Bankruptcy creditor’s “proof of claim” allows payment of the debt owed

Before a bankruptcy creditor can be paid from the debtor’s estate, the creditor must show proof of the indebtedness by filing a proof of claim, which serves as evidence to the court that the debt exists. If the creditor does not timely file a proof of claim, then the debtor or the bankruptcy trustee may file the claim within 30 days after expiration of the filing period. If the debtor or trustee files the proof of claim for the creditor, the court clerk will notify the creditor by mail. [To view a sample proof of claim, click here.] In a Chapter 9 (debt relief for municipalities) or Chapter 11 bankruptcy case, a creditor included on the debtor’s schedule of liabilities need not file a claim. The mere fact that the creditor is listed indicates to the court that the claim is valid. If the claim is omitted or is listed incorrectly, the creditor must file a corrected claim. However, a secured creditor need not file a claim unless the debt is not listed, is disputed, or is listed incorrectly. It is the creditor’s responsibility to determine if the claim is listed correctly. Some creditors prefer to file a claim in all cases, even if it is not required. A trustee may file a claim on behalf of all known or unknown holders of securities issued pursuant to a trust instrument of which the trustee is an agent. If all of the names are unknown, the trustee will file for those creditors in his or her own name. Additionally, an agent representing a group of creditors may file a proof of claim on behalf of those creditors. If a creditor fails to file a claim in an asset case within the appropriate time period, the debtor or the trustee may file a claim on behalf of the creditor within 30 days after expiration of the time for filing claims. The clerk notifies the creditor, who may then file a proof of claim that supersedes the claim filed by the debtor or the trustee. If the creditor, debtor or trustee does not file a proof of claim on behalf of a creditor, then there is no distribution on the claim, and the debt is nondischargeable and subject to full payment by the debtor. Therefore, it is in the debtor’s best interest to make certain all claims are appropriately filed. If it appears that the debtor’s estate has few or no assets, distribution to creditors is unlikely. The clerk will notify creditors of a “no asset” case, and the creditors need not file claims unless directed by the court to do so. For a creditor to vote at a §341(a) meeting of creditors in a Chapter 7 bankruptcy case, the creditor must file a proof of claim on or before the date of the first meeting of creditors. A creditor in a Chapter 7, 12 or 13 bankruptcy case must file a proof of claim within 90 days after the first date set for the §341(a) meeting of creditors. Exceptions to this rule include the following:

• The United States, or governmental unit, may file a claim within 180 days of the order for relief if the debt is not from a tax return. For a Chapter 13 debtor, the United States or governmental unit may file a claim within 180 days of the order for relief, or 60 days after the debtor files a tax return. This time period may be extended upon motion of the governmental unit before the time expires.
• An infant, incompetent, or representative of either, may move for an extension if it will not delay the case.
• A claim that resulted from a judgment on an unsecured claim for the recovery of money may be filed within 30 days after the judgment becomes final. A judgment becomes final for the purpose of this section when the appeal period has expired or, if an appeal is taken, at the conclusion of the appeal.
• A claim that results from the rejection of an executory contract or unexpired lease may be filed within such time as the court directs.
• If creditors were notified that there would be no payment to them because the debtor’s estate had no assets, and they subsequently learn that payment from the estate is possible, a proof of claim may be filed within 90 days after notification of that possibility.
• In Chapter 9 (municipality) and Chapter 11 bankruptcy cases, the court will fix the time for filing claims, and may extend the time to a creditor with a foreign address or if good cause is shown to the court’s satisfaction.
• If the notice of the time to file a proof of claim was mailed to a creditor at a foreign address, the court may extend the time by not more than 60 days upon a motion filed by the creditor.