Revised Bankruptcy Rule 3002 – Changes Affecting Proofs of Claim

The United States Supreme Court adopted revisions to the Federal Rules of Bankruptcy Procedure (“Bankruptcy Rules”), which went into effect on December 1, 2017. The revised Rules apply to all bankruptcy cases commenced on or after December 1, 2017, and may apply to cases commenced prior to such date if application is determined by the bankruptcy court to be “just and practicable.”

Among the revisions is a new requirement in Bankruptcy Rule 3002, which requires secured creditors, such as tax lien creditors, to file a proof of claim in order to have an allowed claim and to be entitled to receive distributions under a Plan. In addition, revised Rule 3002 recites a longstanding bankruptcy principle that a lien cannot be discharged solely because a secured creditor has failed to file a proof of claim. The Bankruptcy Rules, however, permit a trustee or a debtor to file a proof of claim for a secured claim if the creditor has failed to file one. This will permit the trustee or debtor to deal with a secured tax claim in the bankruptcy and may result in the discharge of liens if the debtor complies with the terms of the Plan.

Revised Rule 3002 has also shortened the time creditors have to file their proofs of claims in cases under Chapters 7, 12 and 13. In such cases, creditors are required to file proofs of claim within 70 days of the debtor’s filing for bankruptcy relief. Although revised Rule 3002 has shortened the timing on filing proofs of claims, the revised Rule does permit a bankruptcy court to allow late-filed proofs of claim if the creditor makes a motion showing cause for not filing a timely claim, including that the creditor did not receive sufficient notice of the bankruptcy case to file the claim within the 70-day period.

We routinely file proofs of claim in all New York State-venued bankruptcy cases on behalf of our tax lien clients. As such, the revisions to Bankruptcy Rule 3002 should not affect our current procedure with respect to those cases. As to bankruptcy cases filed outside of New York State, tax lien creditors should now consider the risk that the claim will not be paid in full or on acceptable terms in the bankruptcy case if a proof of claim is not filed and the claim treatment is not monitored.

Additional Assistance

For questions regarding the revisions to Bankruptcy Rule 3002, please contact Nickolas Karavolas at
(212) 508-0477,; William J. Brown at (716) 847-7089,; or Catherine N. Eisenhut at (716) 847-8323,