the
debtor; or
(III) any
entity that owned a financial interest in—
(aa) the
debtor;
(bb) a past or present
affiliate of the
debtor; or
(cc) a predecessor in interest
of the
debtor.
(B)
Subject to subsection
(h), if,
under a plan of reorganization, a kind of demand described
in such plan is to be paid in whole or in part by a trust
described in paragraph
(2)(B)(i)
in connection with which an injunction described in paragraph
(1)
is to be implemented, then such injunction shall be valid
and enforceable with respect to a demand of such kind made,
after such plan is confirmed, against the
debtor or
debtors involved, or against a third party described
in subparagraph
(A)(ii),
if—
(i)
as part of the proceedings leading to issuance of such injunction,
the court appoints a legal representative for the purpose
of protecting the rights of
persons that might subsequently assert demands of such
kind, and
(ii)
the court determines, before entering the order confirming
such plan, that identifying such
debtor or
debtors, or such third party (by name or as part of
an identifiable group), in such injunction with respect
to such demands for purposes of this subparagraph is fair
and equitable with respect to the
persons that might subsequently assert such demands,
in light of the benefits provided, or to be provided, to
such trust on behalf of such
debtor or
debtors or such third party.
(5)
In this subsection, the term "demand" means a demand for
payment, present or future, that—
(A)
was not a
claim during the proceedings leading to the confirmation
of a plan of reorganization;
(B)
arises out of the same or similar conduct or events that
gave rise to the
claims addressed by the injunction issued under paragraph
(1); and
(C)
pursuant to the plan, is to be paid by a trust described
in paragraph
(2)(B)(i).
(6)
Paragraph
(3)(A)(i)
does not bar an action taken by or at the direction of an
appellate court on appeal of an injunction issued under
paragraph
(1)
or of the order of confirmation that relates to the injunction.
(7)
This subsection does not affect the operation of section
1144 or the power of the district court to refer a proceeding
under section
157 of title
28 or any reference of a proceeding made prior to the
date of the enactment of this subsection.
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(h)
Application to existing injunctions.—For purposes of
subsection
(g)—
(1)
subject to paragraph
(2),
if an injunction of the kind described in subsection
(g)(1)(B)
was issued before the date of the enactment of this Act,
as part of a plan of reorganization confirmed by an order
entered before such date, then the injunction shall be considered
to meet the requirements of subsection
(g)(2)(B)
for purposes of subsection
(g)(2)(A),
and to satisfy subsection
(g)(4)(A)(ii),
if—
(A)
the court determined at the time the plan was confirmed
that the plan was fair and equitable in accordance with
the requirements of section
1129(b);
(B)
as part of the proceedings leading to issuance of such injunction
and confirmation of such plan, the court had appointed a
legal representative for the purpose of protecting the rights
of
persons that might subsequently assert demands described
in subsection
(g)(4)(B)
with respect to such plan; and
(C)
such legal representative did not object to confirmation
of such plan or issuance of such injunction; and
(2)
for purposes of paragraph
(1),
if a trust described in subsection
(g)(2)(B)(i)
is subject to a court order on the date of the enactment
of this Act staying such trust from settling or paying further
claims—
(A)
the requirements of subsection
(g)(2)(B)(ii)(V)
shall not apply with respect to such trust until such stay
is lifted or dissolved; and
(B)
if such trust meets such requirements on the date such stay
is lifted or dissolved, such trust shall be considered to
have met such requirements continuously from the date of
the enactment of this Act.
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(i) The willful failure of a
creditor to credit payments received under a plan confirmed
under this title, unless the order confirming the plan is
revoked, the plan is in default, or the
creditor has not received payments required to be made
under the plan in the manner required by the plan (including
crediting the amounts required under the plan), shall constitute
a violation of an injunction under subsection
(a)(2)
if the act of the
creditor to collect and failure to credit payments in
the manner required by the plan caused material injury to
the
debtor.
