Cite as: Keith M. Lundin, Lundin On Chapter 13, § 72.5, at ¶ ____, LundinOnChapter13.com (last visited __________).
Working from the same statute—the same mandatory1 and permissive2 provisions—and using the same federal rules and official forms, logic, efficiency and good public policy dictate that all bankruptcy courts should use the same form for the Chapter 13 plan. Not happening. In spite of decades of effort by many in the bankruptcy community, local culture dominates the form of the Chapter 13 plan. The only reliable way to know what form to use is to consult the local rules and/or the trustee in each district.
But wait. There is an “Official Form” for the Chapter 13 plan—Official Form 113. It sure looks like an “Official Form.” Once again, the devil is in the Bankruptcy Rules: In 2017, the Committee on Rules of Practice and Procedure of the Judicial Conference on the advice of the Advisory Committee on Bankruptcy Rules amended Bankruptcy Rule 3015(c) to provide:
If there is an Official Form for a plan filed in a chapter 13 case, that form must be used unless a Local Form has been adopted in compliance with Rule 3015.1. With either the Official Form or a Local Form, a nonstandard provision is effective only if it is included in a section of the form designated for nonstandard provisions and is also identified in accordance with any other requirements of the form. As used in this rule and the Official Form or a Local Form, “nonstandard provision” means a provision not otherwise included in the Official or Local Form or deviating from it.
Fed. R. Bankr. P. 3015(c).
The Rules Committee then also enacted this jewel of obfuscation, Bankruptcy Rule 3015.1:
Notwithstanding Rule 9029(a)(1), a district may require that a Local Form for a plan filed in a chapter 13 case be used instead of an Official Form adopted for that purpose if the following conditions are satisfied:
(a) a single Local Form is adopted for the district after public notice and an opportunity for public comment;
(b) each paragraph is numbered and labeled in boldface type with a heading stating the general subject matter of the paragraph;
(c) the Local Form includes an initial paragraph for the debtor to indicate that the plan does or does not:
(1) contain any nonstandard provision;
(2) limit the amount of a secured claim based on a valuation of the collateral for the claim; or
(3) avoid a security interest or lien;
(d) the Local Form contains separate paragraphs for:
(1) curing any default and maintaining payments on a claim secured by the debtor’s principal residence;
(2) paying a domestic-support obligation;
(3) paying a claim described in the final paragraph of § 1325(a) of the Bankruptcy Code; and
(4) surrendering property that secures a claim with a request that the stay under §§ 362(a) and 1301(a) be terminated as to the surrendered collateral; and
(e) the Local Form contains a final paragraph for:
(1) the placement of nonstandard provisions, as defined in Rule 3015(c), along with a statement that any nonstandard provision placed elsewhere in the plan is void; and
(2) certification by the debtor’s attorney or by an unrepresented debtor that the plan contains no nonstandard provision other than those set out in the final paragraph.
Fed. R. Bankr. P. 3015.1.
Anyone with a little experience using federal rules recognizes that something very strange is going on in Bankruptcy Rules 3015(c) and 3015.1. “If there is an Official Form for a plan” is nonsensical given that the Rules Committee approved an Official Form—Form 113—at the same time they enacted Bankruptcy Rules 3015(c) and 3015.1. The casual introductory phrase, “notwithstanding Rule 9029(a)(1),” in Bankruptcy Rule 3015.1 is a startling departure from the normal content of federal rulemaking. “Rule 9029(a)(1)” states that local bankruptcy rules cannot “prohibit or limit the use of the Official Forms.” Rule 3015.1 trashes that fundamental premise and telegraphs that the requirements and limitations that normally apply to local bankruptcy rules don’t apply to any Chapter 13 plans that might be enacted as local bankruptcy forms. All but contradicting itself, new Rule 3015.1 then painstakingly lists at least 12 detailed items that must be included in any local form for the Chapter 13 plan else the “Official” form (“If” it exists?!) is the required form.
No one designs a camel like this unless the process was buffeted by strong competing forces. That’s exactly what happened and a little history is necessary to make any sense of the Nowhere we have landed with respect to the form for the Chapter 13 plan. As you slog through this, don’t lose sight of the ultimate message: the only form for the Chapter 13 plan that is safe to use is the local form prescribed by the district in which you file the Chapter 13 case; if no local form exists, use Official Form 113. Now, a little history.
Prior to December 1, 2017, there was no “Official” form for the Chapter 13 plan. Research demonstrated that there were nearly as many different forms for the Chapter 13 plan as there were bankruptcy courts, judges and Chapter 13 trustees.3 Many practitioners used one-off plans generated by office computer software.4
Prior to 2017, by local rule or local practice, there were required or preferred forms for the Chapter 13 plan in many jurisdictions.5 If a district, or division within a district, had adopted a required plan form, deviation from that form was discouraged and many courts rejected “nonstandard” provisions in the absence of proof of a compelling justification.6 Prior to 2017, a few decisions found provisions of mandatory local plan forms to be inconsistent with the Bankruptcy Code or Bankruptcy Rules.7 In some jurisdictions, a preferred or required form for the Chapter 13 plan could be found through a Web page maintained by the bankruptcy court or by the Chapter 13 trustee. The organization and minimum content of the Chapter 13 plan in the pre-2017 world varied dramatically from district to district.8
A standard form for the Chapter 13 plan always made a great deal of sense—within a district and across judicial districts.9 Almost all Chapter 13 cases require the same categories of information in the plan. Within a district and even across districts, no obvious purpose is served by nonstandard forms for the plan. A fruit salad of forms simply confuses the processing of Chapter 13 cases. The trustees and creditors are forced by nonstandard plans to search for the basic information necessary for noticing, confirmation and distributions in Chapter 13 cases. A standard form for the plan guides all Chapter 13 players to the information that is important and reveals at a glance when there is a problem. Nonstandard forms multiply the opportunities for mistakes, confusion and deception.
