What happens if I make a Mistake on my Bankruptcy Schedules?

Despite the fact that some lawyers like to consider themselves infallible, the reality is that we all make mistakes. This is even true of our clients sometimes.

If you have made a mistake on your bankruptcy schedules, there is a general right to amend as allowed by the Federal Rules of Bankruptcy Rule 1009. The rule allows for amending of schedules any time before the case is closed so long as Notice is given to the trustee and any entity affected (usually meaning notice to all creditors).

In Massachusetts, there is also a local rule (Rule 1009-1), which requires that in some cases if your amendment involves adding a creditor or changing your exemptions, then you must file a Motion with the Court requesting approval of the amendment. As a practical matter, filing a Motion to Amend for any amendment may be the safest way to get the Court's approval quickly.

The most important thing to understand here is that if you discover a mistake on your schedules or petition, immediately file (or have your attorney file) an amendment to ensure that your case proceeds smoothly and you do not get accused of providing false information.

Changes to the Massachusetts Local Bankruptcy Rules

Changes to the Massachusetts Local Bankruptcy Rules go into effect today, December 1, 2009.

The signifcant changes regarding time calculation are as follows:

1. A simplifaction of how "days" will be counted for computing all time periods in each set of rules. Now, each and every calendar day, including all intermediate weekend days and holidays will be computed all time periods in the bankruptcy court. Under the old rule, intermediate weekends and holidays were sometimes counted and sometimes not.

2. Most periods shorter than 30 days are changed to multiples of 7 days (7, 14, 21, or 28 days) so that deadlines will usually fall on weekdays. As such, amendments were made to the local [Massachusetts] bankruptcy rules to remain consistent with the new federal rules. Many local rules (especially those governing time or setting deadlines) will have changed. It is important that you review the new rules, which are available at the Massachusetts Bankruptcy Court website here.

3. The current ten day appeal period in bankruptcy court will become a fourteen-day period after December 1, 2009.

In addition, a number of other local rule amendments were adopted to improve practice in the Massachusetts bankruptcy court.

A proposed thorough revision to Rule 6004-1 Sale of Estate Property will clarify the sale procedures for bankruptcy assets.

Amendments to Rule 9013-1 Motions changes the response deadline from ten to fourteen days after service and also enhances the proper use of expedited and emergency motions when necessary.

The new rule amendments will also affect Chapter 13 filings.

Rules 13-8(c) Objection to Confirmation and 13-13(e) Proofs of Claim and Objections now require counsel to confer seven days after the respective objection is filed in order to narrow the areas in dispute and to certify that the conference was held.

The rules also set down new pleading requirements for motions for relief from stay in Chapter 13 cases; with the goal that responses to motions for relief from stay will facilitate quicker identification of legitimate areas of disagreement between the parties.

Lastly, there are a number of new local forms that attorneys should be aware of: the Motion for Relief From Stay - Real Estate Worksheet, Debtor(s)’ Schedule of Disputed Payments in Opposition to Motion for Relief From Stay - Postpetition Transaction History, and the Combined Plan of Reorganization and Disclosure Statement for Small Business Debtor.

All Massachusetts local forms are available through the Massachusetts Bankruptcy Court link here.