Proposed Changes to Proof of Claim Procedure Require Mortgagees to Provide More Information in Less Time
On August 15, 2014, the Judicial Conference Advisory Committee on Rules of Practice and Procedure published a preliminary draft of proposed amendments to the Federal Rules of Bankruptcy Procedure and Official Forms. If adopted, several of the amendments will have a noticeable effect on mortgagees.
First, the Committee’s proposed amendment to Rule 3002(c) would reduce the time within which a creditor must file its proof of claim from 90 days after the first date set for the meeting of creditors under § 341(a) of the Bankruptcy Code (generally about 120 days after a case is commenced) to 60 days after the order for relief or the date of the order of conversion to a case under chapter 12 or 13 and 90 days from entry of an order for relief in the case of an involuntary filing under chapter 7.
Subsection 7 of amended Rule 3002(c) would provide a qualification to the general rule to allow the holder of a claim secured by the debtor’s principal residence who has filed a proof of claim and the attachments required by Rule 3001(c)(2) within 60 days after the entry of an order for relief an additional 60 days to file any attachments required by Rule 3001(c)(1) and (d) as a supplement to its claim. Significantly, this qualification, which is likely intended to benefit the holder of a claim secured by a debtor’s principal residence, has the opposite effect in an involuntary case where it actually reduces the time within which such holder must file its claim from 90 to 60 days after the entry of the order for relief.
Next, the Committee proposes a new proof-of-claim attachment form for claims secured by mortgages on a debtor’s principal residence, which form would now require the creditor to provide a full loan payment history from the first date of default. This more detailed attachment must be completed and filed along with the original proof of claim within the new, shortened 60-day deadline.
These proposed amendments follow the Advisory Committee’s earlier draft of a number of these proposed amendments was published by the Advisory Committee last year, which elicited substantial feedback. The Advisory Committee will nevertheless consider anew public comments from the bench, bar and general public on the proposed amendments submitted on or before Tuesday, February 17, 2015, at 11:59 p.m. and may choose to discard, revise or transmit any of the proposals as contemplated to the Judicial Conference’s Committee on Rules of Practice and Procedure for consideration.