On December 1, 2022, new Federal Rules for Bankruptcy Procedure will go into effect. There is also a new Official Form 101 that changes how names used in the last eight years are listed. It clarifies that additional names used by a debtor do not include any separate legal entities such as a LLCs or corporations owned by the debtor. This new form must be used for all applicable cases filed on or after December 1, 2022.
New Bankruptcy Rules and Form Coming Into Effect December 1, 2022
On December 1, 2022, the Federal Rules of Bankruptcy Procedure will be updated to incorporate the changes in bankruptcy law. This year’s changes incorporate the interim rule changes based on the Small Business Reorganization Act of 2019, Pub. L. No. 116-54, 133 Stat. 1079, establishing subchapter V of chapter 11, but also include a few general rule changes to Rules 3002, 5005, 7004, and 8023. The specific changes are listed below.
Rule 1007 (Lists, Schedules, Statements, and Other Documents; Time Limits)
As amended, subdivision (b)(5) of the rule includes an exception for subchapter V cases. Because Code §1129(a)(15) is inapplicable to such cases, there is no need for an individual debtor in a subchapter V case to file a statement of current monthly income. Subdivision (h) is amended to provide that the duty to file a supplemental schedule under the rule terminates upon confirmation of the plan in a subchapter V case, unless the plan is confirmed under § 1191(b), in which case it terminates upon discharge as provided in § 1192.
Rule 1020 (Chapter 11 Reorganization Case for Small Business Debtors)
The title and subdivision (a) of the rule are amended to include that option and to require a small business debtor to state in its voluntary petition, or in a statement filed within 14 days after the order for relief is entered in an involuntary case, whether it elects to proceed under subchapter V. The rule does not address whether the court, on a case-by-case basis, may allow a debtor to make an election to proceed under subchapter V after the times specified in subdivision (a) or, if it can, under what conditions. Former subdivision (c) of the rule is deleted because the existence or level of activity of a creditors’ committee is no longer a criterion for small-business-debtor status. The SBRA eliminated that portion of the definition of “small business debtor” in § 101(51D) of the Code. Former subdivision (d) is redesignated as subdivision (c), and the list of entities to be served is revised to reflect that in most small business and subchapter V cases there will not be a committee of creditors.
Rule 2009 (Trustees for Estates When Joint Administration Ordered)
In a case under subchapter V of chapter 11, § 1183 of the Code requires the United States trustee to appoint a trustee, so there will be no election. Accordingly, subdivisions (a) and (b) of the rule are amended to except cases under subchapter V from their coverage. Subdivision (c)(2), which addresses the appointment of trustees in jointly administered chapter 11 cases, is amended to make it applicable to cases under subchapter V.
Rule 2012 (Substitution of Trustee or Successor Trustee; Accounting)
Subdivision (a) of the rule is amended to include any case under subchapter V of chapter 11 in which the debtor is removed as debtor in possession under §1185 of the Code.
Rule 2015 (Duty to Keep Records, Make Reports, and Give Notice of Case or Change of Status)
Subdivision (b) is amended to prescribe the duties of a debtor in possession, trustee, and debtor in a subchapter V case. Those cases are excepted from subdivision (a) because, unlike other chapter 11 cases, there will generally be both a trustee and a debtor in possession. Subdivision (b) also reflects that §1187 of the Code prescribes reporting duties for the debtor in a subchapter V case. Former subdivisions (b), (c), (d), and (e) are redesignated (c), (d), (e), and (f) respectively. Rule 3002 (Filing Proof of Claim or Interest)
Rule 3002(c)(6) is amended to provide a single standard for granting motions for an extension of time to file a proof of claim, whether the creditor has a domestic address or a foreign address. If the notice to such creditor was “insufficient under the circumstances to give the creditor a reasonable time to file a proof of claim,” the court may grant an extension.
Rule 3010 (Small Dividends and Payments in Cases Under Chapter 7, Subchapter V of Chapter 11, Chapter 12, and Chapter 13)
To avoid the undue cost and inconvenience of distributing small payments, the title and subdivision (b) are amended to include subchapter V cases.
Rule 3011 (Unclaimed Funds in Cases Under Chapter 7, Subchapter V of Chapter 11, Chapter 12, and Chapter 13) The rule is amended to include subchapter V of chapter 11 because § 347(a) of the Code applies to them.
Rule 3014 (Election Under § 1111(b) by Secured Creditor in Chapter 9 Municipality or Chapter 11 Reorganization Case)
Because there generally will not be a disclosure statement in a subchapter V case, see § 1181(b) of the Code, the rule is amended to provide a deadline for making an election under § 1111(b) in such cases that is set by the court.
