{"id":957,"date":"2019-08-01T22:02:39","date_gmt":"2019-08-01T22:02:39","guid":{"rendered":"http:\/\/www.fremont-bankruptcy-attorney.com\/blog\/?p=957"},"modified":"2019-08-01T22:35:20","modified_gmt":"2019-08-01T22:35:20","slug":"what-is-this-request-for-special-notice-in-my-bankruptcy-case","status":"publish","type":"post","link":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/2019\/what-is-this-request-for-special-notice-in-my-bankruptcy-case\/","title":{"rendered":"What Is This Request For Special Notice In My Bankruptcy Case?"},"content":{"rendered":"\n

By Ryan C. Wood<\/a><\/p>\n\n\n\n

If you recently filed for bankruptcy protection you may have\nreceived a document in the mail entitled request for special notice.  This is a creditor requesting that all documents\nfiled in the case be served on them so they know what is going on in the case.  You may be surprised to learn that when a\nbankruptcy case is filed creditors only receive the two page notice of meeting\nof creditors.  Creditors do not receive\nthe actual petition, statements or supporting schedules.  If a creditor does nothing further the notice\nof meeting of creditors will be the ONLY document they receive until the order\nof discharge or order confirming a plan of reorganization is served on them\nlater on in the case.      <\/p>\n\n\n\n

Why Is This?<\/strong><\/p>\n\n\n\n

Quite simply just like in many areas of the law parties are\nrequired to enforce their rights.  If you\nsnooze you lose.  Bankruptcy is a very time\nsensitive process.  There are a number of\ndeadlines and some are absolute.  If you\nmiss certain deadlines you are done for. \nCreditors actually have to participate in the bankruptcy case and obtain\nthe petition and supporting documents themselves to know what is going on and\nenforce their rights.   Again, creditors listed in bankruptcy\npetitions only receive the notice of meeting of creditors in the mail after the\nfiling of the bankruptcy petition.  There\nare applicable statutes of limitations for various causes of action like breach\nof contract or personal injury claims pursuant to state laws.  Creditors are supposed participate in the\nbankruptcy process and enforce their rights just like they have to under\napplicable state laws when a claim exists.   Again, if you snooze you lose. <\/p>\n\n\n\n

For example there are 60 days from the date of the first\nscheduled meeting of creditors for a creditor or party in interest to file an\nadversary proceeding to object to a debtors discharge or dischargeability of\nthe underlying debt unless this deadline is extended within the 60 day period.  This is a deadline provided in the notice of\nmeeting of creditors and is generally absolute. \nIf you file the adversary proceeding on day 61 the Bankruptcy Code,\nFederal Rules of Bankruptcy Procedure and case law supports the adversary\nproceeding should be dismissed as not timely filed.      <\/p>\n\n\n\n

Disturbing Trend<\/strong><\/p>\n\n\n\n

An extremely disturbing trend is for bankruptcy trustees,\njudges and the clerk\u2019s office stepping into the shoes of creditors whether\nknowingly or not.  It is open to\ninterpretation as to the responsibilities of trustee\u2019s and various unrelated\nparties to creditors.  This creates\nrights and obligations that do not actually exist though.  Whether certain amended schedules have to be\nserved on creditors is provided for in the Federal Rules of Bankruptcy Procedure\nand Bankruptcy Local Rules on a jurisdictional basis. <\/p>\n\n\n\n

FRBP 4003(b) <\/p>\n\n\n\n

(b) Objecting to a Claim of Exemptions: (1) Except as\nprovided in paragraphs (2) and (3), a party in interest may file an objection\nto the list of property claimed as exempt within 30 days after the meeting of\ncreditors held under \u00a7341(a) is concluded or within 30 days after any amendment\nto the list or supplemental schedules is filed<\/strong>,\nwhichever is later. The court may, for cause, extend the time for filing\nobjections if, before the time to object expires, a party in interest files a\nrequest for an extension.<\/p>\n\n\n\n

Exemptions are what protect assets and exclude the assets of\na bankruptcy filer from the bankruptcy estate. \nThis is basic statutory interpretation 101.  So a party has until 30 days after the\nmeeting of creditors to object to claimed exemptions or from when any amendment\nto the list or supplemental schedules are filed<\/strong>,\nand there is no language requiring serving on anyone with an amend Schedule C.  This is the plain language of FRBP 4003 and\nit is unambiguous.  If Congress wanted the\namended Schedule C to be filed and served the word served would also be\nincluded.  Depending upon your\njurisdiction you may have a local rule that requires service of the amended\nSchedule C.  Here in the Northern\nDistrict of California there is no such local rule requirement. <\/p>\n\n\n\n

In interpreting statutes \u201c[t]he starting point of [the] inquiry\nis the language of the statute itself.\u201d \nUnited States v. Cabaccang, 332 F.3d 622, 625 (9th Cir. 2003) (en\nbanc).  In so doing, we use canons of\nconstruction.  Those canons: help courts\ndetermine the meaning of legislation, and in interpreting a statute a court\nshould always turn first to one, cardinal canon before all others.  We have stated time and again that courts\nmust presume that a legislature says in a statute what it means and means in a\nstatute what it says there.  When the words of a statute are\nunambiguous, then, this first canon is also the last: \u201cjudicial inquiry is\ncomplete.\u201d<\/strong><\/p>\n\n\n\n

