Local Rule Rule 2016-1: Compensation of Professional Persons

Rule 2016-1. Compensation of Professional Persons

(a) NOTICE. Except as provided in subsection (b) of this rule, notice of any application for compensation must be sent to all creditors under Federal Rule of Bankruptcy Procedure 2002(a)(6) and such notice must state that any responses are due within 21 days of the filing of the application. If no response to the application is filed, the court may enter an order without further notice or a hearing.

(b) CHAPTER 7 CASES. In a chapter 7 case, an application for compensation filed in accordance with Federal Rule of Bankruptcy Procedure 2016(a) will be reviewed as part of the trustee's interim or final report. Therefore, the trustee's interim or final report satisfies the notice requirements of Federal Rule of Bankruptcy Procedure 2002(a)(6) and the applicant need not comply with subsection (a) of this rule.

(c) CHAPTER 13 CASES. In addition to the requirements in subsection (a) above, in a chapter 13 case, any application for compensation by a debtor's attorney must comply with the guidance maintained by the clerk.

(d) BANKRUPTCY PETITION PREPARERS. A bankruptcy petition preparer must complete, sign, and cause to be filed with the petition the bankruptcy petition preparer's notice, declaration, and signature (Official Form 119) and disclosure of compensation of bankruptcy petition preparer (Director's Form 2800). A bankruptcy petition preparer's compensation in a chapter 7 or 13 case is generally limited to $200.00. Any bankruptcy petition preparer paid more than $200.00 in any chapter 7 or 13 case must file an application for compensation in accordance with Federal Rule of Bankruptcy Procedure 2016(a) and subsections (a) and (b) of this rule.

[Effective April 15, 1997. Amended effective January 1, 2002; January 9, 2006; April 3, 2007; February 22, 2008; December 1, 2009; May 1, 2015; December 1, 2015; June 1, 2016; March 1, 2017; October 1, 2019; September 3, 2025.]

2025 Advisory Committee Notes Local Rule 2016-1 was significantly revised to ensure consistency with the Federal Rules of Bankruptcy Procedure.

The language of former subsection (a) now appears in new subsection (b) with few modifications. New subsection (a) makes clear that 21 days' notice of the application must be given in accordance with Fed. R. Bankr. P. 2002(a)(6). If no response to the application is received, the court may grant the application without further notice or a hearing. Any reference to a motion, which was found in former subsection (b), was removed. New subsection (b) contains much of the same language as former subsection (a) and specifically addresses chapter 7 cases. The procedure for filing and reviewing an application for compensation in a chapter 7 case is remaining the same.

The language of former subsection (c) was removed to ensure consistency with Fed. R. Bankr. P. 2016(a). Many of the requirements in former subsection (c) could be traced to the language in the federal rule. Other requirements, such as including a copy of the order approving the applicant's employment, stating the date that a plan was confirmed, and itemizing all unpaid administrative expenses, were deemed unnecessary. To comply with Fed. R. Bankr. P. 2016(a), specifically the requirement to describe the services rendered, the time expended, and expenses incurred, an applicant should generally attach its bills or timesheets, as applicable, to its application for compensation. New subsection (c) addresses chapter 13 cases only. When the debtor's attorney is filing an application for compensation, such application must comply with the guidance maintained by the clerk and available on the court's website at www.mnb.uscourts.gov. The guidance addresses the presumptively reasonable fee amounts and describes the types of services that are included in such amounts. Local Form 2016-1 was revised to conform to the guidance and to include certain formatting changes.

Former subsection (e) is now subsection (d) and was revised to avoid duplication with 11 U.S.C. § 110 and to reflect the clerk's current practice in this district. For example, former subsection (e)(4) was removed as 11 U.S.C. § 110 has sanction provisions. In addition, the provision in former subsection (e)(5) about the clerk providing notice of that section was removed as that procedure does not reflect current practice. The amount permitted to be charged for preparation of a chapter 7 or 13 debtor's schedules and statements increased from $90.00 to $200.00. The amount is set by local rule, as the Supreme Court and the Judicial Conference of the United States have not set a maximum allowable fee under 11 U.S.C. § 110(h)(1). Finally, any reference to a motion was removed and replaced with a reference to an application. Because various subsections were removed, former subsection (e) was condensed to one paragraph without further subsections.