Cite as: Keith M. Lundin, Lundin On Chapter 13, § 43.1, at ¶ ____, LundinOnChapter13.com (last visited __________).
In 1993, Bankruptcy Rule 2003(a) was amended to provide that the meeting of creditors in a Chapter 13 case shall be held “no fewer than 20 and no more than 50 days after the order for relief.”1 In many districts, prior to the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA),2 the meeting of creditors was also the date on which a confirmation order was entered and distributions began in Chapter 13 cases in which there were no objections to confirmation.3
BAPCPA amended § 1324(b) to provide that the confirmation hearing “may be held not earlier than 20 days and not later than 45 days after the date of the meeting of creditors,” unless the court finds cause to hold the confirmation hearing earlier.4 Because of the requirement of 20 days’ notice of the meeting of creditors in Bankruptcy Rule 2003(a) and the requirement of 25 days’ notice for the filing of objections and the hearing on confirmation in Bankruptcy Rule 2002(b), there is little scheduling flexibility for the meeting of creditors within the maximum 50 days now permitted.5
The U.S. trustee convenes and presides at the meeting of creditors.6 Although the Code does not address the question, it has been reasonably concluded that a bankruptcy court can entertain a debtor’s motion to continue and reset a meeting of creditors, notwithstanding that the U.S. trustee schedules the meeting in the first instance.7
Local practice varies on how debtors accomplish a change in the scheduling of the meeting of creditors. Debtor’s counsel should consult the U.S. trustee before filing a motion to continue the § 341 meeting. In some districts, a letter to the U.S. trustee with adequate explanation will accomplish rescheduling before notices are mailed to creditors. In other districts the standing Chapter 13 trustee does the scheduling and handles requests for new dates and times. Volume practitioners learn how to work the system so that the meetings of creditors for cases filed by the same attorney are scheduled together.
Rescheduling a § 341 meeting after notices have been mailed is more difficult. If there is time for renoticing, in some districts the debtor’s counsel rather than the trustee or the clerk’s office has to do any rescheduling notice. If there is not time for renoticing, counsel may have to be present at the first scheduled date to announce the continuance and meet informally with creditors. The Electronic Case Filing (ECF) system has greatly simplified the noticing and renoticing of meetings of creditors when a meeting is rescheduled—at least with respect to notices to creditors that are registered users or participants in the ECF system.
Typically, the standing Chapter 13 trustee examines the debtor and discusses the proposed plan with the debtor and counsel at the meeting of creditors. In some jurisdictions, the final form of the plan will be hammered out at the meeting of creditors.
Creditors are permitted to examine the debtor at the meeting of creditors, but experienced creditors get their questions answered through informal discussions with debtor’s counsel at or before the meeting of creditors. Once a creditor’s treatment by the plan is known, further interrogation of the debtor at the meeting of creditors is usually discouraged. Often there are a significant number of cases set but only one standing trustee available. The meeting of creditors in a Chapter 13 case is rarely a good opportunity for a creditor to conduct extended discovery of the debtor.
Debtor’s counsel must know local practice in anticipation of the meeting of creditors. In many jurisdictions, the plan is designed and reduced to writing before the meeting of creditors. In other jurisdictions, the plan is actually created at the meeting of creditors. In some jurisdictions, debtor’s counsel is expected to perform all the necessary mathematical calculations before the meeting; elsewhere, the trustee does the math at or before the § 341 meeting.
In some jurisdictions, the notice of the § 341 meeting warns creditors that the final terms of the plan may be modified at the meeting of creditors, collateral may be valued for confirmation purposes and confirmation of the plan will follow immediately upon completion of the meeting of creditors absent objection.8 Although Bankruptcy Rule 2002(a)(5) requires at least 20 days’ notice of the time fixed to accept or reject a proposed modification of a plan,9 nothing in the Code or Rules requires the scheduling of a new meeting of creditors when the debtor amends or modifies a plan.10 In a district that accelerates Chapter 13 cases toward confirmation immediate to the § 341 meeting,11 debtor’s counsel and creditors’ counsel must complete their negotiations and be prepared to present their final agreements to the trustee at the § 341 meeting. A creditor who objects to confirmation may have to file objections before the § 341 meeting, or, at the latest, present its objection to the trustee at the meeting of creditors and immediately file a written objection to confirmation.12 If the notice to creditors is clear, a creditor’s failure to timely object to confirmation is usually fatal to the creditor’s position, even if a timely objection would have defeated confirmation of the plan.13
The meeting of creditors is often as close to a judicial proceeding as the Chapter 13 case will ever get. Although the bankruptcy judge is forbidden by statute to be present at the meeting of creditors,14 and neither the standing trustee nor the U.S. trustee is empowered to decide controversies, it is a fact of life in Chapter 13 cases in many judicial districts that most disputes between debtors and creditors are resolved at the meeting of creditors or in the hallway just before or after the meeting. It is the practice in many jurisdictions that debtors’ counsel come to the meeting of creditors with evidence (other than witnesses) in support of the proposed plan. For example, if the plan values an automobile, debtor’s counsel will bring the used car guide. Debtor’s counsel may use the debtor’s paycheck stub to demonstrate to the trustee the extent of disposable income. Procedure varies widely around the country—in some jurisdictions, the trustee has interviewed the debtor before the meeting of creditors; in others, the meeting of creditors is the first opportunity for face-to-face contact, and, if debtor’s counsel is prepared and convincing, it will be the last.
