11 U.S.C. § 524 : US Code - Section 524: Effect of discharge

Search 11 U.S.C. § 524 : US Code - Section 524: Effect of discharge

(a) A discharge in a case under this title -
(1) voids any judgment at any time obtained, to the extent that
such judgment is a determination of the personal liability of the
debtor with respect to any debt discharged under section 727,
944, 1141, 1228, or 1328 of this title, whether or not discharge
of such debt is waived;
(2) operates as an injunction against the commencement or
continuation of an action, the employment of process, or an act,
to collect, recover or offset any such debt as a personal
liability of the debtor, whether or not discharge of such debt is
waived; and
(3) operates as an injunction against the commencement or
continuation of an action, the employment of process, or an act,
to collect or recover from, or offset against, property of the
debtor of the kind specified in section 541(a)(2) of this title
that is acquired after the commencement of the case, on account
of any allowable community claim, except a community claim that
is excepted from discharge under section 523, 1228(a)(1), or
1328(a)(1), or that would be so excepted, determined in
accordance with the provisions of sections 523(c) and 523(d) of
this title, in a case concerning the debtor's spouse commenced on
the date of the filing of the petition in the case concerning the
debtor, whether or not discharge of the debt based on such
community claim is waived.
(b) Subsection (a)(3) of this section does not apply if -
(1)(A) the debtor's spouse is a debtor in a case under this
title, or a bankrupt or a debtor in a case under the Bankruptcy
Act, commenced within six years of the date of the filing of the
petition in the case concerning the debtor; and
(B) the court does not grant the debtor's spouse a discharge in
such case concerning the debtor's spouse; or
(2)(A) the court would not grant the debtor's spouse a
discharge in a case under chapter 7 of this title concerning such
spouse commenced on the date of the filing of the petition in the
case concerning the debtor; and
(B) a determination that the court would not so grant such
discharge is made by the bankruptcy court within the time and in
the manner provided for a determination under section 727 of this
title of whether a debtor is granted a discharge.
(c) An agreement between a holder of a claim and the debtor, the
consideration for which, in whole or in part, is based on a debt
that is dischargeable in a case under this title is enforceable
only to any extent enforceable under applicable nonbankruptcy law,
whether or not discharge of such debt is waived, only if -
(1) such agreement was made before the granting of the
discharge under section 727, 1141, 1228, or 1328 of this title;
(2) the debtor received the disclosures described in subsection
(k) at or before the time at which the debtor signed the
agreement;
(3) such agreement has been filed with the court and, if
applicable, accompanied by a declaration or an affidavit of the
attorney that represented the debtor during the course of
negotiating an agreement under this subsection, which states that
-
(A) such agreement represents a fully informed and voluntary
agreement by the debtor;
(B) such agreement does not impose an undue hardship on the
debtor or a dependent of the debtor; and
(C) the attorney fully advised the debtor of the legal effect
and consequences of -
(i) an agreement of the kind specified in this subsection;
and
(ii) any default under such an agreement;
(4) the debtor has not rescinded such agreement at any time
prior to discharge or within sixty days after such agreement is
filed with the court, whichever occurs later, by giving notice of
rescission to the holder of such claim;
(5) the provisions of subsection (d) of this section have been
complied with; and
(6)(A) in a case concerning an individual who was not
represented by an attorney during the course of negotiating an
agreement under this subsection, the court approves such
agreement as -
(i) not imposing an undue hardship on the debtor or a
dependent of the debtor; and
(ii) in the best interest of the debtor.
(B) Subparagraph (A) shall not apply to the extent that such
debt is a consumer debt secured by real property.
(d) In a case concerning an individual, when the court has
determined whether to grant or not to grant a discharge under
section 727, 1141, 1228, or 1328 of this title, the court may hold
a hearing at which the debtor shall appear in person. At any such
hearing, the court shall inform the debtor that a discharge has
been granted or the reason why a discharge has not been granted. If
a discharge has been granted and if the debtor desires to make an
agreement of the kind specified in subsection (c) of this section
and was not represented by an attorney during the course of
negotiating such agreement, then the court shall hold a hearing at
which the debtor shall appear in person and at such hearing the
court shall -
(1) inform the debtor -
(A) that such an agreement is not required under this title,
under nonbankruptcy law, or under any agreement not made in
accordance with the provisions of subsection (c) of this
section; and
(B) of the legal effect and consequences of -
(i) an agreement of the kind specified in subsection (c) of
this section; and
(ii) a default under such an agreement; and
(2) determine whether the agreement that the debtor desires to
make complies with the requirements of subsection (c)(6) of this
section, if the consideration for such agreement is based in
whole or in part on a consumer debt that is not secured by real
property of the debtor.
