NORTH CAROLINA BANKRUPTCY PRACTICE MANUAL Seventh Edition ... · North Carolina Bankruptcy Practice...

North Carolina Bankruptcy Practice Manual, Seventh Edition (2012) xix

NORTH CAROLINA BANKRUPTCY PRACTICE MANUALSeventh Edition (2012)

CHAPTER IINTRODUCTION

A. PURPOSE.........................................................................................................................I-5B. BANKRUPTCY LAW AND PROCEDURE — OVERVIEW.......................................I-5C. SOURCE MATERIALS...................................................................................................I-7D. PROVISIONS OF THE BANKRUPTCY REFORM ACT OF 1978 AND ITS AMENDMENTS..............................................................................................................I-8E. ORGANIZATION OF THE BANKRUPTCY CODE...................................................I-14F. ORGANIZATION OF BANKRUPTCY RULES AND FORMS...............................I-15G. FEDERAL RULES OF CIVIL PROCEDURE..............................................................I-16H. FEDERAL RULES OF EVIDENCE.............................................................................I-16I. JURISDICTION OF THE BANKRUPTCY COURTS................................................I-17J. USE OF THE NORTH CAROLINA BANKRUPTCY PRACTICE MANUAL..........I-17

CHAPTER IINORTH CAROLINA BANKRUPTCY COURTS

A. COURTS.........................................................................................................................II-5B. UNITED STATES BANKRUPTCY JUDGES...............................................................II-5C. UNITED STATES BANKRUPTCY CLERKS..............................................................II-7D. UNITED STATES BANKRUPTCY ADMINISTRATORS...........................................II-9E. CHAPTER 7 PANEL TRUSTEES................................................................................II-10F. CHAPTER 12 STANDING TRUSTEES......................................................................II-12G. CHAPTER 13 STANDING TRUSTEES......................................................................II-14

CHAPTER IIIJURISDICTION, VENUE AND REMOVAL

A. PRE-MARATHON PIPELINE JURISDICTION.........................................................III-9B. POST-MARATHON PIPELINE JURISDICTION........................................................III-9C. STERN V. MARSHALL..................................................................................................III-10D. CORE AND NON-CORE PROCEEDINGS...............................................................III-14 1. Core Proceedings.............................................................................................III-15 2. Non-Core Proceedings.....................................................................................III-16E. ABSTENTION...........................................................................................................III-17 1. Discretionary Abstention.................................................................................III-17 a. 11 U.S.C. § 305 Abstention...................................................................III-18 b. 28 U.S.C. § 1334(c)(1) Abstention.........................................................III-18 2. Mandatory Abstention......................................................................................III-19 3. Withdrawl of Reference...................................................................................III-20

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F. VENUE......................................................................................................................III-22 1. Change of Venue..............................................................................................III-23 2. Retention of Case.............................................................................................III-24G. REMOVAL................................................................................................................III-25H. REMAND..................................................................................................................III-27

CHAPTER IVTRUSTEES AND BANKRUPTCY ADMINISTRATORS

A. THE US TRUSTEE SYSTEM AND BANKRUPTCY ADMINISTRATORS.............IV-5 1. Duties of Bankruptcy Administrators.................................................................IV-6 2. Copies of Documents to be Served on Bankruptcy Administrators....................IV-7 a. Eastern District.......................................................................................IV-7 b. Middle District.......................................................................................IV-8 c. Western District......................................................................................IV-8 3. Quarterly Fees ...........................................................................................IV-8B. CHAPTER 7 TRUSTEES..............................................................................................IV-9 1. Election of Trustee by Creditors at First Creditors’ Meeting..............................IV-9 2. Duties of a Trustee............................................................................................IV-10 3. Compensation of the Trustee.............................................................................IV-11C. CHAPTER 11 REORGANIZATION TRUSTEE........................................................IV-12 1. Grounds for Appointment.................................................................................IV-12 2. Duties and Compensation of Chapter 11 Trustees...........................................IV-13 3. Appointment of Examiner................................................................................IV-13D. CHAPTER 13 TRUSTEES..........................................................................................IV-14 1. Duties...............................................................................................................IV-14 2. Compensation of a Chapter 13 Trustee............................................................IV-14E. CHAPTER 12 TRUSTEE.............................................................................................IV-15 1. Duties and Compensation................................................................................IV-15F. POWERS OF TRUSTEES...........................................................................................IV-16G. COMSUMER PRIVACY OMBUDSMAN AND PATIENT CARE OMBUDSMAN..IV-16

CHAPTER VCOMMENCEMENT OF CASES/DEBT RELIEF AGENCIES

PART I: COMMENCEMENT OF CASESA. COMMENCING A VOLUNTARY CASE.....................................................................V-7 1. Voluntary Petition and Other Necessary Documents...........................................V-7

a. Statement of Social Security Number....................................................V-11b. List of Creditors.....................................................................................V-11c. Schedules, Statement of Financial Affairs, Statement of Current Monthly Income....................................................................................V-11d. Chapter 7 Individual Debtor’s Statement of Intention...........................V-20

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e. Statement of Disclosure of Compensation.............................................V-20f. Payment Advices...................................................................................V-21g. Additional Requirements in a Reorganization Proceeding Under Chapter 11, 12 or 13...............................................................................V-21

2. Joint Petition for Relief......................................................................................V-22B. COMMENCING AN INVOLUNTARY CASE............................................................V-23 1. Involuntary Petition for Relief...........................................................................V-23 2. Issuance of Summons........................................................................................V-23 3. Right to Contest Involuntary Petition................................................................V-23C. SOURCE OF FORMS...................................................................................................V-24D. FILING FEES................................................................................................................V-24PART II: DEBT RELIEF AGENCIESA. WHO IS A DEBT RELIEF AGENCY?...........................................................................V-26B. RESTRICTIONS ON DEBT RELIEF AGENCIES........................................................V-26C. LIABILITY OF DEBT RELIEF AGENCIES.................................................................V-28D. REQUIRED DISCLOSURES.........................................................................................V-28E. REQUIREMENTS FOR DEBT RELIEF AGENCIES..................................................V-30 1. Written Contracts................................................................................................V-30 2. Advertising.........................................................................................................V-30

CHAPTER VIMEANS TESTING

A. OVERVIEW OF ABUSE TESTING AND THE NEW 707(B)....................................VI-13B. EXEMPTIONS FROM THE MEANS TEST..............................................................VI-14 1. The Means Test Only Applies to Individuals....................................................VI-14 2. Filed Under Chapter 7......................................................................................VI-14 3. Debtors with Primarily Consumer Debts.........................................................VI-14 a. Student Loans......................................................................................VI-14 b. Mortgages..........................................................................................VI-15 c. Taxes....................................................................................................VI-15 d. Tort Claims..........................................................................................VI-15 4. Military Exemptions........................................................................................VI-15C. THE MECHANICS OF § 707(b)(2)............................................................................VI-15D. CURRENT MONTHLY INCOME: WHAT INCOME IS INCLUDED?.....................VI-16 1. Income from the Operation of a Business, Profession or Farm......................VI-17 2. Rent and Other Real Property Income..............................................................VI-18 3. Interest, Dividends and Royalties...................................................................VI-18 4. Pension and Retirement Income.....................................................................VI-18 5. Regular Contributions to Household Expenses...............................................VI-19 6. Unemployment Compensation........................................................................VI-20 7. Income from Other Sources............................................................................VI-21 a. Disability Payments.............................................................................VI-21

