Bankruptcy Law News

Amendments to Federal Bankruptcy Rules Effective Dec. 1

Nov. 30, 2018, 10:20 PM

A change in how district courts handle bankruptcy appeals in cases in which judges decide the bankruptcy court lacked proper authority to make a final ruling is among a host of amendments to the Federal Rules of Bankruptcy Procedure scheduled to go into effect Dec. 1.

Chief Justice John G. Roberts Jr. sent the amendments to Congress in April. Lawmakers did not use their rarely-invoked authority to pass a law to set them aside before the effective date.

Many of the amendments deal with filing requirements for electronically filed documents, as e-filing is becoming mandatory in most circumstances.

A summary of the amendments follows:

Rule 3002.1 regulates notices that must be filed by secured lenders with borrowers in Chapter 13 when the payment owed that lender changes.

The amendment provides that for home equity lines of credit, or HELOCs, the lender can get an order modifying the notice requirement. According to the note prepared by the Advisory Committee on Bankruptcy Rules, the change is because HELOCs often adjust frequently.

The amendment also sets out a procedure to object to the payment change notice. If no objection is filed before the effective date of the change, then the change automatically becomes effective on that date.

Rule 5005 governs filing papers with the court. Instead of providing that judicial districts are authorized to require electronic filings, the rule now provides that all parties represented by counsel must file papers electronically.

“Electronic filing has matured,” and the time has come to make it mandatory, the rules committee said. A court may authorize an unrepresented individual to use e-filing systems.

Rule 7004 was amended slightly to reflect and track a 2007 amendment to Rule 4 of the Federal Rules of Civil Procedure (F.R.C.P.).

Rule 7062 was amended to make clear that in bankruptcy matters, judgments are automatically stayed for fourteen days, as opposed to the 30 day stay provided in F.R.C.P. 62(a).

Rule 8002 is amended to clarify timing for filing appeals in bankruptcy, particularly in those circumstances where the court is required to set out the judgment, order or decree in a separate document.

It also sets filing and mailing requirements for an appeal by an incarcerated appellant.

Rule 8006 is titled “certifying a direct appeal to the court of appeals.” Subsection (c) is amended to provide that when the parties jointly seek certification, the bankruptcy court is authorized to file “a short supplemental statement about the merits of the certification” within 14 days after certification. The rule also applies to a bankruptcy appellate panel or district court if the matter is pending before that court.

Rules 8007, 8010, 8021, and 9025 are amended to conform with changes to F.R.C.P. 62. Instead of requiring an appellant seeking a stay pending appeal to provide a “supersedeas bond,” the rules now call for providing a “bond or other security.”

Rule 8011 is amended to reflect changes or clarification for electronic or non-electronic filing. The rule generally makes electronic filing mandatory and is drafted to conform to changes to Federal Rule of Appellate Procedure 25, the committee said.

Rules 8013 and 8022, regarding motions filed in a bankruptcy appeal, are amended to limit electronically filed documents by length rather than by pages. Page limits are retained for non-electronic, typed or handwritten documents.

Rule 8015 concerns the form and length of appellate briefs. It’s amended to reflect limitations by word count, although page limitations will apply to non-electronic filings.

Rule 8016 is amended similarly, applicable to cross-appeals.

Rule 8017 governs the filing of amicus, or friend-of-the-court briefs in appeals. It’s amended to add that a district court or BAP may prohibit the filing of an amicus brief if its filing would result in a judge’s disqualification. The rule is also amended to provide for when and under what conditions a party can file an amicus brief regarding the court’s consideration of a motion for rehearing.

Rule 8018.1 is new. It provides that if a district court determines on an appeal that the bankruptcy court lacked Article III authority to enter the judgment, order or decree, it can treat the bankruptcy court’s decision as proposed findings of fact and conclusions of law and rule accordingly, with whatever briefing or participation by the parties it deems appropriate.

To contact the reporter on this story: Daniel Gill in Washington at dgill@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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