AMENDMENTS TO THE BANKRUPTCY RULES.

Author:Avery, Wesley H.
 
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EFFECTIVE DECEMBER 1, 2000

On April 17, 2000, the U.S. Supreme Court issued proposed amendments to the Federal Rules of Bankruptcy Procedure and ordered that they be transmitted to Congress. Assuming no changes are made to the proposed amendments during the review period, the amendments become effective as of December 1, 2000.

The most significant changes will be new rules designed to give litigants more time to determine whether or not they wish to initiate certain contested matters before the bankruptcy court. Other proposed amendments are intended to simplify noticing requirements or to clarify certain ambiguities in the existing rules. A summary of the proposed amendments to the bankruptcy rules follows.

Rule 1017(e): Extension of Time to Bring a [sections]707(b) Motion to Dismiss. Under [sections]707(b) of the Bankruptcy Code, the court on its own motion or on a motion by the United States trustee, but not at the request of a creditor, may dismiss an individual's liquidation case involving primarily consumer debt if the court finds that the granting of a discharge would be a substantial abuse of the provisions of Chapter 7. Fed. R. Bankr. p. 1017(e). It specifies that such a motion must be filed within 60 days after the first date set for the meeting of creditors under [sections] 341(a). The proposed amendment to Rule 1017(e) permits the United States trustee for cause to request an extension of time to file such a motion to dismiss, but is silent as to whether the court can grant an extension sua sponte. In any event, so long as the request for an extension of time is filed within that 60-day period, under proposed Rule 1017(e), such an extension may be granted even if the court rules on the request more t han 60 days after the initial [sections] 341(a) meeting. The length of such an extension will presumably be within the discretion of the bankruptcy judge based upon the cause shown by the United States trustee.

Rule 2002 (a) (6): Notice Requirements for Small Fee Applications. Fed. R Bankr. P. 2002(a) specifies what requests for relief or events in a bankruptcy case must be noticed to parties in interest. In the case of a fee application by a professional for $1,000 or less, Rule 2002(a)(6) is amended to avoid the expense of mailing to all parties in interest a notice of the requisite hearing. The current rule, which had been in effect since 1987, provides that such notice is not necessary if the amount of the request is $500 or...

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