The drafting of a model national form for the Chapter 13 plan was undertaken at a series of Institutes sponsored by the National Association of Chapter 13 Trustees beginning in 2002. The model form that emerged from that effort is found in Appendix 51 (SSS/E). The Model Plan was short—hardly two pages. It standardized the location of various optional plan provisions and the plan itself could be used as the notice of the content of the plan for purposes of Bankruptcy Rule 2002. The history of the first Model Plan and arguments in favor of its use are also found in Appendix 51 (SSS/E).
The Model Plan first published in 2002 was revised from time to time. A draft of that early Model Plan was submitted to the Advisory Committee on Bankruptcy Rules in 2003. The Advisory Committee responded that a standard form for the Chapter 13 plan was a “worthwhile goal” but “not practical” at that time because of (ironically) variations in local forms and local practice.
The Model Chapter 13 Plan that was drafted at the Advanced Consumer Bankruptcy Practice Institute in 2002 was significantly redrafted in 2006 to address Code changes by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).10 The Model Plan (BAPCPA) is printed in Appendix 50 (GG). BAPCPA compelled the Chapter 13 plan to become much longer and much more complicated. The pre-BAPCPA Model Plan barely required two sides of one piece of paper. The trustees and lawyers who drafted the original Model Plan wanted a form that would be easily recognized and digested by creditors and that was hard to corrupt.
BAPCPA pushed these goals almost beyond reach. The lobbyists who drafted the 2005 protections for car lenders11 and who rewrote the projected disposable income test12 either didn’t understand or didn’t care about the economics of Chapter 13 plans. BAPCPA required Chapter 13 debtors to satisfy new tests for confirmation that are not based on the realities of the value of collateral or the income available to fund a plan. Debtors and their counsel were forced to offer options through the plan that weren’t easily reduced to one-line statements. The inevitable result was that Chapter 13 plans became longer and more complicated. This was a challenge for debtors’ attorneys who constructed the plans and for creditors who received plans and summaries of plans that were unfamiliar and significantly more difficult to process after the enactment of BAPCPA.
Those of you who are familiar with the original Model Plan noticed two fundamental changes in the BAPCPA version. First, the Model Plan (BAPCPA) anticipated that Chapter 13 debtors would make greater use of the power to surrender collateral to deal with BAPCPA changes to the treatment of secured claims in the hanging sentence at the end of § 1325(a).13 Oversimplified, the hanging run-on sentence prohibited application of § 506 to purchase-money car loans incurred within 910 days of the petition, when the car was acquired for the personal use of the debtor.14 This corrupted concept of a “secured” debt that is not valued under § 506 was inartfully worded and produced an avalanche of litigation.15 The obvious dilemma for Chapter 13 debtors was that plans, after BAPCPA, had to either provide for full payment of “910-car debt” without regard to value or surrender the collateral whenever the lienholder declined to accept some other treatment to satisfy the confirmation standard in § 1325(a)(5).16
The Model Plan (BAPCPA) dealt with these problems of presentation by alternative provisions. Debtors were encouraged by the form to value cars (and other collateral subject to the hanging sentence at the end of § 1325(a))17 and to offer lienholders the option of accepting full payment of that value through the plan with interest. If the lienholder did not accept the proposed valuation and payment through the plan, then the Model Plan (BAPCPA) defaulted to surrender the collateral. This presented both debtors and creditors with clear, simple choices: accept the economic value of the collateral in periodic payments that included present value (interest) or come get the car. Creditors could make a rational decision based on the cost of repossession, etc.—the debtor’s proposed valuation and interest rates made the lienholder better off or worse off than repossession and resale of the collateral.
The second basic change in the Model Plan (BAPCPA) was in the treatment of unsecured creditors. BAPCPA distorted the projected disposable income test, computing the entitlement of unsecured claim holders in a Chapter 13 case based on the debtor’s historical average income for six months before the filing of the petition.18 For debtors with “current monthly income” greater than applicable median family income,19 the amount that unsecured claim holders must be paid after BAPCPA uses a mathematical formula that reflects the actual financial circumstances of the debtor only by coincidence. As a result, the linear mathematics of the pre-BAPCPA Model Plan which required Chapter 13 debtors to exhaust their disposable income based on an actual budget was replaced in the Model Plan (BAPCPA) by a statement of the amount that falls out of the bottom of the projected disposable income test created by BAPCPA, multiplied by the applicable commitment period.20 Because the reconfigured projected disposable income test was not reality-based, the amount calculated often had no relationship to the amount of money available for payment of creditors through the plan. The Model Plan (BAPCPA) attempted to accommodate these inconsistent conditions by disconnecting the amount of money available to make payments through the plan from the minimum amount that must be paid to unsecured creditors. The outcome was intellectually dishonest but true to BAPCPA.
The Model Plan (BAPCPA) incorporated several other new statutory requirements for confirmation. It eliminated the option for early release of liens,21 required equal installment payments of allowed secured claims,22 addressed the new tax23 and domestic support obligation24 requirements and contained new space for debtors to specify preconfirmation payments to lessors25 and allowed purchase-money lienholders26 so that Chapter 13 trustees know whom to pay and how much to pay between the petition and confirmation.
