Source: https://law.justia.com/codes/us/2011/title-11/chapter-5/subchapter-ii/section-524/
Timestamp: 2019-04-25 01:53:31+00:00

Document:
Source Credit Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2592; Pub. L. 98-353, title III, §§308, 455, July 10, 1984, 98 Stat. 354, 376; Pub. L. 99-554, title II, §§257(<em>o</em>), 282, 283(k), Oct. 27, 1986, 100 Stat. 3115-3117; Pub. L. 103-394, title I, §§103, 111(a), title V, §501(d)(14), Oct. 22, 1994, 108 Stat. 4108, 4113, 4145; Pub. L. 109-8, title II, §§202, 203(a), title XII, §1210, Apr. <!-- PDFPage:148 -->20, 2005, 119 Stat. 43, 194; Pub. L. 111-327, §2(a)(19), Dec. 22, 2010, 124 Stat. 3559.
(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.
(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.
(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.
(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.
(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.
(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.”.
“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 property securing the lien 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 must make a single payment to the creditor equal to the amount of the allowed secured claim, as agreed by the parties or determined by the court.”.
“Part C: Certification by Debtor's Attorney (If Any).
“Signature of Debtor's Attorney: Date:”.
“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: ______.
“Court Order: The court grants the debtor's motion and approves the reaffirmation agreement described above.”.
(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.
Section 524(a) of the House amendment represents a compromise between the House bill and the Senate amendment. Section 524(b) of the House amendment is new, and represents standards clarifying the operation of section 524(a)(3) with respect to community property.
Sections 524(c) and (d) represent a compromise between the House bill and Senate amendment on the issue of reaffirmation of a debt discharged in bankruptcy. Every reaffirmation to be enforceable must be approved by the court, and any debtor may rescind a reaffirmation for 30 days from the time the reaffirmation becomes enforceable. If the debtor is an individual the court must advise the debtor of various effects of reaffirmation at a hearing. In addition, to any extent the debt is a consumer debt that is not secured by real property of the debtor reaffirmation is permitted only if the court approves the reaffirmation agreement, before granting a discharge under section 727, 1141, or 1328, as not imposing a hardship on the debtor or a dependent of the debtor and in the best interest of the debtor; alternatively, the court may approve an agreement entered into in good faith that is in settlement of litigation of a complaint to determine dischargeability or that is entered into in connection with redemption under section 722. The hearing on discharge under section 524(d) will be held whether or not the debtor desires to reaffirm any debts.
Subsection (a) specifies that a discharge in a bankruptcy case voids any judgment to the extent that it is a determination of the personal liability of the debtor with respect to a prepetition debt, and operates as an injunction against the commencement or continuation of an action, the employment of process, or any act, including telephone calls, letters, and personal contacts, to collect, recover, or offset any discharged debt as a personal liability of the debtor, or from property of the debtor, whether or not the debtor has waived discharge of the debt involved. The injunction is to give complete effect to the discharge and to eliminate any doubt concerning the effect of the discharge as a total prohibition on debt collection efforts. This paragraph has been expanded over a comparable provision in Bankruptcy Act §14f [section 32(f) of former title 11] to cover any act to collect, such as dunning by telephone or letter, or indirectly through friends, relatives, or employers, harassment, threats of repossession, and the like. The change is consonant with the new policy forbidding binding reaffirmation agreements under proposed 11 U.S.C. 524(b), and is intended to insure that once a debt is discharged, the debtor will not be pressured in any way to repay it. In effect, the discharge extinguishes the debt, and creditors may not attempt to avoid that. The language “whether or not discharge of such debt is waived” is intended to prevent waiver of discharge of a particular debt from defeating the purposes of this section. It is directed at waiver of discharge of a particular debt, not waiver of discharge in toto as permitted under section 727(a)(9).
