As of December 1, 2017, there are several changes to the Federal Rules of Bankruptcy Procedure. A number of those changes will impact the Court’s procedures and, most importantly, the normal progression of Chapter 13 cases filed in the Central District of Illinois. This memorandum is intended to bring the most significant of those changes to the attention of practitioners in the Central District, but it is not exhaustive. All persons practicing before the Court are responsible for familiarizing themselves with the new Rules and Court procedures and taking the steps necessary to account for the changes in their own practices.
Amended Rule 3015 introduces the requirement that a form plan be used in all Chapter 13 cases, allowing the use of a local model plan form if certain conditions, as set forth in new Rule 3015.1, are met. Among the requirements listed in new Rule 3015.1 is the inclusion of an initial paragraph for the debtor to indicate whether the plan does or does not: “(1) contain any nonstandard provision; (2) limit the amount of a secured claim based on a valuation of the collateral for the claim; or (3) avoid a security interest or lien.” Local plan forms must also contain separate paragraphs for various substantive provisions, including one for “surrendering property that secures a claim with a request that the stay under §§362(a) and 1301(a) be terminated as to the surrendered collateral[,]” and a final paragraph for the placement of nonstandard provisions and a certification that the plan contains no nonstandard provisions other than those set out in such final paragraph. The Central District of Illinois has adopted a local model plan form. It is available on the Forms page of the Court’s website.
Amended Rule 3012 makes clear that requests to determine the amount of nonpriority, nongovernmental secured claims may be made in a Chapter 13 plan. Similarly, amended Rule 4003 incorporates the practice of the majority of courts allowing lien avoidance to be accomplished through plan confirmation. Plans including such provisions are subject to heightened service requirements and must be served on the claim holder or affected creditors according to Rule 7004. And, again, including such provisions requires the additional step of checking the appropriate box on the first page of the plan. Failure to serve a plan containing such provisions according to the requirements of Rule 7004 or to check the appropriate box on the first page of the plan will result in those provisions being ineffective.
Rule 3015(d), as amended, no longer requires that the plan be included in the notice of confirmation hearing. Instead, courts can simply serve the notice of the objection deadline and confirmation hearing and leave it to debtors to serve the plan itself. While the practice of this Court has been to have the Clerk serve both the notice and plan at its own expense, the amounts expended on sending numerous, and sometimes unnecessary, amended plans in a typical case have become unreasonable. As such, the Clerk will no longer distribute amended plans. The Clerk will still send the notice and plan for the original plan. But, for any amended plan, the debtor will be required to serve the amended plan in accordance with the Federal Rules of Bankruptcy Procedure and file proof of service. Such proof of service must specifically identify the parties served, the physical address where each party was served, and the method through which each party was served. Merely stating that parties were served “by electronic or regular mail” is not sufficient. A sample certificate of service form is available on the Forms page of the Court’s website. The Clerk will continue to send notices of the objection deadline and confirmation hearing on amended plans to all parties listed on the list of creditors (“mailing matrix”) filed by the debtor. If parties not listed on the mailing matrix are to receive the plan, then the debtor must also serve those parties with a copy of the notice of the objection or hearing date and file proof of service.
Generally, there is no need for the order confirming plan to refer to additional requests for relief that are embedded in the plan. For instance, amended Rule 3015(g) provides that “any determination made under Rule 3012 about the amount of a secured claim is binding on the holder of the claim, even if the holder files a contrary proof of claim or the debtor schedules that claim, and regardless of whether an objection to the claim has been filed . . . and . . . any request in the plan to terminate the stay imposed by §362(a), §1201(a), or §1301(a) is granted.” Amended Rule 5009, however, includes new subsection (d), which provides for the debtor in a Chapter 12 or 13 case to request entry of an order declaring a lien satisfied and released under the terms of a confirmed plan. The request must be made by motion and served on the holder of the claim and any other party designated by the Court as provided by Rule 7004.
Among the major changes, amended Rule 3002 sets the deadline for filing a proof of claim in Chapter 12 and Chapter 13 cases at 70 days after a petition is filed or a case is converted to Chapter 12 or 13. This deadline is significantly earlier than under the previous rule, which set a deadline of 90 days after the first meeting of creditors. As such, it is imperative that debtors and their attorneys take the time to create a complete list of creditors (“mailing matrix”) and file it with the petition because it will be used to send out notice of the commencement of the case. Likewise, given the abbreviated claim deadlines, great care must be taken to ensure that the required schedules, statements, plan, and other documents are accurate and timely filed.
The 70-day deadline for filing a proof of claim set by amended Rule 3002 also applies in voluntary Chapter 7 cases, but it is still subject to Rules 2002(e) and 3002(c)(5). Under Rule 2002(e), in Chapter 7 cases that appear to have no assets from which a dividend can be paid, the notice of the meeting of creditors may also include a notice of no dividend and statement that no proofs of claim need be filed unless further notice is given. And, if the trustee later notifies the court that payment of a dividend may be possible, Rule 3002(c)(5) requires at least 90 days’ notice of the date for filing proofs of claim. This Court has consistently treated Chapter 7 cases as no-asset cases when sending out notice of the meeting of creditors, thereby declining to set a deadline for filing proofs of claim unless requested by the trustee. The amendments to Rule 3002 will have no impact on this practice, and the Court will continue to treat all Chapter 7 cases as no-asset cases and will not set a proof-of-claim deadline unless requested by the trustee.
Amended Rule 3002 also includes a new provision allowing holders of a claim that is secured by a security interest in the debtor’s principal residence to file any attachments required by Rule 3001(c)(1) and (d) as a supplement to a timely filed claim within 120 days of the order for relief. See Fed. R. Bankr. P. 3002(c)(7)(B). To accommodate the rule change, the electronic proof of claims program (“ePOC”) will be enhanced to include a new event for filing supplemental documents as attachments. Claimants who wish to file supplemental documents required by Rule 3001(c)(1) and (d) after the initial claim is filed may file the supplements through ePOC. Alternatively, claimants with a CM/ECF login and password can file supplements to a claim through the Court’s CM/ECF system, which will then appear on the claims register as a supplement.