UNITED STATES BANKRUPTCY COURT

DISTRICT OF VERMONT

In conjunction with Standing Order # 08-01, this instruction sheet is provided to assist the filer(s) in successfully completing Official Form 27, the cover sheet that must be filed with each reaffirmation agreement filed in this District. Use of this instruction sheet is optional, but strongly encouraged to help reduce the necessity of debtors (and possibly others) from having to appear at evidentiary hearings as a prerequisite for obtaining approval of a reaffirmation agreement. These instructions explain how to fill out each item, check box, and certification of Official Form 27.

Enumerated Items:

Item 1 – "Amount of debt as of commencement of case.” Fill in the dollar figure reported in Schedule D of the Debtor's petition for the Creditor's claim that the Debtor now seeks to reaffirm.

Item 2 – "Describe collateral, if any, securing debt.” Where the Debtor has pledged some kind of property as a condition for receiving a loan from the Creditor, the pledged property is called the "collateral”; it secures the Creditor's loan (or "debt”) that the Debtor is seeking to reaffirm. A description of that property (or collateral) must be provided here. So, for example, if a Debtor has pledged a car in exchange for the Creditor's loan, a description of the car's make, model, year, VIN, and overall condition should be provided. Similar identifying information should be provided for other collateral so that the Court can easily identify the asset in the Debtor's petition and assess its value.

Item 3 – "Amount of debt being affirmed.” This is the dollar figure reported in the Disclosure Statement of the Reaffirmation Agreement. It is found at the bottom of the first page of Form 240A. This "amount of debt” includes all fees and costs (if any) that have accrued as of the date of the reaffirmation agreement.

Item 4 – "Repayment term of reaffirmation.” The "term” is simply the length of the loan; one may think of it as the total number of payments the Debtor must make to the Creditor to pay off the loan. Under the reaffirmation agreement, the term may be longer than the original term of the Creditor's loan. This information is found on page 3 of Form 240A

Item 5 – "Monthly payment under reaffirmation.” This is the monthly loan payment due to the Creditor under this reaffirmation agreement. This amount may not be the same amount that the Debtor had been paying the Creditor in the past. This information is found on page 3 of Form 240A.

Item 6 – "Annual percentage rate under reaffirmation.” This is the rate of interest the Creditor is charging the Debtor for making the loan; it is a percentage figure. The percentage rate on the loan may be fixed or variable. The "Annual Percentage Rate” to be reported here is found on page 2 or 3 of Form 240A. Note that this interest rate may not be the same rate as what the Creditor was originally charging the Debtor under the original loan.

Item 7 – "Debtor's monthly income at reaffirmation.” Provide the Debtor's most current income information; it may be more or less than the Debtor's monthly income when s/he filed for bankruptcy relief. This figure is calculated by adding together the Debtor's take-home pay and all other income received. It must be the same dollar figure the Debtor reports in Part D of Form 240A (on page 8).

Item 8 – "Income from Schedule I, line 16.” Refer to the Debtor's Schedule I (filed with the bankruptcy petition). Copy the dollar figure found on line 16 of Schedule I onto the line for Item 8.

Item 9 – "Explain any difference in the amounts set out on lines 7 and 8.” The Court requires a specific explanation. So, if the Debtor's monthly income is currently more than what it was on the date the bankruptcy case was filed, the Debtor must identify in Item 9 all new sources of income and the monthly amounts received from each source. Or, if the Debtor's monthly income is now less than what it was when the Debtor filed bankruptcy, the Debtor must explain the reason for this reduction and specify the amount of the monthly reduction.

Item 10 – "Debtor's monthly expenses at reaffirmation (without this reaffirmed debt).” Here, the Debtor must report all his/her current monthly expenses except for the monthly payment s/he plans to make under this reaffirmation agreement. (So, do not include the monthly payment that will be due under the this reaffirmation agreement.) This must be the same dollar figure the Debtor reports in Part D of Form 240A (on page 8), as his/her "actual current monthly expenses including monthly payments on post-bankruptcy debt and other reaffirmation agreements,” if any.

Item 11 – "Current expenditures from Schedule J, line 18.” Refer to the Debtor's Schedule J (filed with the bankruptcy petition). Copy the dollar figure found on line 18 of Schedule J onto the line for Item 11.

Item 12 – "Explain any difference in the amounts set out on lines 10 and 11.” The Court requires a specific explanation. So, if there is a difference between the Debtor's expenses on the date the bankruptcy petition was filed and the Debtor's current expenses, at a minimum, the Debtor must identify those categories of expenses that have changed, explaining the reason(s) for the change(s), and stating the amount of the change(s) in each category of expenses. For example, it is not sufficient to state, "I have reduced my discretionary spending by $100.” Rather, a sufficient explanation would be, "I have reduced my discretionary spending by decreasing entertainment expenses by $60, dry cleaning expenses by $15, and gift expenses by $35.”

Check Boxes:

Check the first box if the dollar figure in Item 10 is more than the dollar figure in Item 7. The Bankruptcy Code's presumption of "undue hardship” has been triggered requiring the Court to review the facts and figures that give rise to this "hardship” and to decide whether to approve the reaffirmation agreement. See 11 U.S.C. Sec. 524(m).

Note: A Debtor may provide a written statement to the Court explaining how s/he can afford to make the reaffirmation payments, even though s/he appears to have insufficient income to make the payment. If the Debtor chooses not to provide this statement, or if the statement is insufficient, the Debtor will be required to appear at a hearing in order to obtain Court approval of the re-affirmation agreement. If the written statement identifies a third party as an additional source of funds for making those payments, then either the third party must testify or file an affidavit or certification made under penalty of perjury indicating the third party's:

• relationship to the Debtor;

• ability and willingness to assist the Debtor;

• assistance is voluntary and is not a guarantee or promise of payment to the Creditor; and

• understanding that his/her assistance may be a basis for the Court's approval of the

    reaffirmation agreement.

Check the second box if the Debtor was not represented by an attorney in negotiating the reaffirmation agreement. In this District, if an attorney charges a Debtor a flat fee for representation in a Chapter 7 case, negotiating reaffirmation agreements is a service covered by the fee and the attorney cannot charge an additional fee to assist the Debtor with any reaffirmation agreement. See Vt. LBR 2016-1(f)(2)(A). Therefore, a Debtor should only check this box if s/he is not represented by an attorney in the bankruptcy case.

Certifications:

"Filer's Certification” – In this District, the "Filer's Certification” has been modified to include language that the reaffirmation agreement meets the requirements set out in 11 U.S.C. Sec. 524. Thus, the filer must certify that the agreement attached to the cover sheet is a true and correct copy of the reaffirmation agreement under consideration and that the reaffirmation agreement meets the requirements set out in Sec. 524 The party filing the reaffirmation agreement and the cover sheet (whether the Creditor, Debtor or another party) must complete and sign this certification. A cover sheet without an executed "Filer's Certification” shall be considered deficient and will not be processed by the Court.

"Debtor's Certification” – The Debtor must execute the "Debtor's Certification.” A cover sheet without an executed "Debtor's Certification” shall be considered deficient and will not be processed by the Court.

Questions

Any questions about this instruction sheet, or the deficiency procedure, should be directed to Kathleen Ford, Chief Deputy Clerk, at (802) 776-2003; however, neither she nor anyone in the Clerk's Office is permitted to give legal advice.

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