Chapter 4 (Information Gathering, Analysis, Counseling, and Drafting)(pp. 50-87)
51before the 1st bullet, add a new bullet which is Insert 4-1
Insert 4-1
•If the debtor is an individual and is a candidate for bankruptcy, the paralegal informs the debtor that the debtor is required, within 180 days preceding a bankruptcy filing, to receive an individual or group briefing from an approved nonprofit budget and credit counseling agency that outlines the opportunities for credit counseling and a budget analysis.
65B. ANALYSIS: NONBANKRUPTCY OR BANKRUPTCY -- 1st ¶, 9th line -- change "six" to "eight"
At the end of 1st ¶, add Insert 4-2
Insert 4-2
Third, the attorney must determined whether the debtor satisfies the means test of 11 U.S.C.A. § 707(b) so the debtor's Chapter 7 case will not be presumed to be in abuse of Chapter 7 and thereby dismissed.
661. Alternatives to a Bankruptcy Filing – 2nd ¶, 3rd line (after the end of the 2nd sentence) add Insert 4-3
Insert 4-3
In recognition of this, Congress now requires, as a prerequisite for filing bankruptcy, for consumer debtors to receive a briefing from an approved nonprifit credit counseling agency within 180 days of filing a petition.
701st line -- change "six" to "eight"
1st EXAMPLE -- 3rd line -- change "six" to "eight"
71EXHIBIT 4-1 -- 4th box down -- after "family farmer" insert "and family fisherman"
72block quote towards top of the page -- (b)(2), 4th line -- delete "subsection (c) or (d) of"
same block quote and delete (b)(3) and substitute Insert 4-3
Insert 4-3
(3)(A) a foreign insurance company, engaged in such business in the United States; or
(B) a foreign bank, savings bank, cooperative bank, savings and loan association, building and loan association, or credit union, that has a branch or agency (as defined in section 1(b) of the International Banking Act of 1978 in the United States.
73After PROBLEM 4.13 and before "b. Chapter 9" add Insert 4-1A
Insert 4-1A
The 2005 bankruptcy reform legislation added a Chapter 7 means test. Thus in a case of an individual debtor whose debts are primarily consumer debts, the debtor who was eligible to file under 11 U.S.C.A. § 109(b), may find his or her case dismissed for presumed abuse of the provisions of Chapter 7 under 11 U.S.C.A. § 707(b). Abuse is presumed if the debtor's currently monthly income (i.e., the average of the previous 6 months from all sources) less certain reductions divided by 60 (i.e., secured payments. priority debts, allowed expenses permitted by the Internal Revenue Service (based on the number of persons in the debtor's household in the debtor's state), and certain other allowed expenses), is greater than $100 per month. Official Form B22A (Statement of Current Monthly Income and Means Test Calculation (Chapter 7)) should be consulted. See www.uscourts.gov/bkforms/bankruiptcy_forms.html
74d. Chapter 12 -- Adjustment -- in heading after "Family Farmer" add "or Family Fisherman"
1st line -- delete "The new" before "Chapter 12 is available"
2nd line -- after "family farmers" add "and family fishermen"
2nd line -- change "section" to "sections" and after "(18)" add "and (19A)"
3rd line -- after "family farmer with regular annual income" add "and family fisherman with regular annual income."
after 1st ¶ -- block quote on "family farmer with regular annual income" -- after "(19)" insert the phrase "The term" so it reads
(19) The term "family farmer with regular annual income" means
After the ¶ quoting (19) -- add a ¶ quoting (19B) (Insert 4-4)
Insert 4-4
(19B)The term "family fisherman with regular annual income" means a family fisherman whose annual income is sufficiently stable and regular to enable such family fisherman to make payments under a plan under chapter 12 of this title.
after 2nd ¶ -- block quote on "family farmer" -- after "(18)" insert the phrase "The term" so it reads
(18) The term "family farmer" means --
in the definition of family farmer -- 2nd line -- change "$1,500,000" to "$3,237,000"
same line -- change "80" to "50"
same ¶, 7th line -- delete "the taxable year . . . . filed; or and replace with a dash after "for" so it reads "spouse's gross income for--"
Then in ¶ A add Insert 4-5 at the end and before (B)
Insert 4-5
(i) the taxable year preceding; or
(ii) each of the 2d and 3d taxable years preceding; the taxable year in which the case concerning such individual or such individual and spouse was filed; or
same block quote -- (B)(ii) -- 1st line -- change $1,500,000" to $3,237,000" and change "80" to "50"
at "(21)" add "The term"
Before PROBLEM 4.22 -- add the following (Insert 4-6)
Insert 4-6
(19A) The term "family fisherman" means--
(A) an individual or individual and spouse engaged in a commercial fishing operation--
(i) whose aggregate debts do not exceed $1,500,000 and not less than 80 percent of whose aggregate noncontingent, liquidated debts (excluding a debt for the principal residence of such individual or such individual and spouse, unless such debt arises out of a commercial fishing operation), on the date the case is filed, arise out of a commercial fishing operation owned or operated by such individual or such individual and spouse; and
(ii) who receive from such commercial fishing operation more than 50 percent of such individual's or such individual's and spouse's gross income for the taxable year preceding the taxable year in which the case concerning such individual or such individual and spouse was filed; or
(B)a corporation or partnership--
(i) in which more than 50 percent of the outstanding stock or equity is held by--
(I) 1 family that conducts the commercial fishing operation; or
(II) 1 family and the relatives of the members of such family, and such family or such relatives conduct the commercial fishing operation; and
(ii)(I) more than 80 percent of the value of its assets consists of assets related to the commercial fishing operation;
(II) its aggregate debts do not exceed $1,500,000 and not less than 80 percent of its aggregate noncontingent, liquidated debts (excluding a debt for 1 dwelling which is owned by such corporation or partnership and which a shareholder or partner maintains as a principal residence, unless such debt arises out of a commercial fishing operation), on the date the case is filed, arise out of a commercial fishing operation owned or operated by such corporation or such partnership; and
(III) if such corporation issues stock, such stock is not publicly traded.
75After PROBLEM 4.29 add a new ¶ (Insert 4-7)
Insert 4-7
The dollar amounts for the definition of family farmer will be adjusted every three years. 11 U.S.C.A. § 104(b). Future adjustment dates will be April 1, 2007 and April 1, 2010.
78Before the two ¶s before the EXAMPLE –add Insert 4-7
Insert 4-7
If it appears tht the individual debtor whose debts are primarily consumer debts has sufficient monthly income to fund a Chapter 13 plan, and if the creditor’s claim is not being reaffirmed by the debtor, the creditor may file a motion to dismiss the case as an abuse of Chapter 7.
80 The #4 just above D. Analysis – 2nd line after “under the plan” add “for the applicable commitment period (3 to 5 years or 5 years)”
87Key Terms -- add
family fisherman
family fisherman with regular annual income
1