Bankruptcy Procedures Change Due to Coronavirus Outbreak

Check with your bankruptcy court for changes made to accommodate social distancing.

Bankruptcy courts across the country recognize that appearing in court and attending to court-related activities can increase exposure to the coronavirus. Here are some steps bankruptcy courts have taken to help curb the spread of COVID-19.

“Wet Signatures” Waived by Some Bankruptcy Courts

Some courts have temporarily relaxed the rule that requires bankruptcy attorneys to obtain an original or “wet signature” on the bankruptcy petition—the document filed to start the bankruptcy—before filing it through the online court system. The waiver allows attorneys and clients to review completed bankruptcy forms virtually before submitting them online, thereby avoiding an in-office signing.

Bankruptcy courts announcing modified signing rules include the Central District of Illinois, the Southern District of Alabama, and the District of Kansas (this is not an inclusive list). More courts are adopting similar practices. Check with your local bankruptcy court or attorney for details.

In-Person 341 Meeting of Creditors Canceled

On March 16, 2020, the U.S. Trustee continued all in-person 341 creditor meetings until April 10, 2020. Courts can hold 341 meetings telephonically, and many bankruptcy courts are implementing virtual options. For instance:

  • The Northern District of Illinois (western division only) provided notice of updated telephonic procedures effective March 24, 2020.
  • The Eastern District of Washington will proceed with telephonic conferencing beginning March 31, 2020.
  • The Southern District of Georgia, Savannah Division has rescheduled all hearings on March 25, 2020 to April 1, 2020 (they will be held telephonically).
  • The Southern District of New York and the Middle District of Florida require that all hearings and conferences take place by telephone.

Keep in mind that many courts are still modifying procedures and adopted changes vary. You can find out whether your court will conduct 341 hearings by phone by checking with your local bankruptcy attorney or by visiting the U.S. Trustee’s 341 meeting status webpage.

Other Bankruptcy Court Changes

Be aware that bankruptcy courts are modifying additional operational rules and guidelines, such as:

  • courthouse entry protocols
  • clerk office hours
  • service of process requirements, and
  • filing deadlines (typically courts have extended dates).

These changes are not uniform and vary by district, individual courthouses, and judges.

Bankruptcy Court Closures

While federal courts will take steps to remain open, you should anticipate closures. On March 23, 2020, the federal court serving the northern district of California announced closure due to COVID-19 exposure. Given the dynamic nature of the coronavirus outbreak, the federal court assigned to handle your bankruptcy matter could close, too.

If the court closes while your case is in progress, the automatic stay that provides protection from debt collection will remain in place. If the bankruptcy court closes before you file, talk with a local bankruptcy attorney about the possibility of filing at another location.

Effective March 24, 2020