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Bankruptcy Reform Update: Weltman, Weinberg & Reis’ Top 10 List of Things You Must Know
By: Alan Hochheiser, Esquire
As you are all aware, the new bankruptcy legislation has been in effect since October 17, 2005. Prior to October 17th, we saw a record number of filings. During the month of September, approximately 9,000 new files a day were filed nationally. In the Northern District of Ohio, from October 7-10, 6,500 cases were filed. Prior to September, the Northern District of Ohio was averaging 4,000 filings a month. In 2005, over two million consumer bankruptcies were filed in the United States. Debtors rushed to file their cases so that they would not have to deal with the new requirements. Here are the things every creditor must still remember:
1. The current bankruptcy law still remains in effect for all cases filed prior to October 17th. Creditors must continue to use existing forms on these cases. On Chapter 13 cases, we could be dealing with the current law for the next five years.
2. Dockets are finally slowing down. However, through the month of March dockets were very full due to the tremendous increase in the number of filings prior to October 17th. First Meetings did not occur for up to 75 days.
3. Some delays in scheduling First Meetings still exist; remember that you may still be able to proceed with Relief from Stay Motions and Reaffirmation Agreements. Your collateral will continue to depreciate.
4. First Day Motions on cases filed after October 17th continue to be filed. It will be necessary to review and react to these motions. Failure to timely respond to a motion may severely affect your rights in the case. Be sure to get the motions to counsel as quickly as possible. Some courts have granted motions where no response has been filed. On the other hand, courts have denied motions in part as it pertains to only Creditors who object.
5. On cases where the Automatic Stay is not in place where there have been two prior dismissals within one year, emergency telephonic hearings and expedited in Court hearings have been taking place. Courts remain very concerned about creditors getting proper notice.
6. Timely file Proof of Claims. In order to be assured of adequate protection on secured accounts, Proof of Claims may need to be filed prior to any pre-confirmation disbursement. In any event, Proof of Claims must be filed prior to the claim deadline.
7. Review all plans carefully. There are many new provisions that will affect your rights. Timely objections will be required; otherwise your rights will be locked in according to the plan at confirmation.
8. Non-dischargeable issues in Chapter 13’s are starting to play out. Make sure objections are filed along with the Adversary Proceedings. This will insure that the Creditor’s rights are protected.
9. This continues to be a learning process. We are still not sure how Courts, Trustees and Debtor’s counsel will act under the new law. As we review more and more cases and situations, we will pass along new information. Be sure to ask questions. We will all be dealing with new situations and a failure to act may waive your rights. Rulings by the courts, which have been rendered, differ from Judge to Judge in the same jurisdiction.
10. Don’t panic. Law firms will work with their clients to enable a smooth transition under the new law and to continue to protect their clients’ interests.
Alan C. Hochheiser is the Partner managing WWR's (Weltman, Weinberg & Reis Co., L.P.A.) Bankruptcy department. He is located in the Brooklyn Heights operations center. He can be reached at (216) 739-5649 or ahochheiser@weltman.com. | 
