December 1 Changes to Bankruptcy Rules, Forms, and Fees

This article reviews four amendments to the bankruptcy rules, a number of changes to the bankruptcy forms, and filing fee and other fee increases that all took effect on December 1, 2020. One of the rule changes has the potential for cost savings for debtors and their attorneys in chapter 13 cases. Also of note, filing fees for chapter 7 and 13 cases increased modestly.

All of these changes are reflected in a digital update to NCLC’s Consumer Bankruptcy Law and Practice—the rules are updated in Appendix B, the fee schedule changes in Appendix C, Official Forms revisions in Appendix D, and the Director’s Forms in Appendix E.

Consumer Bankruptcy Law and Practice is a comprehensive practice package also including:

• Appendix A, an up-to-date reprint of all federal bankruptcy statutes affecting consumer bankruptcies, including the Code with 2019 dollar changes;
• Appendix F, a client bankruptcy questionnaire, also available in Word format in English and Spanish;
• Appendix G, 183 sample pleadings, also available in Word format;
• Appendix H, explaining the included date calculator, including forms and an explanation on obtaining tax returns from the IRS, and providing other practice tools;
• Appendix I, current means test data;
• Appendix J, a 50 state summary of state exemption laws;
• Appendix K, a number of client handouts.

For almost 40 years Consumer Bankruptcy Law and Practice, comprised of eighteen chapters and now in its 2020 Twelfth Edition, has been recognized as the definitive consumer bankruptcy treatise, and also includes a special chapter on consumers as creditors in a business’ bankruptcy.

Modest Filing Fee Increases

The Judicial Conference approved adjustments to the Bankruptcy Court Miscellaneous Fee Schedule, effective December 1, 2020. One change will result in a small increase in the fee for filing a chapter 7, 12, and 13 case. A portion of the total filing fee is the administrative fee assessed when every bankruptcy case is filed. The new administrative fee will be $78, an increase of $3. Thus, the total new filing fees has changed as follows:

• For filing a chapter 7 petition, the $335 filing fee is now $338;
• For filing a chapter 12 petition, the $275 filing fee is now $278;
• For filing a chapter 13 petition, the $310 filing fee is now $313.

Other changes to the fee schedule that affect consumer cases are:

• For filing an amendment to the debtor’s schedules, the $31 filing fee increases to $32;
• For filing a motion to redact, the $25 filing fee increases to $26;
• For reproduction of an audio recording of a court proceeding, the $31 filing fee increases to $32;
• For filing of certain motions (to terminate the automatic stay; to compel abandonment of estate property; to withdraw the reference; to sell estate property free and clear of liens under section 363(f)), the $181 filing fee increases to $188.

Changes as to Notice to Creditors Who File Timely Claims: Rule 2002(h)

A Bankruptcy Rule 2002(h) change may help debtors and their attorneys save on who must receive notices in chapter 13 cases. Unlike the initial plan, the burden and cost of mailing motions to modify and copies of amended plans on interested parties in many districts falls upon debtors rather than the court clerk. In cases in which there are many creditors and there have been multiple plan modifications, the cost of mailing such notice on creditors who have not filed timely claims can be substantial. If the Rule 2002(h) amendment is implemented by courts, it could save significant time and money for debtors and their attorneys in some cases.

Bankruptcy Rule 2002(h) deals with notices that are mailed to creditors who have filed a timely proof of claim in a bankruptcy case. The rule had previously provided that only for chapter 7 cases some notices do not need to be mailed to creditors who fail to file a proof of claim before the bar date. The bar date for creditors other than governmental units is generally not later than 70 days after the case is filed. The new rule amendment now makes this possible not only for chapter 7, but also in chapter 12 and 13 cases.

Bankruptcy Rule 2002(h) is amended, effective December 1, to provide that after 70 days following the filing of a chapter 7, 12, or 13 case, or the date of the order converting the case to chapter 12 or chapter 13, the court may direct that all notices required by Rule 2002(a) be mailed only to the debtor, the trustee, all indenture trustees, creditors that hold claims for which proofs of claim have been filed, and creditors that are still permitted to file claims because an extension was granted under Rule 3002(c)(1) or (c)(2). This means that certain notices of events in a case that occur after the bar date may no longer be required to be sent to nongovernmental creditors who have not filed a timely proof of claim (or not been granted an extension to file a claim).

Importantly, this rule change requires action by the court to be implemented. The amended language in Rule 2002(h) states that the “court may direct that all notices required by” Rule 2002(a) be mailed only to the parties discussed above. Without an order from the court directing this notice, all creditors, even those who have not filed timely claims, must continue to be mailed any notice required by Rule 2002(a). The most efficient way to implement the change will be for courts to adopt a local court rule or enter a standing order that will apply in all chapter 13 cases, rather than direct such notice in individual cases. Attorneys who are active on local rules committees should urge their courts to take this action.

In a chapter 13 case, the most common notices required by Rule 2002(a) that would be mailed after the claim filing bar date are the notice of the time for filing objections to a proposed plan modification and notice of the time fixed for filing objections to confirmation of a chapter 13 plan. These notices no longer need to be provided to a creditor who has not filed a timely claim, if the court so directs.

