Amendments to the Federal Rules of Bankruptcy Procedure became effective on December 1, 2017, which impose affirmative obligations on secured creditors to protect their rights to distributions in a bankruptcy case. Previously, Bankruptcy Rule 3002(a) required only unsecured creditors and equity security holders to file proofs of claim or proofs of interest in a bankruptcy. Although often recommended, it was not statutorily necessary for a secured creditor to file a proof of claim in order to protect its rights. Newly amended Bankruptcy Rule 3002(a) effects a marked change in the law and affirmatively requires a secured creditor to file a proof of claim in order for its secured claim to be allowed in a bankruptcy.

Ignoring this new requirement may lead to a secured claim not being allowed in the bankruptcy (unless such claim is included on a debtor’s schedule of liabilities or is otherwise allowed by Bankruptcy Court order). Nevertheless, consistent with Section 506(d) of the Bankruptcy Code, Bankruptcy Rule 3002(a) has also codified prior bankruptcy case law to clarify that a secured creditor’s failure to file a proof of claim will not alone lead to the underlying lien securing the claim being voided.

Two additional amendments to Bankruptcy Rule 3002, which are intended to expedite the resolution of bankruptcy cases, are worth noting for secured and unsecured creditors.

1. Bankruptcy Rule 3002(c) has been amended to shorten certain deadlines or “bar dates” applicable to the filing of proofs of claim. New Bankruptcy Rule 3002(c) shortens the deadlines for filing a proof of claim in a voluntary Chapter 7 (liquidation for companies or individuals), Chapter 12 (reorganization for a family farmer or fisherman), and Chapter 13 (reorganization for individuals) case to not later than 70 days after entry of the order for relief (or the date of the order of conversion to a Chapter 12 or Chapter 13 case). In most jurisdictions, this typically means that proofs of claim must be filed no later than 70 days after the bankruptcy petition is filed. In an involuntary Chapter 7 case, proofs of claim must be filed no later than 90 days after the entry of the order for relief under amended Bankruptcy Rule 3002(c), rather than 90 days after the “first date set for the meeting of creditors” (under the prior version of the Rule).

2. Bankruptcy Rule 3002(c)(6) has been amended to grant a creditor relief from the bar date if a creditor in a Chapter 7, Chapter 12, or Chapter 13 case failed to receive sufficient notice of the filing of the bankruptcy case. Under new Bankruptcy Rule 3002(c)(6), upon a creditor’s motion, the Bankruptcy Court may extend the time for filing a proof of claim for not more than 60 days following an order granting the creditor’s motion for an extension of time. In order to be granted additional time, a creditor must show that: (a) the debtor failed to file its list of creditors under Bankruptcy Rule 1007(a) timely, or (b) the notice was insufficient to provide the creditor with a reasonable time to file a proof of claim, because the notice was mailed to a foreign address. Rule 3002(c)(6) does not define “foreign address”. It is likely that new subsection 3002(c)(6) will be utilized by creditors who fail to receive notice of the bankruptcy case because they were left off of the debtor’s schedules of liabilities or were listed in the schedules, but at the wrong address.