Courts EOUST Prepare for BAPCPA

Courts EOUST Prepare for BAPCPA

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Both the Executive Office for U.S. Trustees and the federal courts rulemaking apparatus are ready for the Oct. 17 effective date of BAPCPA, according to testimony at a House Judiciary Committee oversight hearing on July 26. The hearing covered issues such as the criteria for approval of budget and credit counseling agencies and financial management instructional courses, establishing of means test protocols (income/expense screening mechanisms), new procedures for oversight of small business debtors, new rules and forms promulgated by the Judicial Conference of the United States, and more.

Under BAPCPA, all individual debtors who file on or after Oct. 17 must first undergo credit counseling and complete a financial-management course after they file. BAPCPA directs the EOUST to approve budget and credit counseling agencies and providers of the financial management course according to criteria set forth in the law. It also directs the clerk of the bankruptcy court to maintain a publicly available list of U.S. Trustee-approved agencies and education providers. The EOUST is now actively reviewing the applications. The EOUST has also set forth new bonding requirements for those seeking approval as a nonprofit budget and credit counseling agency. Surety bonds payable to the United States are required, as is proof of adequate employee bonding or fidelity insurance.

Interim rules and forms are being promulgated by the Judicial Conference to apply from Oct. 17 until final rules and forms can be effected through the normal Rules Enabling Act process. A total of 40 rules are either added to or amended by the interim rules. There are 10 new rules. Rules changes cover consumer cases, business cases, health care cases, cross-border cases and direct appeals. Links to the rules changes can be found on the ABI home page.

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Journal Date: 
Thursday, September 1, 2005