Bankruptcy rule changes in the offing
Beginning on Dec. 1, Florida consumers who plan to file for Chapter 13 bankruptcy will be subject to new rules approved earlier this year by the Supreme Court. The upcoming changes have been contemplated and debated since the Obama administration and will be presented to Congress later this year for final approval and implementation. Although the rule amendments will mostly impact creditors, it is important for debtors to be aware of these changes if they are planning on filing a petition.
As the situation currently stands, creditors have 90 days to file a proof of claim after the meeting of creditors has been scheduled in the docket. Under the new rule, creditors will have 70 days to file this claim after they receive the order for relief, which is essentially when the initial bankruptcy filing is completed.
It is important to note that this shortened time frame does not mean that creditors will be shut out. Untimely filings will not void their right to file proofs of claim, and they will be allowed to file a 60-day extension if needed.
Another important change to Chapter 13 cases is that secured creditors such as mortgage lenders will have to file objections to the payment plan at least seven days before the notice of confirmation hearing. Objections that are filed late in consumer bankruptcy cases will not be considered, and this could work out to the debtor’s advantage if a motion to reduce property valuation has been previously filed. An lawyer who has consumer bankruptcy experience can provide further details on these changes.