11 U.S.C. § 521 — Debtor’s duties

submitted 48 years ago by Pub. L. 95-598 to r/title-11-BANKRUPTCY · 2,316 words · no verdicts yet

in plain englishAI-generated · not legal advice

This section lists a bankruptcy debtor's required duties: filing schedules, statements, tax records, and identifying documents; cooperating with the trustee; deciding what to do with secured property; and timely filing tax returns. Missing deadlines can trigger automatic dismissal of the case, loss of the automatic stay over specific property, or conversion of the case, though courts have some ability to extend time or excuse noncompliance.

This section lists everything a bankruptcy debtor must do, and what happens if they don't. (a) The debtor must file several things. (1) A list of creditors. Also, unless the court says otherwise: a schedule of assets and liabilities; a schedule of current income and expenses; a statement of financial affairs, plus (if section 342(b) applies) a certificate confirming the debtor got the required notice from their attorney or bankruptcy petition preparer, or confirming the debtor received and read that notice if no attorney or preparer is listed; copies of pay stubs or other proof of payment from the debtor's employer, covering the 60 days before filing; a statement of monthly net income, showing how it was calculated; and a statement about any expected increase in income or expenses over the next 12 months. (2) If an individual debtor's schedule includes debts secured by property of the estate: (A) within 30 days of filing a chapter 7 case (or by the creditors' meeting, whichever is earlier), the debtor must file a statement saying whether they will keep or give up that property — including whether they claim it as exempt, plan to redeem it, or plan to reaffirm the debt; and (B) within 30 days after the first scheduled creditors' meeting, the debtor must actually follow through on what they said in (A). Nothing in (A) or (B) changes the debtor's or trustee's rights to that property otherwise, except as section 362(h) provides. (3) If a trustee, or an auditor under section 586(f) of title 28, is serving in the case, the debtor must cooperate with the trustee so the trustee can do their job. (4) In that same situation, the debtor must surrender to the trustee all property of the estate, and any related records — books, documents, papers — whether or not immunity is granted under section 344. (5) The debtor must appear at the hearing required under section 524(d). (6) In a chapter 7 case where the debtor is an individual, the debtor cannot keep personal property that secures a creditor's claim for its purchase price, unless within 45 days of the first creditors' meeting the debtor either (A) reaffirms the debt under section 524(c), or (B) redeems the property under section 722. (7) Unless a trustee is serving, the debtor must keep performing any duties they had as administrator of an employee benefit plan (as defined by the Employee Retirement Income Security Act of 1974), if they held that role when the case began. If the debtor misses the 45-day deadline in paragraph (6), the automatic stay ends for that property. The property stops being part of the estate, and the creditor can take whatever action nonbankruptcy law allows — unless the trustee asks the court, before that 45-day period ends, to keep the stay because the property has real value to the estate, and the court orders protection for the creditor and delivery of the collateral to the trustee. (b) In addition to (a), an individual debtor must also file: (1) a certificate from the approved credit counseling agency describing the services provided under section 109(h); and (2) a copy of any debt repayment plan developed through that agency. (c) The debtor must also file a record of any interest in an education IRA, an ABLE account, or a qualified state tuition program, as those are defined in the tax code. (d) If the debtor doesn't act in time under (a)(6) or section 362(h)(1)-(2), regarding property a lessor or bailor leased, rented, or bailed to them, or property secured by a creditor's interest that isn't otherwise voidable, this title does not block a lease or agreement clause that puts the debtor in default because of the bankruptcy filing or the debtor's insolvency. This subsection does not justify limiting such a clause in other situations. (e)(1) In a chapter 7 or 13 case with an individual debtor, if a creditor asks the court for a copy of the petition, schedules, and financial affairs statement, the court must make those available to the creditor. (2)(A) The debtor must give the trustee a copy (or, if elected, a transcript) of their most recent filed federal tax return, at least 7 days before the first creditors' meeting. At the same time, the debtor must give a copy to any creditor who timely requested one. (B) If the debtor fails to meet either deadline, the court must dismiss the case, unless the debtor shows the failure was due to circumstances beyond their control. (C) If a creditor requested the return and the debtor didn't provide it when giving it to the trustee, the court must dismiss the case, again unless the debtor shows the failure was beyond their control. (3) In a chapter 13 case, if a creditor requests a copy of the debtor's plan, the court must make it available, at reasonable cost, within 7 days of the request. (f) At the request of the court, the U.S. trustee, or any party in interest, in a chapter 7, 11, or 13 case, an individual debtor must file: (1) a copy of each federal tax return (or transcript) for each tax year ending while the case is pending, at the same time it's filed with the tax authority; (2) any return that wasn't filed as of the case's start but was later filed for a tax year in the 3 years before the case started; (3) a copy of any amendment to a return or transcript filed under (1) or (2); and (4) in a chapter 13 case, at set deadlines tied to the tax year and plan confirmation, a sworn statement of the debtor's income and expenses, showing how they were calculated. (g)(1) The statement in (f)(4) must disclose: (A) the amount and source of the debtor's income; (B) who else is responsible for supporting the debtor's dependents; and (C) who else contributed money to the debtor's household, and how much. (2) The tax returns, amendments, and income statements described in (e)(2)(A) and (f) must be available for the U.S. trustee (or bankruptcy administrator), the trustee, and any party in interest to inspect and copy, subject to section 315(c) of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act. (h) If the U.S. trustee or the trustee asks, the debtor must provide either (1) a photo ID document, like a driver's license or passport, or (2) other personal identifying information that establishes who the debtor is. (i)(1) Subject to paragraphs (2) and (4), and despite section 707(a), if an individual debtor in a voluntary chapter 7 or 13 case doesn't file everything required under (a)(1) within 45 days of filing the petition, the case is automatically dismissed on the 46th day. (2) Subject to (4), any party in interest can ask the court to formally dismiss such a case; the court must do so within 7 days of the request. (3) Subject to (4), the debtor can ask, within that same 45-day period, for up to 45 more days to file the missing information, if the court finds a good reason to extend. (4) Despite the rest of this subsection, the trustee can ask the court, before the relevant deadline passes, not to dismiss the case. After notice and a hearing, the court may agree if it finds the debtor tried in good faith to file the pay-stub information required by (a)(1)(B)(iv), and that creditors are better served by keeping the case open. (j)(1) Despite anything else in this title, if the debtor fails to file a tax return that comes due after the case starts, or fails to properly get a filing extension, the taxing authority can ask the court to convert or dismiss the case. (2) If the debtor still doesn't file the return or get the extension within 90 days of that request, the court must convert or dismiss the case — whichever better serves creditors and the estate.

