- Bankruptcy Update
- September 30, 2013 | Author: Alan C. Hochheiser
- Law Firm: Weltman, Weinberg & Reis Co., L.P.A. - Cleveland Office
The Government’s involvement in bankruptcy matters is now more evident than ever. Whether it is the Federal Government’s sequestration policy, the Consumer Financial Protection Bureau, The Supreme Court or The Justice Department’s involvement in major airlines mergers, it will change the way our clients do business for years to come.
Although we have seen a decrease in bankruptcy filings by 13% nationally over the last 12 months, bankruptcy courts continue to operate. With the recent sequestration of Federal Employees, we have seen reductions in clerk offices, as well as delays with getting additional bankruptcy judges appointed. Even though we may not feel the strains of these reductions on a daily basis, continued cutbacks by the government could affect the timing of matters being heard in the bankruptcy courts. This may mean longer time frames for Chapter 13 plans being confirmed, delayed hearings on evidentiary matters for Relief from Stay and increased time frames for First Meetings to Occur. In addition, when Judge’s retire, will they be replaced and confirmed on a timely basis? It will be an interesting road ahead.
The CFPB continues to provide guidance and rules pertaining to the credit industry. Recently, the CFPB issued a directive that will require creditors collecting their own debts to be subject to the provisions of the FDCPA (Fair Debt Collections Practices Act). Although the legislation enacted by Congress many years ago exempted creditors who collect their own debt, the CFPB has indicated that they will issue penalties to creditors who violate the FDCPA. The majority of creditors conduct their business within the rules, but all creditors must be alerted as to how this may affect their procedures.
The Supreme Court will continue to play a role in bankruptcy law. More and more cases are being presented to the Court but only a few are being heard. As lower courts are reaching differing conclusions, the Supreme Court will end up providing guidance on issues of major concern like they have done in Till and Rash.