Bankruptcy Creditors Beware
The Bankruptcy Rules Advisory Committee has recommended that certain amendments to the rules surrounding the procedures for filing proofs of claim and that they take effect on December 1, 2015.
Currently, Bankruptcy Rule 3002(c) states that in a Chapter 7 liquidation, a Chapter 12 family farmer’s debt adjustment, or a Chapter 13 individual debt adjustment case, a proof of claim is timely filed if it is filed not later than 90 days after the first date set for the meeting of creditors. The rule as written only requires unsecured creditors to file proofs of claim. This has caused some confusion about whether and when secured creditors must file claims.
The proposed amendment to Rule 3002(c) would change the calculation of the claims bar date to 60 days after the petition is filed in a voluntary Chapter 7 case, a Chapter 12 case, or a Chapter 13 case. Second, the proposed amendment to Rule 3002(a) would explicitly require for the first time that a secured creditor, as well as an unsecured creditor, to file a proof of claim in order to have an allowed claim. In the past, if the debtor listed you as a creditor, and did not list your debt as disputed, you would not have to file a claim to share in the Chapter 11 or 12 world. In the Chapter 13 world you always had to file to share in the “kitty”, and in a 7, the trustee will typically establish a date by which you must file after figuring out if there are any assets in the estate.
The logic behind the change is not unreasonable. If companies are to restructure efficiently and resume business, or liquidate and have creditors be returned some of their investments, faster and more succinct action by creditors seeking to retrieve their money is necessary. If you are a creditor and have counsel, they should be contacted earlier rather than later to ensure claims are filed timely and completely. If you don’t have counsel, my message is simple: file your claim fast.
If you are a banker, you might want to read this article by Michael Sevitz of USFN, a national not-for-profit association of law firms and trustee companies specializing in mortgage servicing matters: