11 U.S.C. § 342 — Notice

Page 63 TITLE 11—BANKRUPTCY § 342 Editorial Notes AMENDMENTS 2005—Subsec. (c). Pub. L. 109–8, § 413, inserted at end ‘‘Notwithstanding any local court rule, provision of a State constitution, any otherwise applicable nonbank- ruptcy law, or any other requirement that representa- tion at the meeting of creditors under subsection (a) be by an attorney, a creditor holding a consumer debt or any representative of the creditor (which may include an entity or an employee of an entity and may be a rep- resentative for more than 1 creditor) shall be permitted to appear at and participate in the meeting of creditors in a case under chapter 7 or 13, either alone or in con- junction with an attorney for the creditor. Nothing in this subsection shall be construed to require any cred- itor to be represented by an attorney at any meeting of creditors.’’ Subsec. (e). Pub. L. 109–8, § 402, added subsec. (e). 1994—Subsec. (d). Pub. L. 103–394 added subsec. (d). 1986—Subsec. (a). Pub. L. 99–554, § 212(1), substituted ‘‘the United States trustee shall convene and preside at a meeting of creditors’’ for ‘‘there shall be a meeting of creditors’’. Subsec. (b). Pub. L. 99–554, § 212(2), substituted ‘‘United States trustee may convene’’ for ‘‘court may order’’. Subsec. (c). Pub. L. 99–554, § 212(3), inserted ‘‘including any final meeting of creditors’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title. EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–394 effective Oct. 22, 1994, and 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. EFFECTIVE DATE OF 1986 AMENDMENT Effective date and applicability of amendment by Pub. L. 99–554 dependent upon the judicial district in- volved, see section 302(d), (e) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure. PARTICIPATION BY BANKRUPTCY ADMINISTRATOR AT MEETINGS OF CREDITORS AND EQUITY SECURITY HOLDERS Pub. L. 103–394, title I, § 105, Oct. 22, 1994, 108 Stat. 4111, provided that: ‘‘(a) PRESIDING OFFICER.—A bankruptcy adminis- trator appointed under section 302(d)(3)(I) of the Bank- ruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986 (28 U.S.C. 581 note; Pub- lic Law 99–554; 100 Stat. 3123), as amended by section 317(a) of the Federal Courts Study Committee Imple- mentation Act of 1990 (Public Law 101–650; 104 Stat. 5115), or the bankruptcy administrator’s designee may preside at the meeting of creditors convened under sec- tion 341(a) of title 11, United States Code. The bank- ruptcy administrator or the bankruptcy administra- tor’s designee may preside at any meeting of equity se- curity holders convened under section 341(b) of title 11, United States Code. ‘‘(b) EXAMINATION OF THE DEBTOR.—The bankruptcy administrator or the bankruptcy administrator’s des- ignee may examine the debtor at the meeting of credi- tors and may administer the oath required under sec- tion 343 of title 11, United States Code.’’ § 342. Notice (a) There shall be given such notice as is ap- propriate, including notice to any holder of a community claim, of an order for relief in a case under this title. (b) Before the commencement of a case under this title by an individual whose debts are pri- marily consumer debts, the clerk shall give to such individual written notice containing— (1) a brief description of— (A) chapters 7, 11, 12, and 13 and the gen- eral purpose, benefits, and costs of pro- ceeding under each of those chapters; and (B) the types of services available from credit counseling agencies; and (2) statements specifying that— (A) a person who knowingly and fraudu- lently conceals assets or makes a false oath or statement under penalty of perjury in connection with a case under this title shall be subject to fine, imprisonment, or both; and (B) all information supplied by a debtor in connection with a case under this title is subject to examination by the Attorney Gen- eral. (c)(1) If notice is required to be given by the debtor to a creditor under this title, any rule, any applicable law, or any order of the court, such notice shall contain the name, address, and last 4 digits of the taxpayer identification num- ber of the debtor. If the notice concerns an amendment that adds a creditor to the sched- ules of assets and liabilities, the debtor shall in- clude the full taxpayer identification number in the notice sent to that creditor, but the debtor shall include only the last 4 digits of the tax- payer identification number in the copy of the notice filed with the court. (2)(A) If, within the 90 days before the com- mencement of a voluntary case, a creditor sup- plies the debtor in at least 2 communications sent to the debtor with the current account number of the