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b. Income Tax Refunds............................................................................VI-21 c. Proceeds from the Sale of an Asset.....................................................VI-21 d. Loans..................................................................................................VI-21E. CHAPTER 13 CONSIDERATION: HAMILTON V. LANNING.................................VI-22 1. What Qualifi es as a “Known or Virtually Certain” Change in Income/Expenses?............................................................................................VI-22 a. Change Found......................................................................................VI-22 b. No Change Found................................................................................VI-23 2. Lanning’s Effect on the Applicable Commitment Period..............................VI-23 3. In Light of Lanning, is Form B22C or Schedules I and J Determinative of Projected Disposable Monthly Income?..........................................................VI-24 4. Practical Pointers for Refl ecting a “Lanning Adjustment” In Your Petition....VI-24 a. Middle District of North Carolina........................................................VI-24 b. Eastern District of North Carolina.......................................................VI-24 c. Western District of North Carolina.......................................................VI-24F. HOUSEHOLD SIZE....................................................................................................VI-24G. EXPENSES................................................................................................................VI-26 1. National Standards...........................................................................................VI-26 a. Food, Clothing and Other Items...........................................................VI-26 b. Health Care..........................................................................................VI-26 2. Local Standards...............................................................................................VI-27 a. Housing & Utilities; Non-Mortgage....................................................VI-27 b. Housing & Utilities; Mortgage/Rent.....................................................VI-27 c. Housing & Utilities Adjustment...........................................................VI-27 d. Transportation: Vehicle Operation Expense........................................VI-28 e. Transportation: Additional Public Transportation Expense................VI-29 f. Transportation: Vehicle Ownership/Lease Expense............................VI-29 3. Other Necessary Expenses...............................................................................VI-30 a. Taxes.................................................................................................VI-30 b. Involuntary Deductions for Employment.............................................VI-30 c. Life Insurance......................................................................................VI-31 d. Court-Ordered Payments......................................................................VI-31 e. Education for Employment or Challenged Children............................VI-31 f. Child Care............................................................................................VI-31 g. Health Care..........................................................................................VI-32 h. Telecommunication Services...............................................................VI-32 4. Health Insurance, Disability Insurance and Health Savings Account Expenses............................................................................................VI-32 5. Contributions to Care of Household or Family................................................VI-32 6. Protection Against Family Violence................................................................VI-33 7. Home Energy Costs in Excess of IRS Local Standards..................................VI-33 8. Educational Expenses......................................................................................VI-33 9. Additional Food & Clothing Expenses..........................................................VI-33

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10. Charitable Contributions.................................................................................VI-33 11. Future Payments on Secured Claims................................................................VI-34 12. Past Due Payments on Secured Claims............................................................VI-35 13. Payments on Priority Claims............................................................................VI-35 14. Additional Expense Claims.............................................................................VI-35H. SPECIAL CIRCUMSTANCE.....................................................................................VI-35 1. Special Circumstances Found..........................................................................VI-36 2. Special Circumstances Not Found....................................................................VI-37I. CONVERSION FROM ANOTHER CHAPTER........................................................VI-39J. PROCEDURAL ASPECTS AND DEADLINES........................................................VI-40

CHAPTER VIIEXEMPTIONS

A. WHAT EXEMPTIONS APPLY...................................................................................VII-7B. THE FEDERAL EXEMPTIONS UNDER SECTION 522(d).....................................VII-9C. LIMITATIONS ON EXEMPTIONS UNDER BAPCPA.............................................VII-11D. EXEMPTIONS UNDER NORTH CAROLINA STATE LAW − N.C.G.S. § 1C-1601...................................................................................................................VII-12 1. Type of Property and Amount That May be Exempted...................................VII-13 a. Residence and Burial Plots Exemption..............................................VII-13 b. Wildcard Exemption...........................................................................VII-13 c. Motor Vehicle.....................................................................................VII-13 d. Household and Family, Personal Use Goods.......................................VII-14 e. Professional Books and Tools of the Trade..........................................VII-14 f. Life Insurance.....................................................................................VII-14 g. Professionally Prescribed Health Aids................................................VII-15 h. Compensation from Personal Injury or Death of Person Upon Which the Debtor Depends................................................................VII-16 i. Qualifi ed Individual Retirement Plans...............................................VII-16 j. College Savings Plans .......................................................................VII-16 k. Alimony, Support, Separate Maintenance and Child Support Payments............................................................................................VII-16 2. Defi nition of “Value” as Used in N.C.G.S. § 1C-1601..................................VII-17 3. Exceptions to Exemptions Under N.C.G.S. § 1C-1601..................................VII-17E. OTHER NORTH CAROLINA EXEMPTIONS........................................................VII-18F. PROCEDURE TO CLAIM EXEMPTIONS............................................................VII-19G. WAIVER OF EXEMPTIONS...................................................................................VII-20H. AVOIDANCE OF LIENS IMPAIRING EXEMPTION............................................VII-20I. REDEMPTION OF PROPERTY...............................................................................VII-21J. OBJECTIONS TO EXEMPTIONS............................................................................VII-22K. PRE-BANKRUPTCY EXEMPTION PLANNING...................................................VII-23

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CHAPTER VIIITHE AUTOMATIC STAY

A. MATTERS AFFECTED BY THE STAY....................................................................VIII-8B. MATTERS NOT AFFECTED BY THE STAY...........................................................VIII-8C. TERMINATION OF THE AUTOMATIC STAY........................................................VIII-14 1. Procedure for Obtaining Relief from Stay...................................................VIII-17 a. Grounds for Relief from Stay...........................................................VIII-18 b. Ex Parte Relief from Stay.................................................................VIII-22 2. Violations of the Automatic Stay....................................................................VIII-22 3. Stay of an Order Granting Relief from Stay.................................................VIII-23 4. Applicability of Local Bankruptcy Rules of Each District to Motions for Relief from Stay............................................................................................VIII-23 a. Middle District...................................................................................VIII-23 b. Eastern District..................................................................................VIII-24 c. Western District.................................................................................VIII-26D. CO-DEBTOR STAY..................................................................................................VIII-28 1. Termination of Co-Debtor Stay......................................................................VIII-28 2. Procedure for Obtaining Relief From Co-Debtor Stay.................................VIII-29E. SPECIAL PROVISIONS FOR UTILITY SERVICE................................................VIII-29

CHAPTER IXMEETING OF CREDITORS

A. STATUTORY AND RULE REFERENCES..................................................................IX-5B. THE PROCEDURAL CONDUCT OF THE MEETING............................................IX-6 1. Meeting of Equity Security Holders...................................................................IX-6 2. Election of Chapter 7 Trustee or Creditors’ Committee.....................................IX-6 a. Disputed Election...................................................................................IX-7 b. Adjournment..........................................................................................IX-7 c. No Meeting in Certain Cases.................................................................IX-7C. PROCEDURE IN NORTH CAROLINA.....................................................................IX-7 1. Examination of Debtor.......................................................................................IX-8 2. Creditor Participation.........................................................................................IX-8 3. Who May Appear for the Creditor.....................................................................IX-9D. STRATEGIC CHECKLIST...........................................................................................IX-9

CHAPTER XCLAIMS

A FILING PROOFS OF CLAIM OR INTEREST..............................................................X-7 1. Filing Claims in a Chapter 7 Case........................................................................X-8 2. Filing Claims in a Chapter 11 Case.......................................................................X-8

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3. Filing Claims in a Chapter 12 Case.......................................................................X-9 4. Filing Claims in a Chapter 13 Case.......................................................................X-9B. ALLOWANCE OF CLAIMS OR INTEREST..............................................................X-10C. ALLOWANCE OF COSTS OF ADMINISTRATION..................................................X-11D. DETERMINATION OF CLAIMS................................................................................X-12 1. Determination of Secured Status.......................................................................X-12 a. Valuation of Collateral...........................................................................X-12 b. Procedure to Determine Value...............................................................X-13 c. Valuation Standards..............................................................................X-13 d. Preservation of Collateral Surcharge.....................................................X-14 e. Section 1325 “910-day Claims”............................................................X-14 2. Determination of Priority Status.......................................................................X-14 a. Order of Priority....................................................................................X-15 b. Super-Priorities.....................................................................................X-17 3. Determination of Tax Liability..........................................................................X-17E. SUBORDINATION......................................................................................................X-18F. SUBROGATION.........................................................................................................X-19G. TRUSTEE’S DUTY TO EXAMINE CLAIMS............................................................X-19H. OBJECTIONS TO CLAIMS.........................................................................................X-20 1. Grounds for Objection.......................................................................................X-20 2. Procedure for Objection....................................................................................X-21I. SETOFF.......................................................................................................................X-22J. DISTRIBUTION..........................................................................................................X-22

CHAPTER XIDISCHARGE, NON-DISCHARGEABLE DEBTS AND REAFFIRMATION

A. DISCHARGE IN A CHAPTER 7 CASE......................................................................XI-7 1. Denial of Discharge...........................................................................................XI-7 a. Grounds for Denial of Discharge...........................................................XI-8 b. Procedure for Objecting to Discharge ................................................XI-10B. DISCHARGE IN A CHAPTER 11 CASE....................................................................XI-10 1. Exemptions to Discharge..................................................................................XI-11 a. Individual Debtors...............................................................................XI-11 b. Business Debtors.................................................................................XI-11 2. Procedure for Objecting to Discharge or Dischargeability..............................XI-12 3. Scope of the Discharge.....................................................................................XI-12C. DISCHARGE IN A CHAPTER 12 CASE...................................................................XI-12 1. Exceptions to Discharge...................................................................................XI-13 2. Procedure for Objecting to Dischargeability of Debts....................................XI-13 3. “Hardship” Discharge.......................................................................................XI-13 4. Discharge Hearing...........................................................................................XI-14D. DISCHARGE IN A CHAPTER 13 CASE....................................................................XI-14

