Requirements of the Bankruptcy Act of 1978. When it was initially adopted, the code gave the courts a central role in establishing binding confirmation agreements. The code required a court to decide that the agreement does not impose inappropriate severity on the debtor. A court also had to decide that the agreement was in fact in the “best interests” of the debtor. (312) If a confirmation agreement has not passed these reviews, the agreement has not been approved. The Code also established procedures for approving related agreements for the repurchase of security and the settlement of non-silly remedies, which would only be enforceable if the Tribunal established that the agreements were concluded in good faith. (313) In all cases, the Tribunal was required to hold a hearing on the proposal for confirmation of guilt. During this hearing, the Tribunal warns the debtor that the agreement is completely voluntary and explains the legal consequences of an assertion. The debtor had the absolute right to change his mind within thirty days. John has arranged a confirmation with his mortgage company that will be approved by the court. It reaffirms the debt it owes to the mortgage of the house, with the possibility of renegotiating the payments with the lender.
He and his mortgage company agree during the confirmation process of a lower monthly mortgage payment or a lower interest rate. John can make those lower payments with a few odd jobs he could find. When a debtor signs a confirmation agreement, he agrees to commit a certain portion of his future income to pay an unsecured creditor, to the exclusion of any other. This goes against the principle of abrupt distribution to creditors, which is at the heart of the collective bankruptcy proceedings. The high volume of repayment obligations outside the structure of Chapter 13 of the payment plan reinforces the difference in treatment between similar creditors. In examining ways to improve the consumer insolvency system, some parties questioned compatibility with the policy of equal distribution of stolen anthems that are paid to some creditors, but not to others. According to others, the assertion of the debts that first brought the debtor to the bankruptcy court undermines the object of bankruptcy, since individuals are subject to bankruptcy proceedings, has only overburdened chapter 7. Creditor groups have generally argued that Congress should maintain and possibly strengthen the ability of creditors to obtain confirmation agreements to facilitate the personal liability of debtors after the Chapter 7 discharge.
(301) Academics who have empirically and politically confirmed themselves are in favour of a large number of reforms; Some support a total ban on assertions, while others believe that the system should allow the value of collateral to be paid to secured creditors over time, while unsecured portions of the debt are paid. (302) In all cases, the court and/or the debtor`s lawyer must find that the agreement serves the best interests of the debtor and does not impose unreasonable severity until the agreement can be reached. The success and integrity of the bankruptcy system is due not only to the bankruptcy bank, but also to the bankruptcy bank.