2012 Brings Changes to the Federal Rules of Bankruptcy Procedure
Bankruptcy rules will be changing dramatically in 2012. Effective December 1, 2011, the Federal Rules of Bankruptcy Procedure (FRBP) that govern filing a proof of claim have changed significantly.
If you thought the filing of a proof of claim in a bankruptcy proceeding was a trivial task, recent changes to the FRBP have made what once seemed like a simple undertaking into a minefield of potential liabilities to a creditor.
Below is a brief overview of the recent amendments. A complete summary of the rule changes is available here.
FRBP 3001 - Amended to increase the types of information required to be attached to a proof of claim. While Rule 3001 has always required a creditor produce a writing to support its claim, now a creditor must also attach information relative to the principal, interest, fees, and any other expenses incurred pre-petition - including arrearages.
- 3001(C)(2)(A) - now requires an itemized statement.
- 3001(C)(2)(B) - requires a statement of the amount needed to cure any arrearages or defaults,
- 3001(C)(2)(C) - applies if a security interest is claimed in the debtor's principal residence.
- 3001(C)(2)(D) - if the creditor fails to provide the information and documents requested, Rule 3001(c)(2)(D) now provides for sanctions against the creditor.
FRBP 3002.1 – This is a brand new rule that applies to proofs of claims filed in Chapter 13 cases only and to claims secured by the debtor's principal residence. Rule 3002.1 also deals with the finality of Chapter 13 cases and curing any discrepancies in final cure payments. Most significant in the amendments are the new provisions that may award sanctions for non-compliance with the new rules.
- 3002.1(B) - a creditor secured by the debtor's principal residence is required to "file and serve on the debtor, debtor's counsel, and the trustee a notice of any change in the payment amount.
- 3002.1(C) AND (D) - requires the creditor file and serve on the debtor, debtor's counsel, and the trustee a notice "itemizing all fees, expenses, or other charges. Part D requires that this notice be prepared on the official form known as B10S2 "Supplement 2" and is entitled "Notice of Postpetition Mortgage Fees, Expenses, and Charges."
- 3002.1(F) AND (G) - relates to the duties of the Trustee at the end of the debtor's Chapter 13 case. Rule 3002.1(f) requires the trustee serve on the creditor, the debtor, and the debtor's counsel a notice stating "that the debtor has paid in full the amount required to cure any default on the claim."
- 3002.1(I) - contains a sanctions provision for noncompliance.
Official Proof of Claim Form – Form 10 – In addition to the amendments and additions to the proof of claim rules, the official claim form 10 has been modified. Click here to read more about the most significant amendments.
While the changes may seem daunting, keep in mind the amendments to Rule 3001(c) are for individual debtor cases only. Moreover, in regard to Rule 3001(c)(2)(C) if the security interest is in the debtor's principal residence, the new official form must be filed with the proof of claim, along with an escrow account statement if applicable.
The new Rule 3002.1 applies to Chapter 13 cases only with claims that are (1) secured by a security interest in the debtor's principal residence; and (2) provided for under Section 1322(b)(5) of the Code and the debtor's plan. Most notable of the new rules is that they now provide for sanctions for non-compliance.
Finally, the new proof of claim form is to be used in all cases filed under the Bankruptcy Code.
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Learn more about these amendments and new requirements here.