Subsection (a) also codifies the split discharge for debtors in community property states. If community property was in the estate and community claims were discharged, the discharge is effective against community creditors of the nondebtor spouse as well as of the debtor spouse.
Subsection (b) gives further effect to the discharge. It prohibits reaffirmation agreements after the commencement of the case with respect to any dischargeable debt. The prohibition extends to agreements the consideration for which in whole or in part is based on a dischargeable debt, and it applies whether or not discharge of the debt involved in the agreement has been waived. Thus, the prohibition on reaffirmation agreements extends to debts that are based on discharged debts. Thus, “second generation” debts, which included all or a part of a discharged debt could not be included in any new agreement for new money. This subsection will not have any effect on reaffirmations of debts discharged under the Bankruptcy Act [former title 11]. It will only apply to discharges granted if commenced under the new title 11 bankruptcy code.
Subsection (c) grants an exception to the anti-reaffirmation provision. It permits reaffirmation in connection with the settlement of a proceeding to determine the dischargeability of the debt being reaffirmed, or in connection with a redemption agreement permitted under section 722. In either case, the reaffirmation agreement must be entered into in good faith and must be approved by the court.
Subsection (d) provides the discharge of the debtor does not affect co-debtors or guarantors.
The Bankruptcy Act, referred to in subsec. (b)(1), is act July 1, 1898, ch. 541, 30 Stat. 544, as amended, which was classified generally to former Title 11.
The date of the enactment of this subsection, referred to in subsec. (g)(7), is the date of enactment of Pub. L. 103–394, which enacted subsec. (g) and was approved Oct. 22, 1994.
The date of the enactment of this Act, referred to in subsec. (h), probably means the date of enactment of Pub. L. 103–394, which enacted subsec. (h) and was approved Oct. 22, 1994.
The Truth in Lending Act, referred to in subsec. (k), is title I of Pub. L. 90–321, May 29, 1968, 82 Stat. 146, as amended, which is classified generally to subchapter I (§1601 et seq.) of chapter 41 of Title 15, Commerce and Trade. Sections 103, 127(b), and 128(a)(4) of the Act are classified to sections 1602, 1637(b), and 1638(a)(4), respectively, of Title 15. For complete classification of this Act to the Code, see Short Title note set out under section 1601 of Title 15 and Tables.
Section 19(b)(1)(A)(iv) of the Federal Reserve Act, referred to in subsecs. (k)(6)(B) and (m)(2), is classified to section 461(b)(1)(A)(iv) of Title 12, Banks and Banking.
2010—Subsec. (k)(3)(J)(i). Pub. L. 111–327, §2(a)(19)(A), in last undesignated par., substituted “property securing the lien” for “security property” and “amount of the allowed secured claim” for “current value of the security property” and inserted “must” before “make a single payment”.
Subsec. (k)(5)(B). Pub. L. 111–327, §2(a)(19)(B), substituted “that,” for “that”.
2005—Subsec. (a)(3). Pub. L. 109–8, §1210, substituted “section 523, 1228(a)(1), or 1328(a)(1), or that” for “section 523, 1228(a)(1), or 1328(a)(1) of this title, or that”.
“(B) such agreement contains a clear and conspicuous statement which advises the debtor that such agreement is not required under this title, under nonbankruptcy law, or under any agreement not in accordance with the provisions of this subsection;”.
Subsecs. (i), (j). Pub. L. 109–8, §202, added subsecs. (i) and (j).
Subsecs. (k) to (m). Pub. L. 109–8, §203(a)(2), added subsecs. (k) to (m).
1994—Subsec. (a)(3). Pub. L. 103–394, §501(d)(14)(A), substituted “1328(a)(1)” for “1328(c)(1)”. See 1986 Amendment note below.
Subsec. (c)(2). Pub. L. 103–394, §103(a)(1), designated existing provisions as subpar. (A), inserted “and” at end, and added subpar. (B).