debtor and the address at which such creditor requests to receive correspond- ence, then any notice required by this title to be sent by the debtor to such creditor shall be sent to such address and shall include such account number. (B) If a creditor would be in violation of appli- cable nonbankruptcy law by sending any such communication within such 90-day period and if such creditor supplies the debtor in the last 2 communications with the current account num- ber of the debtor and the address at which such creditor requests to receive correspondence, then any notice required by this title to be sent by the debtor to such creditor shall be sent to such address and shall include such account number. (d) In a case under chapter 7 of this title in which the debtor is an individual and in which the presumption of abuse arises under section 707(b), the clerk shall give written notice to all creditors not later than 10 days after the date of the filing of the petition that the presumption of abuse has arisen. (e)(1) In a case under chapter 7 or 13 of this title of a debtor who is an individual, a creditor at any time may both file with the court and Page 64 TITLE 11—BANKRUPTCY § 342 serve on the debtor a notice of address to be used to provide notice in such case to such cred- itor. (2) Any notice in such case required to be pro- vided to such creditor by the debtor or the court later than 7 days after the court and the debtor receive such creditor’s notice of address, shall be provided to such address. (f)(1) An entity may file with any bankruptcy court a notice of address to be used by all the bankruptcy courts or by particular bankruptcy courts, as so specified by such entity at the time such notice is filed, to provide notice to such en- tity in all cases under chapters 7 and 13 pending in the courts with respect to which such notice is filed, in which such entity is a creditor. (2) In any case filed under chapter 7 or 13, any notice required to be provided by a court with respect to which a notice is filed under para- graph (1), to such entity later than 30 days after the filing of such notice under paragraph (1) shall be provided to such address unless with re- spect to a particular case a different address is specified in a notice filed and served in accord- ance with subsection (e). (3) A notice filed under paragraph (1) may be withdrawn by such entity. (g)(1) Notice provided to a creditor by the debtor or the court other than in accordance with this section (excluding this subsection) shall not be effective notice until such notice is brought to the attention of such creditor. If such creditor designates a person or an organiza- tional subdivision of such creditor to be respon- sible for receiving notices under this title and establishes reasonable procedures so that such notices receivable by such creditor are to be de- livered to such person or such subdivision, then a notice provided to such creditor other than in accordance with this section (excluding this sub- section) shall not be considered to have been brought to the attention of such creditor until such notice is received by such person or such subdivision. (2) A monetary penalty may not be imposed on a creditor for a violation of a stay in effect under section 362(a) (including a monetary pen- alty imposed under section 362(k)) or for failure to comply with section 542 or 543 unless the con- duct that is the basis of such violation or of such failure occurs after such creditor receives notice effective under this section of the order for relief. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2565; Pub. L. 98–353, title III, §§ 302, 435, July 10, 1984, 98 Stat. 352, 370; Pub. L. 103–394, title II, § 225, Oct. 22, 1994, 108 Stat. 4131; Pub. L. 109–8, title I, §§ 102(d), 104, title II, § 234(b), title III, § 315(a), Apr. 20, 2005, 119 Stat. 33, 35, 75, 88; Pub. L. 111–16, § 2(4), May 7, 2009, 123 Stat. 1607.) HISTORICAL AND REVISION NOTES LEGISLATIVE STATEMENTS Section 342(b) and (c) of the Senate amendment are adopted in principle but moved to section 549(c), in lieu of section 342(b) of H.R. 8200 as passed by the House. Section 342(c) of H.R. 8200 as passed by the House is deleted as a matter to be left to the Rules of Bank- ruptcy Procedure. SENATE REPORT NO. 95–989 Subsection (a) of section 342 requires the clerk of the bankruptcy court to give notice of the order for relief. The rules will prescribe to whom the notice should be sent and in what manner notice will be given. The rules already prescribe such things, and they will continue to govern unless changed as provided in section 404(a) of the bill. Due process will certainly require notice to all