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(j) Subsection
(a)(2)
does not operate as an injunction against an act by a
creditor that is the holder of a secured
claim, if—
(1) such
creditor retains a
security interest in real property that is the principal
residence of the
debtor;
(2) such act is in the ordinary course of business
between the
creditor and the
debtor; and
(3) such act is limited to seeking or obtaining
periodic payments associated with a valid
security interest in lieu of pursuit of in rem relief
to enforce the
lien.
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(k)(1) The disclosures required under subsection
(c)(2)
shall consist of the disclosure statement described in paragraph
(3),
completed as required in that paragraph, together with the
agreement specified in subsection
(c), statement,
declaration, motion and order described, respectively, in
paragraphs
(4) through
(8),
and shall be the only disclosures required in connection
with entering into such agreement.
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(2) Disclosures made under paragraph
(1) shall
be made clearly and conspicuously and in writing. The terms
"Amount Reaffirmed" and "Annual Percentage Rate" shall be
disclosed more conspicuously than other terms, data or information
provided in connection with this disclosure, except that
the phrases "Before agreeing to reaffirm a
debt, review these important disclosures" and "Summary
of Reaffirmation Agreement" may be equally conspicuous.
Disclosures may be made in a different order and may use
terminology different from that set forth in paragraphs
(2) through
(8),
except that the terms "Amount Reaffirmed" and "Annual Percentage
Rate" must be used where indicated.
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(3) The disclosure statement required under this
paragraph shall consist of the following:
(A) The statement: "Part A: Before agreeing to reaffirm
a
debt, review these important disclosures:"
(B) Under the heading "Summary of Reaffirmation
Agreement", the statement: "This Summary is made pursuant
to the requirements of the Bankruptcy Code";
(C) The "Amount Reaffirmed", using that term, which
shall be—
(i) the total amount of
debt that the
debtor agrees to reaffirm by entering into an agreement
of the kind specified in subsection
(c), and
(ii) the total of any fees and costs accrued as
of the date of the disclosure statement, related to such
total amount.
(D) In conjunction with the disclosure of the "Amount
Reaffirmed", the statements—
(i) "The amount of
debt you have agreed to reaffirm"; and
(ii) "Your credit agreement may obligate you to
pay additional amounts which may come due after the date
of this disclosure. Consult your credit agreement.".
(E) The "Annual Percentage Rate", using that term,
which shall be disclosed as—
(i) if, at the time the petition is filed, the
debt is an extension of credit under an open end credit
plan, as the terms "credit" and "open end credit plan" are
defined in section 103 of the Truth in Lending Act,
then—
(I) the annual percentage rate determined under
paragraphs (5) and (6) of section 127(b) of the Truth in
Lending Act,
as applicable, as disclosed to the
debtor in the most recent periodic statement prior to
entering into an agreement of the kind specified in subsection
(c) or,
if no such periodic statement has been given to the
debtor during the prior 6 months, the annual percentage
rate as it would have been so disclosed at the time the
disclosure statement is given to the
debtor, or to the extent this annual percentage rate
is not readily available or not applicable, then
(II) the simple interest rate applicable to the
amount reaffirmed as of the date the disclosure statement
is given to the
debtor, or if different simple interest rates apply
to different balances, the simple interest rate applicable
to each such balance, identifying the amount of each such
balance included in the amount reaffirmed, or
(III) if the
entity making the disclosure elects, to disclose the
annual percentage rate under subclause
(I)
and the simple interest rate under subclause
(II);
or
(ii) if, at the time the petition is filed, the
debt is an extension of credit other than under an open
end credit plan, as the terms "credit "and "open end credit
plan" are defined in section 103 of the Truth in Lending
Act,
then—
(I) the annual percentage rate under section 128(a)(4)
of the Truth in Lending Act,
as disclosed to the
debtor in the most recent disclosure statement given
to the
debtor prior to the entering into an agreement of the
kind specified in subsection
(c) with
respect to the
debt, or, if no such disclosure statement was given
to the
debtor, the annual percentage rate as it would have
been so disclosed at the time the disclosure statement is
given to the
debtor, or to the extent this annual percentage rate
is not readily available or not applicable, then
(II) the simple interest rate applicable to the
amount reaffirmed as of the date the disclosure statement
is given to the
debtor, or if different simple interest rates apply
to different balances, the simple interest rate applicable
to each such balance, identifying the amount of such balance
included in the amount reaffirmed, or
(III) if the
entity making the disclosure elects, to disclose the
annual percentage rate under
(I)
and the simple interest rate under
(II).