the actual law source: uscode.house.gov ↗public domain

(a)

The debtor shall—

(1)

file—

(A)

a list of creditors; and

(B)

unless the court orders otherwise—

(i)

a schedule of assets and liabilities;

(ii)

a schedule of current income and current expenditures;

(iii)

a statement of the debtor’s financial affairs and, if section 342(b) applies, a certificate—

(I)

of an attorney whose name is indicated on the petition as the attorney for the debtor, or a bankruptcy petition preparer signing the petition under section 110(b)(1), indicating that such attorney or the bankruptcy petition preparer delivered to the debtor the notice required by section 342(b); or

(II)

if no attorney is so indicated, and no bankruptcy petition preparer signed the petition, of the debtor that such notice was received and read by the debtor;

(iv)

copies of all payment advices or other evidence of payment received within 60 days before the date of the filing of the petition, by the debtor from any employer of the debtor;

(v)

a statement of the amount of monthly net income, itemized to show how the amount is calculated; and

(vi)

a statement disclosing any reasonably anticipated increase in income or expenditures over the 12-month period following the date of the filing of the petition;

(2)

if an individual debtor’s schedule of assets and liabilities includes debts which are secured by property of the estate—

(A)

within thirty days after the date of the filing of a petition under chapter 7 of this title or on or before the date of the meeting of creditors, whichever is earlier, or within such additional time as the court, for cause, within such period fixes, file with the clerk a statement of his intention with respect to the retention or surrender of such property and, if applicable, specifying that such property is claimed as exempt, that the debtor intends to redeem such property, or that the debtor intends to reaffirm debts secured by such property; and

(B)

within 30 days after the first date set for the meeting of creditors under section 341(a), or within such additional time as the court, for cause, within such 30-day period fixes, perform his intention with respect to such property, as specified by subparagraph (A) of this paragraph;

except that nothing in subparagraphs (A) and (B) of this paragraph shall alter the debtor’s or the trustee’s rights with regard to such property under this title, except as provided in section 362(h);

(3)

if a trustee is serving in the case or an auditor is serving under section 586(f) of title 28, cooperate with the trustee as necessary to enable the trustee to perform the trustee’s duties under this title;

(4)

if a trustee is serving in the case or an auditor is serving under section 586(f) of title 28, surrender to the trustee all property of the estate and any recorded information, including books, documents, records, and papers, relating to property of the estate, whether or not immunity is granted under section 344 of this title;

(5)

appear at the hearing required under section 524(d) of this title;

(6)

in a case under chapter 7 of this title in which the debtor is an individual, not retain possession of personal property as to which a creditor has an allowed claim for the purchase price secured in whole or in part by an interest in such personal property unless the debtor, not later than 45 days after the first meeting of creditors under section 341(a), either—

(A)

enters into an agreement with the creditor pursuant to section 524(c) with respect to the claim secured by such property; or

(B)

redeems such property from the security interest pursuant to section 722; and

(7)

unless a trustee is serving in the case, continue to perform the obligations required of the administrator (as defined in section 3 of the Employee Retirement Income Security Act of 1974) of an employee benefit plan if at the time of the commencement of the case the debtor (or any entity designated by the debtor) served as such administrator.

