New Federal Rules of Bankruptcy Procedure: Impact on Chapter 7, 12 and 13 Secured Creditors

Description

Significant changes to the federal bankruptcy rules went into effect Dec. 1, 2017, (approved by the Supreme Court earlier in the year). The bulk of the rules changes will affect Chapter 7, 12 and 13 cases, but certain filing requirements may apply to Chapter 11 cases as well.

Under amended Rule 3002 the time periods for filing and amending proofs of claim have been shortened, and now apply to both secured and unsecured creditors. The implications for secured creditors are enormous, as the failure to timely file a proof claim would bar a secured creditor from receiving a distribution under a confirmed bankruptcy plan.

New Rules 3012 and 3015 will permit a Chapter 12 or 13 plan to make determinations about the amount of a secured claim that are binding even if the claimholder files a contrary proof of claim, and regardless of whether the debtor has objected to the claim. These changes make it essential for counsel to review proposed plans early and confirm that they do not have any objections to a debtor’s valuation of the collateral.

The foregoing is only a partial description of the rule changes. Under 3015, bankruptcy courts must now use the official form for a Chapter 13 plan or adopt a local form that contains substantially the same information as the official form. Rules 9009, 3007 and 7001 have also been revised.

Listen as our authoritative panel reviews the various bankruptcy rule changes, and the procedural adjustments secured and unsecured creditors should make in navigating Chapter 7, 12 and 13 cases. The panel will also highlight rules changes that may impact claims procedures in Chapter 11 cases.