(e) Except as provided in subsection (a)(3) of this section,
discharge of a debt of the debtor does not affect the liability of
any other entity on, or the property of any other entity for, such
debt.
(f) Nothing contained in subsection (c) or (d) of this section
prevents a debtor from voluntarily repaying any debt.
(g)(1)(A) After notice and hearing, a court that enters an order
confirming a plan of reorganization under chapter 11 may issue, in
connection with such order, an injunction in accordance with this
subsection to supplement the injunctive effect of a discharge under
this section.
(B) An injunction may be issued under subparagraph (A) to enjoin
entities from taking legal action for the purpose of directly or
indirectly collecting, recovering, or receiving payment or recovery
with respect to any claim or demand that, under a plan of
reorganization, is to be paid in whole or in part by a trust
described in paragraph (2)(B)(i), except such legal actions as are
expressly allowed by the injunction, the confirmation order, or the
plan of reorganization.
(2)(A) Subject to subsection (h), if the requirements of
subparagraph (B) are met at the time an injunction described in
paragraph (1) is entered, then after entry of such injunction, any
proceeding that involves the validity, application, construction,
or modification of such injunction, or of this subsection with
respect to such injunction, may be commenced only in the district
court in which such injunction was entered, and such court shall
have exclusive jurisdiction over any such proceeding without regard
to the amount in controversy.
(B) The requirements of this subparagraph are that -
(i) the injunction is to be implemented in connection with a
trust that, pursuant to the plan of reorganization -
(I) is to assume the liabilities of a debtor which at the
time of entry of the order for relief has been named as a
defendant in personal injury, wrongful death, or property-
damage actions seeking recovery for damages allegedly caused
by the presence of, or exposure to, asbestos or asbestos-
containing products;
(II) is to be funded in whole or in part by the securities of
1 or more debtors involved in such plan and by the obligation
of such debtor or debtors to make future payments, including
dividends;
(III) is to own, or by the exercise of rights granted under
such plan would be entitled to own if specified contingencies
occur, a majority of the voting shares of -
(aa) each such debtor;
(bb) the parent corporation of each such debtor; or
(cc) a subsidiary of each such debtor that is also a
debtor; and
(IV) is to use its assets or income to pay claims and
demands; and
(ii) subject to subsection (h), the court determines that -
(I) the debtor is likely to be subject to substantial future
demands for payment arising out of the same or similar conduct
or events that gave rise to the claims that are addressed by
the injunction;
(II) the actual amounts, numbers, and timing of such future
demands cannot be determined;
(III) pursuit of such demands outside the procedures
prescribed by such plan is likely to threaten the plan's
purpose to deal equitably with claims and future demands;
(IV) as part of the process of seeking confirmation of such
plan -
(aa) the terms of the injunction proposed to be issued
under paragraph (1)(A), including any provisions barring
actions against third parties pursuant to paragraph (4)(A),
are set out in such plan and in any disclosure statement
supporting the plan; and
(bb) a separate class or classes of the claimants whose
claims are to be addressed by a trust described in clause (i)
is established and votes, by at least 75 percent of those
voting, in favor of the plan; and
(V) subject to subsection (h), pursuant to court orders or
otherwise, the trust will operate through mechanisms such as
structured, periodic, or supplemental payments, pro rata
distributions, matrices, or periodic review of estimates of the
numbers and values of present claims and future demands, or
other comparable mechanisms, that provide reasonable assurance
that the trust will value, and be in a financial position to
pay, present claims and future demands that involve similar
claims in substantially the same manner.