Local practice at the meeting of creditors may include a speech or videotape explaining the debtor’s duties and responsibilities. Counsel should warn the debtor not to leave the § 341 meeting before attending any required presentation.
1 Fed. R. Bankr. P. 2003(a). Prior to August 1, 1993, the Bankruptcy Rules required the U.S. trustee to “call” a meeting of creditors not less than 20 or more than 40 days after the petition in a Chapter 13 case. The committee note to the 1993 amendment states that “subdivision (a) is amended to extend by 10 days the time for holding the meeting of creditors in a Chapter 13 case. This extension will provide more flexibility for scheduling the meeting of creditors.”
2 Pub. L. No. 109-8, 119 Stat. 23 (2005). See Part 9.
3 See § 216.1 [ Timing of Hearing on Confirmation ] § 115.1 Timing of Hearing on Confirmation before BAPCPA.
4 11 U.S.C. § 1324(b), discussed in § 502.1 [ Timing of Hearing on Confirmation ] § 115.2 Timing of Hearing on Confirmation after BAPCPA.
5 See also § 38.2 [ Time for Filing Schedules, Statement of Financial Affairs, Plan and Other Documents ] § 37.4 Time for Filing Schedules, Statement of Financial Affairs, Plan and Other Documents.
6 11 U.S.C. § 341(a), as amended in 1986, requires that “the United States Trustee shall convene and preside at a meeting of creditors” (emphasis added). Bankruptcy Rule 2003 was amended in 1991 to reflect the role of the U.S. trustee. In the judicial districts of Alabama and North Carolina, these functions are performed by the clerk of the bankruptcy court. Prior to the nationwide expansion of the U.S. trustee program, the clerk of the court presided at meetings of creditors unless the court designated a different person to preside. In many jurisdictions, the bankruptcy court designated the Chapter 13 trustee to administer oaths and preside at the meeting of creditors.
7 United States Trustee v. Vance, 189 B.R. 386, 389–92 (W.D. Va. 1995) (Bankruptcy judge has authority to continue meeting of creditors on motion of debtor without notice to the U.S. trustee or a hearing. “There is no question that the scheduling of creditor’s meetings is ordinarily the task of the U.S. trustee . . . . This allocation of duties does not, however, preclude the possibility that a bankruptcy judge may choose to exercise control in an area which was assigned by the Code to the U.S. trustee. . . . [N]o provision of the Code expressly addresses a Bankruptcy Court’s authority to continue a Chapter 13 creditor’s meeting. . . . The court holds that the general grant of power to a Bankruptcy Court under § 105(a) includes the power to issue orders continuing creditor’s meetings. . . . There being no credible evidence before the court of malicious intent or abuse of authority by the Bankruptcy Court, this court holds that the Bankruptcy Court acted within its discretionary powers in hearing [the debtor] out of the presence of the U.S. trustee.”).
8 The binding effect of such notice is discussed in §§ 229.1 [ 11 U.S.C. § 1327(a): Binding Effect on Creditors and Debtors ] § 120.2 11 U.S.C. § 1327(a): Binding Effect on Creditors and Debtors and 233.1 [ Notice and Due Process Considerations, Including Claims Allowance and Valuation ] § 121.2 Notice and Due Process Considerations, Including Claims Allowance and Valuation.
9 See § 209.1 [ Timing, Procedure and Form ] § 114.1 Timing, Procedure and Form.
10 Modification before confirmation is discussed beginning at § 126.1 Standing, Timing and Procedure.
11 See §§ 216.1 [ Timing of Hearing on Confirmation ] § 115.1 Timing of Hearing on Confirmation before BAPCPA and 502.1 [ Timing of Hearing on Confirmation ] § 115.2 Timing of Hearing on Confirmation after BAPCPA.
13 See §§ 229.1 [ 11 U.S.C. § 1327(a): Binding Effect on Creditors and Debtors ] § 120.2 11 U.S.C. § 1327(a): Binding Effect on Creditors and Debtors and 233.1 [ Notice and Due Process Considerations, Including Claims Allowance and Valuation ] § 121.2 Notice and Due Process Considerations, Including Claims Allowance and Valuation.
14 11 U.S.C. § 341(c).