The word “bankruptcy” often strikes dread in the hearts of creditors. To some, when they hear that someone who owes them money has filed bankruptcy, they envision writing off the debt and never receiving a cent. However, all is not necessarily lost when a customer files bankruptcy. There are some steps you can take to assert your claim – one of which is to file a proof of claim.
Although this is intended to provide a basic overview of the proof of claim process, dependent on the type of claim, type of bankruptcy case, and the nuances involved, it is advisable to consult an attorney before filing a proof of claim.
What is a proof of claim?
A proof of claim is a written statement, usually on an official form provided by the court, setting forth a creditor’s claim. Generally, the proof of claim must be signed by the creditor or its authorized agent.
Why should you file a proof of claim?
In chapter 11 cases, you should file a proof of claim if the debtor does not list the claim in its schedules, lists a different amount due, or lists the claim as disputed, contingent, or unliquidated. In chapter 7 cases, if it appears that there are no assets from which a dividend can be paid, the notice of the meeting of the creditors may instruct creditors not to file a proof of claim.
What is the deadline to file a proof of claim?
Generally, in chapter 7 or 13 cases, a proof of claim must be filed no later than 90 days after the first date set for the meeting of creditors. In chapter 11 cases, the deadline for filing a proof of claim is set by the court.
The proof of claim must be filed with the clerk of the bankruptcy court by the deadline. Be sure to mail the proof of claim sufficiently in advance of the deadline so that it is actually received by the deadline. Some courts allow proofs of claims to be electronically filed and may provide you login information for the electronic case filing system.
What information should a proof of claim contain?
The proof of claim provides the amount and basis for your claim against the debtor and lists amounts owed to you as of the date the bankruptcy case was filed. If your claim is based on a written document, a redacted copy of that document must be attached to the proof of claim. If the document has been lost or destroyed, you must include a statement explaining the circumstances of the loss or destruction.
If the debtor is an individual and the claim includes interest, fees, expenses, or other charges incurred before the debtor filed the bankruptcy petition, then you must attach an itemized statement setting forth these charges. For instance, if you are a credit card collector, you must attach the credit agreement and a summary showing the name and account number of the debtor, the amount of the debt, the interest rate, and a break down of the interest charges, finance charges, and other fees that make up the balance of the debt, or attach enough monthly statements so that this information can be easily determined.
If the account has been transferred and you are the transferee, you must attach documentation showing your ownership of the claim, such as a copy of the assignment and sufficient information to identify the original account.
If you claim a security interest in the debtor’s property, you must attach a statement of the amount necessary to cure any default as of the date of the petition with the proof of claim and evidence that the security interest has been perfected.
There are additional requirements for creditors who claim a security interest in the debtor’s home. For example, a mortgage holder, including private lenders, must also attach any escrow statement as of the date the debtor filed bankruptcy.
You should also review the bankruptcy court’s local rules for requirements particular to that jurisdiction. For instance, the Southern District of Texas requires that, in chapter 13 cases, an approved loan history form be completed and attached to the proof of claim.
What happens after the proof of claim is filed?
A proof of claim executed and filed in accordance with the Bankruptcy Rules is deemed allowed unless an objection is filed.
An objection to a proof of claim puts the parties on notice that litigation may be required, and a court will have to determine whether to allow or disallow the claim. If your claim is deemed allowed, it should be paid pursuant to the plan in a chapter 11 or chapter 13 case or when a distribution is made in a chapter 7 case. For an unsecured claim, the amount of the payment will vary depending on the value of the assets liquidated and the amount of the claims filed against the debtor.
As you can see, while it seems that proofs of claim are simple documents that require you to simply fill in the blanks, there are often nuances and complexities that merit reviewing the proof of claim with your lawyer before filing it. You will also want to monitor the bankruptcy case for activity that may affect your claim. Additionally, depending on your status as a secured or unsecured creditor, you may have the ability to influence the overall distribution.
 In large chapter 11 cases, a claims agent may be responsible for handling the proofs of claim. In these cases, the notice with the deadline for filing the proofs of claim will provide instructions on where to file the proofs of claim.