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1. Exceptions to Discharge Under Section 1328(a)..............................................XI-14 2. “Hardship” Discharge......................................................................................XI-16 3. Discharge Hearing & Procedures....................................................................XI-16E. NON-DISCHARGEABLE DEBTS............................................................................XI-17 1. Grounds for Objecting to Dischargeability.......................................................XI-17 a. Certain Taxes and Customs Duties - § 523(a)(1)..................................XI-17 b. Debts Incurred Through Fraud - § 523(a)(2).......................................XI-18 c. Unlisted and Unscheduled Claims - § 523(a)(3)..................................XI-18 d. Fraud of a Fiduciary Embezzlement or Larceny - § 523(a)(4).............XI-18 e. Domestic Support Obligation - § 523(a)(5).......................................XI-18 f. Willfull and Malicious Injury - § 523(a)(6)..........................................XI-19 g. Fines, Penalties and Forfeitures - § 523(a)(7)......................................XI-19 h. Certain Educational Loans - § 523(a)(8).............................................XI-19 i. Debts Resulting from Driving While Intoxicated - § 523(a)(9).........XI-20 j. Debts from a Previous Bankruptcy in Which Discharge was Denied - § 523(a)(10)...........................................................................XI-20 k. Debts Arising from Fraud or Defalcation While Acting as a Fiduciary to Depository Institution or Insured Credit Union - § 523(a)(11)..........................................................................................XI-20 l. Malicious or Reckless Failure to Fulfi ll Commitment to Federal Depository Institutions Regulatory Agency to Maintain Capital of Insured Depository Institution - § 523(a)(12)................................XI-20 m. Restitution Under Title 18 - § 523(a)(13)............................................XI-20 n. Debt Incurred to Pay a Non-Dischargeable Federal Tax - § 523(a)(14)..........................................................................................XI-21 o. Tax to Governmental Unit Other Than the United States - § 523(a)(14A)......................................................................................XI-21 p. Debt to Pay Federal Election Law Penalty - § 523(a)(14B)................XI-21 q. Debts in the Course of Divorce or Separation - § 523(a)(15) .............XI-21 r. Post-Petition Homeowners’ Assessments - § 523(a)(16).....................XI-21 s. Court Fees - § 523(a)(17).....................................................................XI-21 t. Support Payments Under the Social Security Act - § 523(a)(18)........XI-21 u. Securities Law Violations - § 523(a)(19).............................................XI-22 2. Procedure for Objecting to Dischargeability.....................................................XI-22 3. Revocation of Discharge.................................................................................XI-23F. EFFECT OF DISCHARGE.........................................................................................XI-24G. REAFFIRMATION OF DEBT....................................................................................XI-24

CHAPTER XIIAVOIDING POWERS OF THE DEBTOR AND TRUSTEE

A. TRUSTEE’S AVOIDING POWERS...........................................................................XII-9 1. “Strong Arm” Powers of the Trustee: Section 544(a) ......................................XII-9 a. Judicial Lien Creditor.........................................................................XII-10

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b. Unsatisfi ed Execution Creditor...........................................................XII-10 c. Bona Fide Purchaser of Real Estate...................................................XII-10 2. Successor to Actual Creditors: Section 544(b)..............................................XII-11 3. Statutory Lien Creditor: Section 545..............................................................XII-11 4. Avoidance of Certain Liens for Fines or Punitive Damages: Section 724....XII-12 5. Preferences: Section 547................................................................................XII-12 a. Frequently Litigated Issues Concerning Elements of a Preferential Transfer.............................................................................................XII-13 b. Statutory Defenses to the Preference Action......................................XII-15 c. Common Other Defenses to a Preference Action..............................XII-19 d. Setoffs as Preferences.........................................................................XII-20 e. Procedure to Avoid a Preference........................................................XII-21 f. Statute of Limitations.........................................................................XII-22 6. Fraudulent Transfers: Section 548.................................................................XII-22 a. The Elements of the Case..................................................................XII-22 b. Actual Fraudulent Intent....................................................................XII-23 c. Constructive Fraudulent Intent..........................................................XII-24 d. Partnership Debtor..............................................................................XII-26 e. State Law............................................................................................XII-26 f. Discovery.........................................................................................XII-26 g. Venue.................................................................................................XII-27 7. Post-Petition Transfers: Section 549...............................................................XII-27 a. Involuntary Case Gap Transferees for Value....................................XII-28 b. Bona Fide Purchasers of Real Estate.................................................XII-28 c. Good Faith Payor of Debt Owed to Debtor........................................XII-28 d. Limitations Under Section 549(d)......................................................XII-28 8. Limitation on the Trustee’s Avoiding Powers: Section 546.............................XII-29B. DEBTOR’S AVOIDING POWERS: SECTION 522.................................................XII-30C. LIABILITY OF TRANSFEREE OF AVOIDED TRANSFER: SECTION 550........XII-30D. AUTOMATIC PRESERVATION OF AVOIDED TRANSFERS AND LIENS........XII-31E. HEIGHTENED PLEADING REQUIREMENTS IN PREFERENCE CASES.......XII-32

CHAPTER XIIILIQUIDATION AND SALE OF ENCUMBERED PROPERTY

A. SALE OF PROPERTY IN A CHAPTER 7 CASE.......................................................XIII-5 1. Abandonment of Property...............................................................................XIII-5 2. Liquidation by the Trustee...............................................................................XIII-6 3. Lifting of the Automatic Stay for Foreclosure................................................XIII-7 4. Trustee’s Duty to Determine Validity of Lien.................................................XIII-8 5. Costs and Expenses Incurred by a Chapter 7 Trustee in Liquidation of Property.......................................................................................................XIII-8B. SALE OF PROPERTY IN A CHAPTER 11 CASE....................................................XIII-9

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1. Sales Free and Clear........................................................................................XIII-9 2. Sale of Assets Absent a Plan of Reorganization.............................................XIII-9 3. Abandonment of Property..............................................................................XIII-11C. SALE OF PROPERTY IN A CHAPTER 12 CASE.................................................XIII-11D. SALE OF PROPERTY IN A CHAPTER 13 CASE..................................................XIII-12

CHAPTER XIVPROTECTING THE CREDITOR’S INTEREST

A. NOTICE OF APPEARANCE.....................................................................................XIV-7B. FILING A CLAIM.......................................................................................................XIV-8C. NOTICE TO CREDITORS.........................................................................................XIV-8D. ALLOWANCE OF CLAIMS AND DETERMINATION OF SECURED STATUS...XIV-9E. VALUATION............................................................................................................XIV-9 1. Standards of Valuation.....................................................................................XIV-9 2. Section 506(c) Surcharge...............................................................................XIV-10 3. Cramdown of Secured Claims.......................................................................XIV-10F. AUTOMATIC STAY.................................................................................................XIV-11 1. Exceptions to the Automatic Stay.................................................................XIV-11 2. Abusive Filings and the Automatic Stay.........................................................XIV-11 3. Motion for Relief from Stay.........................................................................XIV-12 a. Procedure to Obtain Relief from Stay...............................................XIV-12 b. Tactical Considerations.....................................................................XIV-13 4. Violations of the Automatic Stay.................................................................XIV-13G. MEANS FOR PROTECTING THE RIGHTS OF THE CREDITOR......................XIV-13 1. Motion to Dismiss.........................................................................................XIV-14 a. Chapter 7 Case...................................................................................XIV-14 b. Chapter 11 Case..................................................................................XIV-14 c. Chapter 12 Case.................................................................................XIV-14 d. Chapter 13 Case..................................................................................XIV-15 e. Tactical Considerations......................................................................XIV-15 2. Conversion to Another Chapter......................................................................XIV-15 a. Chapter 7 Case...................................................................................XIV-15 b. Chapter 11 Case..................................................................................XIV-16 c. Chapter 12 Case..................................................................................XIV-16 d. Chapter 13 Case..................................................................................XIV-16 e. Tactical Considerations.....................................................................XIV-16 3. Objections to Discharge.................................................................................XIV-17H. REPRESENTING THE CREDITOR IN A CHAPTER 7 CASE.............................XIV-17 1. Section 341 – First Creditors’ Meeting...........................................................XIV-17 2. Section 554 – Abandonment...........................................................................XIV-18 3. Section 524 – Reaffi rmation...........................................................................XIV-18 4. Section 722 – Redemption.............................................................................XIV-18

