In April 2017, the U.S. Supreme Court gave Congress a number of proposed amendments to the Federal Rules of Bankruptcy Procedure (FRBP). Congress approved those amendments, and they became effective on December 1, 2017.
Some of the advantages in the new amendments go to consumers who declare bankruptcy in Federal Court. The lending and banking attorneys at Rosenberg Martin Greenberg have reviewed these amendments and believe that they will have an even greater impact (both positive and negative) on the rights of our lending and banking clients to recover assets in Federal Bankruptcy legal actions.
Key Features of the Federal Bankruptcy Rule Amendments
The bulk of the amendments cover how forms are completed and claims are to be filed. Five of the amendments bear closer analysis:
- Amendments to FRBP Rule 2002 give creditors a 21-day notice period to file objections to confirmation of a Chapter 13 plan and a 28-day notice of any scheduled Chapter 13 confirmation hearing. This is a benefit for creditors, as the Rule previously provided for no such notices.
- Amendments to FRBP Rule 3002 have shortened the time for creditors to file proofs of claims. The amendments now give both secured and unsecured creditors only 70 days after the filing date of a Chapter 7, 12, or 13 Federal Bankruptcy case to file a proof of claims. They do add an opportunity to request a 60-day extension if the creditor can prove that it did not have enough time to file within the 70-day deadline. Further, the amendments include a two-phase deadline with an outer limit of 120 days for creditors to file claims against a debtor’s principal residence. These shortened time periods will impose an extra diligence obligation on creditors to file claims in a timely manner.
- Objections to claims under FRBP Rule 3007 now require a minimum 30-day notice to the creditor. The amendments to this rule also alter how service of an objection may be validly accomplished. This change is significant because it removes certain defenses to objections that creditors had previously relied upon.
- Amendments to FRBP Rule 312 address how the amount of a secured claim can be determined, and establish that once determined, the amount is binding on the creditor regardless of contrary proofs and objections. This amendment will have regional effects in jurisdictions where creditors are required to file objections to Chapter 12 or 12 bankruptcy plans.
- Amendments to FRBP Rule 3015 will also have regional effects in jurisdictions that have local “Confirmation of Plan” forms. The Rule now requires the use of an Official Form Model Chapter 13 Plan unless the local jurisdiction has opted out of the Model Form and has adopted its own Form.
Contact the Maryland Bankruptcy Lawyers at Rosenberg Martin Greenberg Today
The lending and banking attorneys at Rosenberg Martin Greenberg will closely watch the implementation of these Amendments, and will continue to advise their clients in Maryland, Delaware, and throughout the mid-Atlantic region on how to protect their interests in recovering assets to compensate for defaulted loans where the debtor has filed for bankruptcy protection in Federal Court.
If you have questions or would like more information about the new Federal Bankruptcy Rule changes, please contact us to speak with one of our bankruptcy attorneys.
Further Resources on the New Federal Bankruptcy Rules:
- United States Bankruptcy Court, Notice of Federal Rules of Bankruptcy Procedure Changes Effective December 1, 2017,
- National Law Review, New Bankruptcy Rules that Creditors Need to Know and Follow,