(3)(A) If the requirements of paragraph (2)(B) are met and the
order confirming the plan of reorganization was issued or affirmed
by the district court that has jurisdiction over the reorganization
case, then after the time for appeal of the order that issues or
affirms the plan -
(i) the injunction shall be valid and enforceable and may not
be revoked or modified by any court except through appeal in
accordance with paragraph (6);
(ii) no entity that pursuant to such plan or thereafter becomes
a direct or indirect transferee of, or successor to any assets
of, a debtor or trust that is the subject of the injunction shall
be liable with respect to any claim or demand made against such
entity by reason of its becoming such a transferee or successor;
and
(iii) no entity that pursuant to such plan or thereafter makes
a loan to such a debtor or trust or to such a successor or
transferee shall, by reason of making the loan, be liable with
respect to any claim or demand made against such entity, nor
shall any pledge of assets made in connection with such a loan be
upset or impaired for that reason;
(B) Subparagraph (A) shall not be construed to -
(i) imply that an entity described in subparagraph (A)(ii) or
(iii) would, if this paragraph were not applicable, necessarily
be liable to any entity by reason of any of the acts described in
subparagraph (A);
(ii) relieve any such entity of the duty to comply with, or of
liability under, any Federal or State law regarding the making of
a fraudulent conveyance in a transaction described in
subparagraph (A)(ii) or (iii); or
(iii) relieve a debtor of the debtor's obligation to comply
with the terms of the plan of reorganization, or affect the power
of the court to exercise its authority under sections 1141 and
1142 to compel the debtor to do so.
(4)(A)(i) Subject to subparagraph (B), an injunction described in
paragraph (1) shall be valid and enforceable against all entities
that it addresses.
(ii) Notwithstanding the provisions of section 524(e), such an
injunction may bar any action directed against a third party who is
identifiable from the terms of such injunction (by name or as part
of an identifiable group) and is alleged to be directly or
indirectly liable for the conduct of, claims against, or demands on
the debtor to the extent such alleged liability of such third party
arises by reason of -
(I) the third party's ownership of a financial interest in the
debtor, a past or present affiliate of the debtor, or a
predecessor in interest of the debtor;
(II) the third party's involvement in the management of the
debtor or a predecessor in interest of the debtor, or service as
an officer, director or employee of the debtor or a related
party;
(III) the third party's provision of insurance to the debtor or
a related party; or
(IV) the third party's involvement in a transaction changing
the corporate structure, or in a loan or other financial
transaction affecting the financial condition, of the debtor or a
related party, including but not limited to -
(aa) involvement in providing financing (debt or equity), or
advice to an entity involved in such a transaction; or
(bb) acquiring or selling a financial interest in an entity
as part of such a transaction.
(iii) As used in this subparagraph, the term "related party"
means -
(I) a past or present affiliate of the debtor;
(II) a predecessor in interest of the debtor; or
(III) any entity that owned a financial interest in -
(aa) the debtor;
(bb) a past or present affiliate of the debtor; or
(cc) a predecessor in interest of the debtor.
(B) Subject to subsection (h), if, under a plan of
reorganization, a kind of demand described in such plan is to be
paid in whole or in part by a trust described in paragraph
(2)(B)(i) in connection with which an injunction described in
paragraph (1) is to be implemented, then such injunction shall be
valid and enforceable with respect to a demand of such kind made,
after such plan is confirmed, against the debtor or debtors
involved, or against a third party described in subparagraph
(A)(ii), if -
(i) as part of the proceedings leading to issuance of such
injunction, the court appoints a legal representative for the
purpose of protecting the rights of persons that might
subsequently assert demands of such kind, and
(ii) the court determines, before entering the order confirming
such plan, that identifying such debtor or debtors, or such third
party (by name or as part of an identifiable group), in such
injunction with respect to such demands for purposes of this
subparagraph is fair and equitable with respect to the persons
that might subsequently assert such demands, in light of the
benefits provided, or to be provided, to such trust on behalf of
such debtor or debtors or such third party.
(5) In this subsection, the term "demand" means a demand for
payment, present or future, that -
(A) was not a claim during the proceedings leading to the
confirmation of a plan of reorganization;
(B) arises out of the same or similar conduct or events that
gave rise to the claims addressed by the injunction issued under
paragraph (1); and
(C) pursuant to the plan, is to be paid by a trust described in
paragraph (2)(B)(i).
(6) Paragraph (3)(A)(i) does not bar an action taken by or at the
direction of an appellate court on appeal of an injunction issued
under paragraph (1) or of the order of confirmation that relates to
the injunction.