(F) If the underlying
debt transaction was disclosed as a variable rate transaction
on the most recent disclosure given under the Truth in Lending
Act,
by stating "The interest rate on your loan may be a variable
interest rate which changes from time to time, so that the
annual percentage rate disclosed here may be higher or lower.".
(G) If the
debt is secured by a
security interest which has not been waived in whole
or in part or determined to be void by a final order of
the court at the time of the disclosure, by disclosing that
a
security interest or
lien in goods or property is asserted over some or all
of the
debts the
debtor is reaffirming and listing the items and their
original purchase price that are subject to the asserted
security interest, or if not a purchase-money
security interest then listing by items or types and
the original amount of the loan.
(H) At the election of the
creditor, a statement of the repayment schedule using
1 or a combination of the following—
(i) by making the statement: "Your first payment
in the amount of $_____ is due on _____ but the future payment
amount may be different. Consult your reaffirmation agreement
or credit agreement, as applicable.", and stating the amount
of the first payment and the due date of that payment in
the places provided;
(ii) by making the statement: "Your payment schedule
will be:", and describing the repayment schedule with the
number, amount, and due dates or period of payments scheduled
to repay the
debts reaffirmed to the extent then known by the disclosing
party; or
(iii) by describing the
debtor's repayment obligations with reasonable specificity
to the extent then known by the disclosing party.
(I) The following statement: "Note: When this disclosure
refers to what a
creditor "may" do, it does not use the word "may" to
give the
creditor specific permission. The word "may" is used
to tell you what might occur if the law permits the
creditor to take the action. If you have questions about
your reaffirming a
debt or what the law requires, consult with the
attorney who helped you negotiate this agreement reaffirming
a
debt. If you don’t have an
attorney helping you, the judge will explain the effect
of your reaffirming a
debt when the hearing on the reaffirmation agreement
is held.".
(J)(i) The following additional statements:
"Reaffirming a
debt is a serious financial decision. The law requires
you to take certain steps to make sure the decision is in
your best interest. If these steps are not completed, the
reaffirmation agreement is not effective, even though you
have signed it.
"1. Read the disclosures in this Part A carefully. Consider
the decision to reaffirm carefully. Then, if you want to
reaffirm, sign the reaffirmation agreement in Part B (or
you may use a separate agreement you and your
creditor agree on).
"2. Complete and sign Part D and be sure you can afford
to make the payments you are agreeing to make and have received
a copy of the disclosure statement and a completed and signed
reaffirmation agreement.
"3. If you were represented by an
attorney during the negotiation of your reaffirmation
agreement, the
attorney must have signed the certification in Part
C.
"4. If you were not represented by an
attorney during the negotiation of your reaffirmation
agreement, you must have completed and signed Part E.
"5. The original of this disclosure must be filed with the
court by you or your
creditor. If a separate reaffirmation agreement (other
than the one in Part B) has been signed, it must be attached.
"6. If you were represented by an
attorney during the negotiation of your reaffirmation
agreement, your reaffirmation agreement becomes effective
upon filing with the court unless the reaffirmation is presumed
to be an undue hardship as explained in Part D.
"7. If you were not represented by an
attorney during the negotiation of your reaffirmation
agreement, it will not be effective unless the court approves
it. The court will notify you of the hearing on your reaffirmation
agreement. You must attend this hearing in bankruptcy court
where the judge will review your reaffirmation agreement.
The bankruptcy court must approve your reaffirmation agreement
as consistent with your best interests, except that no court
approval is required if your reaffirmation agreement is
for a
consumer debt secured by a mortgage, deed of trust,
security deed, or other
lien on your real property, like your home.