If the debtor fails to so act within the 45-day period referred to in paragraph (6), the stay under section 362(a) is terminated with respect to the personal property of the estate or of the debtor which is affected, such property shall no longer be property of the estate, and the creditor may take whatever action as to such property as is permitted by applicable nonbankruptcy law, unless the court determines on the motion of the trustee filed before the expiration of such 45-day period, and after notice and a hearing, that such property is of consequential value or benefit to the estate, orders appropriate adequate protection of the creditor’s interest, and orders the debtor to deliver any collateral in the debtor’s possession to the trustee.

(b)

In addition to the requirements under subsection (a), a debtor who is an individual shall file with the court—

(1)

a certificate from the approved nonprofit budget and credit counseling agency that provided the debtor services under section 109(h) describing the services provided to the debtor; and

(2)

a copy of the debt repayment plan, if any, developed under section 109(h) through the approved nonprofit budget and credit counseling agency referred to in paragraph (1).

(c)

In addition to meeting the requirements under subsection (a), a debtor shall file with the court a record of any interest that a debtor has in an education individual retirement account (as defined in section 530(b)(1) of the Internal Revenue Code of 1986), an interest in an account in a qualified ABLE program (as defined in section 529A(b) of such Code,1 or under a qualified State tuition program (as defined in section 529(b)(1) of such Code).

(d)

If the debtor fails timely to take the action specified in subsection (a)(6) of this section, or in paragraphs (1) and (2) of section 362(h), with respect to property which a lessor or bailor owns and has leased, rented, or bailed to the debtor or as to which a creditor holds a security interest not otherwise voidable under section 522(f), 544, 545, 547, 548, or 549, nothing in this title shall prevent or limit the operation of a provision in the underlying lease or agreement that has the effect of placing the debtor in default under such lease or agreement by reason of the occurrence, pendency, or existence of a proceeding under this title or the insolvency of the debtor. Nothing in this subsection shall be deemed to justify limiting such a provision in any other circumstance.

(e)

(1)

If the debtor in a case under chapter 7 or 13 is an individual and if a creditor files with the court at any time a request to receive a copy of the petition, schedules, and statement of financial affairs filed by the debtor, then the court shall make such petition, such schedules, and such statement available to such creditor.

(2)

(A)

The debtor shall provide—

(i)

not later than 7 days before the date first set for the first meeting of creditors, to the trustee a copy of the Federal income tax return required under applicable law (or at the election of the debtor, a transcript of such return) for the most recent tax year ending immediately before the commencement of the case and for which a Federal income tax return was filed; and

(ii)

at the same time the debtor complies with clause (i), a copy of such return (or if elected under clause (i), such transcript) to any creditor that timely requests such copy.

(B)

If the debtor fails to comply with clause (i) or (ii) of subparagraph (A), the court shall dismiss the case unless the debtor demonstrates that the failure to so comply is due to circumstances beyond the control of the debtor.

(C)

If a creditor requests a copy of such tax return or such transcript and if the debtor fails to provide a copy of such tax return or such transcript to such creditor at the time the debtor provides such tax return or such transcript to the trustee, then the court shall dismiss the case unless the debtor demonstrates that the failure to provide a copy of such tax return or such transcript is due to circumstances beyond the control of the debtor.

(3)

If a creditor in a case under chapter 13 files with the court at any time a request to receive a copy of the plan filed by the debtor, then the court shall make available to such creditor a copy of the plan—

(A)

at a reasonable cost; and

(B)

not later than 7 days after such request is filed.

(f)

At the request of the court, the United States trustee, or any party in interest in a case under chapter 7, 11, or 13, a debtor who is an individual shall file with the court—

(1)

at the same time filed with the taxing authority, a copy of each Federal income tax return required under applicable law (or at the election of the debtor, a transcript of such tax return) with respect to each tax year of the debtor ending while the case is pending under such chapter;

(2)

at the same time filed with the taxing authority, each Federal income tax return required under applicable law (or at the election of the debtor, a transcript of such tax return) that had not been filed with such authority as of the date of the commencement of the case and that was subsequently filed for any tax year of the debtor ending in the 3-year period ending on the date of the commencement of the case;

(3)

a copy of each amendment to any Federal income tax return or transcript filed with the court under paragraph (1) or (2); and

(4)

in a case under chapter 13—

(A)

on the date that is either 90 days after the end of such tax year or 1 year after the date of the commencement of the case, whichever is later, if a plan is not confirmed before such later date; and

(B)

annually after the plan is confirmed and until the case is closed, not later than the date that is 45 days before the anniversary of the confirmation of the plan;

a statement, under penalty of perjury, of the income and expenditures of the debtor during the tax year of the debtor most recently concluded before such statement is filed under this paragraph, and of the monthly income of the debtor, that shows how income, expenditures, and monthly income are calculated.

