Consumer Bankruptcy Journal Winter 2016 - Page 15

COMMENTS OF THE NACBA the debtor upon plan confirmation, but it permits the debtor a whole range of possibilities that are completely ignored by most mandatory model plans. 11 U.S.C. § 1322(b)(9) permits the debtor to provide for vesting “on confirmation of the plan or at a later time, in the debtor or in any other entity.” 77% of the model plans either provided only one revesting provision or provided none, which would default to revesting on plan confirmation. 17% offered two revesting options. Only 6% of the model plans allowed the debtor to specify a revesting provision, like the National Model Plan does. The current group of mandatory model plans seriously abridge debtors’ rights in this regard as well. NACBA urges that if the proposed rules are adopted, local model plans be required to offer revesting options which include the ability for the debtor to describe his/her own provision. 5. Specification of Projected Disposable Income (PDI) and Best Interest of Creditors (BIOC) Test Calculations Many mandatory model plans require the debtor to state the results of the PDI and BIOC tests within the plan. However, some model plans go beyond that to specifying a formula and form to use to calculate those tests. Of the mandatory model plans, 17% specify BIOC calculations that are arguably incorrect and 14% of the mandatory model plans prescribe calculations for PDI or designate the use of PDI arguably incorrectly. Because the debtor is theoretically the proponent of the filed plan, s/he could well be bound by these calculations and results – even if they do not comply with the Code (See Espinosa). NACBA urges that if the proposed rules are adopted, comments encourage the avoidance of mandatory worksheets specifying PDI and BIOC calculations. 6. Methods of Determining Dividends on General Unsecured Claims Nationwide, the great variation in methods of specifying the dividends to be paid on general unsecured claims provided in mandatory model plans is almost beyond imagination. The following options – including combinations of them – are included in the mandatory model plans. Because some plans offer several options, the sum of the identified plan provisions exceeds the number of model plans. a. 26 plans specified or allowed specifying this option: “funds left over after secured, priority, and administrative claims are paid” [on general unsecured claims] b 26 other plans allowed specifying this option: “funds left over after secured, priority, and administrative claims are paid,” combined with one or more other option c. 24 plans specified: “no less than __” d. 36 plans specified or allowed specifying: “$____”, a dollar dividend combined with one or more other option National Association of Consumer Bankruptcy Attorneys 7 Winter 2016 CONSUMER BANKRUPTCY JOURNAL 15