The Model Plan (BAPCPA) in Appendix 50 (GG) did not pretend to be a comprehensive solution to all of the challenges of BAPCPA. It was hoped that it offered some damage control suggestions for attorneys, trustees and courts that had to quickly transit into the unmapped world of BAPCPA.
The broken road to an Official Form for the Chapter 13 plan took a promising turn in 2012 with the appointment of Eugene Wedoff, a bankruptcy judge in Chicago, as chairman of the Advisory Committee on Bankruptcy Rules. Judge Wedoff understood the importance of standardized forms in consumer bankruptcy practice and appointed an all-star Form Plan Working Group27 to study and develop a proposal for an Official Form for the Chapter 13 plan. The Form Plan Working Group invested nearly three years in the development of an Official Form for the Chapter 13 plan. They collected hundreds of Chapter 13 plans from across the country to identify and blend the best parts. The Working Group identified many rules of bankruptcy procedure that needed to be changed to bring sanity and consistency to the Chapter 13 plan confirmation process. The Form Plan Working Group reached out through public hearings and innumerable informal networks and contacts to every corner of the Chapter 13 world—debtors, creditors, attorneys, trustees, judges, consumer groups, academics and the public at large. Several drafts of a form Chapter 13 plan were published, subjected to comment and hearings. A final draft of the Working Group’s proposed Official Form for the Chapter 13 Plan—together with numerous related rules amendments—was scheduled for public hearing before the Advisory Committee on Bankruptcy Rules in Washington, D.C., on January 23, 2015.
A funny thing happened on the way to that January 2015 public hearing. Eugene Wedoff was succeeded as Chairman of the Advisory Committee by a Circuit Judge from the United States Court of Appeals for the Ninth Circuit, Sandra Ikuta. A campaign among bankruptcy judges—led by Marvin Isgur from the Southern District of Texas and Brian Lynch from the Western District of Washington—produced a letter in opposition to any Official Form for the Chapter 13 plan signed by 144 bankruptcy judges. A similar campaign among Chapter 13 trustees—spearheaded by George Stevenson, the Standing Chapter 13 Trustee in Memphis, Tennessee—submitted an opposition to any Official Form for the Chapter 13 plan signed by 62 Standing Chapter 13 Trustees.
Overwhelmed by this opposition, the Advisory Committee on Bankruptcy Rules abruptly abandoned the mandatory Official Form approach to the Chapter 13 plan in favor of the half-pregnant version described first above: there is an “Official” form for the Chapter 13 plan, Official Form 113, but oxymoronically, it is the required form only in districts that have not adopted a local form for the Chapter 13 plan. At this writing, the judicial districts that have adopted local forms for the Chapter 13 plan far outnumber the districts that have not, resulting, once again, in an incomprehensible patchwork of different Chapter 13 plans across the country.
What can we say about the form of the Chapter 13 plan? Use the local form, if there is one. Use Official Form 113 if there isn’t a local form. If you are not sure, ask the Chapter 13 trustee.
Because of the interplay of Official Form 113, Bankruptcy Rule 3015(c) and Bankruptcy Rule 3015.1, you have to signal prominently in Part I of any Chapter 13 plan form if any provision of the plan is “nonstandard.” As quoted above, nonstandard means “a provision not otherwise included in the official or local form or deviating from it.”28 Err on the side of signaling because any failure to signal a nonstandard provision defeats the effectiveness of the nonstandard provision unless it is included in a section of the plan designated for nonstandard provisions. That circular sentence is exactly the trap laid by Bankruptcy Rule 3015(c).
In the run-up to the abandonment of a mandatory Official Form for the Chapter 13 plan in 2015, the opponents of the proposed Official Form argued that an Official Form would stifle creativity and violate the statutory rights of Chapter 13 debtors to be the architects of their own plans. Ironically, though not surprisingly, too many bankruptcy judges and standing trustees have seized the opportunity presented by the exception to Bankruptcy Rule 9029(a)(1) in Bankruptcy Rule 3015.1 to enact local form plans that stifle creativity and experimentation with respect to the content of the Chapter 13 plan. Put another way, too many of the local Chapter 13 plan forms are weaponized to repel nonstandard provisions and to require Chapter 13 debtors to include provisions in their plans that debtors and their attorneys don’t want and can’t challenge except to object to confirmation of their own plans. Judges are using the local form for the Chapter 13 plan as a vehicle for making substantive decisions about what is or is not permitted by the Bankruptcy Code with respect to many aspects of Chapter 13 practice. In quick order after the 2017 amendments to Bankruptcy Rule 3015(c), reported cases revealed tailored, local plan forms that mandated, without flexibility, specific treatments for tax returns, tax refunds, direct payment of creditors, modified plans after confirmation and postconfirmation property of the estate.29 Nonstandard provisions have been, if anything, more forcefully and predictably rejected by the bankruptcy courts that have local form plans than was true before the 2017 promulgation of Official Form 113.30 There are relatively few reported cases dealing with Official Form 113 itself31—a testament to the predominance of local form plans.
Official Forms are supposed to be about placement and organization, not about deciding substantive issues of bankruptcy law. That said, the early trend in the decisions addressing Official Form 113 reveals the continued dominance of local culture in Chapter 13 practice and that the failed effort to standardize the form for the Chapter 13 plan has encouraged bankruptcy judges and trustees to accelerate and institutionalize the parochialism of Chapter 13 practice across the country. There is so much variation in the placement, wording, content and instructions in local forms for the Chapter 13 plan enacted after December 1, 2017, that any effort to offer line-by-line advice is doomed to be inaccurate. Debtors and their attorneys are best advised to get the right local form and fill in the lines and boxes with unusual care and attention to detail. There is little return or reward for variation or imagination in the use of a local Chapter 13 plan form. The 144 bankruptcy judges who signed the letter in opposition to an Official Form will each tell you that the “best” form for the Chapter 13 plan is the form they use in their courts. There will be no standardization of the form for the Chapter 13 plan in our lifetimes.
1 See 11 U.S.C. § 1322(a).
2 See 11 U.S.C. § 1322(b).
3 See Lundin, Chapter 13 Practice Guide (John Wiley & Sons 1995).
4 See § 36.1 Commercial Forms.
5 See, e.g., McIntosh v. LaBarge (In re McIntosh), 491 B.R. 905, 910 (B.A.P. 8th Cir. June 10, 2013) (Kressel, Saladino, Shodeen) (Model plan required by local rule promotes efficiency and does not infringe any right of debtor to include additional language. “The adoption of a uniform plan helps promote efficiency and assists the court in carrying out its duty of ensuring a proposed plan satisfies the requirements of the Bankruptcy Code. . . . [T]he model plan form in use in the Eastern District of Missouri does not infringe upon a debtor’s substantive rights under the Bankruptcy Code and the bankruptcy court did not issue a blanket rejection of a debtor’s ability to include language.”); In re Lasica, 294 B.R. 718 (Bankr. N.D. Ill. May 19, 2003) (Squires) (Bankruptcy judges in the Northern District of Illinois adopted a Model Plan to meet concerns of Seventh Circuit in Adair v. Sherman, 230 F.3d 890 (7th Cir. Aug. 25, 2000) (Bauer, Easterbrook, Ripple); confirmation of plan that provided zero payment for priority claim of debtor’s attorney precluded fees altogether.); In re Sounakhene, 249 B.R. 801, 803–06 (Bankr. S.D. Cal. June 26, 2000) (Adler) (“The Debtors utilized the ‘Chapter 13 (Mandated Form)’; although the form is not, in fact, mandated by the judges of this District. . . . The Court is sympathetic to the need of chapter 13 trustees to develop standardized forms to assist in expediting their case load. However, these standardized forms cannot grant rights not authorized by the Bankruptcy Code; nor can they abrogate the ability of debtors to propose their own plans within the permissible limits of the Code. Use of the term ‘mandated’ leads debtors to believe they cannot propose their own plans.”); In re Barton, 249 B.R. 561 (Bankr. E.D. Wash. June 15, 2000) (Williams) (Language of “court-required form Chapter 13 plan” contained special provision that the allowed amount of a secured claim was the amount stated in a proof of claim unless a separate motion was filed to value collateral or to object to the claim.); In re McNichols, 249 B.R. 160, 177 (Bankr. N.D. Ill. May 25, 2000) (Squires) (“One alternative for the Debtor when drafting a coherent and easily understandable plan is to utilize the clear and concise Model Form Chapter 13 Plan.”); In re Pedersen, 229 B.R. 445, 451–52 (Bankr. E.D. Cal. Jan. 22, 1999) (McManus) (Plan not confirmable because debtor used required form, but failed to fill in the blanks. “To promote uniformity and administrative convenience, the general order requires use of a form chapter 13 plan. . . . This form plan requires the debtor or the debtor’s attorney to fill in information such as the plan’s term, the monthly plan payment, and the dividend to be paid to holders of general unsecured claims. . . . In this case, the debtor used the form plan. He inserted ‘$100.00’ as the monthly plan payment but failed to insert a plan term. Further, he did not insert a percentage . . . in the blank specifying the dividend payable to general unsecured creditors. . . . In the absence of basic plan provisions, such as the length of the plan and the amount to be paid on account of general unsecured claims, confirmation is impossible.”).
6 See Reyes v. Brown (In re Reyes), 482 B.R. 603 (D. Ariz. Oct. 16, 2012) (Campbell) (Requirement that payments be made only by certified funds, wage deduction or electronic transfer was reasonable; requirement that debtors review all proofs of claims and resolve discrepancies between claims and plan before confirmation did not impermissibly shift burden on claim objections; that confirmation order did not constitute informal proof of claim was valid; that plan did not supersede trustee’s request for documentation or information was approved; but remand was required for reconsideration of provision that secured payments be applied first to principal and then to interest.); Bank of Am., N.A. v. Gordon (In re Gordon), 471 B.R. 614, 622, 625–26 (D. Colo. Mar. 27, 2012) (Blackburn) (Form plan that required debtors to modify plan when claims were timely filed after confirmation did not violate § 1327; language that did not conform to local plan form was not confirmable. Nonconforming language would bind creditors to terms of confirmed plan before deadline for filing proofs of claim, permitting plan to define claim amount and treatment of creditors, including arrearage claims. “Under this view, if the debtor states in the confirmed plan that he or she is not in default on a debt subject to the restrictions of § 1322(b)(5), that assertion becomes binding on confirmation of the plan. If, after confirmation, a secured creditor files a timely claim asserting that the debtor is in default on such a loan, the creditor cannot pursue the issue to require (1) a determination of whether there is a default or not; and (2) if there is a default, a determination of reasonable plan provisions to cure the default.” Form plan’s requirement that debtors modify confirmed plan to be consistent with timely filed, postconfirmation proofs of claims did not violate § 1329(a)’s postconfirmation modification requirements, and form plan did not violate res judicata effect of confirmation. Citing United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 130 S. Ct. 1367, 176 L. Ed. 2d 158 (Mar. 23, 2010), bankruptcy court has affirmative obligation to see that plans conform to Code requirements. When form plan provided that confirmed plan should be modified to conform to actual allowed claims filed after confirmation, that plan provision itself became part of res judicata effect of confirmation. “Ultimately, the non-standard plan language proposed by the debtors and approved by the bankruptcy court in these cases conflicts with the claims processing procedures and other requirements of the Code and the Rules. Most important, the non-standard language improperly eliminates the requirement that a Chapter 13 plan remain in compliance with the Code even after the plan has been confirmed. On