There are plenty of documents and requirements in a consumer bankruptcy case. One that you may have heard of is the “proof of claim.” This is a written statement that tells the court, the debtor, and the trustee, along with other interested parties, that a creditor will exercise the right to receive a payout from the bankruptcy estate.
In a Chapter 7 or Chapter 13 consumer bankruptcy case, when assets are there to distribute, creditors are required to file their proof of claim if they wish to receive payment from those assets.
Who Files the Proof of Claim?
For a Chapter 7 or Chapter 13 bankruptcy case, the unsecured creditors will file their proof of claim to receive payment. Certain secured creditors do not have to file a proof of claim to receive payment. For example, if there is a lien holder on your property, that secured creditor will receive payment without a proof of claim required.
When is the Proof of Claim Issued in a Bankruptcy Case?
There are strict deadlines for bankruptcy cases. The deadline for a proof of claim for all non-government creditors in Chapter 7 and Chapter 13 bankruptcy is 90 days after the first creditor meeting. A government entity has 180 days from the date of the bankruptcy order to request relief.
The initial notice sent to creditors, which tells them about a consumer’s choice to file bankruptcy, will give them a deadline for their proof of claim. The notice also tells creditors about their date and time of the meeting of the creditors, which they can choose to attend or send a representative.
Bankruptcy court judges rarely approve an extension, especially after the deadline has passed. However, they do have the power to allow extensions if the creditor has extenuating circumstances.
The Requirements for the Proof of Claim
While the debtor is not the one filing the proof of claim, he or she should be aware of the requirements for that document. A formal proof of claim is filed with the Official Bankruptcy Form 10. It includes the bankruptcy case number, debtor’s name, identification of the creditor, the amount due, the basis for their proof, and the type of claim (i.e., secured or unsecured debt).
The proof will also include supporting documentation. The creditor must be able to prove to the courts that the debt is valid. For example, they may have statements or original documents with your signature. Most importantly, they must have the originals. They cannot have faxed versions or copies of the signature.
What Happens if I Have No Assets and File Chapter 7?
If you are performing a no-asset Chapter 7 bankruptcy, then the court will tell creditors there is no proof of claim, because you have no assets to liquidate and distribute. If, however, you acquire assets later, the creditors are notified by your bankruptcy trustee, and they are given the opportunity to file a proof of claim against those assets.
Can I Object to a Proof of Claim?
Yes, you can. However, you will want to consult with a bankruptcy attorney. The court will accept the proof of claim as-is, unless you object to it. You may object if you feel the amount is incorrect, the claim has improper penalty and interest accumulation, or the creditor cannot furnish evidence that you are the one who owes the debt.
For assistance with your bankruptcy case, or to object to a proof of claim, speak with an attorney at Hames Anderson Whitlow & O’Leary today by calling 509-586-7797 or requesting your appointment online.