The question arises whether the debtor must still serve a motion to modify the plan and a copy of the amended plan on creditors who have not filed a timely claim. A separate rule, Rule 3015(h), generally governs plan modifications. It provides that notice shall be given by mail to all creditors of the time fixed for filing objections, and if an objection is filed, the hearing to consider a proposed plan modification. A copy of the proposed modification (or a summary of it) must be included with the notice. This notice of a proposed plan modification is the notice also described in Rule 2002(a).

While it would have been helpful if the amendment to Rule 2002(h) avoided any ambiguity by referring to Rule 3015(h), it would seem that the more specific language in Rule 2002(h) as to notice to creditors whose claims are filed should control. Moreover, Rule 3015(h) gives a court authority to direct that the clerk or debtor do not need to serve the notice of a proposed modification and amended plan on “creditors who are not affected by the proposed modification.” This should arguably include creditors who have not timely filed a proof of claim, since they are not able to receive distributions under the plan. Thus, courts who implement the amendment to Rule 2002(h) should also direct in the same local rule or standing order that motions to modify and copies of an amended plan do not need to be mailed to creditors who have not filed a timely claim.

A Changed Notice of Plan Confirmation Order: Rule 2002(f)

Rule 2002(f) provides that the clerk (or some other person the court directs) shall give the debtor, all creditors, and indenture trustees notice by mail of the entry of an order confirming a chapter 9, 11, or 12 plan. Oddly, this rule did not apply to chapter 13 cases. That changes on December 1, as Rule 2002(f) is amended to add a reference to a chapter 13 plan, thereby requiring that a chapter 13 plan confirmation order be mailed to interested parties.

It should be noted, in light of the change to Rule 2002(h) described above, that a creditor who has not filed a timely claim and therefore may not receive notice of plan modifications will nevertheless be given notice of any order confirming a chapter 13 plan. This will help ensure compliance with a plan confirmation order as such creditors are bound by the terms of a confirmed plan.

Changes Regarding Examinations by Parties in Interest; Rule 2004

Bankruptcy Code § 343 provides for examination of the debtor at the meeting of creditors. Bankruptcy Rule 2004 goes beyond this and allows the examination of any entity on motion of any party in interest, as well as the production of documents. While such examinations are not often conducted by the debtor in consumer cases, they can be done by debtors to assist in discovery of claims against creditors. See NCLC’s Consumer Bankruptcy Law and Practice § 8.3.16.2 and § 18.5.8.

Rule 2004(c) provides that a motion under Rule 2004 can be used to compel the attendance of an entity for examination and for the production of documents. Recognizing that information now commonly exists in electronic form, Rule 2004(c) is amended to specifically refer to the production of documents or “electronically stored information.”

Rule 2004(c) is also amended to make the rule’s subpoena provision consistent with the current version of Fed. R. Civ. P. 45, which Bankruptcy Rule 9016 makes applicable in bankruptcy cases. Rule 2004(c) is amended to provide that an attorney may issue and sign a subpoena on behalf of the court where the case is pending if the attorney is admitted to practice in that court. Previously the rule permitted an attorney admitted in the district in which the examination was to be held to issue the subpoena. The Advisory Committee Note describes the change as follows:

Under Rule 45, a subpoena always issues from the court where the action is pending, even for a deposition in another district, and an attorney admitted to practice in the issuing court may issue and sign it. In light of this procedure, a subpoena for a Rule 2004 examination is now properly issued from the court where the bankruptcy case is pending and by an attorney authorized to practice in that court, even if the examination is to occur in another district.

Changes to the Disclosure Statement in Appeals: Rule 8012

Rule 8012 is one of the part VIII rules that deal with disclosure statements in bankruptcy appeals. This rule is amended to make it conform to recent amendments to Fed. R. App. P. 26.1. Rule 8012(a) is amended to apply to nongovernmental corporations that seek to intervene in an appeal. A new subdivision, Rule 8012(b), is added to require disclosure of the name of all of the debtors in the bankruptcy case, as the names of the debtors are not always included in the case caption of appeals. It also requires that corporate debtors disclose the same information required to be disclosed under Rule 8012(a). Rule 8012(c) (previously subdivision (b)), now applies to all the disclosure requirements in Rule 8012.

Several minor changes were made to other appellate rules, Rules 8013, 8015, and 8021. These changes are intended to make these rules consistent with previous amendments to related rules.

Form Changes Effective on October 1 and December 1, 2020

Effective October 1, 2020, technical changes were made to correct a link in Official Forms 309A–309I, which are the notices sent to parties in interest at the commencement of a bankruptcy case. A change was also made to the instructions for Official Form 410A, which is the Mortgage Proof of Claim Attachment.

Effective December 1, 2020, several of the Director’s Forms of the Administrative Office of the U.S. Courts will be updated to reflect the increase in administrative fees on the Bankruptcy Court Miscellaneous Fee Schedule. As discussed above, the increase in the administrative fee results in a $3 increase in the fee for filing a chapter 7 or 13 case. The changes were made to Director’s Forms 1320, 2000, 2010, and the instructions to Director’s Form 1310.