Bankruptcy Forms: Filing Bankruptcy Chapter 7 Bankruptcy Software Chapter 13

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TITLE 11–BANKRUPTCY

CHAPTER 3–CASE ADMINISTRATION

Sub Chapter II –Officers

Sec. 329. Debtor's transactions with attorneys

    (a) Any attorney representing a debtor in a case under this title, 
or in connection with such a case, whether or not such attorney applies 
for compensation under this title, shall file with the court a statement 
of the compensation paid or agreed to be paid, if such payment or 
agreement was made after one year before the date of the filing of the 
petition, for services rendered or to be rendered in contemplation of or 
in connection with the case by such attorney, and the source of such 
compensation.
    (b) If such compensation exceeds the reasonable value of any such 
services, the court may cancel any such agreement, or order the return 
of any such payment, to the extent excessive, to--
        (1) the estate, if the property transferred--
            (A) would have been property of the estate; or
            (B) was to be paid by or on behalf of the debtor under a 
        plan under chapter 11, 12, or 13 of this title; or

        (2) the entity that made such payment.

(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2564; Pub. L. 98-353, title III, 
Sec. 432, July 10, 1984, 98 Stat. 370; Pub. L. 99-554, title II, 
Sec. 257(c), Oct. 27, 1986, 100 Stat. 3114.)


                      Historical and Revision Notes

                        senate report no. 95-989

    This section, derived in large part from current Bankruptcy Act 
section 60d [section 96(d) of former title 11], requires the debtor's 
attorney to file with the court a statement of the compensation paid or 
agreed to be paid to the attorney for services in contemplation of and 
in connection with the case, and the source of the compensation. 
Payments to a debtor's attorney provide serious potential for evasion of 
creditor protection provisions of the bankruptcy laws, and serious 
potential for overreaching by the debtor's attorney, and should be 
subject to careful scrutiny.
    Subsection (b) permits the court to deny compensation to the 
attorney, to cancel an agreement to pay compensation, or to order the 
return of compensation paid, if the compensation exceeds the reasonable 
value of the services provided. The return of payments already made are 
generally to the trustee for the benefit of the estate. However, if the 
property would not have come into the estate in any event, the court 
will order it returned to the entity that made the payment.
    The Bankruptcy Commission recommended a provision similar to this 
that would have also permitted an examination of the debtor's 
transactions with insiders. S. 236, 94th Cong., 1st sess, sec. 4-311(b) 
(1975). Its exclusion here is to permit it to be dealt with by the Rules 
of Bankruptcy Procedure. It is not intended that the provision be 
deleted entirely, only that the flexibility of the rules is more 
appropriate for such evidentiary matters.


                               Amendments

    1986--Subsec. (b)(1)(B). Pub. L. 99-554 inserted reference to 
chapter 12.
    1984--Subsec. (a). Pub. L. 98-353, Sec. 432(a), substituted ``or'' 
for ``and'' after ``in contemplation of''.
    Subsec. (b)(1). Pub. L. 98-353, Sec. 432(b), substituted ``estate'' 
for ``trustee''.


                    Effective Date of 1986 Amendment

    Amendment by Pub. L. 99-554 effective 30 days after Oct. 27, 1986, 
but not applicable to cases commenced under this title before that date, 
see section 302(a), (c)(1) 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.

                  Section Referred to in Other Sections

    This section is referred to in sections 330, 541 of this title.



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Note: For affordable legal assistance The Center For Debt Management highly recommends Standard Legal's Do-It-Yourself Bankruptcy Forms Software Kits. For credit repair services,
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For more bankruptcy help and bankruptcy alternatives, go to Bankruptcy Resources

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