(g)

(1)

A statement referred to in subsection (f)(4) shall disclose—

(A)

the amount and sources of the income of the debtor;

(B)

the identity of any person responsible with the debtor for the support of any dependent of the debtor; and

(C)

the identity of any person who contributed, and the amount contributed, to the household in which the debtor resides.

(2)

The tax returns, amendments, and statement of income and expenditures described in subsections (e)(2)(A) and (f) shall be available to the United States trustee (or the bankruptcy administrator, if any), the trustee, and any party in interest for inspection and copying, subject to the requirements of section 315(c) of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

(h)

If requested by the United States trustee or by the trustee, the debtor shall provide—

(1)

a document that establishes the identity of the debtor, including a driver’s license, passport, or other document that contains a photograph of the debtor; or

(2)

such other personal identifying information relating to the debtor that establishes the identity of the debtor.

(i)

(1)

Subject to paragraphs (2) and (4) and notwithstanding section 707(a), if an individual debtor in a voluntary case under chapter 7 or 13 fails to file all of the information required under subsection (a)(1) within 45 days after the date of the filing of the petition, the case shall be automatically dismissed effective on the 46th day after the date of the filing of the petition.

(2)

Subject to paragraph (4) and with respect to a case described in paragraph (1), any party in interest may request the court to enter an order dismissing the case. If requested, the court shall enter an order of dismissal not later than 7 days after such request.

(3)

Subject to paragraph (4) and upon request of the debtor made within 45 days after the date of the filing of the petition described in paragraph (1), the court may allow the debtor an additional period of not to exceed 45 days to file the information required under subsection (a)(1) if the court finds justification for extending the period for the filing.

(4)

Notwithstanding any other provision of this subsection, on the motion of the trustee filed before the expiration of the applicable period of time specified in paragraph (1), (2), or (3), and after notice and a hearing, the court may decline to dismiss the case if the court finds that the debtor attempted in good faith to file all the information required by subsection (a)(1)(B)(iv) and that the best interests of creditors would be served by administration of the case.

(j)

(1)

Notwithstanding any other provision of this title, if the debtor fails to file a tax return that becomes due after the commencement of the case or to properly obtain an extension of the due date for filing such return, the taxing authority may request that the court enter an order converting or dismissing the case.

(2)

If the debtor does not file the required return or obtain the extension referred to in paragraph (1) within 90 days after a request is filed by the taxing authority under that paragraph, the court shall convert or dismiss the case, whichever is in the best interests of creditors and the estate.

Source credit: (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2586; Pub. L. 98–353, title III, §§ 305, 452, July 10, 1984, 98 Stat. 352, 375; Pub. L. 99–554, title II, § 283(h), Oct. 27, 1986, 100 Stat. 3117; Pub. L. 109–8, title I, § 106(d), title II, § 225(b), title III, §§ 304(1), 305(2), 315(b), 316, title IV, § 446(a), title VI, § 603(c), title VII, § 720, Apr. 20, 2005, 119 Stat. 38, 66, 78, 80, 89, 92, 118, 123, 133; Pub. L. 111–16, § 2(5), (6), May 7, 2009, 123 Stat. 1607; Pub. L. 111–327, § 2(a)(16), Dec. 22, 2010, 124 Stat. 3559; Pub. L. 113–295, div. B, title I, § 104(c), Dec. 19, 2014, 128 Stat. 4064.)

history & why it existsrecord from the source credit

1978Enacted · Pub. L. 95-598 · 92 Stat. 2586
1984Amended · Pub. L. 98-353 · 98 Stat. 352, 375
1986Amended · Pub. L. 99-554 · 100 Stat. 3117
2005Amended · Pub. L. 109-8 · 119 Stat. 38, 66, 78, 80, 89, 92, 118, 123, 133
2009Amended · Pub. L. 111-16 · 123 Stat. 1607
2010Amended · Pub. L. 111-327 · 124 Stat. 3559
2014Amended · Pub. L. 113-295 · 128 Stat. 4064

A history note hasn’t been published yet. The record shows enactment by Pub. L. 95-598 on 1978-11-06.

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