Testimony

Public Hearing on Proposed Amendments to

Bankruptcy Rule 3015 and New Rule 3015.1

Judicial Conference Advisory Committee on Bankruptcy Rules

September 27, 2016

TAB

Jenny L. Doling, Doling Shaw & Hanover .......................................................... 1

United States Bankruptcy Judges Roger Efremsky and Marvin Isgur................. 2

Norma L. Hammes, Gold and Hammes ............................................................... 3

James “Ike” Shulman ........................................................................................... 4
Tab 1

Jenny L. Doling, Doling Shaw & Hanover
WRITTEN SUBMISSION OF TESTIMONY

For September 27, 2016 Hearing

Jenny L. Doling, Attorney

DOLING SHAW & HANOVER, APC

Judge Ikuta and Members of the Committee:

Thank you for the opportunity to testify before the Rules Committee today regarding the

proposed rules under consideration. 

I have been a bankruptcy attorney in the Central District of California, the largest district in

the country, for the past 16 years, primarily representing debtors in chapter 7, chapter 12, and chapter

13 cases. The Central District of California has adopted a single chapter 13 plan form for the

District. However, there are five (5) divisions within the district and each division has its own set

of rules with regard to the chapter 13 plan. These rules are usually promulgated by the chapter 13

trustees.

My concerns with the adoption of Rule 3015.1 Requirements for Local Form Plans Filed in

a Chapter 13 Case arise from the disparity in treatment of the Local Rules already in existence. If

a single plan form is adopted for an entire district (as is the case now), then a single set of rules and

requirements for implementation of that plan should also be adopted and enforced district-wide. 

Furthermore, the Plan and Rules adopted must be compliant with the U.S. Bankruptcy Code.

Although a bankruptcy court may adopt local rules, that authority is carefully circumscribed. A local

rule may not enlarge, abridge or modify any substantive rights. Any conflicts between the U.S.

Bankruptcy Code and the Bankruptcy Rules must be settled in favor of the Code. American Law

CenterPC v. Stanley, 253 F.3d 438 (9th Cir. 2001).

For instance, a common problem debtors face in the Central District (and nationwide in

various formats) is that the local plan requires the debtor to propose an estimated percentage to be

paid to the general unsecured creditors. The Order Confirming Plan, however, converts the

proposed estimate into the plan with a fixed term and a fixed percentage dividend. It is no longer

treated as an estimate in the debtor’s plan. No where in the Code or Rules is a percentage to

unsecured creditors required to confirm a chapter 13 plan. The Code refers to dollar amounts. 

Allowing a local plan form or local rule to add substantive requirements conflicts with the Code and

should be prohibited. Not only are debtors unable to specify a dollar dividend on general unsecured

claims, the fixed term of the plan imposed by the court’s Order Confirming Plan binds the debtor

to a plan duration that even exceeds the Applicable Commitment Period.
WRITTEN SUBMISSION OF TESTIMONY

For September 27, 2016 Hearing

Jenny L. Doling, Attorney

DOLING SHAW & HANOVER, APC

Page -2-

___________________________________

The harsh consequence to debtors is that their case will likely be denied confirmation or, even

worse, dismissed. Even where debtors who have paid all that is required to be paid under the Code,

and for the length of time required under the Code, trustees file motions to dismiss the cases if the

percentage set in the confirmation order not has not been met. The proposed percentage is only an

estimate for informational purposes. There is no legal basis to support converting it to a fixed term

of the plan.

Furthermore, Rule 3015.1(c), as proposed, requires a debtor to indicate whether or not the

plan contains a non-standard provision. This portion of the rule is rendered useless when in practice

every non-standard provision is stricken by request of the chapter 13 trustee.

The Committee Note incorporates the goal to promote consistency among Local Forms and

clarity of content of chapter 13 plans. However, there is no remedy available to either debtors or

creditors if the local practice in a district does not conform to the changes proposed by Rul 3015.1. 