Subsec. (c)(3). Pub. L. 103–394, §103(a)(2), struck out “such agreement” after “which states that” in introductory provisions, struck out “and” at end of subpar. (A), inserted “such agreement” in subpars. (A) and (B), and added subpar. (C).
Subsec. (c)(4). Pub. L. 103–394, §501(d)(14)(B), substituted “rescission” for “recission”.
Subsec. (d). Pub. L. 103–394, §103(b), inserted “and was not represented by an attorney during the course of negotiating such agreement” after “this section” in introductory provisions.
Subsec. (d)(1)(B)(ii). Pub. L. 103–394, §501(d)(14)(C), inserted “and” at end.
Subsecs. (g), (h). Pub. L. 103–394, §111(a), added subsecs. (g) and (h).
1986—Subsec. (a)(1). Pub. L. 99–554, §257(o)(1), inserted reference to section 1228 of this title.
Subsec. (a)(3). Pub. L. 99–554, §257(o)(2), which directed the substitution of “, 1228(a)(1), or 1328(a)(1)” for “or 1328(a)(1)” was executed by making the substitution for “or 1328(c)(1)” to reflect the probable intent of Congress. See 1994 Amendment note above.
Subsec. (c)(1). Pub. L. 99–554, §257(o)(1), inserted reference to section 1228 of this title.
Subsec. (d). Pub. L. 99–554, §257(o)(1), inserted reference to section 1228 of this title.
Pub. L. 99–554, §282, substituted “shall” for “may” before “hold” in first sentence, inserted “any” after “At” in second sentence, and inserted “the court shall hold a hearing at which the debtor shall appear in person and” after “then” in third sentence.
Subsec. (d)(2). Pub. L. 99–554, §283(k), substituted “section” for “subsection” after “subsection (c)(6) of this”.
1984—Subsec. (a)(2). Pub. L. 98–353, §§308(a), 455, struck out “or from property of the debtor,” before “whether or not discharge”, and substituted “an act” for “any act”.
Subsec. (a)(3). Pub. L. 98–353, §455, substituted “an act” for “any act”.
Subsec. (c)(2). Pub. L. 98–353, §308(b)(1), (3), added par. (2). Former par. (2), which related to situations where the debtor had not rescinded the agreement within 30 days after the agreement became enforceable, was struck out.
Subsec. (c)(3), (4). Pub. L. 98–352, §308(b)(3), added pars. (3) and (4). Former pars. (3) and (4) redesignated (5) and (6), respectively.
Subsec. (c)(5). Pub. L. 98–353, §308(b)(2), redesignated former par. (3) as (5).
Subsec. (c)(6). Pub. L. 98–353, §308(b)(2), (4), redesignated former par. (4) as (6) and generally amended par. (6), as so redesignated, thereby striking out provisions relating to court approval of such agreements as are entered into in good faith and are in settlement of litigation under section 523 of this title or provide for redemption under section 722 of this title.
Subsec. (d)(2). Pub. L. 98–353, §308(c), substituted “subsection (c)(6)” for “subsection (c)(4)”.
Subsec. (f). Pub. L. 98–353, §308(d), added subsec. (f).
Amendment by Pub. L. 103–394 effective Oct. 22, 1994, and, except with respect to amendment by section 111(a) of Pub. L. 103–394, amendment by Pub. L. 103–394 not applicable with respect to cases commenced under this title before Oct. 22, 1994, see section 702 of Pub. L. 103–394, set out as a note under section 101 of this title.
Amendment by sections 282 and 283 of Pub. L. 99–554 effective 30 days after Oct. 27, 1986, see section 302(a) of Pub. L. 99–554.

References: §501
 §1210
 §2
 §14
 §2
 §2
 §1210
 §202
 §203
 §501
 §103
 §103
 §501
 §103
 §501
 §111
 §257
 §257
 §257
 §257
 §282
 §283
 §455
 §308
 §308
 §308
 §308
 §308
 §308