March 6, 2015
by Megan E. Lees
Pite Duncan, LLP – USFN Member (California, Nevada)
Certain amendments to the Local Bankruptcy Rules (LBR) and local bankruptcy forms for the U.S. Bankruptcy Court for the Southern District of California have gone into effect recently.
Effective March 1, 2015, all motions for relief from the automatic stay in the Southern District that are filed to foreclose upon a security interest, or to pursue unlawful detainer actions, must substantially conform to Local Bankruptcy Forms CSD 1160 and CSD 1163. Additionally, the Southern District adopted amended its Local Bankruptcy Rules (also effective March 1, 2015), which can be viewed at the following link: http://www.casb.uscourts.gov/pdf/announcements/GLLBRAPCombined.pdf.
A more detailed discussion regarding the changes to Local Bankruptcy Forms CSD 1160 and CSD 1163, as well as the relevant amendments to the LBR, is set forth below:
1. Amendments to Local Bankruptcy Forms CSD 1160 and CSD 1163: Motions for Relief from the Automatic Stay and Unlawful Detainer
Beginning March 1, 2015, all Southern District motions for relief from the automatic stay (MFR) to foreclose upon a security interest or for unlawful detainer (UD) actions will be prepared by this author’s firm on revised Local Forms CSD 1160 or CSD 1163. As a result, any forms currently in use for Southern District MFR should be updated to conform to these new local forms. The revisions to the MFR forms are limited and mostly non-substantive. Aside from some subtle stylistic changes to the amended MFR and UD MFR forms, references to subsections (4), (5), and (6) of LBR 4001-2(a) have been replaced by a broader, more general reference to LBR 4001-2(a), which governs all of the required content in a MFR, including the requirement to provide a post-petition accounting of payments in a chapter 11 or 13 case, provide admissible evidence of value where relevant, and admissible evidence of the specific facts that constitute cause for relief. From a practical standpoint, this revision will not alter the requirement to provide the specific information required by the subsections of LBR 4001-2(a), and essentially only changes the appearance and format of Local Forms CSD 1160 and CSD 1163.
2. Amendments to Local Bankruptcy Rules
In light of the lengthy amendments to the Southern District Local Bankruptcy Rules, only those amendments deemed the most relevant are detailed here. More specifically, Local Bankruptcy Rules 3002-1, 3002-2, and 9018-1 are discussed below. Although not addressed here, please note that significant amendments were made to LBR 9013, which sets forth the rules for motion practice and contested matters in the Southern District, including notice and hearing requirements.
a. LBR 3002-1: Notices for Chapter 13 Cases Where No Proof of Claim Has Been Filed by the Creditor Holding a Claim Against the Debtor’s Principal Residence
LBR 3002-1 provides that a creditor holding a claim secured by a chapter 13 debtor’s principal residence may electronically file mandatory notices of mortgage payment change and notices of post-petition mortgage fees, expenses, and charges on the court’s claims register, pursuant to Federal Rule of Bankruptcy Procedure (FRBP) 3002.1(b) and (c), regardless of whether the creditor previously filed a proof of claim in the case. Accordingly, creditors who have yet to file their proof of claim, or previously elected to refrain from filing a proof of claim in a chapter 13 case, must still file any required payment change notices on the claims register in order to comply with the requirements of the Federal Rules of Bankruptcy Procedure.
b. LBR 3002-2: Objection to Notice of Payment Change
LBR 3002-2 sets forth the requirements for objecting to a creditor’s notice of mortgage payment change filed pursuant to FRBP 3002.1(b). Specifically, LBR 3002-2 requires a debtor objecting to a notice of mortgage payment change to obtain a hearing and file/serve an objection with Local Form CSD 1184 (Request and Notice of Hearing) on the creditor, chapter 13 trustee, and U.S. Trustee with at least 21 days’ notice to the creditor. The rule further provides that the creditor’s response to the objection must be filed within 14 days after service of the objection. As a result, creditors should be vigilant in reviewing and responding to any objections to payment change notices, and to also attend any scheduled hearings on the same. Finally, if debtors dispute any payment change notices in the context of a pending motion for relief from the automatic stay, creditors should raise the lack of any prior objection to the payment change notices in reply to the same.
c. LBR 9018-1: Documents Containing Personal Identifiers
LBR 9018-1 provides that all requests to restrict public access to documents, including proofs of claim and attachments, containing any of the personal identifiers enumerated in FRBP 9037(a) must be made by motion to restrict (redact) the document. The rule further provides that the party bringing the motion must file the amended document with the redacted information concurrently with the motion to restrict access. A hearing will not be required, as the amended rule specifically delegates the entry of an order on a motion to restrict to the clerk of the court as an administrative function. Accordingly, LBR 9018-1 allows creditors to streamline the process for restricting and redacting documents containing personally identifiable information without the necessity for a hearing or entry of an order by the bankruptcy judge assigned to the case. As a result, creditors and their counsel should take advantage of, and comply with, this expedited procedure when filing motions to restrict.
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