Albright v. Maumee Valley Credit Union (In re Albright)

Decision Date05 August 2016
Docket NumberCase No. 11-35802,Adv. Pro. No. 15-3067
Citation554 B.R. 832
PartiesIn re: Nick A. Albright, Mary A.F. Albright, Debtor(s). Nick A. Albright, Mary A.F. Albright, Plaintiff(s), v. Maumee Valley Credit Union, Defendant(s).
CourtU.S. Bankruptcy Court — Northern District of Ohio

Edward L. Snyder, Toledo, OH, for Plaintiff.

Howard B. Hershman, Toledo, OH, for Defendant.

John P. Gustafson
, United States Bankruptcy Judge

This case came before the court on cross-motions for summary judgment on Debtors' Complaint [Doc. # 1] filed by the Plaintiffs, Debtors Nick A. Albright and Mary A.F. Albright, and the Defendant, Maumee Valley Credit Union. [Doc. # # 13, 14]. The facts do not appear to be in dispute.

The Complaint was filed to determine the validity of a Reaffirmation Agreement that the Debtors entered into with Defendant Maumee Valley Credit Union (Credit Union) on a second mortgage. The Reaffirmation Agreement documents were timely filed, but there were two problems with the documents: 1) an obsolete form was used for the Reaffirmation Agreement; and 2) the Filer's Certification on the Reaffirmation Agreement Cover Sheet was not signed.

1. The Use Of An Obsolete Reaffirmation Agreement Form.

The parties spend some time on the issue of the use of an obsolete Reaffirmation Agreement form. Debtors point to Local Bankruptcy Rule 4008–1

. At the time the reaffirmation agreement in issue was filed, LBR 4008–1 stated: “All reaffirmation agreements filed with the Court pursuant to 11 U.S.C. § 524(c) shall conform to the most current Form B240A or Form B240A/B promulgated by the Administrative Office of the United States Courts. Copies of the most current forms are available from the Clerk.”1

The reason that the modification made to the Local Rules was merely “technical” was because it reflected a change in the way the Official Forms were numbered—moving from a three digit to a four digit system of numbering—and was not based on any substantive changes in the forms themselves.

Still, it appears that the form used by Defendant was not the current form in use at the time the Reaffirmation Agreement was filed on January 30, 2012, as required by Local Rule 4008–1


In response, Defendant Credit Union points to Federal Rule of Bankruptcy Procedure 9009

, which states that:

Except as otherwise provided in Rule 3016(d), the Official Forms prescribed by the Judicial Conference of the United States shall be observed and used with alterations as may be appropriate. Forms may be combined and their contents rearranged to permit economies in their use. The Director of the Administrative Office of the United States Courts may issue additional forms for use under the Code. The forms shall be construed to be consistent with these rules and the Code.

Defendant argues that the Bankruptcy Rules provide for use of the Official Forms “with alterations”, and also instruct that such forms be construed so as to be consistent with the Code. The Advisory Committee notes reflect that the use of the Official Forms has generally been held subject to a “rule of substantial compliance”. It should also be noted that the changes that were made to the reaffirmation agreement form have been described as deviating somewhat from the actual statutory requirements. See, Gomez v. Wells Fargo Bank, N.A. (In re Gomez), 473 B.R. 322, 325 (Bankr.W.D.Ark.2012)

( [T]he new form only generally complies with the provisions of § 524(c)(2) and (k) but appears to be written to make it easier to understand.”).

Both parties discuss the decision in In re Orrison, 343 B.R. 906 (Bankr.N.D.Ind.2006)

which involved an altered Petition form, which interfered with administrative efficiency and was required to be replaced by the court. In this case, the Reaffirmation Agreement form that was used was an old version of the Official Form B240. There was no intervening change in the law, and the changes that were made to the form in 2011 were “to make it easier to understand.” Gomez, 473 B.R. at 325. While Local Bankruptcy Rule 4008–1 clearly requires that reaffirmation agreements “shall conform to the most current” Official Forms, there is flexibility in the information that can be (and should be) included in a reaffirmation agreement. Further, the requirements for what must be in a reaffirmation agreement are set forth in Section 524 of the Bankruptcy Code, and Federal Rule of Bankruptcy Procedure 9029 limits what courts can do in enacting local rules. See,

Suggs v. Regency Fin. Corp. (In re Suggs), 377 B.R. 198, 205–206 (8th Cir. BAP 2007)


McGowan v. Ries (In re McGowan), 226 B.R. 13, 19 (8th Cir. BAP 1998) (“A local rule may only be upheld if: (a) it is consistent with the Bankruptcy Code in that it does not ‘abridge, enlarge, or modify any substantive right,’ as required by 28 U.S.C. § 2075 ; and (b) it is ‘a matter of procedure not inconsistent with’ the Bankruptcy Rules as required by Bankruptcy Rule 9029


While the parties have made several arguments related to “Official Forms”, those arguments are not directly applicable here. The Reaffirmation Agreement form is not actually an “Official Form”. Instead, it is a “Director's Bankruptcy Form”2 (or “Director's Procedural Form”3 or “Director's Form”). See, In re Binion, 2006 WL 2668464 at *2, 2006 Bankr.LEXIS 2372 at *5 (Bankr.N.D.Ohio Sept. 15, 2006)

. These “additional forms” are authorized to be issued by the Director of the Administrative Office of the United States Courts by Federal Rule of Bankruptcy Procedure 9009 :

The Director of the Administrative Office of the United States Courts may issue additional forms for use under the Code. The forms shall be construed to be consistent with these rules and the Code.

