By Roger Cox *
Numerous amendments to the Federal Rules of Bankruptcy Procedure took effect December 1, 2017. While these appear to primarily affect consumer cases, some amendments generally affect all creditors, especially those with claims in cases filed under Chapter 7, 12, or 13.
Among those most directly affecting creditors are the following:
Proof of Claim Deadline. The Rule 3002(b) deadline for filing a proof of claim (sometimes called the “bar date”) in voluntary cases filed after December 1 should now run no later than 70 days after the filing. This specifically applies to voluntary Chapter 7, 12, or 13 cases. The old rule generally set a bar date 90 days after the date set for the Section 341 first meeting of creditors – this change significantly shortens the bar date in affected cases. (Note that involuntary Chapter 7 cases also feature a newly amended bar date.)
Chapter 11 not directly affected. Deadlines for filing claims in Chapter 11 cases were effectively unchanged. Creditors should note, however, that although the Bankruptcy Rules do not contemplate a specific bar date in Chapter 11, local court practice may vary from district to district, and bankruptcy courts are often requested to enter orders setting bar dates in Chapter 11 cases.
Secured Claims. Secured creditors are now required to file a proof of claim in order to have an allowed secured claim in the bankruptcy case. According to the amended Rule 3002(b), failure to file a claim will not, by itself, lead to the lien being deemed void. Thus, at least on the surface, it appears that a valid, perfected lien can still “ride through” most bankruptcy cases. But for a secured creditor to receive distributions from a bankruptcy estate, the better (required) course of action will be to file a proof of claim.
Claims Secured by Debtor’s Principal Residence. Amended Rule 3002(c)(7) provides that a proof of claim filed by the holder of a lien on the debtor’s principal residence (in effect, a home mortgage) is timely filed if the proof of claim, with the required attachments (see official forms 410 and 401A), and escrow analysis, if required, is filed no later than 70 days after the petition date; and any other attachments required by Rule 3001(c) & (d), such as the note, with any endorsement or allonge, deed of trust, etc., are filed as a supplement to the claim no later than 120 days after the petition date.
Determining Amount of Secured and Priority Claims. Amended Rule 3012 provides that courts may determine the amount of a secured claim by motion, claim objection, or under a Chapter 12 or 13 Plan. Generally, under amended Rule 3015(g) a confirmed Plan that provides for the amount of a secured claim will effectively trump a contrary proof of claim or the debtor’s schedules.
Official Form Chapter 13 Plan. Official Form 113 is a new form – Chapter 13 Plan for use nationwide. Local districts may, however, opt out, if a local form has been adopted that complies with new Bankruptcy Rule 3015.1. The Northern District of Texas, for example, has opted out and has adopted its own form.
More information about the amended rules and forms may be located at the following site: United States Courts: New Bankruptcy Form, Rules Take Effect
Additionally, the American Bankruptcy Institute and other organizations may have materials and commentary on the new rules.
*Roger Cox, a shareholder resident in Underwood’s Amarillo office, Mr. Cox is the author of Cox’s Texas Creditors Rights Laws Annotated (Thomson Reuters 2017), and a former contributor to the SMU Law Review. He is Board Certified in Business Bankruptcy Law, Commercial Real Estate Law, and Farm & Ranch Real Estate Law by the Texas Board of Legal Specialization. Underwood has offices in Amarillo, Austin, Fort Worth, Lubbock, and Pampa. This article is for general and academic information only and is not intended as legal advice or as a specific position asserted on behalf of any existing or future client of the firm.