New Chapter 13 Plan Form, Creditor Bankruptcy Rules Take Effect

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IL for www.theindianalawyer.com

New rules and procedures for individuals filing for bankruptcy under Chapter 13, and creditors certain bankruptcy cases will have less time to file proof of claims, federal courts announced.

Chapter 13 filers must use a new form that presents their payment plan in a more uniform and transparent manner. Creditors now will have less time to submit a proof of claim under the changes.

The new national Chapter 13 plan form will make it easier for creditors, lawyers and judges to ensure that all elements of a bankruptcy agreement reached under Chapter 13 comply with federal laws, the courts said. Chapter 13, sometimes known as the wage earner’s plan, enables qualified individual filers to reschedule and make debt payments, allowing them to keep their homes and other property.

Bankruptcy now must either use new national Bankruptcy Form 113, or create a locally adapted form that contains key elements of the national form. In recent months, courts have been updating electronic filing systems and notifying local bankruptcy lawyers and filers of the pending changes. Bankruptcy courts previously relied on local versions of Chapter 13 plans, which varied from district to district.

 Meanwhile, a new rule reduces from 90 to 70 days the deadline for creditors to submit a proof of claim in certain bankruptcy cases. The revision was contained in an amendment to Federal Rules of Bankruptcy Procedure 3002.
The new deadline will affect bankruptcies filed under Chapter 7, in which debtors liquidate assets; Chapter 12, which enables family farmers and fishermen to restructure their finances; and Chapter 13.
The Supreme Court transmitted the new rules regarding bankruptcy, as well as amendments to Appellate and Civil Rules of Procedure, and Rules of Evidence, to Congress. The new rules took effect Friday after Congress did not act to prevent their implementation.
The full list of the new rules, form amendments and the Current Rules of Practice and Procedure are available here.

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