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5. Section 707 – Dismissal.................................................................................XIV-19 6. Section 727 – Objection to Discharge...........................................................XIV-19 7. Exemptions...................................................................................................XIV-19I. REPRESENTING THE CREDITOR IN A CHAPTER 11 CASE...........................XIV-19 1. Use of Cash Collateral...................................................................................XIV-20 2. Use, Sale or Lease of Property Under Section 363.......................................XIV-21 3. Post-Petition Lending....................................................................................XIV-21 4. Appointment of a Trustee or Examiner..........................................................XIV-22 5. Objection to Plan of Reorganization..............................................................XIV-22J. REPRESENTING THE CREDITOR IN A CHAPTER 12 CASE.............................XIV-23 1. Protecting the Claim......................................................................................XIV-23 a. Relief from the Automatic Stay........................................................XIV-23 b. Use of Cash Collateral......................................................................XIV-23 c. Use, Sale and Lease of Property.......................................................XIV-23 d. Post-Petition Lending........................................................................XIV-24 e. Revocation of Confi rmation or Discharge.........................................XIV-24 2. The Plan of Reorganization...........................................................................XIV-24K. REPRESENTING THE CREDITOR IN A CHAPTER 13 CASE.............................XIV-25 1. Co-Debtor Stay..............................................................................................XIV-25 2. Release of Property.......................................................................................XIV-26 3. Foreclosure of Real Property.........................................................................XIV-26 4. Other Remedies Available in Chapter 13......................................................XIV-26 5. The Chapter 13 Plan......................................................................................XIV-27 a. Objection to Confi rmation.................................................................XIV-27 b. Curing Default..................................................................................XIV-28L. CONCLUSION.........................................................................................................XIV-28

CHAPTER XVCHAPTER 7 LIQUIDATION

A. DISTINCTION BETWEEN CHAPTER 7 AND OTHER CHAPTERS UNDER THE BANKRUPTCY CODE......................................................................................XV-7B. VOLUNTARY CHAPTER 7 BANKRUPTCY CASES..............................................XV-8 1. Debtor Eligibility..............................................................................................XV-8 2. Filing the Case..................................................................................................XV-9 a. Pre-Petition Disclosures.......................................................................XV-9 b. The Petition.........................................................................................XV-10 c. Statement of Financial Affairs.............................................................XV-11 d. Schedules.........................................................................................XV-12 e. Certifi cate of Credit Counseling..........................................................XV-15 f. Statement of Social Security Number................................................XV-15 g. Statement of Current Monthly Income................................................XV-15 h. Rule 2016 Statement...........................................................................XV-15

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i. Other Necessary Documents..............................................................XV-16 3. Procedure After Filing the Case....................................................................XV-16C. INVOLUNTARY CHAPTER 7 BANKRUPTCY CASES.........................................XV-17 1. Debtor Eligibility............................................................................................XV-18 2. Filing the Involuntary Case............................................................................XV-18 a. The Petition.........................................................................................XV-19 b. The Summons.....................................................................................XV-19 3. Appointment of Trustee Before Order for Relief...........................................XV-19 4. Procedure After Filing an Involuntary Petition.............................................XV-19D. CONVERSIONS OR DISMISSALS..........................................................................XV-20

CHAPTER XVICHAPTER 13 — ADJUSTMENT OF DEBTS

OF AN INDIVIDUAL WITH REGULAR INCOME

A. ELIGIBILITY ...........................................................................................................XVI-13 1. Individual......................................................................................................XVI-13 2. Regular Income.............................................................................................XVI-14 3. Debt Limits...................................................................................................XVI-14 4. Effect of Prior Bankruptcy.............................................................................XVI-14 5. Pre-Bankruptcy Credit Counseling...............................................................XVI-15B. FILING THE CASE..................................................................................................XVI-15 1. The Petition for Relief...................................................................................XVI-16 2. The Filing Fee ...............................................................................................XVI-16 3. Schedules, Statements and Lists....................................................................XVI-16 a. List of Creditors and Mailing Matrix................................................XVI-17 b. Summary of Schedules......................................................................XVI-17 c. Statement of Financial Affairs..........................................................XVI-17 4. Attorneys’ Fees.............................................................................................XVI-18 5. Additional Required Documents..................................................................XVI-18 a. Debtor’s Statement of Social Security Number (Offi cial Form 21)....XVI-18 b. Debtor’s Certifi cate of Credit Counseling and Debt Repayment Plan (or § 109(h)(3) Certifi cation or § 109(h)(4) Request)......................XVI-18 c. Notice to Individual Debtors with Primarily Consumer Debts..........XVI-18 d. Statement of Current Monthly Income and Disposable Income Calculation (Offi cial Form 22C)......................................................XVI-19 e. Chapter 13 Plan................................................................................XVI-19 f. Payment Advices..............................................................................XVI-19 6. Amendments to Petition, Schedule or Statement.........................................XVI-20C. PROPERTY OF THE ESTATE.................................................................................XVI-20D. POWERS AND DUTIES OF THE DEBTOR.........................................................XVI-21 1. Duties..........................................................................................................XVI-21

2. Powers ...........................................................................................................XVI-23

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E. POWERS AND DUTIES OF THE TRUSTEE.......................................................XVI-23F. THE CHAPTER 13 PLAN........................................................................................XVI-24 1. Mandatory Provisions of the Plan.................................................................XVI-25 2. Discretionary Provisions of the Plan.............................................................XVI-25 3. Prohibited Provisions....................................................................................XVI-26 4. Length of Plan ..............................................................................................XVI-27 5. Classifi cation of Claims................................................................................XVI-27 6. Confi rmation of the Plan...............................................................................XVI-27 a. Confi rmation Requirements..............................................................XVI-28 b. Objection to Confi rmation................................................................XVI-29 c. Confi rmation Provisions Binding.....................................................XVI-30G. CLAIMS...................................................................................................................XVI-30H. STAYS UNDER CHAPTER 13................................................................................XVI-31 1. Automatic Stay..............................................................................................XVI-31 a. Limitations on the Automatic Stay for Repeat Filers.........................XVI-32 b. Limitations on the Automatic Stay as to Real Property....................XVI-33 2. Co-Debtor Stay.............................................................................................XVI-33I. REAL PROPERTY...................................................................................................XVI-34 1. Mortgage Payments in Chapter 13................................................................XVI-34 a. Conduit Mortgage Payments.............................................................XVI-34 2. Curing Default..............................................................................................XVI-35J. WAGE ORDERS......................................................................................................XVI-36K. MODIFICATION OF PLANS..................................................................................XVI-36 1. Pre-Confi rmation..........................................................................................XVI-36 2. Post-Confi rmation........................................................................................XVI-36 a. Post-Confi rmation Modifi cation for Above-Median-Income Debtors..........................................................................................XVI-37L. DISCHARGE..........................................................................................................XVI-37M. CONVERSION OR DISMISSAL...........................................................................XVI-38N. DEBTOR ENGAGED IN BUSINESS.....................................................................XVI-39

CHAPTER XVIICHAPTER 12 — ADJUSTMENT OF DEBTS OF A FAMILY FARMER

OR FISHERMAN WITH REGULAR INCOME

A. FILING A CHAPTER 12 CASE..............................................................................XVII-9 1. Eligibility for Relief......................................................................................XVII-10 a. Family Farmer.................................................................................XVII-10 b. Family Fisherman............................................................................XVII-11 c. Voluntary Petitions Only..................................................................XVII-13 d. The Petition for Relief and Other Necessary Documents.................XVII-13B. POST-PETITION OPERATIONS...........................................................................XVII-15 1. Appointment of Trustee...............................................................................XVII-15

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a. Duties of Trustee..............................................................................XVII-15 b. Compensation of Trustee.................................................................XVII-16 2. The Rights and Powers of the Debtor...........................................................XVII-16 3. Monthly Reports..........................................................................................XVII-17 4. Filing of Claims...........................................................................................XVII-17 5. Status Conferences.......................................................................................XVII-17C. CHAPTER 12 AUTOMATIC STAY.......................................................................XVII-18 1. Relief from Stay...........................................................................................XVII-18 2. Adequate Protection.....................................................................................XVII-19 a. Reasonable, Customary Rent..........................................................XVII-19 b. Elimination of Lost Opportunity Costs..........................................XVII-20D. SALE OF PROPERTY IN A CHAPTER 12 CASE...............................................XVII-20E. USE OF CASH COLLATERAL.............................................................................XVII-21F. THE PLAN OF REORGANIZATION....................................................................XVII-21 1. Provisions of the Plan..................................................................................XVII-22 2. Treatment of Post-Petition Crops or Crop Proceeds...................................XVII-23 3. Other Provisions of the Plan.......................................................................XVII-24 4. Confi rmation of the Plan..............................................................................XVII-24 a. Confi rmation Standards...................................................................XVII-25 b. Secured Claims................................................................................XVII-26 c. Good Faith and Feasability..............................................................XVII-28 5. Post-Confi rmation......................................................................................XVII-28 a. Wage Deduction...............................................................................XVII-28 b. Effect of Confi rmation.....................................................................XVII-28 c. Modifi cation of Plan After Confi rmation.........................................XVII-28 d. Revocation of Confi rmation............................................................XVII-29G. DISCHARGE..........................................................................................................XVII-29H. CONVERSION.......................................................................................................XVII-30I. DISMISSAL............................................................................................................XVII-31

