Effective December 1, 2026, amendments to the Federal Rules of Bankruptcy Procedure (“Rules”) will take effect. These Rules govern how things are done, and while not the substantive law (which is in the Bankruptcy Code), they will affect processes and procedures in both law firms and with creditors. The following is a synopsis of those changes and thoughts about how they may affect how things are done in your shop.
Change One: Fees are increasing.
The change to Rule 1007 will increase the filing fee for a (1) motion to terminate the automatic stay, (2) motion to compel abandonment, (3) motion to withdraw of the reference of a matter from the bankruptcy court to the federal district court and (4) motion to sell property of the estate (11 U.S.C. §363) from $199 to $221. Additionally, the costs to Transfer a Claim and a Motion to Redact will go from $28 to 31. There are other fee changes, but these are the ones that affect creditors.
Change Two: Testimony in both Contested Matters and Adversary Proceedings.
Contested Matters are situations where the Court may want to take testimony in a case before the it rules. Examples are contested confirmation hearings, motions to redeem, motions to terminate the stay, etc. This is where you see most of the day-to-day proceedings.
Adversary Proceedings are a separate matter with a separate case number akin to a lawsuit within the bankruptcy. Examples are suits to set aside liens, suits contesting the dischargability of a debt, etc.
Prior to the change effective in December, the rules on testimony were largely one and the same for both. That is changing.
Many of the Rules follow or incorporate the Federal Rules of Civil Procedure and Federal Rules of Evidence. Federal Rule of Civil Procedure 43 (“Taking Testimony” in trials) used to govern both Contested Matters and Adversary Proceedings. Civil Rule 43 now governs Adversary Proceedings only.
Amended Rule 9014(d) will govern Contested Matters which is where most of the action is seen and this change could be significant.
The Rule change reads: “For cause and with appropriate safeguards, the court may permit testimony in open court by contemporaneous transmission from a different location.” Therefore, it appears the Bankruptcy Courts may allow remote testimony. More and more bankruptcy courts are going to Teams or Zoom for hearings, first meetings of creditors, etc. This change continues that trend. Time will tell what constitutes “cause” and “appropriate safeguards”. This likely will differ from court to court.
Additionally, Rule 9017(d)(2) allows the court to hear matters on affidavits or depositions in addition to oral testimony. Many times, the facts in contested matters can be stipulated by the parties. If the parties cannot agree, some of those facts may be established in writing with an affidavit or deposition transcript. That may not be the best way to get your evidence in the record, but if the stakes in the case are lower, this could be cost effective.
Change Three: Sanctions Regarding Proofs of Claim
Rule 3001 as previously amended inadvertently created a loophole regarding sanctions against filing creditors for incomplete information in their proofs of claim. The change to Rule 3001(c)(3)(4) is clear that sanctions explicitly may apply to creditors who fail to comply with disclosures for open-end or revolving consumer credit agreements.
The sanctions could include: (1) precluding the claim holder from presenting any information that should have been in the claim in a contested matter or adversary proceeding, and (2) other appropriate relief, including reasonable attorney fees and expense caused by the failure. Sanctions may be awarded only after notice and a hearing. If you get such a notice, act quickly. Also, be aware that “notice and a hearing” is a term of art. It does not require a hearing to be held, only that there is the opportunity for a hearing. See 11 U.S.C. §102(1).
There are other changes to the Federal Rules of Bankruptcy Procedure, but these are the changes that most directly affect our clients. Keith D. Weiner & Associates, L.P.A, continues to service clients in all the bankruptcy courts and divisions found in OH, KY, WV and IN. Please contact our office if you would like to become a client at [email protected], or by contacting us at (216) 771-6500 and asking for our Partner in Charge of the Bankruptcy Department, Cynthia Jeffrey.