the other hand, the standard language . . . in the standard Chapter 13 plan form adopted in this district permits the court, the debtor, and the creditors to maintain compliance with all of the requirements of the Code, both before and after confirmation of a Chapter 13 plan.”), appeal dismissed, 743 F.3d 720 (10th Cir. Feb. 20, 2014) (Gorsuch, Ebel, O’Brien); In re Shay, 553 B.R. 412 (Bankr. W.D. Wash. June 29, 2016) (Lynch) (Local plan form is within rulemaking authority of bankruptcy court even though it requires all postpetition property to vest in trustee because debtors can alter that language as long as any variance is in correct place on the form.); In re Rose, No. GG 14-04308-JTG, 2015 WL 151221 (Bankr. W.D. Mich. Jan. 12, 2015) (not for publication) (Gregg) (Some additions to local model plan are allowed and some are not: special definition of effective date of plan is allowed; blanket reservation of avoidance actions is not; specific requirement of allocation of payments by mortgagee is allowed; preservation of § 524(i) rights is unnecessary.); In re Ott, No. 12-80526-G3-13, 2014 WL 1430009, at *3 (Bankr. S.D. Tex. Apr. 10, 2014) (Paul) (Variance from use of local uniform plan denied when totality of circumstances did not establish “exceptional circumstances related to the Chapter 13 case.”); In re Rosa, 495 B.R. 522 (Bankr. D. Haw. July 8, 2013) (Faris) (Nonstandard plan that provides for surrender of property to and vesting of property in secured creditor is authorized under § 1322(b)(9).); In re Walters, No. 11-81466-TRC, 2012 WL 1536964, at *3 (Bankr. E.D. Okla. Apr. 30, 2012) (Cornish) (Confirmation of nonstandard plan, shorter than current 17-page form, was denied. Current form needed revision, but “a standard plan form is essential for this Court to meet its responsibility to review all Chapter 13 plans . . . , to provide proper notice to interested parties, and to promote efficiency in the review of those plans.” Bankruptcy bar and trustees were encouraged to propose revision of current form.); Diaz v. Zeman (In re Diaz), 462 B.R. 804, 810 (Bankr. D. Colo. Oct. 24, 2011) (Romero) (Debtor cannot escape local form plan that required debtor to file and serve modified plan providing for timely filed priority and secured claims that were not filed at time of confirmation. Marking local form provision “not applicable” was inconsistent with §§ 501 and 502 and Bankruptcy Rule 3002 because it would cut off creditor’s rights through plan confirmation. Form plan did not exceed rule-making authority, did not violate § 1329 and did not conflict with res judicata effect of confirmed plan. 59 of 93 judicial districts had some provision “in local rules or local chapter 13 plan forms indicating distributions to creditors are made based on amounts appearing in allowed proofs of claim.”); In re Butcher, 459 B.R. 115 (Bankr. D. Colo. Sept. 20, 2011) (Tallman) (Bankruptcy court will not confirm plan that omits provision of local form plan that requires debtor to modify after confirmation to provide for priority and secured claims not filed or allowed at time of confirmation. Form provision is not inconsistent with § 1329 and strikes proper balance between accelerated timing of confirmation after BAPCPA and claims allowance process under § 502 and Bankruptcy Rules.); In re Madera, 445 B.R. 509 (Bankr. D.S.C. Mar. 1, 2011) (Duncan) (Court has authority to enforce form plan and to reject nonconforming provisions. Counsel inserted boilerplate provisions into form plan, including that failure to object would constitute implied acceptance and consent, that all contractual arbitration provisions were rejected and that all claims disputes with mortgage lender were preserved. Cluttering form plan with these provisions served no useful purpose.); In re Visintainer, 435 B.R. 727 (Bankr. M.D. Fla. Sept. 13, 2010) (Delano) (Plan that did not comply with model plan for district is stricken. Citing United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 130 S. Ct. 1367, 176 L. Ed. 2d 158 (Mar. 23, 2010), bankruptcy court’s duty to ensure that plans comply with confirmation requirements includes that court may prescribe form of Chapter 13 plan. Model plan in district was adopted after regular meetings of judicial liaison committee, attended by judges, trustees, trustee staff attorneys, assistant U.S. trustee, creditors’ attorneys and debtors’ attorneys.); In re Rudd, No. A09-00187-DMD, 2009 WL 8478298 (Bankr. D. Alaska June 22, 2009) (MacDonald) (Footnote providing that plan would be informal claim on behalf of scheduled creditors prevented confirmation. Informal claim footnote was misleading to creditors, perhaps leading them to believe it unnecessary to file proof of claim. Debtor did not have right to file informal claim, or to file claim on behalf of creditor, until creditor’s time to file proof of claim had expired.); In re Solitro, 382 B.R. 150, 153 (Bankr. D. Mass. Feb. 7, 2008) (Rosenthal) (Sustaining objection of creditor to various plan provisions that do not conform to local form, court rejects terms that invalidate contractual arbitration clauses, that require lienholders to release liens within 10 days from demand and that preserve standing to bring avoidance actions after confirmation. Any modifications of form plan must be accompanied by a statement of “special circumstances justif[ying] their inclusion.”); In re Brown, 348 B.R. 583 (Bankr. N.D. Ga. July 25, 2006) (Bihary) (Revised Model Chapter 13 Plan for the Northern District of Georgia provides option whether preconfirmation adequate protection payments will be made directly to an allowed secured claim holder or paid to the trustee and imposed with an “administrative lien” pending distribution; these options are consistent with § 1326(a).); In re Wilson, 321 B.R. 222 (Bankr. N.D. Ill. Feb. 25, 2005) (Hollis) (Model Chapter 13 plan for the Northern District of Illinois (https://www.ilnb.uscourts.gov) mandatory since August 16, 2004, fixes procedures for determining the pre- and postpetition defaults with respect to home mortgages and does not impermissibly modify claims protected by § 1322(b)(2).).