(7) This subsection does not affect the operation of section 1144
or the power of the district court to refer a proceeding under
section 157 of title 28 or any reference of a proceeding made prior
to the date of the enactment of this subsection.
(h) Application to Existing Injunctions. - For purposes of
subsection (g) -
(1) subject to paragraph (2), if an injunction of the kind
described in subsection (g)(1)(B) was issued before the date of
the enactment of this Act, as part of a plan of reorganization
confirmed by an order entered before such date, then the
injunction shall be considered to meet the requirements of
subsection (g)(2)(B) for purposes of subsection (g)(2)(A), and to
satisfy subsection (g)(4)(A)(ii), if -
(A) the court determined at the time the plan was confirmed
that the plan was fair and equitable in accordance with the
requirements of section 1129(b);
(B) as part of the proceedings leading to issuance of such
injunction and confirmation of such plan, the court had
appointed a legal representative for the purpose of protecting
the rights of persons that might subsequently assert demands
described in subsection (g)(4)(B) with respect to such plan;
and
(C) such legal representative did not object to confirmation
of such plan or issuance of such injunction; and
(2) for purposes of paragraph (1), if a trust described in
subsection (g)(2)(B)(i) is subject to a court order on the date
of the enactment of this Act staying such trust from settling or
paying further claims -
(A) the requirements of subsection (g)(2)(B)(ii)(V) shall not
apply with respect to such trust until such stay is lifted or
dissolved; and
(B) if such trust meets such requirements on the date such
stay is lifted or dissolved, such trust shall be considered to
have met such requirements continuously from the date of the
enactment of this Act.
(i) The willful failure of a creditor to credit payments received
under a plan confirmed under this title, unless the order
confirming the plan is revoked, the plan is in default, or the
creditor has not received payments required to be made under the
plan in the manner required by the plan (including crediting the
amounts required under the plan), shall constitute a violation of
an injunction under subsection (a)(2) if the act of the creditor to
collect and failure to credit payments in the manner required by
the plan caused material injury to the debtor.
(j) Subsection (a)(2) does not operate as an injunction against
an act by a creditor that is the holder of a secured claim, if -
(1) such creditor retains a security interest in real property
that is the principal residence of the debtor;
(2) such act is in the ordinary course of business between the
creditor and the debtor; and
(3) such act is limited to seeking or obtaining periodic
payments associated with a valid security interest in lieu of
pursuit of in rem relief to enforce the lien.
(k)(1) The disclosures required under subsection (c)(2) shall
consist of the disclosure statement described in paragraph (3),
completed as required in that paragraph, together with the
agreement specified in subsection (c), statement, declaration,
motion and order described, respectively, in paragraphs (4) through
(8), and shall be the only disclosures required in connection with
entering into such agreement.
(2) Disclosures made under paragraph (1) shall be made clearly
and conspicuously and in writing. The terms "Amount Reaffirmed" and
"Annual Percentage Rate" shall be disclosed more conspicuously than
other terms, data or information provided in connection with this
disclosure, except that the phrases "Before agreeing to reaffirm a
debt, review these important disclosures" and "Summary of
Reaffirmation Agreement" may be equally conspicuous. Disclosures
may be made in a different order and may use terminology different
from that set forth in paragraphs (2) through (8), except that the
terms "Amount Reaffirmed" and "Annual Percentage Rate" must be used
where indicated.
(3) The disclosure statement required under this paragraph shall
consist of the following:
(A) The statement: "Part A: Before agreeing to reaffirm a debt,
review these important disclosures:";
(B) Under the heading "Summary of Reaffirmation Agreement", the
statement: "This Summary is made pursuant to the requirements of
the Bankruptcy Code";
(C) The "Amount Reaffirmed", using that term, which shall be -
(i) the total amount of debt that the debtor agrees to
reaffirm by entering into an agreement of the kind specified in
subsection (c), and
(ii) the total of any fees and costs accrued as of the date
of the disclosure statement, related to such total amount.
(D) In conjunction with the disclosure of the "Amount
Reaffirmed", the statements -
(i) "The amount of debt you have agreed to reaffirm"; and
(ii) "Your credit agreement may obligate you to pay
additional amounts which may come due after the date of this
disclosure. Consult your credit agreement.".