CHAPTER XVIIICHAPTER 11 REORGANIZATION

A. INTRODUCTION.................................................................................................XVIII-11 1. Advantages of Alternative Chapters...........................................................XVIII-11 2. Disadvantages of Alternative Chapters......................................................XVIII-12B. ELIGIBILITY, FEASIBILITY AND PRE-FILING CONSIDERATIONS...........XVIII-12 1. Eligibility..................................................................................................XVIII-12 2. Feasibility...................................................................................................XVIII-13 3. Pre-Filing Considerations..........................................................................XVIII-14C. FILING THE CASE...............................................................................................XVIII-15 1. Voluntary Petition.......................................................................................XVIII-15 a. Application to Employ Attorney for Debtor in Possession............XVIII-15

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b. Application to Approve Employment of Accountants...................XVIII-16 c. Application for Authority to Employ an Offi cer...........................XVIII-16 2. Involuntary Petition....................................................................................XVIII-16 a. Procedure for Commencing an Involuntary Case...........................XVIII-17 b. Continued Operation of the Business.............................................XVIII-18 c. Entry of an Order for Relief...........................................................XVIII-18 d. Dismissal of the Case.....................................................................XVIII-18D. POST-PETITION PROCEDURES IN CHAPTER 11...........................................XVIII-18 1. Post-Petition Operation of the Business.....................................................XVIII-19 2. Appointment of a Trustee or an Examiner...................................................XVIII-20E. AUTOMATIC STAY..............................................................................................XVIII-21 1. Procedure for Obtaining Relief from Stay.................................................XVIII-21 2. Grounds for Obtaining Relief from Stay...................................................XVIII-22 3. Violations of the Automatic Stay...............................................................XVIII-22 4. Setoff..........................................................................................................XVIII-23F. USE, SALE OR LEASE OF PROPERTY..............................................................XVIII-23 1. Use of Cash Collateral...............................................................................XVIII-24 2. Sale of Property Free and Clear of Liens...................................................XVIII-25 3. Adequate Protection...................................................................................XVIII-26G. OBTAINING CREDIT..........................................................................................XVIII-26H. SUPER-PRIORITY................................................................................................XVIII-27I. UTILITY SERVICE..............................................................................................XVIII-28J. CREDITORS’ COMMITTEES.............................................................................XVIII-29K. DISCLOSURE STATEMENT...............................................................................XVIII-29L. FILING A PLAN OF REORGANIZATION........................................................XVIII-31 1. Contents of a Plan of Reorganization.........................................................XVIII-31 2. Acceptance of a Plan of Reoganization...................................................XVIII-33 3. Modifi cation of a Plan of Reorganization..................................................XVIII-33 4. Confi rmation of a Plan of Reorganization..................................................XVIII-34 5. Cramdown............................................................................................XVIII-37 6. Effect of Confi rmation................................................................................XVIII-40 7. Revocation of Confi rmation.......................................................................XVIII-40M. DISCHARGE.........................................................................................................XVIII-40N. CONVERSION OR DISMISSAL.........................................................................XVIII-40O. “FAST TRACK” TO CONFIRMATION................................................................XVIII-42 1. Chapter 11A Procedures — Eastern District.............................................XVIII-42 2. Other Districts............................................................................................XVIII-43P. SPECIAL RULES FOR SMALL BUSINESS DEBTORS.....................................XVIII-43 1. Reporting Requirements............................................................................XVIII-43 2. Automatic Stay...........................................................................................XVIII-44 3. Information Requirements.........................................................................XVIII-44 4. Time Restrictions.......................................................................................XVIII-44

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5. Disclosure Statements................................................................................XVIII-45Q. SPECIAL RULES FOR INDIVIDUAL CHAPTER 11 DEBTORS....................XVIII-45

CHAPTER XIXCREDITORS’ COMMITTEES

A. CHAPTER 7 CREDITORS’ COMMITTEES.............................................................XIX-5 1. Election of the Committee..............................................................................XIX-5 2. Powers and Function of the Committee..........................................................XIX-5

3. Compensation.................................................................................................XIX-6B. CHAPTER 11 CREDITORS’ COMMITTEES..........................................................XIX-6 1. Appointment of Committee.............................................................................XIX-6 a. Western District of North Carolina.....................................................XIX-7 b. Middle District of North Carolina.......................................................XIX-8 c. Eastern District of North Carolina.......................................................XIX-8 2. Required Sharing of Information.....................................................................XIX-9 3. Organization of Committee and Employment of Professionals.....................XIX-9 4. Compensation of Professionals and Employed Agents.................................XIX-11 5. Powers and Functions of Committee.............................................................XIX-12 a. Party in Interest.................................................................................XIX-13 b. Fiduciary Duty..................................................................................XIX-13 c. Reimbursement of Expenses of Committee Members......................XIX-13

CHAPTER XXEXECUTORY CONTRACTS AND UNEXPIRED LEASES

A. INTRODUCTION..................................................................................................XX-7B. DEFINITION OF EXECUTORY CONTRACT..........................................................XX-7 1. No Code Defi nition of “Executory”.................................................................XX-7 2. The Countryman Defi nition..............................................................................XX-7 3. Variations on the Countryman Defi nition........................................................XX-7C. PRE-PETITION TERMINATION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES................................................................................................XX-8 1. Existence of Contract or Lease.........................................................................XX-8 2. Bankruptcy Termination Clauses......................................................................XX-9D. REJECTION OR ASSUMPTION OF EXECUTORY CONTRACTS........................XX-9 1. Section 365 Generally ......................................................................................XX-9 a. Time Limits for Assumption or Rejection...........................................XX-9 b. Personal Service Contracts.................................................................XX-10 c. Contracts to Make Loans.....................................................................XX-11 d. Manner of Assumption or Rejection..................................................XX-12 2. Assumption of Executory Contract.................................................................XX-12

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a. Prerequisites for Assumption..............................................................XX-12 b. Effect of Assumption..........................................................................XX-15 3. Rejection of Executory Contracts...................................................................XX-15 a. Standards of Rejection........................................................................XX-15 4. Effect of Rejection..........................................................................................XX-16 a. Assumption Followed by Rejection...................................................XX-16 b. Limitations on the Amount of Claims Arising Out of Rejection........XX-17 c. Lifting of Automatic Stay With Respect to Personal Property Leases.................................................................................................XX-17 5. Assignment of Executory Contracts...............................................................XX-17 a. Assumption in Compliance With Section 365...................................XX-17 b. Adequate Assurance by Assignee of Future Performance.................XX-18 c. Procedure for Assignment of Executory Contracts...........................XX-18 d. Liability of Trustee After Assignment................................................XX-18E. UNEXPIRED LEASES IN BANKRUPTCY.............................................................XX-18 1. Generally.......................................................................................................XX-19 a. State Law Governs Absent a Specifi c Bankruptcy Provision.............XX-19 b. Lease Includes Any Rental of Real Property......................................XX-19 2. Performance of Lease Obligations Pending Assumption or Rejection............XX-20 3. Leases of Real Property in Shopping Centers..............................................XX-20 a. Defi nition of “Shopping Center”........................................................XX-20 b. Adequate Assurance of Future Performance of a Shopping Center Lease...................................................................................................XX-21 4. Providing Services and Supplies Under Defaulted Lease Pending Assumption or Rejection.................................................................................XX-22 5. Rejection of Unexpired Leases.......................................................................XX-22 a. The Lessor’s Claim Upon Rejection...................................................XX-22 b. Measuring Administrative Rent..........................................................XX-23 c. Limited Administrative Claim Following Post-Assumption Rejection.............................................................................................XX-23 d. Surrender of Premises Upon Rejection..............................................XX-23 6. Lessor May Require Deposit by Assignee......................................................XX-24 7. The Debtor as Lessor......................................................................................XX-24 a. Effect of Rejection by Debtor/Lessor.................................................XX-24 b. Lessee Alternatives Upon Rejection by Debtor/Lessor....................XX-24F. LICENSEES OF INTELLECTUAL PROPERTY.....................................................XX-25G. COMMITMENTS TO FEDERAL AGENCIES........................................................XX-25