7 See, e.g., Sunahara v. Burchard (In re Sunahara), 326 B.R. 768 (B.A.P. 9th Cir. June 27, 2005) (Smith, Hollowell, Brandt) (Mandatory local plan language that unless claims are paid in full, plan must last at least 36 months, is inconsistent with § 1329, which allows postconfirmation modification to pay off plan earlier than 36 months and without paying all claims in full.). See also In re Seal, No. 05-17262, 2007 WL 710135 (Bankr. D. Kan. Mar. 6, 2007) (Somers) (Wichita Chapter 13 trustee’s model plan is slightly modified to provide for curing of mortgage defaults and provision is suggested to determine that home mortgages are current at completion of payments under plan.).
9 See, e.g., In re Butcher, 459 B.R. 115, 136 (Bankr. D. Colo. Sept. 20, 2011) (Tallman) (“[T]he Court will voice its support for the Judicial Conference efforts to craft a uniform national chapter 13 plan. The high volume of chapter 13 cases coupled with the high degree of similarity in the issues that are presented in these consumer cases lends itself to a uniform treatment. The nature of consumer credit means that the majority of creditors appearing in chapter 13 cases are institutional creditors with national operations. Such creditors receive plans proposed by debtors from all over the country that vary substantially from district to district in format, language and emphasis. Chapter 13 is not merely a scaled down chapter 11 reorganization. The difference between business debtors and consumer debtors is fundamental. To employ plans that run to a dozen pages and allow debtors unlimited latitude to customize provisions adds complexity, with the attendant cost such complexity entails, to no useful purpose. A streamlined and uniform national form chapter 13 plan would likely benefit debtors, creditors, trustees and certainly the courts.”).
10 Pub. L. No. 109-8, 119 Stat. 23 (2005).
11 See hanging sentence at the end of 11 U.S.C. § 1325(a), discussed beginning at § 75.1 In General: Modification Without § 506.
12 See discussion of projected disposable income test in 11 U.S.C. § 1325(b) beginning at § 91.1 In General.
13 See 11 U.S.C. § 1325(a), discussed beginning at § 75.1 In General: Modification Without § 506 and continuing in § 87.7 910-Day PMSI Car Claims after BAPCPA: A Reprise.
14 See discussion beginning at § 75.1 In General: Modification Without § 506.
15 See discussion beginning at § 75.1 In General: Modification Without § 506.
21 See 11 U.S.C. § 1325(a)(5)(B)(i)(I), discussed in § 74.13 Lien Retention after BAPCPA, Including in No-Discharge Cases.
22 See 11 U.S.C. § 1325(a)(5)(B)(iii)(I), discussed in § 74.14 Equal Monthly Installments after BAPCPA.
23 See 11 U.S.C. § 1325(a)(9), discussed in § 113.4 All Tax Returns Must Be Filed.
24 See 11 U.S.C. § 1325(a)(8), discussed in § 113.3 Domestic Support Obligations Must Be Current.
25 See 11 U.S.C. § 1326(a)(1)(B), discussed in § 44.6 Preconfirmation Payments after BAPCPA and § 57.4 Preconfirmation Rights of Landlords and Lessors after BAPCPA.
26 See 11 U.S.C. § 1326(a)(1)(C), discussed in § 44.6 Preconfirmation Payments after BAPCPA and § 57.3 Preconfirmation Adequate Protection Rights after BAPCPA. See, e.g., In re Brown, 348 B.R. 583 (Bankr. N.D. Ga. July 25, 2006) (Bihary) (Revised Model Chapter 13 Plan for the Northern District of Georgia provides option whether preconfirmation adequate protection payments will be made directly to an allowed secured claim holder or paid to the trustee and imposed with an “administrative lien” pending distribution; these options are consistent with § 1326(a).).
27 The Form Plan Working Group included John Rao, Troy McKenzie, Elizabeth Gibson, Elizabeth Perris, Arthur Harris, Judith Wizmur and Richardo Kilpatrick.