(E) The "Annual Percentage Rate", using that term, which shall
be disclosed as -
(i) if, at the time the petition is filed, the debt is an
extension of credit under an open end credit plan, as the terms
"credit" and "open end credit plan" are defined in section 103
of the Truth in Lending Act, then -
(I) the annual percentage rate determined under paragraphs
(5) and (6) of section 127(b) of the Truth in Lending Act, as
applicable, as disclosed to the debtor in the most recent
periodic statement prior to entering into an agreement of the
kind specified in subsection (c) or, if no such periodic
statement has been given to the debtor during the prior 6
months, the annual percentage rate as it would have been so
disclosed at the time the disclosure statement is given to
the debtor, or to the extent this annual percentage rate is
not readily available or not applicable, then
(II) the simple interest rate applicable to the amount
reaffirmed as of the date the disclosure statement is given
to the debtor, or if different simple interest rates apply to
different balances, the simple interest rate applicable to
each such balance, identifying the amount of each such
balance included in the amount reaffirmed, or
(III) if the entity making the disclosure elects, to
disclose the annual percentage rate under subclause (I) and
the simple interest rate under subclause (II); or
(ii) if, at the time the petition is filed, the debt is an
extension of credit other than under an open end credit plan,
as the terms "credit" and "open end credit plan" are defined in
section 103 of the Truth in Lending Act, then -
(I) the annual percentage rate under section 128(a)(4) of
the Truth in Lending Act, as disclosed to the debtor in the
most recent disclosure statement given to the debtor prior to
the entering into an agreement of the kind specified in
subsection (c) with respect to the debt, or, if no such
disclosure statement was given to the debtor, the annual
percentage rate as it would have been so disclosed at the
time the disclosure statement is given to the debtor, or to
the extent this annual percentage rate is not readily
available or not applicable, then
(II) the simple interest rate applicable to the amount
reaffirmed as of the date the disclosure statement is given
to the debtor, or if different simple interest rates apply to
different balances, the simple interest rate applicable to
each such balance, identifying the amount of such balance
included in the amount reaffirmed, or
(III) if the entity making the disclosure elects, to
disclose the annual percentage rate under (I) and the simple
interest rate under (II).
(F) If the underlying debt transaction was disclosed as a
variable rate transaction on the most recent disclosure given
under the Truth in Lending Act, by stating "The interest rate on
your loan may be a variable interest rate which changes from time
to time, so that the annual percentage rate disclosed here may be
higher or lower.".
(G) If the debt is secured by a security interest which has not
been waived in whole or in part or determined to be void by a
final order of the court at the time of the disclosure, by
disclosing that a security interest or lien in goods or property
is asserted over some or all of the debts the debtor is
reaffirming and listing the items and their original purchase
price that are subject to the asserted security interest, or if
not a purchase-money security interest then listing by items or
types and the original amount of the loan.
(H) At the election of the creditor, a statement of the
repayment schedule using 1 or a combination of the following -
(i) by making the statement: "Your first payment in the
amount of $___ is due on ___ but the future payment amount may
be different. Consult your reaffirmation agreement or credit
agreement, as applicable.", and stating the amount of the first
payment and the due date of that payment in the places
provided;
(ii) by making the statement: "Your payment schedule will
be:", and describing the repayment schedule with the number,
amount, and due dates or period of payments scheduled to repay
the debts reaffirmed to the extent then known by the disclosing
party; or
(iii) by describing the debtor's repayment obligations with
reasonable specificity to the extent then known by the
disclosing party.
(I) The following statement: "Note: When this disclosure refers
to what a creditor 'may' do, it does not use the word 'may' to
give the creditor specific permission. The word 'may' is used to
tell you what might occur if the law permits the creditor to take
the action. If you have questions about your reaffirming a debt
or what the law requires, consult with the attorney who helped
you negotiate this agreement reaffirming a debt. If you don't
have an attorney helping you, the judge will explain the effect
of your reaffirming a debt when the hearing on the reaffirmation
agreement is held.".
(J)(i) The following additional statements:
"Reaffirming a debt is a serious financial decision. The law
requires you to take certain steps to make sure the decision is in
your best interest. If these steps are not completed, the
reaffirmation agreement is not effective, even though you have
signed it.
