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New bankruptcy rules clarify deadlines for creditors

New rules for consumer bankruptcies will apply to debtors in Massachusetts and nationwide effective Dec. 1, 2017. In April, the Chief Justice of the United States delivered a set of proposed amendments for review by lawmakers. The amendments intend to establish consistent deadline rules for creditors responding to bankruptcy filings.

One of the new rules specifically requires secured creditors to file a proof of claim within 70 days of bankruptcy filing date. Creditors, however, will get an additional 50 days for a total of 120 days after the original filing date to submit documentation of the secured debt, such as a note, mortgage or deed of trust. These deadlines represent a tightening of requirements on creditors. Other amendments grant courts the power to uphold the amounts of secured debts as determined by motions and objections concerning the bankruptcy plan. Court determinations will be binding upon creditors even if documentation submitted later indicates a different amount.

Standards will also be established for objecting to the confirmation of a bankruptcy plan. Specifically, a creditor intending to object to a plan confirmation must provide 21 days' notice by mail. This notice must also occur by mail 28 days before a confirmation hearing date. As a whole, the new amendments place rigorous standards upon creditors to prove their claims in a timely fashion.

Chapter 13 plans will have to be filed using a national model form unless the particular district in which the filing is being made has its own form. There are other provisions in the new regulations that could affect debtors and which an attorney can explain more detail.

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