Feedback Sought on National Form for Chapter 13 Plan

bankruptcychapter13signFeedback is being sought on a suggested mandatory national form for chapter 13 bankruptcy plans. The Advisory Committee on Bankruptcy Rules has created a working group to study the proposal and is holding a conference on January 18, 2013, to discuss current drafts of a plan form and bankruptcy rule amendments to implement the form.

  • January 18, 2013, 8:30 a.m. to 3 p.m.
  • Courtroom 2525 on the 25th floor
  • Everett M. Dirksen U.S. Courthouse
  • 219 S. Dearborn St., Chicago, IL

Seventeen representatives of several groups affected by the plan form and rule amendments: servicers, debtors, trustees, judges, and clerks, have been invited to join the rules committee and participate in the conference. The meeting is open to public observers.


Judge Wedoff

The goal is to finalize a proposal for consideration by the Rules Committee at its April 2-3, 2013, meeting, according to Committee ChairmanEugene R. Wedoff, Bankruptcy Judge for the Northern District of Illinois and chair of the Advisory Committee on Bankruptcy Rules. The proposed form and rules changes also would have to be approved by the Committee on Rules of Practice and Procedure, the Judicial Conference, the Supreme Court, and then Congress. The plan and rules would be published for six months public comment in August 2013 and go into effect December 1, 2014, if approved at each stage of the rules making process.

Form Plan Working Group: Hon. Eugene R. Wedoff, John Rao, Prof. Troy McKenzie, Prof. Elizabeth Gibson, Hon. Elizabeth Perris, Hon. Arthur Harris, Hon. Judith Wizmer and Ricardo Kilpatrick.

Send your comments, accolades or criticisms, and suggestions to the Form Plan Working Group by email to Prof. Troy McKenzie and/or Judge Eugene Wedoff.

January 18 Agenda

8:30 ‐ 8:45 Welcome and Introductions

8:45 – 10:30 Panel 1. The Draft Form Plan
Panelists: Glenn Stearns, Judge Rebecca B. Connelly, William E. Brewer, Jr., Mary Beth Ausbrooks, Kathy Huffman, Lawrence Friedman. Committee Liaison: John Rao.

ï‚· Is the plan organized in a logical manner?

ï‚· Is the length of the plan a concern?

ï‚· Does the plan omit provisions that are necessary or frequently used?

ï‚· Does the plan include provisions that are unnecessary or infrequently used?

ï‚· Does the plan give sufficient guidance as to its operation after confirmation?

ï‚· Does the plan appropriately emphasize areas that present key issues in the chapter 13 process?

 Will the plan work in both mortgage conduit and non‐conduit jurisdictions?

ï‚· Should the plan specify a different treatment of home mortgages and other secured claims if relief from the automatic stay is granted?

 Does the plan appropriately treat the inclusion of non‐standard provisions?

 Is it advisable to propose a form dealing with pre‐confirmation adequate protection payments? Is the proposed form suitable for this purpose?

10:45 – 12:00 Panel 2. Draft Rule Amendments I
Panelists: Debra Miller, Judge Deborah J. Saltzman, Tara Twomey, Alane Beckett, Ramona Elliott. Committee Liaison: Judge Arthur Harris.

ï‚· Draft Rule 3002(a) requires a secured creditor to file a proof of claim in order to have an allowed secured claim. Does this amendment present particular concerns?

 Draft Rule 3002(c) changes the deadline for filing proofs of claim in chapter 13 cases to 60 days after the petition date so that proofs of claim are filed before the confirmation hearing date established by Code § 1324(b). Is this amendment an improvement over the current rule?

 Several interrelated rule amendments would provide that the validity, amount, and treatment of a claim under the plan will control over a proof of claim. Draft Rule 3012, together with draft Rule 3015(g), provide that the plan may make a binding determination of the amount of an allowed secured claim, as well as the amount of a claim entitled to priority treatment, subject to ultimate resolution at the confirmation hearing. Draft Rule 3007, in turn, provides an exception to the need to file a claim objection if claim allowance is resolved under Rule 3012. Similarly, draft Rule 4003(d) makes clear that a plan may provide for avoidance of liens under Code § 522(f). And draft Rule 7001 makes clear that an adversary proceeding is not necessary to determine the validity, priority, or extent of a lien resolved through a plan. Do these amendments present particular concerns?

ï‚· If any proposed amendment raises particular concerns, what alternative would you suggest, and how would the suggested alternative impact the draft plan?

12:45‐ 2:00 Panel 3. Draft Rule Amendments II
Panelists: Kevin Anderson, Judge William Brown, John Colwell, Andrew Altenburg, Michael Bates. Committee Liaison: Judge Elizabeth Perris.

ï‚· Draft Rule 3015(c) requires the use of the official form plan in all chapter 13 cases. Draft Rule 9009 limits modification of official forms so designated, including the form chapter 13 plan. Are these amendments advisable?

ï‚· Draft Rule 5009 provides that a debtor may obtain an order declaring that a lien has been satisfied, and that the order will be effective as a release of the lien. This provision is intended to facilitate documentation for title purposes. Does this amendment present concerns with respect to the timing of the order? Are there other concerns raised by this amendment?

 Several draft rule amendments concern service and notice in chapter 13 cases. Draft Rule 3015(d) is intended to ensure that creditors receive a copy of the plan before confirmation. Draft Rule 3015(f) provides that objections to confirmation must be filed and served seven‐days prior to the confirmation hearing. Draft Rule 3015(h) deals with notice of a modification of the plan after confirmation. Do these provisions adequately provide for notice to interested parties?

 Some of the draft amendments require enhanced service. Draft Rule 3012 provides that a request to determine the amount of secured and priority claims under a plan must be served in accordance with Rule 7004’s requirements for adversary proceedings. Draft Rule 4003(d), which concerns a plan proposing lien avoidance under Code § 522(f), and draft Rule 5009 also require service in accordance with Rule 7004. Are these enhanced service provisions appropriate?

 Because draft Rule 3015(f) sets a seven‐day default deadline for objections to plan confirmation, current Rule 2002(b)(2) would effectively require that notice of the confirmation hearing be given at least 35 days before the hearing. Should the Rules Committee consider amending Rule 2002(b)(2) to provide either for 21 days’ notice of the deadline to file objections to confirmation or 35 days’ notice of the confirmation hearing?

ï‚· If any proposed amendment raises particular concerns, what alternative would you suggest, and how would the suggested alternative impact the draft plan?

2:15 ‐ 3:00 Open forum to raise and discuss issues not previously addressed or fully covered, including the value of a national form for chapter 13 plans.

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First published in Bankruptcy Law Network

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