BANKRUPTCY PROPOSED NEW RULE

NEW PROPOSED BANKRUPTCY RULES moving ever forward.

The first bankruptcy proposed new rule is to shorten the Proof of Claim (POC) filing from 120 days to 60 days after the date of bankruptcy filing.   Remember, no POC means no money for the creditor.  This change would severely hamper creditors ability to manage the debt.  60 days is a short time frame to receive notice, process the notice, hire an attorney, if necessary, obtain current balances owed, obtain complete documentation, prepare the POC, and file the POC.  On top of all of this, the bankruptcy proposed new rule wants to change the form which will require a payment history on the loan or indebtedness back to the first date of the current default.  Such detail will delay the preparation time.   But there can be no delay when you have only 60 days.  Remember that the POC is signed subject to penalties of perjury.  The creditor makes an affirmative representation that the figures are true and accurate.  So rushing to meet the 60 day time frame and filing an incomplete form may subject the creditor to such penalties.    Creditors need to gear up as this proposal should go into effect this December.

The second proposal was to create a national Chapter 13 plan.  This would have eased the necessity of creditors who do business throughout the country from continuing to learn countless variations in plans. Would this bring clarity nationwide and sacrifice specific needs in each District?  Like ever thing else in the world a compromise proposal was discussed allowing each jurisdiction to either accept the national form or opt out and establish its own district plan.

Bottom line is that nothing was agreed on. Stay tuned.

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