See also, In re Smith, 2015 WL 2452946 at *1 n. 1, 2015 Bankr. LEXIS 1716 at *3 n. 1 (Bankr.D.Kan. May 19, 2015)


The reason the numbering for the Reaffirmation Agreement form was changed to a four digit number is because that is the new numbering protocol for “Director's Bankruptcy Forms”. Generally, the use of “Director's Forms” is not mandatory. See, In re Rogers, 2015 WL 1515203 at *7, 2015 Bankr. LEXIS 981 at **16–17 (Bankr.S.D.Ga. March 30, 2015)

; In re Gross, 2009 WL 2882828 at *4 n. 6, 2009 Bankr. LEXIS 2761 at *12 n. 6 (Bankr.E.D.Va. Aug. 28, 2009) ; In re Binion, 2006 WL 2668464 at *2, 2006 Bankr. LEXIS 2372 at *5 (Bankr.N.D.Ohio Sept. 15, 2006).

In 2006, an unpublished bankruptcy court decision addressed the issue of whether the bankruptcy court could enforce an administrative order4 , requiring the use of the Director's Procedural Form for reaffirmation agreements. In that decision, citing 28 U.S.C. Section 2075

, 11 U.S.C. Section 105(a) and Federal Rules of Bankruptcy Procedure 9009 and 9029, the court held that requiring the use of the “Director's Procedural Form” through a General Order was an appropriate use of the court's power to prescribe practice and procedures, and manage its docket. In re Binion, 2006 WL 2668464 at *2, 2006 Bankr. LEXIS 2372 at *5 (Bankr.N.D.Ohio Sept. 15, 2006).

The attorney for the creditor in Binion

had argued that the reaffirmation form he had drafted was better, and more compliant with the requirements of § 524 than the Director's Procedural Form. Therefore, he asserted, the use of the creditor's reaffirmation form should be permitted. In rejecting this argument, the Binion court cited the need for administrative efficiency in judicial review of reaffirmation agreements, and the court's power to “regulate practice”. Accordingly, the Binion decision denied the motion for approval of the nonconforming reaffirmation agreement. In re Binion, 2006 WL 2668464 at *5, 2006 Bankr. LEXIS 2372 at *16 (Bankr.N.D.Ohio Sept. 15, 2006) ; see also,

In re Lee, 356 B.R. 177, 179 (Bankr.N.D.W.Va.2006) (use of old form resulted in notice of deficiency and order declaring reaffirmation agreement to be defective and unenforceable based on absence of information required by § 524(k) and (m)


Today, it is the language of Local Bankruptcy Rule 4008–1

that requires parties to use the most current version of “Form B240A or Form B240A/B”. Credit Union points to Local Bankruptcy Rule 1001–1(a), which states: “Nothing in these Rules shall be construed in a manner inconsistent with the Federal Rules of Bankruptcy Procedure.” The Credit Union argues that the forms used were in substantial compliance with the Bankruptcy Rules and were: 1) accepted for filing; and, 2) legally sufficient to support the reaffirmation of the debt.

The first point, regarding acceptance for filing, misses the mark because bankruptcy clerks are prohibited from refusing “to accept for filing any paper presented for that purpose solely because it is not presented in proper form as required by these rules or any local rules or practices.” See, New Boston Dev. Co. v. Toler (In re Toler), 999 F.2d 140 (6th Cir.1993)

; Shuler v. Garrett, 715 F.3d 185 (6th Cir.2013) (applying the same rule to electronic filing).

However, the fact that no filing deficiency or show cause order was issued does demonstrate that, unlike the form filed in Binion,

the reaffirmation form submitted in this case did not affect the administrative efficiency of the court—the minor differences in the form were not detected by the Clerk's Office or the court.

The second point made by the Credit Union hits closer to the mark. In terms of meeting the requirements of the Bankruptcy Code, the Reaffirmation Agreement form was legally sufficient for purposes of satisfying the statutory requirements of § 524

when it was issued by the Director of the Administrative Office in 2009. Because there were no intervening changes made in the text of § 524 between 2009 and 2011, the “obsolete” form would continue to meet the statutory requirements.

The requirements of § 524(c) and (d)

“grew out of a long history of coercive and deceptive actions by creditors” and...

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  • In re Jenkins, Case No. 17-30753
    • United States
    • U.S. Bankruptcy Court — Southern District of Ohio
    • September 26, 2017
    ...reaffirmationagreements as the product of fully voluntary negotiations by all parties."); Albright v. Maumee Valley Credit Union (In re Albright), 554 B.R. 832, 837 (Bankr. N.D. Ohio 2016) (noting that state contract law applies to reaffirmation agreements and enforcing a reaffirmation agre......

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