NACBA member David Shaev (NY) testified before the Advisory Committee on Bankruptcy Rules  on Friday, February 5, 2010, on the subject of the proposed changes to Bankruptcy Rules 3001 and 3002. Shaev was the only witness who testified on behalf of consumer debtors and strongly supported the proposed changes, suggesting that, if anything, they should be strengthened. 

In addition to submitting written testimony [linked], Shaev rebutted the testimony of other witnesses, including debt buyers and bank representatives, who focused on the fact that few objections to Proofs of Claim are typically filed.  David stated that in general there is no incentive to file objections to claims because any money saved would be distributed to other creditors and because attorney's fees are not awarded for successful objections.

He had the opportunity to expand on NACBA Member Professor Katherine Porter's study on mortgage claims and was able to debunk the other witnesses' basic argument on secured and unsecured claims, using as an example a proof of claim filed by PRA Receivables Management as agent for Portfolio Recovery Assets, which had filed an unsecured proof of claim for over $12,000 with no documentation.  A summary page was annexed, but did not identify any creditor that the debtor could verify as a debt.  David explained that he demanded documentation by letter prior to the filing of the objection but received none.  The Judge expunged the entire claim at hearing as well as others, totaling approximately 60% of the total unsecured claims filed.

NACBA Board Member John Rao, a member of the Rules Committee, was also at the hearing.