Attachments:

Request of Jenny L. Doling to testify at September 27, 2016 Hearing. 
Main Office - Palm Desert

36-915 Cook Street Ste. 101

Palm Desert, CA 92211

Telephone: (760)341-8837

Fax: (760)341-3022

Yucca Valley Office

7355 Church Street, Ste. A

Yucca Valley, CA 92284

Telephone: (760)369-9565

Fax: (760)369-7343

www.DSHAPC.com

jd@dshapc.com

August 23, 2016

Rebecca A. Womeldorf, Secretary

Committee on Rules of Practice and Procedure of the

Judicial Conference of the United States

Thurgood Marshall Federal Judiciary Building

One Columbus Circle NE, Suite 7-240

Washington DC 20544

Re: Request to Testify

Public Hearing of the Judicial Conference of the U.S. Advisory Committee 

on the Federal Rules of Bankruptcy Procedure on the 

Currently Proposed Amendments to FRBP 3015 and New FRBP 3015.1 at

Pasadena, CA on September 27, 2016

Dear Ms. Womeldorf:

I respectfully request that I be allowed to testify at the above scheduled hearing. 

I have been in private practice representing consumer and small business bankruptcy debtors

since 2000. Our firm has represented thousands of clients in bankruptcy matters. I serve as the

National Association of Consumer Bankruptcy Attorneys (NACBA) State Chair for Central California

(the largest district in the United States). I am on the board of the Inland Empire Bankruptcy Forum

(IEBF) and I serve on the Bar Advisory Committee to our Central District of California Judges. We

meet quarterly at the U.S. Bankruptcy Court in Los Angeles, California. In addition, I am a professor

of bankruptcy law for the California Desert Trial Academy. I have also been a frequent panel speaker

for bankruptcy organizations such as: the National Conference of Bankruptcy Judges (NCJB), the

National Association of Chapter 13 Trustees (NACTT), and the National Association of Consumer

Bankruptcy Attorneys (NACBA). Probably most important for my request to testify is that I am also

on the Central District of California Chapter 13 Committee formed by our judges to address the

proposed National Plan, drafting of a local plan, and rule changes.

Given my intimate experience in representing clients in bankruptcy and my active affiliation

with the aforementioned organizations and committees to address the proposed amendments, I

believe my testimony would be valuable. I wish to testify about the impact of the proposed rules

on mandatory local plans (including those already in place in many courts), as well as some of the

remaining problematic provisions in the proposed National Form Plan. I anticipate being able to

share important data obtained from NACBA’s members regarding the content of mandatory local

plans and the procedures related to those mandatory local plans. Furthermore, I believe my access

to the Central District of California data and personal experience in the Central District of California
Rebecca A. Womeldorf, Secretary

Committee on Rules of Practice and Procedure of the

Judicial Conference of the United States

August 23, 2016

 Page -2-

(again, the largest district in the Country), puts me in a unique position to offer testimony.

I hope and expect that my testimony will be informative to the Committee.

Thank you for your consideration. I look forward to hearing from you.

Sincerely,

DOLING SHAW & HANOVER, APC

/s/ Jenny L. Doling

Jenny L. Doling, Esq.

JLD/rc
Tab 2

United States Bankruptcy Judge Roger Efremsky and 

United States Bankruptcy Judge Marvin Isgur
JOINT WRITTEN SUBMISSION OF TESTIMONY

For September 27, 2016 Hearing

United States Bankruptcy Judge Roger Efremsky and 

United States Bankruptcy Judge Marvin Isgur

Judge Ikuta and Members of the Committee:

Because we hold similar views on whether Bankruptcy Rules 3015 and 3015.1 should be 

adopted, we join in this written submission of testimony. Although the two of us were part of 

the group that drafted the November 18, 2014 letter that was signed by 144 bankruptcy judges 

opposing the adoption of a national plan, and were 2 of the nine signatories to the February 10, 

2015 compromise proposal submitted to this Committee, we now testify in our individual 

capacities.

Initially, we each opposed the adoption of a national form plan. As we spoke with 

trustees, creditors, debtor’s attorneys and our fellow judges, we became convinced that the 

bankruptcy system would benefit by ending the confusion caused by the hundreds of variants of 

chapter 13 plans around the United States. Although many districts presently have district-wide 

plans, many others have multiple plans or no plans at all. 