Rule 3016 (Filing of Plan and Disclosure Statement in a Chapter 9 Municipality or Chapter 11 Reorganization Case)
Subdivision (b) of the rule is amended to reflect that under § 1181(b) of the Code, § 1125 does not apply to subchapter V cases (and thus a disclosure statement is not required) unless the court for cause orders otherwise. Subdivision (d) is amended to include subchapter V cases as ones in which official Forms are available for a reorganization plan and, when required, a disclosure statement.
Rule 3017.1 (Court Consideration of Disclosure Statement in a Small Business Case or in a Case Under Subchapter V of Chapter 11)
The title and subdivision (a) of the rule are amended to cover cases under subchapter V when the court orders that § 1125 of the Code applies.
Rule 3017.2 NEW (Fixing of Dates by the Court in Subchapter V Cases in Which There Is No Disclosure Statement)
Because there generally will not be a disclosure statement in a subchapter V case, see § 1181(b) of the Code, the rule is added to authorize the court in such a case to act at a time other than when a disclosure statement is approved to set certain times and dates.
Rule 3018 (Acceptance or Rejection of Plan in a Chapter 9 Municipality or a Chapter 11 Reorganization Case)
Subdivision (a) of the rule is amended to take account of the court’s authority to set times under Rules 3017.1 and 3017.2 in small business cases and cases under subchapter V of chapter 11.
Rule 3019 (Modification of Accepted Plan in a Chapter 9 Municipality or a Chapter 11 Reorganization Case)
Subdivision (c) is added to the rule to govern requests to modify a plan in a subchapter V case after confirmation in such cases under § 1193(b) or (c) of the Code.
Rule 5005 (Filing and Transmittal of Papers)
Subdivision (b)(1) is amended to authorize the clerk or parties to transmit papers to the United States trustee by electronic means in accordance with Rule 9036, regardless of whether the United States trustee is a registered user with the court’s electronic-filing system. Subdivision (b)(2) is amended to recognize that parties meeting transmittal obligations to the United States trustee using the court’s electronic-filing system need not file a statement evidencing transmittal under Rule 5005(b)(2). The amendment to subdivision (b)(2) also eliminates the requirement that statements evidencing transmittal filed under Rule 5005(b)(2) be verified.
Rule 7004 (Process; Service of Summons, Complaint)
New Rule 7004(i) is intended to reject those cases interpreting Rule 7004(b)(3) and Rule 7004(h) to require service on a named officer, managing or general agent or other agent, rather than use of their titles. Service to a corporation or partnership, unincorporated association or insured depository institution at its proper address directed to the attention of the “Chief Executive Officer,” “President,” “Officer for Receiving Service of Process,” “Managing Agent,” “General Agent,” “Officer,” or “Agent for Receiving Service of Process” (or other similar titles) is sufficient.
Rule 8023 (Voluntary Dismissal)
The amendment is intended to conform the rule to the revised version of Appellate Rule 42(b) on which it was modelled. It clarifies that the fees that must be paid are court fees, not attorney’s fees. The rule does not alter the legal requirements governing court approval of a settlement, payment, or other consideration. See, e.g., Fed. R. Bankr. P. 9019 (requiring court approval of compromise or settlement). The amendment clarifies that any order beyond mere dismissal — including approving a settlement, vacating, or remanding — requires a court order.
New Form for 2022
The following new form will come into effect on December 1, 2022. This form must be used for any new case filed on after December 1, 2022. Failure to use the official form will result in a clerk’s notice of deficiency after a 14 day grace period.
Official Form 101 Voluntary Petition for Individuals Filing for Bankruptcy
Official Form 101 is amended to eliminate language in former Part 1, Question 4, which asked for “any business names . . . you have used in the last 8 years.” Instead, Part 1, Question 2, adds to the direction with respect to “other names you have used in the last 8 years” ―which currently directs the debtor to “Include your married and maiden names”―to ask the debtor to include “any assumed, trade names, or doing business as names,” and to direct that the debtor should not include the names of separate legal entities that are not filing the petition. Many individual debtors erroneously believed that Question 4 was asking for the names of corporations or limited liability corporations in which they held any interest in the past 8 years, and any names listed in response were then treated as additional debtors for purposes of noticing and reporting. By asking for the information in Question 2, the form now makes it clearer that the only names to be listed are names that were used by the debtor personally in conducting business, not names used by other legal entities. This amendment also conforms Official Form 101 to Official Forms 105, 201, and 205 with respect to the same information.
If you have any questions please feel free to contact the Clerk’s Office.