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CHAPTER XXIREAL ESTATE AND BANKRUPTCY

A. JURISDICTION.....................................................................................................XXI-13B. PRE-BANKRUPTCY CONSIDERATIONS............................................................XXI-14 1. Preferential Transfers....................................................................................XXI-15 a. Time of Transfer................................................................................XXI-16 b. Other Elements of a Preference........................................................XXI-16 c. Judicial Liens....................................................................................XXI-17 d. Preference Actions as Applied to North Carolina Mechanic’s Liens and Payment Bond Claims Under Chapter 44A of the North Carolina General Statutes.................................................................XXI-17 e. Exceptions to Preferential Transfers................................................XXI-18 2. Fraudulent Transfers.....................................................................................XXI-18 a. Involuntary Transfers, Foreclosures..................................................XXI-19 b. Effect of Avoidance...........................................................................XXI-19C. POST-PETITION CONSIDERATIONS...................................................................XXI-20 1. Relief from the Automatic Stay......................................................................XXI-20 a. New Exceptions to Automatic Stay Related to Real Property...........XXI-20 b. New Grounds for Relief from Automatic Stay Related to Secured Claims in Real Property....................................................................XXI-21 2. Procedure to Obtain Relief from Stay ...........................................................XXI-23 3. Determination of Value.................................................................................XXI-23 4. Modifi cation of Secured Claims Against Real Property...............................XXI-24 5. Avoidance of Post-Petition Transfers............................................................XXI-26D. EXEMPTIONS IN REAL ESTATE.........................................................................XXI-27 1. Statutory Exemptions Pursuant to North Carolina Law..............................XXI-28 2. Tenancy by the Entireties Property...............................................................XXI-29 3. Right of Redemption.....................................................................................XXI-29 4. Objection to Exemptions...............................................................................XXI-30 5. Judgment Liens.............................................................................................XXI-30E. ABANDONMENT...................................................................................................XXI-33F. SALE OF REAL ESTATE.........................................................................................XXI-34 1. Sales Free and Clear of Liens and Interests.................................................XXI-35 2. Sale of Jointly Owned Property.....................................................................XXI-36 3. Sale of Real Property in a Chapter 11 Plan.................................................XXI-36 4. Sale of Farmland in a Chapter 12 Case........................................................XXI-38 5. Sale of Real Property in a Chapter 13 Case..................................................XXI-38G. LABOR AND MATERIALMAN’S LIENS.............................................................XXI-39 1. Special Application: Condominium Units...................................................XXI-42

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CHAPTER XXIIATTORNEYS’ FEES

A. DISCLOSURE...................................................................................................XXII-5B. RETENTION............................................................................................................XXII-6

1. Chapters 11 and 12.........................................................................................XXII-62. Chapter 13......................................................................................................XXII-83. Chapter 7........................................................................................................XXII-84. Extent of Representation................................................................................XXII-95. Special Counsel.............................................................................................XXII-9

C. QUALIFICATION..................................................................................................XXII-9D. COMPENSATION................................................................................................XXII-10

1. In General....................................................................................................XXII-10 a. Bankruptcy Code and Rules.............................................................XXII-11 b. Factors to be Considered................................................................XXII-13 c. Cost of Administration Status.........................................................XXII-142. In Chapters 11 and 12...................................................................................XXII-14 a. Interim Compensation.....................................................................XXII-14

b. Final Compensation.........................................................................XXII-153. Additional Considerations Regarding Chapter 12 Applications.................XXII-174. Special Provisions in Chapter 13 Cases.......................................................XXII-175. Compensation in Chapter 7 Cases...............................................................XXII-18

E. OTHER FEE ALLOWANCES...............................................................................XXII-181. Contingency and Flat Fees..........................................................................XXII-182. Proofs of Claim............................................................................................XXII-183. Section 503...................................................................................................XXII-194. Section 506(b)..............................................................................................XXII-195. Section 1322(e)............................................................................................XXII-20

F. NOTICING AND PROPOSED ORDERS..............................................................XXII-20

CHAPTER XXIIICHAPTER 9 MUNICIPALITIES

A. INTRODUCTION/HISTORY OF CHAPTER 9....................................................XXIII-7B. ELIGIBILITY UNDER CHAPTER 9......................................................................XXIII-7 1. Municipalities..............................................................................................XXIII-7 2. Requirements for Filing...............................................................................XXIII-8 a. Insolvency........................................................................................XXIII-8 b. Specifi cally Authorized....................................................................XXIII-8 c. Desire to Effect a Plan.....................................................................XXIII-10C. COMMENCEMENT OF CASE.............................................................................XXIII-10 1. Filing of Petition.........................................................................................XXIII-10 2. Notice of Commencement..........................................................................XXIII-11 3. Objections..................................................................................................XXIII-11

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4. Special Revenues........................................................................................XXIII-11D. EMPLOYMENT AND COMPENSATION OF PROFESSIONALS.....................XXIII-11 1. Authority to Review Professional Fees........................................................XXIII-12

2. Professionals Employed by Creditors’ Committees....................................XXIII-12E. TRUSTEES AND AVOIDANCE ACTIONS.........................................................XXIII-13

1. Appointment of Trustees..............................................................................XXIII-132. Avoidance Actions.......................................................................................XXIII-13

F. PROPOSING AND CONFIRMING PLANS OF ADJUSTMENT..........................XXIII-13 1. Requirements for Confi rmation of Plans.....................................................XXIII-14 a. Feasibility.........................................................................................XXIII-14 b. Best Interest of Creditors Test...........................................................XXIII-15

2. Cramdown of Non-Accepting, Impaired Classes.........................................XXIII-15G. OTHER SIGNIFICANT DIFFERENCES FROM CHAPTER 11 CASES..............XXIII-15 1. Section 362..................................................................................................XXIII-16 2. Section 363..................................................................................................XXIII-16 3. Section 364..................................................................................................XXIII-16 4. Section 341..................................................................................................XXIII-16 5. Reporting Requirements..............................................................................XXIII-16

CHAPTER XXIVCHAPTER 9 MUNICIPALITIES

A. INTRODUCTION..................................................................................................XXIV-7B. PETITION FOR RECOGNITION..........................................................................XXIV-7C. INTERIM RELIEF....................................................................................................XXIV-8D. ORDER OF RECOGNITION...................................................................................XXIV-8E. MAIN V. NON-MAIN PROCEEDINGS.................................................................XXIV-9F. POST-RECOGNITION RELIEF.............................................................................XXIV-9G. FOREIGN CREDITOR RIGHTS...........................................................................XXIV-10H. EMPLOYMENT ISSUES......................................................................................XXIV-10

CHAPTER XXVADVERSARY PROCEE DINGS AND CONTESTED MATTERS

A. IN GENERAL .......................................................................................................XXV-9B. JURISDICTION AND VENUE...............................................................................XXV-10 1. Jurisdiction............................................................................................XXV-10 2. Venue...........................................................................................................XXV-10C. REMOVAL.............................................................................................................XXV-11D. JURY DEMANDS / CONSENT TO TRIAL BY BANKRUPTCY COURT.........XXV-11E. APPLICABILITY OF FEDERAL RULES OF CIVIL PROCEDURE AND FEDERAL RULES OF EVIDENCE.......................................................................XXV-12 1. Generally....................................................................................................XXV-12 2. Amendments to Specifi c Federal Rules Affecting Adversary Proceedings..XXV-12