"Your right to rescind (cancel) your reaffirmation agreement.
You may rescind (cancel) your reaffirmation agreement at
any time before the bankruptcy court enters a discharge
order, or before the expiration of the 60-day period that
begins on the date your reaffirmation agreement is filed
with the court, whichever occurs later. To rescind (cancel)
your reaffirmation agreement, you must notify the
creditor that your reaffirmation agreement is rescind
(or canceled).
"What are your obligations if you reaffirm the
debt? A reaffirmed
debt remains your personal legal obligation. It is not
discharged in your bankruptcy case. That means that if you
default on your reaffirmed
debt after your bankruptcy case is over, your
creditor may be able to take your property or your wages.
Otherwise, your obligations will be determined by the reaffirmation
agreement which may have changed the terms of the original
agreement. For example, if you are reaffirming an open end
credit agreement, the
creditor may be permitted by that agreement or applicable
law to change the terms of that agreement in the future
under certain conditions.
"Are you required to enter into a reaffirmation agreement
by any law? No, you are not required to reaffirm a
debt by any law. Only agree to reaffirm a
debt if it is in your best interest. Be sure you can
afford the payments you agree to make.
"What if your
creditor has a
security interest or
lien? Your bankruptcy discharge does not eliminate any
lien on your property. A 'lien'
is often referred to as a
security interest, deed of trust, mortgage or security
deed. Even if you do not reaffirm and your personal liability
on the
debt is discharged, because of the
lien your
creditor may still have the right to take the
property securing the lien if you do not pay the
debt or default on it. If the
lien is on an item of personal property that is exempt
under your
State’s law or that the trustee has abandoned, you may
be able to redeem the item rather than reaffirm the
debt. To redeem, you must make a single payment to the
creditor equal to the amount of the allowed secured
claim, as agreed by the parties or determined by the
court."
(ii) In the case of a reaffirmation under subsection
(m)(2),
numbered paragraph
6
in the disclosures required by clause
(i)
of this subparagraph shall read as follows:
"6. If you were represented by an
attorney during the negotiation of your reaffirmation
agreement, your reaffirmation agreement becomes effective
upon filing with the court."
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(4) The form of such agreement required under this
paragraph shall consist of the following:
"Part B: Reaffirmation Agreement. I (we) agree to reaffirm
the
debts arising under the credit agreement described below.
"Brief description of credit agreement:
"Description of any changes to the credit agreement made
as part of this reaffirmation agreement:
"Signature:
Date:
"Borrower:
"Co-borrower, if also reaffirming these
debts:
"Accepted by
creditor:
"Date of
creditor acceptance:"
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(5) The declaration shall consist of the following:
(A) The following certification:
"Part C: Certification by Debtor's Attorney (If Any).
"I hereby certify that, (1) this agreement represents
a fully informed and voluntary agreement by the
debtor; (2) this agreement does not impose an
undue hardship on the
debtor or any
dependent of the
debtor; and (3) I have fully advised the
debtor of the legal effect and consequences of this
agreement and any default under this agreement.
"Signature of Debtor's Attorney:
Date:".
(B) If a presumption of undue hardship has been
established with respect to such agreement, such certification
shall state that in the opinion of the
attorney, the
debtor is able to make the payment.
(C) In the case of a reaffirmation agreement under
subsection
(m)(2),
subparagraph
(B)
is not applicable .
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(6)(A) The statement in support of such agreement,
which the
debtor shall sign and date prior to filing with the
court, shall consist of the following:
"Part D: Debtor's Statement in Support of Reaffirmation
Agreement.
"1. I believe this reaffirmation agreement will not impose
an undue hardship on my
dependents or me. I can afford to make the payments
on the reaffirmed
debt because my monthly income (take home pay plus any
other income received) is $_____, and my actual current
monthly expenses including monthly payments on post bankruptcy
debt and other reaffirmation agreements total $_____,
leaving $_____ to make the required payments on this reaffirmed
debt. I understand that if my income less my monthly
expenses does not leave enough to make the payments, this
reaffirmation agreement is presumed to be an undue hardship
on me and must be reviewed by the court. However, this presumption
may be overcome if I explain to the satisfaction of the
court how I can afford to make the payments here: _____
"2. I received a copy of the Reaffirmation Disclosure Statement
in Part A and a completed and signed reaffirmation agreement.".
