Bankruptcy Forms: Filing Bankruptcy Chapter 7 Bankruptcy Software Chapter 13

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TITLE 11–BANKRUPTCY

CHAPTER 1–GENERAL PROVISIONS

Sec. 102. Rules of construction

    In this title--
        (1) ``after notice and a hearing'', or a similar phrase--
            (A) means after such notice as is appropriate in the 
        particular circumstances, and such opportunity for a hearing as 
        is appropriate in the particular circumstances; but
            (B) authorizes an act without an actual hearing if such 
        notice is given properly and if--
                (i) such a hearing is not requested timely by a party in 
            interest; or
                (ii) there is insufficient time for a hearing to be 
            commenced before such act must be done, and the court 
            authorizes such act;

        (2) ``claim against the debtor'' includes claim against property 
    of the debtor;
        (3) ``includes'' and ``including'' are not limiting;
        (4) ``may not'' is prohibitive, and not permissive;
        (5) ``or'' is not exclusive;
        (6) ``order for relief'' means entry of an order for relief;
        (7) the singular includes the plural;
        (8) a definition, contained in a section of this title that 
    refers to another section of this title, does not, for the purpose 
    of such reference, affect the meaning of a term used in such other 
    section; and
        (9) ``United States trustee'' includes a designee of the United 
    States trustee.

(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2554; Pub. L. 98-353, title III, 
Sec. 422, July 10, 1984, 98 Stat. 369; Pub. L. 99-554, title II, 
Sec. 202, Oct. 27, 1986, 100 Stat. 3097.)


                      Historical and Revision Notes

                         legislative statements

    Section 102 specifies various rules of construction but is not 
exclusive. Other rules of construction that are not set out in title 11 
are nevertheless intended to be followed in construing the bankruptcy 
code. For example, the phrase ``on request of a party in interest'' or a 
similar phrase, is used in connection with an action that the court may 
take in various sections of the Code. The phrase is intended to restrict 
the court from acting sua sponte. Rules of bankruptcy procedure or court 
decisions will determine who is a party in interest for the particular 
purposes of the provision in question, but the court will not be 
permitted to act on its own.
    Although ``property'' is not construed in this section, it is used 
consistently throughout the code in its broadest sense, including cash, 
all interests in property, such as liens, and every kind of 
consideration including promises to act or forbear to act as in section 
548(d).
    Section 102(1) expands on a rule of construction contained in H.R. 
8200 as passed by the House and in the Senate amendment. The phrase 
``after notice and a hearing'', or a similar phrase, is intended to be 
construed according to the particular proceeding to mean after such 
notice as is appropriate in the particular circumstances, and such 
opportunity, if any, for a hearing as is appropriate in the particular 
circumstances. If a provision of title 11 authorizes an act to be taken 
``after notice and a hearing'' this means that if appropriate notice is 
given and no party to whom such notice is sent timely requests a 
hearing, then the act sought to be taken may be taken without an actual 
hearing.
    In very limited emergency circumstances, there will be insufficient 
time for a hearing to be commenced before an action must be taken. The 
action sought to be taken may be taken if authorized by the court at an 
ex parte hearing of which a record is made in open court. A full hearing 
after the fact will be available in such an instance.
    In some circumstances, such as under section 1128, the bill requires 
a hearing and the court may act only after a hearing is held. In those 
circumstances the judge will receive evidence before ruling. In other 
circumstances, the court may take action ``after notice and a hearing,'' 
if no party in interest requests a hearing. In that event a court order 
authorizing the action to be taken is not necessary as the ultimate 
action taken by the court implies such an authorization.
    Section 102(8) is new. It contains a rule of construction indicating 
that a definition contained in a section in title 11 that refers to 
another section of title 11 does not, for the purposes of such 
reference, take the meaning of a term used in the other section. For 
example, section 522(a)(2) defines ``value'' for the purposes of section 
522. Section 548(d)(2) defines ``value'' for purposes of section 548. 
When section 548 is incorporated by reference in section 522, this rule 
of construction makes clear that the definition of ``value'' in section 
548 governs its meaning in section 522 notwithstanding a different 
definition of ``value'' in section 522(a)(2).


                        senate report no. 95-989

    Section 102 provides seven rules of construction. Some are derived 
from current law; others are derived from 1 U.S.C. 1; a few are new. 
They apply generally throughout proposed title 11. These are terms that 
are not appropriate for definition, but that require an explanation.
    Paragraph (1) defines the concept of ``after notice and a hearing.'' 
The concept is central to the bill and to the separation of the 
administrative and judicial functions of bankruptcy judges. The phrase 
means after such notice as is appropriate in the particular 
circumstances (to be prescribed by either the Rules of Bankruptcy 
Procedure or by the court in individual circumstances that the Rules do 
not cover. In many cases, the Rules will provide for combined notice of 
several proceedings), and such opportunity for a hearing as is 
appropriate in the particular circumstances. Thus, a hearing will not be 
necessary in every instance. If there is no objection to the proposed 
action, the action may go ahead without court action. This is a 
significant change from present law, which requires the affirmative 
approval of the bankruptcy judge for almost every action. The change 
will permit the bankruptcy judge to stay removed from the administration 
of the bankruptcy or reorganization case, and to become involved only 
when there is a dispute about a proposed action, that is, only when 
there is an objection. The phrase ``such opportunity for a hearing as is 
appropriate in the particular circumstances'' is designed to permit the 
Rules and the courts to expedite or dispense with hearings when speed is 
essential. The language ``or similar phrase'' is intended to cover the 
few instances in the bill where ``after notice and a hearing'' is 
interrupted by another phrase, such as ``after notice to the debtor and 
a hearing.''
    Paragraph (2) specifies that ``claim against the debtor'' includes 
claim against property of the debtor. This paragraph is intended to 
cover nonrecourse loan agreements where the creditor's only rights are 
against property of the debtor, and not against the debtor personally. 
Thus, such an agreement would give rise to a claim that would be treated 
as a claim against the debtor personally, for the purposes of the 
bankruptcy code.
    Paragraph (3) is a codification of American Surety Co. v. Marotta, 
287 U.S. 513 (1933). It specifies that ``includes'' and ``including'' 
are not limiting.
    Paragraph (4) specifies that ``may not'' is prohibitive and not 
permissive (such as in ``might not'').
    Paragraph (5) specifies that ``or'' is not exclusive. Thus, if a 
party ``may do (a) or (b)'', then the party may do either or both. The 
party is not limited to a mutually exclusive choice between the two 
alternatives.
    Paragraph (6) makes clear that ``order for relief'' means entry of 
an order for relief. If the court orally orders relief, but the order is 
not entered until a later time, then any time measurements in the bill 
are from entry, not from the oral order. In a voluntary case, the entry 
of the order for relief is the filing of the petition commencing the 
voluntary case.
    Paragraph (7) specifies that the singular includes the plural. The 
plural, however, generally does not include the singular. The bill uses 
only the singular, even when the item in question most often is found in 
plural quantities, in order to avoid the confusion possible if both 
rules of construction applied. When an item is specified in the plural, 
the plural is intended.


                               Amendments

    1986--Par. (9). Pub. L. 99-554 added par. (9).
    1984--Par. (8). Pub. L. 98-353 substituted ``contained'' for 
``continued''.


                    Effective Date of 1986 Amendment

    Effective date and applicability of amendment by Pub. L. 99-554 
dependent upon the judicial district involved, 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.


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Legal Resource Center: United States Code TITLE 11 Filing Bankruptcy Forms Software