Consumer Bankruptcy Journal Winter 2016 - Page 14

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 14 CONSUMER BANKRUPTCY JOURNAL 6 Winter 2016 National Association of Consumer Bankruptcy Attorneys