Consumer Bankruptcy Journal Winter 2016 - Page 17

COMMENTS OF THE NACBA rights in violation of 28 U.S.C. § 2075. It takes no leap of the imagination to believe that where funds which could be used by debtors for basic needs are taken from them and diverted to general unsecured claims, this places those debtors’ plans that much closer to failing due to some unexpected expense during their three- to five-year plan terms. NACBA urges that if the proposed rules are adopted, local model plans be required to offer options for specifying the dividend on general unsecured claims, which include the ability for the debtor to describe his/her own provision. 7. Development of Local Model Plans The process of developing the model plans that have become mandatory has varied substantially across the country, as reported by respondents to NACBA’s survey. Sometimes a judge simply announces it. Sometimes the judge authorizes the Chapter 13 Trustee to design it. Sometimes there is a committee selected by the judge(s) which produces a result that is edited by the judge(s). Sometimes a draft is published for comment, but often not. When a committee is involved, usually there will be an assortment of “stakeholders” selected by the judge to participate (e.g., creditors’ attorneys, trustee(s), and one or two debtors’ attorneys). The fallacy of the concept that a committee of stakeholders should be empowered to develop a mandatory model plan is demonstrated in this scenario. By definition, the majority of the members of the committee are unlikely to have ever prepared a Chapter 13 case and plan, and are also generally unfamiliar with the provisions of 11 U.S.C. §§ 1321, 1322, 1325(a) and (b). Therefore, the development of the plan is likely to resemble a horse-trading negotiating process completely divorced from the statutory framework specified by the Code for the content of chapter 13 plans. This effect is borne out by the comments of survey respondents who were familiar with the process for developing the local model plan. The vast majority of them said that there was little or no discussion of assuring the debtors’ rights under 11 U.S.C. §§ 1321, 1322, 1325(a) and (b). NACBA urges the Advisory Committee, if the proposed rules are adopted, to include a clearly worded instruction that the content of any model plan be reviewed for specific compliance with 11 U.S.C. §§ 1321, 1322, 1325(a) and (b) prior to adoption. National Association of Consumer Bankruptcy Attorneys 9 Winter 2016 CONSUMER BANKRUPTCY JOURNAL 17