28 Fed. R. Bankr. P. 3015(c).
29 See Roseberry v. U.S. Tr. Interested Party, No. 18-01039-DRH, 2018 WL 6624202, at *3 (S.D. Ill. Dec. 18, 2018) (Herndon) (Provision of local model Chapter 13 plan that required debtors to amend schedules when any property interest was acquired postconfirmation and which presumed that any new property interest was disposable income was inconsistent with confirmation requirements in § 1325(a); debtor’s appeal of confirmation is sustained by district court. “‘Absent exceptional circumstances, to permit a bankruptcy court to exercise undefined equitable powers to supplement the requirements of 1325(a) would alter that section beyond the scope that Congress intended . . . .’ . . . The new language requires a debtor to amend the schedules every time she/he acquires any property of more than nominal value and requires that the disclosed asset is presumed to be ‘disposable income’ to be turned over to the trustee if it is cash . . . . These requirements are not merely menial tasks of reporting. . . . [T]he Court rejects the argument that ‘exceptional circumstances’ exist in each and every Chapter 13 case filed after January 1, 2018 to require the application of these new rules.”); Penn v. Viegelahn, No. 5:18-CV-354-OLG, 2018 WL 5984844, at *3 (W.D. Tex. Nov. 13, 2018) (Garcia) (Bankruptcy court appropriately rejected nonstandard plan provision that would allow retention of tax refund in excess of amount allowed by form plan based on finding that additional amount of refund was not necessary to support the debtor. Nonstandard provision reserved to debtor the right to file a motion to retain tax refund of $5,832. Form plan in district required tax refunds in excess of $2,000 to be turned over to the trustee. Debtor argued that precluding deviation from local plan form was inconsistent with the Bankruptcy Code and debtor needed the additional tax refund to make home repairs. “Tax refunds, whether derived from the return of an income tax overpayment or from a refundable tax credit, fall . . . within the definition of disposable income, and must be turned over to the Chapter 13 Trustee as provided under Section 4.1 of the district’s form plan. . . . However, income tax returns [sic], like any other form of income, may fall outside the statutory definitions of disposable income and projected disposable income to the extent that those amounts are ‘reasonably necessary to be expended for the maintenance and support of the debtor or a dependent of the debtor.’ . . . [T]he Bankruptcy Court did not err in concluding that it was not reasonably necessary for Appellant to retain the entire tax refund in order to make repairs to the Potomac property[.]”); In re Xuan Thi Casey, No. 18-50813 MEH, 2018 WL 4501127, at *1–*2 (Bankr. N.D. Cal. Sept. 19, 2018) (Hammond) (In district with model plan that allows option to pay secured claims directly, bankruptcy court clarifies what constitutes “proper documentary evidence” that direct payments are actually being made. Trustee’s motion to dismiss is denied when debtor produced canceled checks and other proof that direct payments were being made. “Effective December 1, 2017, any debtor filing a chapter 13 plan is required to use the standard form chapter 13 plan for the Northern District of California . . . . The form plan provides for conduit post-petition payments . . . . A debtor has the option to propose a non-conduit plan. In doing so, the debtor accepts certain alternate requirements—primarily the obligation to provide a declaration of direct payment with supporting documentary evidence at various intervals in the case. . . . Debtor herein ultimately provided a declaration under penalty of perjury with documentary evidence in the form of copies of a personal check and a cashier’s check, each accompanied by a record from the issuing bank of the posting of payment to Debtor’s account. This is equivalent to a statement of Debtor’s bank account reflecting the cleared check, and constitutes sufficient documentary evidence.”); In re Reichard, No. 2:16-bk-12633-BMW, 2018 WL 3323870, at *2, *3–*5 (Bankr. D. Ariz. July 5, 2018) (Whinery) (New local plan form permissibly requires Chapter 13 debtors to provide to the trustee state and federal tax returns every year during the case. Local plan form provided, “‘While the case is pending, the Debtor shall provide to the Trustee a copy of any post-petition tax return within 14 days after filing the return with the tax agency.’” Debtor modified the local form to provide that federal income tax returns would be filed with the court. “The Debtors argue that the Local Plan Form violates the Bankruptcy Code and the Federal Rules on the basis that the Trustee is required to follow Code §§ 521(f) and (g) in order to obtain access to post-petition tax returns. . . . The provision in the Local Plan Form that requires Chapter 13 debtors to submit post-petition tax returns directly to the trustee is consistent with the Code and Federal Rules, as well as the National Plan Form. Code § 1302(b)(1) . . . requires trustees to ‘investigate the financial affairs of the debtor[.]’ . . . Neither the Code nor Federal Rules address accessibility to or disclosure of debtors’ post-petition state tax returns, but the Code imposes a duty on debtors to supply their post-petition federal tax returns under certain circumstances. . . . A trustee’s use of debtors’ tax return information for purposes of evaluating whether a plan modification is warranted is consistent with the Code. . . . Code § 521(f) does not provide the exclusive mechanism by which a trustee may obtain access to such tax returns. . . . The Trustee has a statutory duty to investigate the financial affairs of the Debtors. In order to fulfill this duty, he needs to have the ability to readily access debtors’ post-petition tax returns, in order to monitor changes in disposable income. . . . It would be cost prohibitive to require trustees to file a motion every year that a case is pending, in order to obtain post-petition tax returns in every case, given the number of cases each trustee handles. . . . The Local Plan Form provision at issue here permissibly streamlines the procedure by which a trustee obtains the debtors’ post-petition tax returns, and promotes cost efficiencies and efficient administration. . . . [I]t appears that the Debtors[’] intent in objecting to this local plan provision is to purposely increase