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Chapter 7 Bankruptcy Reaffirmation Agreement Form

341 See National Consumer Law Center, Fair Credit Reporting Act Changes Affect Bankruptcy, NCLC Reports; Bankruptcies and Forced Executions Edition 11 (1996) (« Consumers who are concerned about obtaining new loans after bankruptcy should always be informed that there are many creditors who lend to younger debtors. In some cases, new credit offers are made these days, even before the debtor`s existing case is closed . . . . Consumers should also be told that they must make special efforts to purchase credits after bankruptcy. They should not simply consider that they must pay a higher interest rate or offer substantial guarantees »). Back to the text The question of whether an agreement between two parties is a lease or a sale at temples is essential in all contexts. State law, for example, if the transaction is a lease sale or temperance sale, raises different reporting requirements. The hybrid nature of this own rental regime has prompted many states to adopt specific leasing legislation.

(393) The debtor may have certain non-negotiable rights on a temperance sale that are not included in a lease agreement. In a collective bankruptcy proceeding, the consequences of classifying a transaction as a temperance sale or lease may be even more profound. The bankruptcy code must determine whether an agreement is a genuine lease or a tempered sale, in order to resolve the relative rights and obligations of those who have potential rights against the debtor. The debtor has the option of violating or executing a tenancy agreement or contract. If the debtor is in breach, the property is returned and the other party can claim damages under the lease. However, if the debtor provides his benefit, the contract must be executed as a whole and the non-debtor party receives the full payment before all other creditors. For a Chapter 13 debtor, this may require a significant redirector of the debtor`s income to pay a single creditor, leaving less room for all other creditors. Even in a Chapter 7 case, a leaseholder receives a larger share that would otherwise accrue to all creditors. The use of the property by the debtor during the transitional period will be a priority of the administrative burden. If leases were considered leases, the seller would give other purchase guarantee holders superior treatment by being entitled to a 100% payment and would receive the lion`s share of assets that would otherwise be available for distribution proportional to all unsecured creditors. A similar provision has already been considered.

The Senate bill, which led to the 1994 Bankruptcy Reform Act, originally contained a similar amendment that would have required that leases be treated as storm sales in the event of bankruptcy. This change was supported, among others, by the League of Trade Law of America, the National Bankruptcy Conference and the National Accounts Association 13 Trustees. (400) 302 Letter from Marianne Culhane and Michaela White, Re: The VISA/Staten Consumer Consumer Debtor Study and Reaffirmation (June 11, 1997) (proposal that a general approach would be to authorize assertions only to the extent of the value of guarantees); Letter from Jean Werder (July 8, 1997) (Prohibition to affirm and authorize passage implies the repayment of unsecured debts, which is contrary to bankruptcy policy); Lawrence Ponoroff, Surf`s Up, Dude: Riding Through Bankruptcy, Bankr Dev. J. (Forthcoming 1997) (advocating ride-through). Back to text 372 See the results of the National Association of Federal Credit Unions Bankruptcy Survey, Percentage of Charge-offs Due to Bankruptcy (May 1996) (44.5% of bankruptcy costs in 1995, 39.4% in 1994 and 41% in 1993). Back to text 297 See letter from Ron Haas, President, Alabama Credit Union League (July 7, 1997); Letter from Derek Smith, Loan Department, First Community Credit Union, Ellisville, MO (August 8, 1997); Letter from Joe Irish, Collections Officer, Fergus County Federal Credit Union, Lewistown, Montana (July 16, 1997); Letter from Andrena MacLeod-Rock,

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