If you’ve been researching bankruptcy rules and procedures but putting off the actual commitment, you only have a short time to file under the current rules.
On Dec. 1, 2017, some amendments to the federal bankruptcy procedure take effect, and they could have a significant impact on your bankruptcy if you wait until after that date to file.
Here are some of the changes you may need to know about, in plain language:
1. The official form that lays out the repayment plan for Chapter 13 bankruptcies has to conform to federal standards. Until the coming changes, local forms could be adopted. Now, local forms have to meet certain requirements — including making the forms easier to review by creditors.
2. Creditors will have less time to file proof of a secured claim. Under the new rules, creditors only have 70 days (with an added 50 to provide related documents). This is a major decrease from the four months creditors have now.
3. Any objection to a claim against the debtor has to be served through first-class mail and must provide 21 days notice. It also has to go directly to the person designated by the creditor on the proof of the claim. This gives creditors more control over where a debtor mails objections to claims. Any objections to a Chapter 13 plan’s confirmation must be filed seven days or more before the bankruptcy hearing.
4. The court will have more control over how much secured claims will be valued at, regardless of either the debtor’s or creditor’s objections or proofs once the value has been fixed. This means creditors have to be more vigilant about reviewing bankruptcy plans to see if they need to file an objection in a timely fashion.
These changes affect Chapter 13 bankruptcies the most — and put some burdens on creditors. However, they also make it easier for creditors to handle bankruptcies more efficiently.
If you’re planning on filing a personal bankruptcy, you need to make sure that you get good legal advice and are aware of the changes that impact you.
Source: Financial Services Perspectives, “New Bankruptcy Rules to Take Effect December 1, 2017,” Christopher L Hawkins, accessed Nov. 23, 2017