Although a single national plan would have solved the confusion issue, the price of that 

solution was far too high. Many of us believed that the national plan would be injurious to 

conduit mortgage programs, would stifle innovation and would prevent local adaptation. 

Moreover, the broad opposition amongst bankruptcy judges foretold a problematic 

implementation of a single national plan.

We concluded that the orderliness of having a single plan in each district would 

substantially reduce confusion while preserving the need for local adaptation and innovation in 

the chapter 13 plan process. Accordingly, the two of us have concluded that Rule 3015.1 

provides the best alternative.

Although the comments to date have largely focused on Rule 3015 (rather than Rule 

3015.1), we briefly comment on Ryan W. Johnson’s July 18, 2016 letter and on what we have 

heard may be possible (but unfiled) opposition to Rule 3015.1.

With respect to Mr. Johnson’s comment on surrender and the lifting of the stay, we 

strongly disagree that a fee would be required or appropriate. Plan confirmation will cause the 

stay to be lifted without a separate motion. See 11 U.S.C. § 1325(a)(5)(C) and 11 U.S.C. 

§ 362(c)(1) read in conjunction with 11 U.S.C. § 1322(a)(11). Mr. Johnson’s reference to 

Bankruptcy Rule 9013 is inapposite. By filing a proposed plan (under both current and 

contemplated rules), the Debtor is seeking an order confirming the plan. Under Mr. Johnson’s 

reading of Rule 9013, the plan is itself a motion. We simply do not read Rule 9013 as 

encompassing the treatment of a plan, an explicit Congressional requirement of Chapter 13. 
Mr. Johnson also expressed concern over the consequences of a stay termination under 

§ 362(e). Many of us have long believed that the stay does not apply to surrendered collateral. 

The provisions (in both the national plan and in any local plan) would clarify that the 

consequence of surrender would be a termination of the stay. The termination provisions of 

§ 362(e) do not apply, because § 362(e) contemplates motions by creditors respecting their 

collateral. The automatic termination under § 362(e) is only “with respect to the party in interest 

making such request.” Under Chapter 13, a plan may only be proposed by the Debtor. 11 

U.S.C. § 1321. Accordingly, it will be the debtor “making such request.” Therefore, the § 362(e) 

termination of the stay would not apply to any creditor in the case. We have no objection to a 

comment clarifying this, but also see no need for such a comment. We strongly oppose the 

requirement that a separate motion be filed. This would unnecessarily burden creditors, debtors 

and the Court with a motion to lift the stay on collateral that the debtor surrenders. 

Respectfully, we do not understand the issue raised by Mr. Johnson with respect to 

§ 363(d) or § 363(e). Before the stay is lifted by plan confirmation, those provisions appear 

inapplicable. After the stay is lifted, they would potentially apply in a limited number of cases. 

In general, those provisions limit actions by a debtor to use, sell or lease property that has been 

surrendered, if the use, sale or lease would be inconsistent with a termination of the stay. After 

the court has approved the surrender of the collateral, we see no harm in such limitations. After 

all, no debtor is forced to surrender collateral.

We understand that there are a few consumer bankruptcy lawyers who would prefer to 

have no national mandate for chapter 13 plans. This past fiscal year, there were over 300,000 

new chapter 13 bankruptcy cases filed in the United States. The Rules Committee has long 

recognized that uniformity in presentation assists Bankruptcy Judges in providing “just, speedy 

and inexpensive” determinations in chapter 13 bankruptcy cases. Although these efforts at 

uniformity have recently been directed at creditors (for example, the uniform reporting of home 

mortgage claims on a mandatory form), we believe that the adoption of a single plan form in 

each district will also further this goal. We note that each district’s uniform plan (and the 

national plan) will give every debtor an opportunity to add special provisions tailored to the 

needs of a particular case. 

The two of us strongly support the proposed amendments to the Federal Rules of 

Bankruptcy Procedure, and thank the Committee for its continued diligence in improving the 

administration of chapter 13 bankruptcy cases in the United States.
Tab 3

Norma L. Hammes, Gold and Hammes
1

ORAL TESTIMONY OF NORMA L. HAMMES, ESQ. 

