Chapter 11 New Forms
Chapter 11 bankruptcy is typically used for corporations that want to continue in operation but cannot pay their debts. However, individual business owners may use Chapter 11 if they owe too much to use Chapter 13.
Form 22B: Statement of Monthly Income
Bankruptcy Form 22b is used exclusively for individuals filing for Chapter 11, and is the required Statement of Monthly Income. The first thing that any one filing this form with a Chapter 11 petition must know is that Part 2 of the form for marital adjustment was mistakenly added. Therefore, the instructions explicitly state that it should not be filled out, and Line 13d should read “0”. In future years, Part 2 of this form will be removed.
There are two columns as before for a married couple, but the headings are Column A for ‘Debtor 1’ and Column B for ‘Debtor 2’, rather than the previous listing for Column B as ‘Spouse’. The remaining categories of income are similar to the previous form.
Chapter 13 New Forms
Chapter 13 bankruptcy is a referred to as reorganization since it does allow a debtor to repay some of their debts. There are two new forms for Chapter 13 that will affect the amount and time period of any repayment plan. The new versions split the income and expense calculations into separate forms. Just as with the new Chapter 11 form, the term ‘Spouse’ is replaced with ‘Debtor 2’.
Form 22C-1: Statement of Your Current Monthly Income and Calculation of Commitment Period
All Chapter 13 debtors must fill out Form 22C-1. This form is used to determine whether the debtor’s income is at or below the median income for their state. If the income is less than the median then Form 22C-2 does not need to be filled out. Form 22C-1 is also used to determine the commitment period for repayment of creditors, subject to court adjustments.
Form 22C-2: Calculation of Your Disposable Income
This form must be filled out if the debtor’s income is more than the state median. This is also referred to as the ‘means test’ and calculates whether the debtor has disposable income after expenses to repay some unsecured debts. This form has eight pages, and although the format is simplified, the amount of detail required is significant. Just as with the other means test forms, both National and Local Standards are used for computing expenses, and this information is found on the US Department of Justice website. Local Standards are typically used for items such as housing, where local market conditions may vary from state to state.
There is a new addition to Form 22C-2 for changes to a debtor’s projected disposable income in Part 3. This reflects a Supreme Court decision that held those types of changes should be considered when calculating a debtor’s means to repay creditors.
There are also additional items for deducting cell phone and internet expenses used for production of income.