Consumer Bankruptcy Journal Winter 2016 - Page 9

COMMENTS OF THE NACBA COMMENTS OF THE NATIONAL ASSOCIATION OF CONSUMER BANKRUPTCY ATTORNEYS Regarding the Proposed Amendments to FRBP 3015 and New Rule 3015.1 October 3, 2016 Summary NACBA appreciates the opportunity to comment on the new “compromise” proposal regarding form chapter 13 plans that was first advanced by a group of creditor attorneys and bankruptcy judges and that has now been proposed, with modifications, by the Advisory Committee. These comments follow up and expand on the testimony offered to the Committee on September 27, 2016, by Jenny Doling, Norma Hammes, and James “Ike” Shulman. From our perspective, the proposal is not a compromise, but rather embodies a concept that is radically different from the original proposal. To the extent some NACBA members supported the original proposal for a national form plan, it was because they believed that many unofficial local form chapter 13 plans had provisions that infringed on the rights of debtors and that a national plan would eliminate that problem. The “compromise” goes in exactly the opposite direction, and would have the effect of giving an official imprimatur to those local plans, which they have never had before. Indeed, because almost all bankruptcy courts have adopted local chapter 13 plans, that is almost the only thing that the proposal will do with respect to plans. It does not even require the uniformity of format that was one of the principal objectives of the proposal for a national plan. There is simply no reason why the rules should legitimize plans that in some cases do not even comply with the law. As is evident from our earlier comments and the testimony of our witnesses, we are particularly concerned that any form plan not limit the debtor’s fundamental right to propose a plan under § 1321 of the Code. It is the debtor, not the Court or the trustee, who is to propose a plan, and that plan may have any appropriate provision not inconsistent with title 11. At a minimum, if a rule to require use of local forms is adopted, the comments should make clear that no local plan can limit the debtor’s substantive rights or the debtor’s right to propose and obtain timely confirmation of a plan that contains alternative provisions not inconsistent with the Code or Rules. Further, the comments should emphasize that there should be no presumption that the provisions of a form plan are in some way better than other provisions, nor should there be additional procedural hurdles, such as special hearings not required when the form plan is proposed, to prove that nonstandard provisions are proper. In particular, a debtor should, without question, be able to use provisions from the proposed national form that have been thoroughly debated and approved by the Advisory Committee. National Association of Consumer Bankruptcy Attorneys 1 Winter 2016 CONSUMER BANKRUPTCY JOURNAL 9