(B) Where the
debtor is represented by an
attorney and is reaffirming a
debt owed to a
creditor defined in section 19(b)(1)(A)(iv) of the Federal
Reserve Act,
the statement of support of the reaffirmation agreement,
which the
debtor shall sign and date prior to filing with the
court, shall consist of the following:
"I believe this reaffirmation agreement is in my financial
interest. I can afford to make the payments on the reaffirmed
debt. I received a copy of the Reaffirmation Disclosure
Statement in Part A and a completed and signed reaffirmation
agreement.".
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(7) The motion that may be used if approval of such
agreement by the court is required in order for it to be
effective, shall be signed and dated by the movant and shall
consist of the following:
"Part E: Motion for Court Approval (To be completed only
if the
debtor is not represented by an
attorney.). I (we), the debtor(s), affirm the following
to be true and correct:
"I am not represented by an
attorney in connection with this reaffirmation agreement.
"I believe this reaffirmation agreement is in my best interest
based on the income and expenses I have disclosed in my
Statement in Support of this reaffirmation agreement, and
because (provide any additional relevant reasons the court
should consider):
"Therefore, I ask the court for an order approving this
reaffirmation agreement.".
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(8) The court order, which may be used to approve
such agreement, shall consist of the following:
"Court Order: The court grants the
debtor's motion and approves the reaffirmation agreement
described above.".
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(l) Notwithstanding any other provision of this
title the following shall apply:
(1) A
creditor may accept payments from a
debtor before and after the filing of an agreement of
the kind specified in subsection
(c) with
the court.
(2) A
creditor may accept payments from a
debtor under such agreement that the
creditor believes in good faith to be effective.
(3) The requirements of subsections
(c)(2)
and (k)
shall be satisfied if disclosures required under those subsections
are given in good faith.
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(m)(1) Until 60 days after an agreement of the kind
specified in subsection
(c) is
filed with the court (or such additional period as the court,
after notice and a hearing and for cause, orders before
the expiration of such period), it shall be presumed that
such agreement is an undue hardship on the
debtor if the
debtor's monthly income less the
debtor's monthly expenses as shown on the
debtor's completed and signed statement in support of
such agreement required under subsection
(k)(6)(A)
is less than the scheduled payments on the reaffirmed
debt. This presumption shall be reviewed by the court.
The presumption may be rebutted in writing by the
debtor if the statement
includes an explanation that identifies additional sources
of funds to make the payments as agreed upon under the terms
of such agreement. If the presumption is not rebutted to
the satisfaction of the court, the court may disapprove
such agreement. No agreement shall be disapproved without
notice and a hearing to the
debtor and
creditor, and such hearing shall be concluded before
the entry of the
debtor's discharge.
(2) This subsection does not apply to reaffirmation
agreements where the
creditor is a credit union, as defined in section 19(b)(1)(A)(iv)
of the Federal Reserve Act.
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(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2592; Pub.
L. 98-353, title III, § 308, 455, July 10, 1984,
98 Stat. 354, 376; Pub. L. 99-554, title II, § 257(o), 282,
283(k), Oct. 27, 1986, 100 Stat. 3115-3117; Pub.
L.
103-394, title I, § 103, 111(a), title V, § 501(d)(14),
Oct. 22, 1994, 108 Stat. 4108, 4113, 4145; Pub. L.
109-8, Title II, Subtitle A, §§
202,
203(a), Title XII, §
1210, April 20, 2005, 119 Stat. 43, 194; Pub.
L.
111-327, § 2(a)(19), Dec. 22, 2010, 124
Stat. 3559.)
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©2005-2013 - WEBER LAW FIRM, P.C.
- All Rights Reserved
Page Last Updated:
June 17, 2013
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