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F. COMMENCING AN ADVERSARY PROCEEDING.............................................XXV-13 1. Preparing and Filing the Complaint and Summons....................................XXV-13 2. Service of the Complaint and Summons......................................................XXV-15G. RESPONSIVE PLEADINGS ; AMMENDED AND SUPPLEMENTAL PLEADINGS...........................................................................................................XXV-15 1. Answer and Affi rmative Defenses...............................................................XXV-15 2. Counterclaims, Crossclaims, Third-Party Claims and Interpleader............XXV-16 3. Amendments to Pleadings............................................................................XXV-17H. SPECIAL ACTIONS...............................................................................................XXV-17 1. Class Actions...............................................................................................XXV-17 2. Derivative Proceedings by Shareholders......................................................XXV-18 3. Adversary Proceedings Relating to Unincorporated Associations.............XXV-18 4. Intervention.................................................................................................XXV-18 5. Substitution of Parties..................................................................................XXV-18I. PRE-TRIAL PROCEDURE IN BANKRUPTCY COURT.....................................XXV-19 1. Provisional Remedies to Secure Satisfaction of Judgment; Injunctive Relief............................................................................................................XXV-19 2. Pre-Trial Discovery......................................................................................XXV-19 3. Rule 2004 Examinations..............................................................................XXV-19 a. Scope of Bankruptcy Rule 2004 Examination................................XXV-19 b. Procedure for Bankruptcy Rule 2004 Examination........................XXV-20 c. Sanctions for Debtor’s Failure to Attend 2004 Examination...........XXV-21 4. Motion Practice in Adversary Proceedings.................................................XXV-21 5. Pre-trial Conferences; Pre-trial Orders........................................................XXV-21J. TRIALS...................................................................................................................XXV-22K. CONSOLIDATION/SEPARATE TRIALS; DISMISSAL.......................................XXV-22L. COMPROMISE SETTLEMENTS/ARBITRATION..............................................XXV-23 1. Mediated Settlement Conferences................................................................XXV-23 2. Approval of Settlement................................................................................XXV-23 3. Court Having Authority to Approve Settlement...........................................XXV-24 4. Settlement by Classes...................................................................................XXV-24 5. Standard for Approval..................................................................................XXV-24 6. Arbitration....................................................................................................XXV-26M. SUMMARY JUDGMENT/DEFAULT JUDGMENT.............................................XXV-26N. OFFER OF JUDGMENT; JUDGMENT.................................................................XXV-26O. POST-TRIAL MOTIONS AND APPEAL...............................................................XXV-27 1. Rule 52: Amend or Add Findings by the Court...........................................XXV-27 2. Rule 59: New Trials; Amendment of Judgment...........................................XXV-27 3. Stay of Execution.........................................................................................XXV-27P. POST-JUDGMENT COLLECTION.......................................................................XXV-28 1. Bill of Costs and Regulation of Judgments in Other Districts....................XXV-28 2. Transferring Judgments to State Courts.......................................................XXV-29 3. Execution.....................................................................................................XXV-29Q. CONTESTED MATTERS.......................................................................................XXV-30

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CHAPTER XXVIAPPEALS FROM THE BANKRUPTCY COURT

A. METHODS OF APPEAL........................................................................................XXVI-7 1. Appeal to District Court from Bankruptcy Court.......................................XXVI-7 2. Appeal to Bankruptcy Appellate Panel from Bankruptcy Court..................XXVI-8 3. Appeal to Circuit Court of Appeals.............................................................XXVI-8B. APPEALABILITY — FINAL AND INTERLOCUTORY ORDERS....................XXVI-8C. SCOPE OF APPELATE REVIEW..........................................................................XXVI-9D. PROCEDURE AND NOTICE OF APPEAL..........................................................XXVI-9 1. Content of Notice of Appeal......................................................................XXVI-10 2. Time for Filing Notice of Appeal...............................................................XXVI-10 3. Certifi cation of Direct Appeals to the Circuit Court..................................XXVI-10 4. Effect of Certain Motions on Time for Filing Notice of Appeal...............XXVI-12 5. Number of Copies and Service of Notice of Appeal................................XXVI-12 6. Record on Appeal.......................................................................................XXVI-12 a. Transcripts on Appeal.....................................................................XXVI-13 b. Docketing of Appeal......................................................................XXVI-13 c. Procedure for Appellee..................................................................XXVI-13 7. Separate Appeal for Each Party..................................................................XXVI-13E. STAY PENDING APPEAL....................................................................................XXVI-14F. BOND ON APPEAL..............................................................................................XXVI-14G. TRANSMITTING THE RECORD ON APPEAL.................................................XXVI-15H. APPELLATE BRIEFS...........................................................................................XXVI-15 1. Time for Filing and Serving Brief.............................................................XXVI-15 2. Form of Brief for Appellant........................................................................XXVI-15 3. Length of Briefs..........................................................................................XXVI-16I. HEARING BEFORE THE DISTRICT COURT....................................................XXVI-16J. DISMISSAL OF THE APPEAL.............................................................................XXVI-17K. DAMAGES AND COSTS FOR FRIVOLOUS APPEAL.....................................XXVI-17

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APPENDIX

FORMS

Note: The Bankruptcy Manual Form No. system for the Table of Contents and at the bottom of each form was developed for the convenience of locating a form when referenced within the text. The Bankruptcy Form No. is NOT an offi cial form number designation and should not be refer-enced as such when using a form from the Bankruptcy Manual.

Form No. Name of Form

1 Motion for Change of Venue..............................................................................A-12 Order Granting Motion for Change of Venue and Transferring Case.................A-33 Notice of Removal..............................................................................................A-54 Motion to Remand..............................................................................................A-75 Voluntary Petition (Form B1; Offi cial Form 1).................................................A-96 Exhibit “A” (Form B1, Exh. A; Offi cial Form 1, Exh. A)..................................A-137 Resolution of Board of Directors of ____ Authorizing Commencement of Proceedings Under Chapter ____.....................................................................A-158 Notice to Individual Consumer Debtor Under § 342(b) of the Bankruptcy Code (Form B201; Offi cial Form 201)......................................................................A-179 Exhibit “C” (Form B1, Exh. C; Offi cial Form 1, Exh. C)................................A-1910 Statement of Social Security Number (Form B21; Offi cial Form 21)............A-2111 Certifi cation of Mailing Matrix Required by E.D.N.C. LBR 1007-2 (Eastern District)...............................................................................................A-23 12 Summary of Schedules (Form B6; Offi cial Form 6)........................................A-2513 Schedule A − Real Property (Form B6A; Offi cial Form 6A)...........................A-2714 Schedule B − Personal Property (Form B6B; Offi cial Form 6B).....................A-2915 Schedule C − Property Claimed as Exempt (Form B6C; Offi cial Form 6C)......A-3316 Schedule C-1 − Property Claimed as Exempt (Eastern District).....................A-3517 Debtors Claim for Property Exemptions (Middle District) (Local Form 91C)..A-3718 Schedule D − Creditors Holding Secured Claims (Form B6D; Offi cial Form 6D)...............................................................................................................A-4119 Schedule E − Creditors Holding Unsecured Priority Claims (Form B6E; Offi cial Form 6E)......................................................................................................A-4320 Schedule F − Creditors Holding Unsecured Non-Priority Claims (Form B6F; Offi cial Form 6F).........................................................................................A-4721 Schedule G − Executory Contracts and Unexpired Leases (Form B6G; Offi cial Form 6G)......................................................................................................A-4922 Schedule H − Co-Debtors (Form B6H; Offi cial Form 6H)..............................A-5123 Schedule I − Current Income of Individual Debtor(s) (Form B6I; Offi cial Form 6I).................................................................................................................A-53

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24 Schedule J − Current Expenditures of Individual Debtor(s) (Form B6J; Offi cial Form 6J).......................................................................................................A-5525 Declaration Concerning Debtor’s Schedules (Form B6; Offi cial Form 6).......A-5726 Statement of Financial Affairs (Form B7; Offi cial Form 7).............................A-5927 Chapter 7 Statement of Current Monthly Income and Means-Test Calculation (Form B22A; Offi cial Form 22A)................................................................A-7128 Chapter 13 Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income (Form B22C; Offi cial Form 22C)..............................................................................................................A-7729 Statement of Current Monthly Income for Use in Chapter 11 (Form B22B; Offi cial Form 22B).......................................................................................A-8330 Chapter 7 Individual Debtor’s Statement of Intention (Form B8; Offi cial Form 8)...................................................................................................................A-8531 Disclosure of Compensation of Attorney for Debtor (Form B203; Offi cial Form 203)...............................................................................................................A-8732 Disclosure to Debtor(s) of Attorneys Fee Procedure for Chapter 13 Cases (Local Form 3) (Western District)...........................................................................A-8933 List of Creditors Holding 20 Largest Unsecured Claims (Form B4; Offi cial Form 4)...................................................................................................................A-9134 Application for Base Fee – Chapter 13 (Local Form C-13-12(e)) (Middle District)...........................................................................................A-9335 Election to Opt Out of Presumptive Base Fee (Middle District)......................A-9536 Notice to Creditors and Proposed Plan (Middle District)..................................A-9737 Chapter 13 Plan (Local Form 4) (Western District).........................................A-10338 Debtor(s) Certifi cation and Affi davit − 341(a) Meeting (Local Form 7) (Western District).......................................................................................A-11139 Involuntary Petition (Form B5; Offi cial Form 5)............................................A-11340 Summons to Debtor in Involuntary Case (Form B250E; Offi cial Form 250E)..A-11541 Application to Pay Filing Fee in Installments (Form B3A; Offi cial Form 3A)..............................................................................................................A-12342 Appearance of Child Support Creditor or Representative (Form B281; Offi cial Form 281)...................................................................................................A-12543 Application for Waiver of the Chapter 7 Filing Fee for Individuals who Cannot Pay the Filing Fee in Full or in Installments (Form B3B; Offi cial Form 3B).......................................................................................A-12744 Notice to Clients Who Contemplate Filing Bankruptcy..................................A-13345 Statement Mandated by Section 527(b) of the Bankruptcy Code..................A-13546 Instructions on Providing Information Required by Bankruptcy Law............A-13747 Contract for Chapter 7 Bankruptcy Services...................................................A-14148 Consultation Agreement and Acknowledgement of Receipt of Disclosures and Instructions................................................................................................A-14949 Addendum to Consultation Agreement...........................................................A-15150 Schedule A − Information to be Provided by Client......................................A-15351 Motion for Relief from Stay............................................................................A-155