Before the Bankruptcy Rules Committee on 

September 27, 2016 

Good morning, Judge Ikuta and Members of the Committee. Thank you for this opportunity. 

I am here to speak against the adoption of the proposed “compromise” rule amendment that 

would allow local districts to opt out of using the National Chapter 13 Plan, instead mandating 

use of a single local plan adopted by the district. 

Certainly, there is a justifiable purpose in having a model plan. It can lay out a standard structure 

within which the debtor can express his or her proposed plan, which must meet the tests of §§ 

1322 and 1325(a)1

. However, when a model plan goes beyond providing a structure for 

provisions – to mandating content of the provisions – that is when things go wrong. 

NACBA recently undertook a project to review local plans, because if the opt-out rule is 

approved these are the plans which are likely to be locally mandated. Leading the task, I 

reviewed the content of about 70 local plans. And, earlier this month NACBA surveyed its 

members about their experiences with their local plans. We received 128 detailed responses 

from 39 states, Puerto Rico, and the District of Columbia, totaling 60 separate districts. 

What I found was disheartening and revealed that many required provisions and procedures 

substantially abridge debtors’ bankruptcy rights and enlarge creditors’ rights in violation of 28 

U.S.C. § 2075 and F.R.B.P. 9029. 

If a Chapter 13 debtor passes the Form 122C “means test” and the “Best Interests of Creditors” 

test under the Code2

, the debtor is entitled to propose a Chapter 13 plan that pays nothing on 

general unsecured claims. I found that a high number of plans did not allow debtors to do that. 

Rather than allowing the debtor to select a dollar amount (including zero) for a dividend on 

general unsecured claims (which the national plan does allow), these local plans often hard-wire 

an overestimation of the trustee’s fees into the plan payments and create a surplus which is paid 

to unsecured creditors. I believe this is a violation of 28 U.S.C. § 2075. 

34% of the respondents to NACBA’s survey said that they are prohibited from filing any zero 

dividend plans by rules or enforced “preferences” of either the judge or the trustee; and many 

respondents expressed deep regret about this, knowing that their clients really could not afford to 

pay the dividend which was not, in fact, required by law. 

My review of plans and the survey results found many other problems with mandated local 

plans, as well. Many plans offer only one or two options for revesting, rather than allowing all 

options available in the Code. Certain plan provisions to require pointless plan modifications 
2

later on in the case, imposing unnecessary costs on debtors. And, plans often require separate 

motions for processes that are permitted to occur within a proposed plan, adding even more costs 

for debtors. 

It is argued that the debtor’s right to propose the plan under § 1321 is protected because most 

local plans have a separate section where the debtor can propose additional provisions that may 

deviate from the model plan. However, in many courts around the country (including my own) 

that right is illusory since any debtor who proposes additional provisions is subjected to 

significant procedural hurdles. 

In my own experience, since the district model plan became mandatory in our division in 

February 2016, the judges in our division have refused to confirm any plans (including 

uncontested plans, with no objections to them) that contain any additional provisions – no matter 

how insignificant. These cases remain unconfirmed despite the fact that the only remarkable 

aspect about them is that the debtors had the temerity to propose additional provisions consistent 

with the Code. Since most debtors’ attorneys do not begin receiving payment on their allowed 

fees until their cases are confirmed – this is a pretty effective way to punish the debtors’ bar for 

conscientiously representing their clients. 

It is crucial that under either the national plan or local plans, debtors be protected from 

procedural burdens (or call it what it is – punishment) for exercising their rights to propose 

additional provisions which comply with the Code. I’m reminded of Henry Ford’s quote: “They 

can have any color car they want as long as it’s black.” A one-size fits all local Chapter 13 plan 

that the debtor is required to sign in order to avoid punishment – particularly a plan abridges the 

debtor’s rights – cannot possibly meet the test of having been proposed by the debtor under 

§ 1321. 

Thank you for your time. 

1 All code sections not otherwise stated are sections within title 11, U.S.C. 

2

 Herein, reference to the “Code” means the Bankruptcy Code, title 11, U.S.C. 


