Can a CH13 include a Solar Power Purchase Agreement (Not a Lease)?

[17CharleyCo]

I've searched and searched on whether a Solar Power Purchase Agreement, not a lease, can be part of my Ch 13. I've read through the "contract" language but haven't found any information on PPA's. I've only found info regarding leases. Anyone deal with this personally? TIA!

[justbroke]

It's probably what is known as an executory contract. You can reject (absolve) an executory contract in bankruptcy. They go on Schedule G (Leases/Executory Contracts).

I've never dealt with that type of contract (PPA) in my bankruptcy. What do you mean as "part of [your] Chapter 13"? Are you asking whether you can reject (get rid of) the contract or whether you can assume (keep) the contract?

You should be able to reject or assume the contract.

Edited to add: I did a "little" research specifically on power purchase contracts and found the following;

https://www.andrewskurth.com/insight...inBankrup.html
https://www.theswapreport.com/2013/0...r-protections/

[17CharleyCo]

The goal would be to get out of the contract all together.

[justbroke]

You should be able to reject the executory contract. They may be able to file an unsecured claim for anything contractually allowed at that point. If this is a significant contract ($$$) then please obtain at least a free consult with a local attorney to see if there are any issues in your area. I have rejected executory contracts before (cellular phone contracts, warranty contracts, etc), but never an energy purchase agreement contract.

I believe that your Chapter 13 Plan (of Reorganization) will need to specifically REJECT the contract in that plan. Some districts use a "model" plan and it should be in the model plan. If the district does not use a model plan or the model plan doesn't have a place for it, make sure your plan specifically rejects the contract. In our model plan, here in Florida, we have section 6 which allows us to specify the creditor, the property, and select assume or reject/surrender.

Since you are filing a Chapter 13 I'm suspecting that you'll use an attorney. Make sure you inform your attorney that you wish to reject this executory contract and discuss anything relevant.

[17CharleyCo]

Thank you very much for the explanation and input. I'm definitely going to seek an attorney as there are too many pitfalls for me to go at this alone. My biggest road block at the moment is to decide whether to file now, or wait til after I file my taxes. I should be receiving a refund of approximately 5k.

[justbroke]

You can use the refund to pay your attorney, which should cost $2,500-$3,500 (or more depending on the services provided). California has pretty good exemptions under their System II exemption scheme. Your attorney should be able to help you to protect your property and maybe some of your money leftover from your refund. If you file now and can't exempt the refund your Chapter 13 Plan may require you to surrender all refunds to the trustee. It's better to obtain the refund now and use it to pay for necessities, such as your attorney fees. Your attorney can explain it better for you.

Obtaining the refund later may not be in your best interest. I'd use it to pay for your necessities and attorney. Of course, talk to the attorney before you do anything I suggest. (wink)