U.S. TRUSTEE PROPOSES DRASTIC BANKRUPTCY RULE CHANGES

December 12, 2003

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Informed sources have disclosed proposed Amendments to the Federal Rules of Bankruptcy Procedure that have been submitted to the Advisory Committee on Bankruptcy Rules by the Executive Office of the U.S. Trustee.

The Rule changes cover four topics:

1. All debtors shall produce at the 341 meeting 18 different categories of documents. Implicitly the 341 meeting will not occur or conclude until all of the documents are produced. A failure to produce all of the documents could result in a dismissal of debtor’s bankruptcy.

The documents include but are not limited to picture identification and proof of social security number, copies of all documents including pay stubs, cancelled checks, check register and paid bills to support all entries on schedules I and J; the previous two years of tax returns complete with W-2‚s; copies of all bank and credit union statements for the 90 days prior to filing; homeowners; life and casualty insurance policies, property appraisals, title documents, mortgagee and liens for all manner of real and personal property and so on.

2. Enhanced 2016 fee disclosures of all fees paid to a bankruptcy attorney within one year prior to filing whether for bankruptcy or not.

3. Easing the due process notice requirements for 727(a)8) and 727(a) (9) objections to discharge by allowing the objection to be brought by motion and not adversary proceeding.

4. Requiring the disclosure of the non-filing spouse’s income in Chapter 7 cases based on the assertion that the non-filing spouseŒs income is a factor in a 707(b) substantial abuse proceeding.

Comments on the proposed changes must be received by January 20, 2004.

Written comments should be addressed to:

Secretary of the Committee on Rules and Practice and Procedure,
Administrative Office of the U.S. Courts, Washington, D.C. 20544.