Tab 4

James “Ike” Shulman

 
ORAL TESTIMONY OF JAMES "IKE" SHULMAN, ESQ.

Before the Bankruptcy Rules Committee on 

September 27, 2016

Judge Ikuta and Members of the Committee:

I want to thank you for this opportunity to testify regarding the proposed rules under 

consideration.

Initially, I, along with many of many colleagues, believed that the proposed National Form Plan, 

would bring many much-needed changes to bankruptcy courts across the nation. This was 

particularly true in those jurisdictions where the existing, approved Chapter 13 local form plans 

unfairly curtailed debtors' rights or created unjustified burdens on debtors and/or debtors' 

counsel. Examples of such burdens in local form plans include requirements that valuations of 

secured claims must be accomplished by separate motion and not be permitted within the plan 

itself, limitations on debtors' ability to propose specified dollar amount dividends to be paid on 

non-priority, unsecured claims, and restrictions on debtors' vesting rights under 11 U.S.C. §

1322(a)(9).

I understood that, while the proposed National Form Plan might not include all of the provisions 

that I personally would recommend as a debtors' attorney, it did offer an approach which would 

provide a much better balance between debtors' and creditors' rights than is offered by many 

current local form plans.

Unfortunately, proposed Rule 3015.1 would undo this achievement by permitting individual 

bankruptcy court districts to ignore the National Form Plan and instead substitute a single, 

mandatory local plan with no built-in safeguards ensuring balance. While the proposed Rule does 

require that adoption of such local district plans be done after "public notice and an opportunity 

for public comment", my own experience with such procedures gives an indication of how such 

procedures can prove more illusory than real in protecting debtors' rights.

In late 2012, I was invited to participate in a process to review changes to our local form plans 

and make recommendations for the adoption of a new, district-wide local plan. The group 

reviewing those proposals included bankruptcy judges, trustees and attorneys representing every 

Division within the Northern District of California. The group held a lengthy, in-person meeting 

at which many plan provisions were discussed in detail, with considerable progress being made 

toward consensus approaches. At the conclusion of this meeting, the judge who hosted the 

meeting announced that our review would continue and that we all would get the details later. 

Approximately one month later, however, the participants were abruptly advised that no further 
meetings would be held, and the Oakland and San Francisco Division judges proceeded to 

approve a mandatory local form plan shortly thereafter. That plan ignored many of the 

suggestions offered during our review process.

I recount this history to make the point that adoption of proposed Rule 3015.1 makes it much less 

likely that a fair balancing of rights will be achieved than would have resulted from the adoption 

of the National Form Plan with no opt-out provision. 

I believe you will have already heard testimony today from some of my colleagues, identifying 

the barriers faced by debtors through provisions in many local form plans today. Debtors who

propose nonstandard provisions, consistent with the Bankruptcy Code, routinely receive trustee 

objections, even though those local form plans contain express language purporting to permit 

optional provisions. Once objections are filed, plan confirmation is often subject to lengthy 

delay. The result is that debtors who take literally the Code's statement in Section 1321 that 

"The debtor shall file a plan" often find their rights abridged when offering optional provisions.

For these reasons, I urge the Committee to reject proposed Rule 3015.1. However, in the event 

the Committee decides to approve this Rule, I offer suggested language, in Attachment A, to add 

to the Rule. This language specifically provides that confirmation of plans utilizing certain 

nonstandard provisions shall not be unduly delayed.

I thank the Committee for this opportunity today.

Attachments:

A. Proposed Amendment to Rule 3015.1

B. Request of James"Ike" Shulman to testify at 9/27/16 Hearing
ATTACHMENT A

PROPOSED AMENDMENT TO RULE 3015.1

add the following at the end of Rule 3015.1(e):

(3) Confirmation of a plan utilizing nonstandard provisions addressing any 

of the following matters shall not be unduly delayed as a result of such utilization:

(A) Provision of a specified dollar dividend to be paid on nonpriority, unsecured claims; or

(B) Provision of a vesting election consistent with 11 U.S.C. 

§ 1322(a)(9).