Bankruptcy Rules Changed in December of 2011

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Federal Rules of Bankruptcy Procedure Changed

Most every year it is necessary to make changes to the set of rules that determine how bankruptcy cases proceed. These rules are formally call the Federal Rules of Bankruptcy Procedure. The newest bankruptcy rule changes took place this past December 1, 2011.

An advisory committee made up of federal judges, bankruptcy attorneys, and others annually identify rule issues that need to be addressed by Congress. This past year’s committee meeting resulted in seven amendments to the rules being amended that would affect various types of bankruptcy cases depending on the type of bankruptcy.

Rule Amendments for Individual Bankruptcy Cases

This blog will deal only with one new rule and two amendments for individual bankruptcy cases, and primarily how they might affect a Chapter 13 or Chapter 7 bankruptcy.

Amended Rule 3001(c) (2), is an amendment dealing with proofs of a claim made by a creditor. Penalties for non-compliance with this rule can include barring the creditor from presenting the omitted information in any contested matter, and an award of reasonable attorney’s fees and expenses. This added subdivision prescribes additional supporting information to be filed with a proof of claim when the filing debtor is an individual. They are:

  • The additional supporting information requires the creditor to provide an itemization of interest, fees, expenses, and other charges incurred by the debtor prior to the petition and included in the claim.

  • The creditor is to include a statement made as to the amount necessary to cure any default on a claim secured by interest in the debtor’s property before the petition was filed. The official Form “B10-Attachment A” must accompany the statement if the secured interest in the debtor’s property is the debtor’s principal place of residence.

  • An escrow statement must be included if one exists for the principal place of residence as of the petition date.

New Rule 3002.1, is a new rule related to any claims secured by the debtor’s principal place of residence in a Chapter 13 case in which the debtor is attempting to cure a default and maintain payments of a home mortgage over the course of the debtor’s plan.

The basic components of this new rule are that the rule requires the holder of the mortgage to notify the debtor, debtor’s counsel, and the trustee at least 21 days prior to the new mortgage payment, requires an itemized notice to be given within a 180 of any post-petition changes in fees, expenses and charges, and to fill our the proper paper in a timely fashion that will adhere to this rule. The rule allows for sanctions to be placed against the creditor in non-compliance.

Amended Rule 4004(b), is an amendment to allow a creditor with a basis for revocation under USC 727(d) to seek an extension of time to file an objection to a debtor’s discharge after the deadline for filing such has already expired.

The laws quoted in this article are not all inclusive nor intended to be used for legal advice. You need to consult with a bankruptcy attorney to get the full meanings of how these law changes might apply in your particular situation.

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