Unfortunately some chapter 13 trustees object to approval of chapter 13 plans of reorganization and require bankruptcy attorneys<\/a> to provide and pay for service of amended schedules when the law does not require it.\u00a0 This phantom service requirement is costly and provides rights to creditor the law does not actually provide.\u00a0 The creditor should have filed a simple one page request for special notice that takes minutes and participated in the bankruptcy case and then all documents filed would then be served on them. \u00a0\u00a0Sadly bankruptcy attorneys choose to capitulate to the trustee demands for service because it is even more costly to have a contested confirmation hearing to have the court overrule the trustee\u2019s objection to confirmation or approval of the chapter 13 plan.\u00a0 Damned if you do and more damned if you do not even though the words on paper are clear as day.\u00a0 See most jurisdictions have what are called no look fees or flat fees for various circumstances in chapter 13 cases.\u00a0 There is the basic case fee plus add-ons like owning a home or having vehicle loans.\u00a0 There are no add-ons for having to meet requirements that do not exist.\u00a0 If the bankruptcy attorney and client choose to fight and have the objection to confirmation overruled the bankruptcy attorney is just going to spend a bunch of their own time and money which also will result in delay of confirmation or approval of the chapter 13 plan that may have unforeseen consequences.\u00a0 This is a sad dynamic that exists and is getting worse.\u00a0 <\/p>\n\n\n\n

Another examples is here in the Northern District of\nCalifornia we have this wonderful Bankruptcy Local Rule, B.L.R. 3015-1 that\nprovides only parties or creditors adversely affected by a plan of\nreorganization amendment are entitle to service of the amended plan.  Well this makes perfect sense.  If a party is not adversely affected then\nwhat is the problem?  Again, chapter 13\ntrustees ignore the plain language of this Bankruptcy Local Rule and create an obligation\nto service of an amended plan that does not exist thereby increasing costs in\nthe bankruptcy case.<\/p>\n\n\n\n

Another example of this is FRBP 3002.1 or the notice of final cure.\u00a0 While this is actually a great thing because it requires a secured creditor like a mortgage lender to have provide a notice as to whether the bankruptcy filer is current on the loan or mortgage when a chapter 13 case ends it has created problems when there are disagreements over how much is still owed or that anything is owed at all.\u00a0 This issue is created because of the mistaken interpretation of bankruptcy attorneys right to payment for their time.\u00a0 The opinion is that all bankruptcy attorneys fees must be paid through the chapter 13 plan unless ordered by the Court.\u00a0 The opinion that any unpaid bankruptcy attorney fees are discharged unless paid through the plan adds an even more troubling wrinkle to a bankruptcy attorneys duty to properly represent their client.\u00a0 The Notice of Final Cure is filed after completion of the chapter 13 plan, so how would the time spent and fees reasonable earned ever be paid through the chapter 13 plan?\u00a0 This issue actually came up in a case and the case was appealed to the Ninth Circuit Bankruptcy Appellate Panel.\u00a0 The 9th<\/sup> Circuit BAP held that fees the bankruptcy attorney<\/a> earned for doing their job properly could not be paid given the plan was done and in their opinion had to be paid through the plan.\u00a0 This is even though FRBP 3002.1 provides: (i) Failure to Notify. If the holder of a claim fails to provide any information as required by subdivision (b), (c), or (g) of this rule, the court may, after notice and hearing, take either or both of the following actions: (1) preclude the holder from presenting the omitted information, in any form, as evidence in any contested matter or adversary proceeding in the case, unless the court determines that the failure was substantially justified or is harmless; or (2) award other appropriate relief, including reasonable expenses and attorney\u2019s fees caused by the failure.<\/p>\n\n\n\n

Section (i)(2) provides for the award of reasonable attorney\u2019s\ncaused by the failure to provide proper or accurate information in the notice\nof final cure?  Or just reasonable\nattorney\u2019s fees if the notice is not filed at all?  Even if the reasonable attorney\u2019s fees are\nawarded how are they to be paid when most courts incorrectly believe all\nbankruptcy attorney\u2019s fees and expenses have to be paid through a plan that\nwill now have been completed\u2026\u2026..?  More\nto come on this issue. <\/p>\n","protected":false},"excerpt":{"rendered":"

By Ryan C. Wood If you recently filed for bankruptcy protection you may have received a document in the mail entitled request for special notice.  This is a creditor requesting that all documents filed in the case be served on them so they know what is going on in the case.  You may be surprised […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[332],"tags":[334,335,333],"_links":{"self":[{"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/posts\/957"}],"collection":[{"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/comments?post=957"}],"version-history":[{"count":4,"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/posts\/957\/revisions"}],"predecessor-version":[{"id":961,"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/posts\/957\/revisions\/961"}],"wp:attachment":[{"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/media?parent=957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/categories?post=957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fremont-bankruptcy-attorney.com\/blog\/wp-json\/wp\/v2\/tags?post=957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}