Procedures for Filing Bankruptcy Claims Changed Today! Read. Learn. Be Prepared.

Details matter.  After years of procedural wrangling, significant changes to the federal procedural rules take effect today.  While the changes are focused principally on streamlining procedures in consumer cases, they include provisions – such as a requirement that secured creditors file proofs of claim – that impact all cases.  Here’s a run through of some key points.  You can find the full text of the amendments here.

Proofs of Claims: Secured Creditors Beware!

  • Secured creditors must now file proofs of claim to have their claims allowed. Although in accordance with Section 506(d), if they don’t, their liens will not be rendered void for only that reason. FRBP 3002(a).

Claim Objections: Who to Serve, Whether to Have a Hearing, Where to Object

  • To object to a claim, you must serve the affected creditor by 1st class mail directed to the name and address on its filed claim form.
  • The Court no longer needs to schedule or hold a hearing on every claim objection.
  • Any party-in-interest may seek a determination of the amount and priority of any claim. Plan proponents in Chapter 12 and 13 may now include these objections in the body of a Plan.  FRBP 3007 & 3012.

Objecting to Liens or Transfers? File a Motion or Put It in a Chapter 13 Plan

  • Parties may now seek to avoid a lien or other transfer of the debtor’s exempt property by motion or in the debtor’s Chapter 13 Plan. FRBP 3012 & 4003(d).

Claim Bar Dates: Time It Right in Chapter 7, 12, and 13

  • Filing a claim in a voluntary Chapter 7 (liquidation), 12 (family farmer), or 13 (individual debt readjustment) case?  You must now file your claim within 70 days after the bankruptcy petition filing date.  For involuntary Chapter 7 cases, you have until 90-days after the order for relief is entered. FRBP 3002.
  • If a case converts to Chapter 7 or 13, the new, 70-day period will run from the date of the order converting the case. If it converts to Chapter 7, a new claims filing deadline starts running.  FRBP 3002.
  • The Court may extend these deadlines if the debtor has not filed a complete list of creditors. FRBP 3002(c)(6).
  • And a new 2-stage deadline is created for filing mortgage claims secured by an interest in the debtor’s principal residence. FRBP 3002(c)(7).

Chapter 13 Plans & Confirmation: Use the Form, Know Your Deadlines

  • An “official,” standardized Chapter 13 plan is created… unless your jurisdiction has adopted its own (consistent) local form.  FRBP 3015(c).
  • A debtor must provide creditors with at least 21 days’ notice of the deadline for objecting to Chapter 13 Plans and 28 days’ notice of the confirmation hearing in Chapter 13 cases. FRBP 2002(a)(9) and (b)(3).

Mette K.

Rule Changes for the Central District of CA: New Signature Requirements

Effective tomorrow, the Bankruptcy Court for the Central District of California has implemented a significant change in its signature requirements for documents filed through CM/ECF.

Documents requiring the signature of a debtor or any other party (with the exception of registered CM/ECF filers) must bear a holographic signature.  And the familiar Electronic Filing Declaration will no longer be accepted.  

Legal nerds and insomniacs can click on the following links to view the changes:

A complete list of new, revised, and retired local rules and forms for the Central District of California, effective as of December 1, 2017, can be found here.  Local forms are available here.  The changes include the following:

  • LBR 1002-1(f)): deleted and superseded by new LBR 9011-1.
  • LBR 1017-2(f): amended to specify that the Court retains jurisdiction in dismissed cases to enforce issues listed in LBR 1017-2(f).
  • LBR 3015-1: the national rules addressing chapter 13 were updated, effective 12/1/17, which necessitated a comprehensive update to this LBR.  Amendments also encourage uniformity and clarity in chapter 13 practice.
  • LBR 3020-1: amended to clarify the requirement for certain language to be included in a Chapter 13 plan confirmation order and specify the effect of conversion from Chapter 11 to Chapter 7.
  • LBR 7055-1(b): amended to reflect a change in the renumbering of 50 U.S.C. Chapter 50.
  • LBR 7064-1: amended to specify that bankruptcy evictions are handled by the U.S. Marshals Service and the exact language to be included in an eviction order.
  • LBR 7067-1: amended to reflect changes in the national registry fund fee structure and add a requirement to use a local form order.
  • LBR 9011-1: new LBR specifies signature requirements for electronically filed documents.

Mette K.