Bankruptcy Rule Changes Taking Effect This December

For many consumers who are struggling with debt, filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy can be a powerful tool to manage debt and to get a fresh start. For anyone who is considering bankruptcy, it is important to be aware of some changes to current bankruptcy law. Recent amendments to the Federal Rules of Bankruptcy Procedure will take effect on December 1, 2017. What do you need to know about these amendments and how they will impact personal bankruptcy cases?
Changes in the Rules for Proofs of Claim
When a debtor files for bankruptcy, any creditors who want to make a claims against the assets of the debtor’s estate need to file a proof of claim. In the proof of claim, the creditor needs to state the amount of money owed. Rule 3002 of the Bankruptcy Code was amended recently to change the date upon which creditors must file proofs of claim. Once the changes to the law take effect on December 1, creditors will need to file proofs of claim in most Chapter 7 bankruptcy and Chapter 13 bankruptcy cases no later than 70 days after the debtor files the bankruptcy petition or the date upon which the debtor converts her Chapter 7 case to a Chapter 13 case.
The bar date for proofs of claim limits the window a creditor has to file a proof of claim. Prior to the amendments, creditors typically 90 days instead of 70 days. In addition to the change in the date by which proofs of claim must be filed, amendments to Rule 3002 now require both secured and unsecured debtors in Chapter 13 cases to files proofs of claim in order to maintain a claim.
Given that changes to the rule mean that creditors generally have less time to file proofs of claim, the amendments do permit extensions for filing proofs of claim when the creditor did not have sufficient notice of the bankruptcy filing. However, bankruptcy courts typically cannot extend the deadline 60 days from the original deadline, and in doing so the bankruptcy court first will need to determine whether that debtor failed to notify the creditor in a timely manner, or that notice was mailed to the creditor outside the country, which contributed to the delay.
Bankruptcy Court can Determine Secured Claim Amount
Amendments to Rule 3012 and the Valuation of Security will change how the amount of a secured claim in Chapter 12 or Chapter 13 bankruptcy proceedings is determined. Specifically, under the revised law, debtors can request that the bankruptcy court make a determination about the amount of the secured claim. The determination of the secured claim amount made by the bankruptcy court will be binding on both the creditor and debtor, even if the creditor files a proof of claim for an alternate amount or if the debtor files a schedule that contains a different amount.
Seek Advice from an Oak Park Bankruptcy Lawyer
Do you have questions about how amendments to the Bankruptcy Rules could impact your case? You should discuss your situation with an Oak Park bankruptcy attorney today. Contact the Emerson Law Firm to learn more about how we assist debtors throughout the Chicago area.
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