"1. Read the disclosures in this Part A carefully. Consider the
decision to reaffirm carefully. Then, if you want to reaffirm,
sign the reaffirmation agreement in Part B (or you may use a
separate agreement you and your creditor agree on).
"2. Complete and sign Part D and be sure you can afford to make
the payments you are agreeing to make and have received a copy of
the disclosure statement and a completed and signed reaffirmation
agreement.
"3. If you were represented by an attorney during the
negotiation of your reaffirmation agreement, the attorney must
have signed the certification in Part C.
"4. If you were not represented by an attorney during the
negotiation of your reaffirmation agreement, you must have
completed and signed Part E.
"5. The original of this disclosure must be filed with the
court by you or your creditor. If a separate reaffirmation
agreement (other than the one in Part B) has been signed, it must
be attached.
"6. If you were represented by an attorney during the
negotiation of your reaffirmation agreement, your reaffirmation
agreement becomes effective upon filing with the court unless the
reaffirmation is presumed to be an undue hardship as explained in
Part D.
"7. If you were not represented by an attorney during the
negotiation of your reaffirmation agreement, it will not be
effective unless the court approves it. The court will notify you
of the hearing on your reaffirmation agreement. You must attend
this hearing in bankruptcy court where the judge will review your
reaffirmation agreement. The bankruptcy court must approve your
reaffirmation agreement as consistent with your best interests,
except that no court approval is required if your reaffirmation
agreement is for a consumer debt secured by a mortgage, deed of
trust, security deed, or other lien on your real property, like
your home.
"Your right to rescind (cancel) your reaffirmation agreement. You
may rescind (cancel) your reaffirmation agreement at any time
before the bankruptcy court enters a discharge order, or before the
expiration of the 60-day period that begins on the date your
reaffirmation agreement is filed with the court, whichever occurs
later. To rescind (cancel) your reaffirmation agreement, you must
notify the creditor that your reaffirmation agreement is rescinded
(or canceled).
"What are your obligations if you reaffirm the debt? A reaffirmed
debt remains your personal legal obligation. It is not discharged
in your bankruptcy case. That means that if you default on your
reaffirmed debt after your bankruptcy case is over, your creditor
may be able to take your property or your wages. Otherwise, your
obligations will be determined by the reaffirmation agreement which
may have changed the terms of the original agreement. For example,
if you are reaffirming an open end credit agreement, the creditor
may be permitted by that agreement or applicable law to change the
terms of that agreement in the future under certain conditions.
"Are you required to enter into a reaffirmation agreement by any
law? No, you are not required to reaffirm a debt by any law. Only
agree to reaffirm a debt if it is in your best interest. Be sure
you can afford the payments you agree to make.
"What if your creditor has a security interest or lien? Your
bankruptcy discharge does not eliminate any lien on your property.
A 'lien' is often referred to as a security interest, deed of
trust, mortgage or security deed. Even if you do not reaffirm and
your personal liability on the debt is discharged, because of the
lien your creditor may still have the right to take the security
property if you do not pay the debt or default on it. If the lien
is on an item of personal property that is exempt under your
State's law or that the trustee has abandoned, you may be able to
redeem the item rather than reaffirm the debt. To redeem, you make
a single payment to the creditor equal to the current value of the
security property, as agreed by the parties or determined by the
court.".
(ii) In the case of a reaffirmation under subsection (m)(2),
numbered paragraph 6 in the disclosures required by clause (i) of
this subparagraph shall read as follows:
"6. If you were represented by an attorney during the
negotiation of your reaffirmation agreement, your reaffirmation
agreement becomes effective upon filing with the court.".
(4) The form of such agreement required under this paragraph
shall consist of the following:
"Part B: Reaffirmation Agreement. I (we) agree to reaffirm the
debts arising under the credit agreement described below.
"Brief description of credit agreement:
"Description of any changes to the credit agreement made as part
of this reaffirmation agreement:
"Signature: Date:
"Borrower:
"Co-borrower, if also reaffirming these debts:
"Accepted by creditor:
"Date of creditor acceptance:".
(5) The declaration shall consist of the following:
(A) The following certification:
"Part C: Certification by Debtor's Attorney (If Any).