creditors and equity security holders. State and Fed- eral governmental representatives responsible for col- lecting taxes will also receive notice. In cases where the debtor is subject to regulation, the regulatory agency with jurisdiction will receive notice. In order to insure maximum notice to all parties in interest, the Rules will include notice by publication in appropriate cases and for appropriate issues. Other notices will be given as appropriate. Subsections (b) and (c) [enacted as section 549(c)] are derived from section 21g of the Bankruptcy Act [section 44(g) of former title 11]. They specify that the trustee may file notice of the commencement of the case in land recording offices in order to give notice of the pendency of the case to potential transferees of the debtor’s real property. Such filing is unnecessary in the county in which the bankruptcy case is commenced. If notice is properly filed, a subsequent purchaser of the property will not be a bona fide purchaser. Otherwise, a purchaser, including a purchaser at a judicial sale, that has no knowledge of the case, is not prevented from obtaining the status of a bona fide purchaser by the mere commencement of the case. ‘‘County’’ is de- fined in title 1 of the United States Code to include other political subdivisions where counties are not used. Editorial Notes AMENDMENTS 2009—Subsec. (e)(2). Pub. L. 111–16 substituted ‘‘7 days’’ for ‘‘5 days’’. 2005—Subsec. (b). Pub. L. 109–8, § 104, amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: ‘‘Prior to the commencement of a case under this title by an individual whose debts are primarily consumer debts, the clerk shall give written notice to such individual that indicates each chapter of this title under which such individual may proceed.’’ Subsec. (c). Pub. L. 109–8, § 315(a)(1) designated exist- ing provisions as par. (1), struck out ‘‘, but the failure of such notice to contain such information shall not in- validate the legal effect of such notice’’ after ‘‘number of the debtor’’, and added par. (2). Pub. L. 109–8, § 234(b), inserted ‘‘last 4 digits of the’’ before ‘‘taxpayer identification number’’ and ‘‘If the notice concerns an amendment that adds a creditor to the schedules of assets and liabilities, the debtor shall include the full taxpayer identification number in the notice sent to that creditor, but the debtor shall in- clude only the last 4 digits of the taxpayer identifica- tion number in the copy of the notice filed with the court.’’ at end. Subsec. (d). Pub. L. 109–8, § 102(d), added subsec. (d). Subsecs. (e) to (g). Pub. L. 109–8, § 315(a)(2), added sub- secs. (e) to (g). 1994—Subsec. (c). Pub. L. 103–394 added subsec. (c). 1984—Subsec. (a). Pub. L. 98–353, § 435, amended sub- sec. (a) generally, inserting requirement respecting no- tice to any holder of a community claim. Pub. L. 98–353, § 302(1), designated existing provisions as subsec. (a). Subsec. (b). Pub. L. 98–353, § 302(2), added subsec. (b). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2009 AMENDMENT Amendment by Pub. L. 111–16 effective Dec. 1, 2009, see section 7 of Pub. L. 111–16, set out as a note under section 109 of this title. EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases Page 65 TITLE 11—BANKRUPTCY § 344 commenced under this title before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title. EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–394 effective Oct. 22, 1994, and 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. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title. § 343. Examination of the debtor The debtor shall appear and submit to exam- ination under oath at the meeting of creditors under section 341(a) of this title. Creditors, any indenture trustee, any trustee or examiner in the case, or the United States trustee may ex- amine the debtor. The United States trustee may administer the oath required under this section. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2565; Pub. L. 98–353, title III, § 436, July 10, 1984, 98 Stat. 370; Pub. L. 99–554, title II, § 213, Oct. 27, 1986, 100 Stat. 3099.) HISTORICAL AND REVISION NOTES SENATE REPORT NO. 95–989 This section, derived from section 21a of the Bank- ruptcy Act [section 44(a) of former title 11], requires the debtor to appear at the meeting of creditors and submit to examination under oath. The purpose of the examination is to enable creditors and the trustee to determine if assets have improperly been disposed of or concealed or if there are grounds for objection to dis- charge. The scope of the examination under this sec- tion will be governed by the Rules of Bankruptcy Pro- cedure, as it is today. See rules 