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52 Order Modifying Section 362 Stay..................................................................A-15753 Notice of Motion.............................................................................................A-16154 Certifi cate of Service.......................................................................................A-16355 Notice of [Motion to] [Objection to] _____(Local Form No. 1A) (Eastern District).........................................................................................A-16556 Motion to Modify Section 1301 Stay to Permit Collection from Co-Debtors...A-16757 Order Modifying Co-Debtor Stay...................................................................A-16958 Notice of Chapter 7 Bankruptcy Case, Meeting of Creditors and Deadlines (Form B9C; Offi cial Form 9C)...................................................................A-17159 Request for Copies of Tape Recording of Meeting of Creditors....................A-17360 Proof of Claim (Form B10; Offi cial Form 10)................................................A-17561 Notice of Unliquidated, Disputed or Contingent Claims................................A-17762 B10A (Attachment A) – Mortgage Proof of Claim Attachment...................A-17963 Addendum to Chapter 13 Proof of Claim for Real Property Creditor (Conduit Mortgages) (Local Form 14).......................................................................A-18164 B10S1 (Supplement 1) – Notice of Mortgage Payment Change....................A-18365 B10S2 (Supplement 2) – Notice of Postpetition Mortgage Fees, Expenses and Charges......................................................................................................A-18566 Motion to Determine Status of a Claim...........................................................A-18767 Motion to Allow Subrogation.........................................................................A-18968 Complaint Objecting to Discharge of Debtor..................................................A-19169 Order Denying Discharge................................................................................A-19370 Complaint to Determine Dischargeability of a Debt.......................................A-19571 Judgement Determining Debt to be Non-dischargeable................................A-19772 Complaint to Revoke Discharge......................................................................A-19973 Reaffi rmation Agreement (Form B240A; Offi cial Form 240A)...................A-20174 Reaffi rmation Agreement Cover Sheet (Form B27; Offi cial Form 27)...........A-20975 Motion by Debtor to Avoid Lien Pursuant to Section 522(f) of the Bankruptcy Code..............................................................................A-21176 Order Avoiding the Security Interest of _____..............................................A-21377 Motion by Debtor to Avoid Lien (Judicial Lien)...........................................A-21578 Order Avoiding Lien (Judicial Lien)..............................................................A-21779 Motion to Require Trustee to Abandon Real Property..................................A-21980 Notice of Motion to Require Trustee to Abandon Real Property..................A-22181 Notice of Proposed Private Sale.....................................................................A-22382 Notice of Proposed Public Sale of Property and Notice of Compensation to Auctioneer..............................................................................................A-22583 Motion to Transfer Liens to Proceeds.............................................................A-22784 Notice of Appearance......................................................................................A-22985 Motion to Convert from Chapter 11 to Chapter 7...........................................A-23186 Order Allowing Motion to Convert from Chapter 11 to Chapter 7..................A-23587 Debtors’ Chapter 12 Plan................................................................................A-23788 Objection to Confi rmation of Chapter 12 Plan...............................................A-24589 Resolution of Board of Directors Authorizing Chapter 11 Bankruptcy..........A-247

xliv North Carolina Bar Association Foundation Continuing Legal Education

90 Application and Affi davit to Employ Attorney................................................A-24991 Order Appointing Attorneys for Debtor in Possession....................................A-25192 Application and Affi davit to Employ Accountant..........................................A-25393 Order Authorizing Employment of Accountant...............................................A-25794 Application for Approval of Compensation and Employment of Offi cer.....A-25995 Motion for Approval of Rejection of Executory Contracts...........................A-26196 Order Authorizing Rejection of Executory Contracts....................................A-26397 Motion for Approval of Assumption of Executory Contract..........................A-26598 Order Authorizing Operation of Business.......................................................A-26999 Motion to Dismiss or Convert and Alternative Motion to Appoint a Trustee or Examiner Pursuant to 11 U.S.C. § 1104.....................................................A-271100 Order Appointing a Chapter 11 Examiner.......................................................A-287101 Debtor’s Emergency Motion for Authorization to Use Cash Collateral Pursuant to 11 U.S.C. § 363.....................................................................A-289102 Interim Order Authorizing Debtor’s Use of Cash Collateral..........................A-293103 Motion to Incur Super-Priority and Secured Debt..........................................A-301104 Disclosure Statement................................................................................A-303105 Plan of Reorganization....................................................................................A-313106 Ballot for Accepting or Rejecting Plan of Reorganization (Offi cial Form 14)..A-325107 Order Confi rming Plan (Offi cial Form 15).....................................................A-327108 Objection of Creditor to Confi rmation of Chapter 11 Plan............................A-329109 Order Appointing Committee of Unsecured Creditors in a Chapter 11 Reorganization...........................................................................................A-343110 Application for Authority to Employ Attorney for Creditor’s Committee.................................................................................................A-345111 Order Authorizing Employment of _____ as Attorneys for the Offi cial Unsecured Creditors’ Committee...............................................................A-349112 Bylaws of _____ Unsecured Creditors’ Committee....................................A-351113 Trustee’s Motion for Authority to Reject Executory Lease..........................A-357114 Order Authorizing and Approving Trustee’s Rejection of Executory Contract Lease..........................................................................................................A-359115 Motion for an Order Requiring Debtors to Assume or Reject Unexpired Lease and for Relief from Automatic Stay.................................................A-361116 Complaint to Compel Sale of Jointly Owned Property...................................A-365117 Initial Application for Compensation and Reimbursement of Expenses.........A-367118 Summary of Services Rendered.......................................................................A-371119 Initial Estimate of Total Fees to be Incurred...............................................A-373120 Interim Application for Compensation and Reimbursement of Expenses....A-375121 Notice of Opportunity for Hearing (Western District).................................A-385122 Notice of Opportunity for Hearing – No Protest (Western District)............A-387123 Notice of Application for Interim Compensation and Reimbursement of Expenses (Eastern District)................................................................A-389124 Final Application for Compensation and Reimbursement of Expenses........A-391125 Summary of Prior Fee Applications (Western District)................................A-401

North Carolina Bankruptcy Practice Manual, Seventh Edition (2012) xlv

126 Motion of Creditor Pursuant to § 506(b) of the Bankruptcy Code for Allowance of Attorneys’ Fees..................................................................A-403127 Petition Under Chapter 15 for Recognition of a Foreign Main Proceeding and Memorandum of Law in Support Thereof........................................A-411128 Statement of Foreign Representative Pursuant to 11 U.S.C. § 1515...............A-435129 Notice of Hearing on Recognition of a Foreign Proceeding...........................A-443130 Order Granting Petition Under Chapter 15 to Reorganize Foreign Proceeding................................................................................................A-445131 Order Approving Motion for Order.................................................................A-447132 Answer to Complaint......................................................................................A-451133 Motion................................................................................................A-455134 Order....................................................................................................A-457135 Motion of Trustee for Approval of a Compromise and Settlement................A-459136 Notice of Motion.............................................................................................A-461137 Order Approving a Compromise and Settlement...........................................A-463138 Motion for Leave to Appeal Interlocutory Order and for Expedited Hearing...A-465139 Opinion and Order...........................................................................................A-467140 Notice of Appeal (Form B17; Offi cial Form 17).............................................A-485141 Motion for Extension of Time Period to File Notice of Appeal.....................A-487142 Certifi cation to Court of Appeals by All Parties (Form B24; Offi cial Form 24).............................................................................................................A-489143 Contents of Record on Appeal and Statement of Issues..................................A-491144 Motion for Stay of Order Pending Appeal.......................................................A-495145 Motion to Dismiss Appeal...............................................................................A-497

Index............................................................................................................................................499