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Rule Amendment Proposes to Allow Objections to Exemptions After Conversion

By Stephen Sather

The Committee on Rules and Practice has recommended that the Judicial Conference approve a series of changes to the Federal Rules of Bankruptcy Procedure. One proposal is to amend Rule 1019 to allow a new period of time to object to exemptions when a case is converted from chapters 11, 12 or 13 to chapter 7. Currently, if creditors fail to object to an exemption in a reorganization case and the case is later converted to chapter 7, the chapter 7 trustee does not have an opportunity to object unless the debtor amends their exemptions. However, the rule would not apply if: (i) the case was originally filed as a chapter 7 and the period for objecting to exemptions expired or (ii) a plan was confirmed more than one year prior to conversion. If approved by the Judicial Conference, the rule will be transmitted to the Supreme Court for adoption.

Full post as published by A Texas Bankruptcy Lawyer's Blog on July 30, 2009 (boomark / email).