"I hereby certify that (1) this agreement represents a fully
informed and voluntary agreement by the debtor; (2) this agreement
does not impose an undue hardship on the debtor or any dependent of
the debtor; and (3) I have fully advised the debtor of the legal
effect and consequences of this agreement and any default under
this agreement.
"Signature of Debtor's Attorney: Date:".
(B) If a presumption of undue hardship has been established
with respect to such agreement, such certification shall state
that in the opinion of the attorney, the debtor is able to make
the payment.
(C) In the case of a reaffirmation agreement under subsection
(m)(2), subparagraph (B) is not applicable.
(6)(A) The statement in support of such agreement, which the
debtor shall sign and date prior to filing with the court, shall
consist of the following:
"Part D: Debtor's Statement in Support of Reaffirmation
Agreement.
"1. I believe this reaffirmation agreement will not impose an
undue hardship on my dependents or me. I can afford to make the
payments on the reaffirmed debt because my monthly income (take
home pay plus any other income received) is $___, and my actual
current monthly expenses including monthly payments on post-
bankruptcy debt and other reaffirmation agreements total $___,
leaving $___ to make the required payments on this reaffirmed debt.
I understand that if my income less my monthly expenses does not
leave enough to make the payments, this reaffirmation agreement is
presumed to be an undue hardship on me and must be reviewed by the
court. However, this presumption may be overcome if I explain to
the satisfaction of the court how I can afford to make the payments
here: ___.
"2. I received a copy of the Reaffirmation Disclosure Statement
in Part A and a completed and signed reaffirmation agreement.".
(B) Where the debtor is represented by an attorney and is
reaffirming a debt owed to a creditor defined in section
19(b)(1)(A)(iv) of the Federal Reserve Act, the statement of
support of the reaffirmation agreement, which the debtor shall sign
and date prior to filing with the court, shall consist of the
following:
"I believe this reaffirmation agreement is in my financial
interest. I can afford to make the payments on the reaffirmed debt.
I received a copy of the Reaffirmation Disclosure Statement in Part
A and a completed and signed reaffirmation agreement.".
(7) The motion that may be used if approval of such agreement by
the court is required in order for it to be effective, shall be
signed and dated by the movant and shall consist of the following:
"Part E: Motion for Court Approval (To be completed only if the
debtor is not represented by an attorney.). I (we), the debtor(s),
affirm the following to be true and correct:
"I am not represented by an attorney in connection with this
reaffirmation agreement.
"I believe this reaffirmation agreement is in my best interest
based on the income and expenses I have disclosed in my Statement
in Support of this reaffirmation agreement, and because (provide
any additional relevant reasons the court should consider):
"Therefore, I ask the court for an order approving this
reaffirmation agreement.".
(8) The court order, which may be used to approve such agreement,
shall consist of the following:
"Court Order: The court grants the debtor's motion and approves
the reaffirmation agreement described above.".
(l) Notwithstanding any other provision of this title the
following shall apply:
(1) A creditor may accept payments from a debtor before and
after the filing of an agreement of the kind specified in
subsection (c) with the court.
(2) A creditor may accept payments from a debtor under such
agreement that the creditor believes in good faith to be
effective.
(3) The requirements of subsections (c)(2) and (k) shall be
satisfied if disclosures required under those subsections are
given in good faith.
(m)(1) Until 60 days after an agreement of the kind specified in
subsection (c) is filed with the court (or such additional period
as the court, after notice and a hearing and for cause, orders
before the expiration of such period), it shall be presumed that
such agreement is an undue hardship on the debtor if the debtor's
monthly income less the debtor's monthly expenses as shown on the
debtor's completed and signed statement in support of such
agreement required under subsection (k)(6)(A) is less than the
scheduled payments on the reaffirmed debt. This presumption shall
be reviewed by the court. The presumption may be rebutted in
writing by the debtor if the statement includes an explanation that
identifies additional sources of funds to make the payments as
agreed upon under the terms of such agreement. If the presumption
is not rebutted to the satisfaction of the court, the court may
disapprove such agreement. No agreement shall be disapproved
without notice and a hearing to the debtor and creditor, and such
hearing shall be concluded before the entry of the debtor's
discharge.
(2) This subsection does not apply to reaffirmation agreements
where the creditor is a credit union, as defined in section
19(b)(1)(A)(iv) of the Federal Reserve Act.