the cost to the Trustee of obtaining an important source of financial information . . . and to avoid the disclosure of any changes in their projected disposable income, in order to prevent the Trustee from seeking modification pursuant to Code § 1329. . . . [T]he turnover of post-petition state tax returns causes no greater infringement upon debtors, given the requirement for turnover of the federal tax returns.”); In re Orozco, No. 17-52818-CAG, 2018 WL 2425971, at *5–*7 (Bankr. W.D. Tex. May 10, 2018) (Gargotta) (Notwithstanding correct placement in Part 8 of local form for Chapter 13 plan, debtors cannot strike out provision requiring remittance of all tax refunds in excess of $2,000 and cannot replace that standard provision with a proration of anticipated tax refunds as income in Schedule 106I. “Allowing any debtor the ability to modify the form or terms of the District Plan would render its use meaningless. The purpose of Fed. R. Bankr. P. 3015.1 was to establish an Official Form of chapter 13 plan so that creditors and litigants could rely upon the same chapter 13 plan being used throughout the country without regard to variances in local practice or rules. Further, to accommodate a number of bankruptcy courts and judges who took issue with the Official Form Plan, Rule 3015.1 provides in the alternative that a bankruptcy court can adopt a district plan. . . . The exclusive right to file a chapter 13 plan, however, does not mean that a chapter 13 debtor is the only party who can determine the form of a chapter 13 plan. . . . Section 4.1 is consistent with this Court’s view that tax refunds are disposable income under § 1325(b)(2) and must be turned over to the Trustee. . . . [A]t least two courts have . . . held that a debtor must, according to the Bankruptcy Code and instructions to the Official Forms, account for tax refunds as income on Schedule I. . . . [Marshall v. Blake, 885 F.3d 1065 (7th Cir. Mar. 22, 2018) (Bauer, Flaum, Manion), and In re Morales, 563 B.R. 867, 872 (Bankr. N.D. Ill. Feb. 27, 2017) (Doyle),] were issued prior to the bankruptcy court . . . adopting a national form or district chapter 13 plan. . . . The Court recognizes that the Seventh Circuit did affirm [In re Blake, 565 B.R. 871, 876 (Bankr. N.D. Ill. Mar. 16, 2017 (Thorne)], noting that the pro-rating of a tax refund on a monthly basis is permissible under the Bankruptcy Code. . . . The Seventh Circuit’s decision, however, is based on a practice that predated . . . adoption of Official Form 113.”); In re Vega-Lara, No. 17-52553-CAG, 2018 WL 2422427 (Bankr. W.D. Tex. May 4, 2018) (Gargotta) (Same holding as In re Orozco, No. 17-52818-CAG, 2018 WL 2425971 (Bankr. W.D. Tex. May 10, 2018) (Gargotta)).
30 In re Parkman, 589 B.R. 567, 571–76 (Bankr. S.D. Miss. Aug. 13, 2018) (Samson) (With one minor exemption, 23 nonstandard plan provisions are rejected as either unnecessary, inaccurate, inappropriate, illegal or inapplicable. “As of December 1, 2017 . . . all chapter 13 debtors in Mississippi have been required to use the form plan authorized under Bankruptcy Rule 3015.1 . . . . Approximately one month after the Mississippi Form Plan was instituted, counsel for the Debtor filed the Plan . . . . The Plan’s standard provisions are outnumbered . . . by the twenty-three . . . nonstandard provisions . . . , formatted within the limitations of the online form as ninety-three single-spaced lines of text . . . . [E]xcept for the Standing Stay Modification, the Nonstandard Provisions are not ‘appropriate provision[s]’ under § 1322(b)(11). . . . The intent of Debtor’s counsel to substitute his own plan for the Mississippi Form Plan is evident . . . . It is not reasonable to expect creditors to scrutinize ninety-three single-spaced lines of visually identical typeface in search of a Nonstandard Provision that might apply to them. Further, many of the Nonstandard Provisions are so poorly drafted that their intended meaning and application are indiscernible.”). See also In re Mikes, No. 1:17-bk-14836-SDR, 2018 WL 7016626, at *2 (Bankr. E.D. Tenn. Feb. 28, 2018) (Rucker) (Form Chapter 13 plan in use in district after December 1, 2017, contains no placement for debtor’s provision that a putative secured claim holder is unsecured for lack of perfection under state law. Avoiding an unperfected security interest under § 544 requires an adversary proceeding and does not fit any of the lien avoidance procedures that can be accomplished through a confirmed plan in a Chapter 13 case. “The debtor’s problem, assuming he has standing, is that avoidance of a lien pursuant to section 544 requires an adversary proceeding under Fed. R. Bankr. P. 7001(2) and cannot be done in the context of confirming a plan. The new form plan was intended to make a chapter 13 confirmation more efficient by allowing the valuation of collateral and the avoidance of liens that impair exemptions to be handled as part of the plan confirmation process. . . . Similar changes were not made for avoidance actions under section 544 or any other of the trustee’s avoidance powers under chapter 5 used to determine the validity, priority, or extent of a lien. Avoidance of a lien in those circumstances still requires an adversary proceeding.”).
31 See, e.g., In re Reynolds, 587 B.R. 347, 348–49 (Bankr. N.D. Ill. July 25, 2018) (Schmetterer) (Section 2.1 of National Model Plan does not resolve fatal ambiguity when plan requires distribution of $54,000 but plan only proposed 36 monthly payments totaling $32,400. Math does not work and ambiguity remains notwithstanding standard-form provision that would allow additional payments after 36-month term. “[T]he amount of plan payments calculated in Section 2.1 of Debtor’s plan totals only $32,400.00, less than the estimated $54,000.00 promised by the plan to be disbursed by the Trustee. However, Debtor points to the line just below Section 2.1 of the National Chapter 13 Plan (recently adopted in this circuit) . . . . He argues that the language of the National Chapter 13 Plan expressly requires that ambiguous or unspecified payments beyond the listed plan duration be paid by the debtor should they be necessary to pay creditors specified in the plan. . . . While the language of the National Plan may sometimes act as a savings clause to a sum certain to be paid to creditors, that is not necessarily the case here. . . . This level of ambiguity in Debtor’s plan renders it unconfirmable.”).