205(d), 10–213(c), and 11–26. It is expected that the scope prescribed by these rules for liquidation cases, that is, ‘‘only the debtor’s acts, conduct, or property, or any matter that may af- fect the administration of the estate, or the debtor’s right to discharge’’ will remain substantially un- changed. In reorganization cases, the examination would be broader, including inquiry into the liabilities and financial condition of the debtor, the operation of his business, and the desirability of the continuance thereof, and other matters relevant to the case and to the formulation of the plan. Examination of other per- sons in connection with the bankruptcy case is left completely to the rules, just as examination of wit- nesses in civil cases is governed by the Federal Rules of Civil Procedure. Editorial Notes AMENDMENTS 1986—Pub. L. 99–554 amended section generally. Prior to amendment, section read as follows: ‘‘The debtor shall appear and submit to examination under oath at the meeting of creditors under section 341(a) of this title. Creditors, any indenture trustee, or any trustee or examiner in the case may examine the debtor.’’ 1984—Pub. L. 98–353 substituted ‘‘examine’’ for ‘‘examiner’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1986 AMENDMENT Effective date and applicability of amendment by Pub. L. 99–554 dependent upon the judicial district in- volved, see section 302(d), (e) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title. PARTICIPATION BY BANKRUPTCY ADMINISTRATOR AT MEETINGS OF CREDITORS AND EQUITY SECURITY HOLDERS A bankruptcy administrator or the bankruptcy ad- ministrator’s designee may examine debtor at meeting of creditors and may administer oath required by this section, see section 105 of Pub. L. 103–394, set out as a note under section 341 of this title. § 344. Self-incrimination; immunity Immunity for persons required to submit to examination, to testify, or to provide informa- tion in a case under this title may be granted under part V of title 18. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2565.) HISTORICAL AND REVISION NOTES SENATE REPORT NO. 95–989 Part V [§ 6001 et seq.] of title 18 of the United States Code governs the granting of immunity to witnesses be- fore Federal tribunals. The immunity provided under part V is only use immunity, not transactional immu- nity. Part V applies to all proceedings before Federal courts, before Federal grand juries, before administra- tive agencies, and before Congressional committees. It requires the Attorney General or the U. S. attorney to request or to approve any grant of immunity, whether before a court, grand jury, agency, or congressional committee. This section carries part V over into bankruptcy cases. Thus, for a witness to be ordered to testify before a bankruptcy court in spite of a claim of privilege, the U. S. attorney for the district in which the court sits would have to request from the district court for that district the immunity order. The rule would apply to both debtors, creditors, and any other witnesses in a bankruptcy case. If the immunity were granted, the witness would be required to testify. If not, he could claim the privilege against self-incrimination. Part V is a significant departure from current law. Under section 7a(10) of the Bankruptcy Act [section 25(a)(10) of former title 11], a debtor is required to tes- tify in all circumstances, but any testimony he gives may not be used against him in any criminal pro- ceeding, except testimony given in any hearing on ob- jections to discharge. With that exception, section 7a(10) amounts to a blanket grant of use immunity to all debtors. Immunity for other witnesses in bank- ruptcy courts today is governed by part V of title 18. The consequences of a claim of privileges by a debtor under proposed law and under current law differ as well. Under section 14c(6) of current law [section 32(c)(6) of former title 11], any refusal to answer a ma- terial question approved by the court will result in the denial of a discharge, even if the refusal is based on the privilege against self incrimination. Thus, the debtor is confronted with the choice between losing his dis- charge and opening himself up to possible criminal prosecution. Under section 727(a)(6) of the proposed title 11, a debt- or is only denied a discharge if he refuses to testify after having been granted immunity. If the debtor claims the privilege and the U. S. attorney does not re- quest immunity from the district courts, then the debt- or may refuse to testify and still retain his right to a discharge. It removes the Scylla and Charibdis choice for debtors that exists under the Bankruptcy Act [former title 11].