John E. Waites
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The Judges of the United States Bankruptcy Court have approved a modification of court divisions for purposes of case assignment and hearing locations. Operating Order 07-08 transfers the counties of Abbeville, McCormick, Greenwood and York to the Greenville/Spartanburg division and transfers the counties of Allendale, Hampton, Williamsburg and Horry to the Charleston division. The division change will affect newly filed (not pending cases) as of the effective date. The redesignation of divisions received considerable support from the bar and was prompted by the residency of a bankruptcy judge in the Greenville/Spartanburg division, a desire to improve access to court locations by reducing travel inconvenience for parties, and a goal to move towards equalization of case work in all three divisions.
Further equalization of the divisions shall be accomplished by order of the court as soon as practicable.
Additional announcements will be made regarding transition procedures in the near future. The assignment of trustees and locations for section 341 meetings is the province of the United States Trustee and will be announced by the UST in the near future.
At a recent meeting the Judges discussed consistent procedures related to reaffirmation agreements and offer the following information to assist the bar and parties:
A hearing will be set to consider a reaffirmation agreement in the following circumstances:
1. Debtor is pro se or is not represented by counsel during the negotiation of the agreement. ( Local Rule 9010-1(d) includes such services in the duties of counsel for a debtor).
2. Debtor is represented by counsel but counsel will not sign the agreement recommending its approval. (Counsel may be asked to attend the hearing).
3. The reaffirmation agreement (an official form) is incomplete or important information is missing. In particular, if there is no marking indicating whether a presumption of undue hardship exists or not (box on top of first page of the form), or debtor does not complete the form, including all signatures, or state specific reasons that he can afford payments to overcome the presumption. If counsel has not properly completed the form or there appears to be a presumption but none is indicated.
4. If the judge has questions or concerns regarding the reaffirmation agreement.
If a presumption is triggered due to a shortfall in the debtors ability to pay according to Schedules I and J, and the debtor proposes to change his spending in order to create an ability to pay, a complete and full explanation should be included in Part D to avoid the necessity of a hearing. Before signing and stating that the debtor has the ability to make the payments at Part C, counsel should ensure the form is sufficiently detailed and thorough to indicate no undue hardship.
If a hearing is scheduled due to an incorrect or incomplete agreement (including the indication of a presumption when none exists) and if a corrected, amended agreement is filed before the scheduled hearing and chambers is advised, the judge may consider cancelling the hearing.
Note that exceptions apply when the creditor is a credit union or the debt is a consumer debt secured by real property. In addition, agreements must be timely filed with the court to be effective.
In instances where the debtor is not represented, an order approving or disapproving the agreement after a hearing will be entered. In instances where the debtor is represented by counsel, an order approving the reaffirmation agreement may not be necessary for the agreement to be effective. However, depending on the judge's preference, a judge may enter an order approving the agreement whether or not there is a hearing.
As a result of recent litigation in the area of Chapter 13 attorneys' fees, the Judges are considering an order/local rule that establishes guidelines in this area and that is similiar to the procedure used in other districts. The Judges would like the participation of the consumer debtors' bar in a working group they are forming to review and offer initial comments on a proposal from the court. Thereafter, the proposal will be submitted to the court's advisory committee and offered for public comment.
The working group will be active in early July and may be asked to meet with the Judges on one occasion in Columbia. Members of the consumer debtors' bar who are interested in serving in the working group should reply by email to email@example.com no later than Wednesday, June 20, 2007 at 4:30 p.m.
The Administrative Office of the U.S. Courts Office of Public Affairs has recently published an article in their May 2007 issue of the Third Branch entitled "Bankruptcy Courts' Work Per Case Increases Significantly". Click here to see the full story.
To welcome Judge Duncan back to court, Judges Waites and Burris would like to invite the members of the Bankruptcy bar to meet them for lunch at 11:30 a.m. on Thursday, June 7, 2007, at Doc's Bar-B-Que at 1601 Shop Road in Columbia. We look forward to the opportunity to join you for some food and fellowship.