Changes to Bankruptcy Rules Effective December 1

I. BANKRUPTCY CLAIMS DEADLINE SHORTENED 

A number of amendments to the Federal Rules of Bankruptcy Procedure go into effect on December 1, 2017. One amendment shortens the deadline for filing a proof of claim in voluntary Chapter 7, 12 and 13 bankruptcies. Rule 3002(c) currently provides that the deadline for filing claims is 90 days from the date first set for the first meeting of creditors under § 341(a). Effective December 1, 2017, Rule 3002(c) is amended to provide that the deadline for filing claims in voluntary bankruptcies under Chapters 7, 12 and 13 is 70 days from the date the bankruptcy petition is filed. This shortens the claims deadline by about two months. In the future, creditors will need to move more quickly in filing claims in voluntary Chapter 7, 12 and 13 bankruptcies.

II. SECURED CREDITORS MUST FILE CLAIMS TO SHARE IN DISTRIBUTIONS FROM BANKRUPTCY ESTATE

A second amendment revises Rule 3002(a) to require secured creditors to file a proof of claim in all cases (not just voluntary Chapter 7, 12 and 13 cases) in order to share in any distribution from the estate. A secured creditor who fails to file a proof of claim will retain its lien, but will otherwise not be entitled to a distribution from the estate. This change will be particularly important for secured creditors whose claims are undersecured, since failure to file a proof of claim will preclude such creditors from receiving any payment on the unsecured portion of their claims. In the past, most bankruptcy attorneys have recommended that, except in some unique circumstances, secured creditors always file a proof of claim, even though not always required to do so. In the future, this advice will be even more important.