11 U.S.C. Section 521 - Debtor Duties Enumerated

What Is Section 521?

Section 521 is the master debtor-duty provision of the Bankruptcy Code. It catalogs the affirmative obligations every debtor undertakes by filing a petition. These duties run from the moment of filing through (in Chapters 13 and 11) the completion of plan payments and the entry of discharge.

The 2005 BAPCPA amendments substantially expanded Section 521, particularly with respect to document production, tax-return delivery, and consequences of noncompliance. Failure to comply with several of these duties triggers automatic case dismissal under Section 521(i), automatic stay termination under Section 362(h), or denial of discharge under Sections 727(a)(11) or 1328(g).

Schedules and Statement of Financial Affairs: Section 521(a)(1)

Section 521(a)(1) requires the debtor to file a list of creditors, a schedule of assets and liabilities, a schedule of current income and current expenditures, a statement of the debtor's financial affairs, copies of all payment advices received from any employer within 60 days before the petition date, a statement of the amount of monthly net income, and a statement disclosing any reasonably anticipated increase in income or expenditures over the 12 months following the petition date.

Bankruptcy Rule 1007 implements these requirements through specific Official Forms: Schedules A/B through J, the Statement of Financial Affairs (SOFA), and the means-test Forms 122A, 122B, or 122C as applicable. The filings are signed under penalty of perjury, with criminal exposure under 18 U.S.C. Sections 152 and 157 for knowingly false statements.

Under Section 521(i)(1), if an individual Chapter 7 or Chapter 13 debtor does not file all of the required information within 45 days after the petition date, the case is "automatically dismissed effective on the 46th day after the date of the filing of the petition," subject to limited extension or excusal provisions.

Statement of Intention: Section 521(a)(2)

Individual Chapter 7 debtors must file a statement of intention with respect to property securing consumer debts. The debtor must indicate whether the property will be retained or surrendered and, if retained, whether it will be claimed exempt, redeemed under Section 722, or reaffirmed under Section 524(c). The statement is due within 30 days after the petition date or by the date of the meeting of creditors, whichever is earlier, and the stated intention must be performed within 30 days after the first date set for the meeting of creditors.

Section 521(a)(6) provides a powerful enforcement mechanism: if the debtor fails to timely take the stated action with respect to personal property securing a purchase-money debt, the automatic stay terminates with respect to that property, and the property is no longer property of the estate.

Document Production: Section 521(a)(3)-(4) and 521(e)

The debtor must cooperate with the trustee as necessary to enable the trustee to perform the trustee's duties, must surrender to the trustee all property of the estate and any recorded information relating to property of the estate, and must provide documents that the trustee or U.S. Trustee requests.

Section 521(e)(2) requires the individual debtor to provide a copy of the federal income tax return for the most recent year for which a return was filed to the trustee not later than 7 days before the first date set for the meeting of creditors. Failure to comply, absent circumstances beyond the debtor's control, results in dismissal under Section 521(e)(2)(B).

A creditor may also request a copy of the return at any time, and the debtor must file the requested return with the court or provide a copy to the requesting creditor.

Tax Return Obligations: Section 521(f)-(g)

Section 521(f) imposes a continuing tax-return-delivery obligation through the life of an individual Chapter 7, 11, or 13 case. At the request of the court, U.S. Trustee, or any party in interest, the debtor must file with the court a copy of each federal income tax return required by the IRS and a copy of each amendment of any such return, plus any statement of income and expenditures during the tax year that the court requires.

Section 521(g) applies specifically to Chapter 13 debtors and Chapter 11 individual debtors and requires the filing of pre-petition tax returns. The debtor must file with the appropriate tax authorities all tax returns for taxable periods ending in the 4-year period before the petition date that have not been filed as of the petition date. Section 1308 imposes a related requirement specific to Chapter 13.

Post-Petition Financial-Management Course: Section 521(b) and the 727(a)(11) Bar

Section 521(b) requires the individual Chapter 7 debtor to file a certificate of credit counseling completion from the pre-petition briefing required by Section 109(h). Distinct from that pre-petition counseling, BAPCPA imposed a post-petition financial-management course as a discharge prerequisite.

Section 727(a)(11) provides that the court "shall grant the debtor a discharge, unless . . . after filing the petition, the debtor failed to complete an instructional course concerning personal financial management." The parallel Chapter 13 provision is Section 1328(g). Bankruptcy Rule 1007(b)(7) operationalizes the requirement by requiring the debtor to file a statement of completion (Official Form 423) within 60 days after the first date set for the meeting of creditors in a Chapter 7 case, or before the last plan payment in Chapter 13.

Failure to file the completion certificate is one of the most common reasons individual Chapter 7 cases close without discharge. The remedy is typically a motion to reopen the case under Section 350(b) and pay the reopening fee, file the certificate, and obtain entry of the previously withheld discharge.

Means-Test Information: Section 521(a)(1)(B)(iv)-(v)

Individual debtors must include with their schedules a statement of the amount of monthly net income, itemized to show how the amount is calculated, and a statement disclosing any reasonably anticipated increase in income or expenditures over the 12 months following the petition date. These figures feed into the Section 707(b) means-test calculation in Chapter 7 and into the projected-disposable-income analysis in Chapter 13.

Consequences of Noncompliance

The Code calibrates penalty to duty:

• Automatic dismissal: Section 521(i)(1) for missing schedules within 45 days; Section 521(e)(2)(B) for missing tax return.
• Automatic stay termination: Section 362(h) for failure to timely file statement of intention or perform stated intention as to consumer-debt collateral.
• Discharge denial or withholding: Section 727(a)(11) / 1328(g) for missing financial-management course; Section 727(a)(3)-(5) for concealment, destruction of records, false statements, or failure to explain loss of assets.
• Criminal exposure: 18 U.S.C. Sections 152 and 157 for knowingly false statements in schedules, SOFA, or related disclosures.

Related Bankruptcy Code Sections

• Section 109 - Debtor eligibility, including pre-petition credit counseling
• Section 341 - Meeting of creditors at which debtor testifies under oath
• Section 707 - Means test and dismissal of Chapter 7 case
• Section 727 - Chapter 7 discharge, including Section 727(a)(11) financial-management bar
• Section 1308 - Chapter 13 tax-return filing requirement
• Section 1328 - Chapter 13 discharge, including Section 1328(g) financial-management bar