How to Object to a Proof of Claim in Bankruptcy

Learn how you can object to a creditor's proof of claim in bankruptcy, and when you might want to do so.

If a creditor wants to get paid in your bankruptcy proceeding, it must file a proof of claim with the court. If you don’t agree with a proof of claim filed in your case, you can object to the claim and ask the court to disallow it. (To learn about proofs of claim and the role they play in bankruptcy, see What Is the Bankruptcy Proof of Claim?) Read on to learn more about how to object to a proof of claim in bankruptcy.

When Can You Object to a Proof of Claim?

In general, you can object to a proof of claim only if you are a party in interest (meaning that the payment of the claim will affect you financially). Whether you have the right to object to a proof of claim depends on whether you file for Chapter 7 or Chapter 13 bankruptcy.

Chapter 7 bankruptcy. In most Chapter 7 cases, the debtor doesn’t have standing to object to a proof of claim because the debtor has a no-asset bankruptcy or is not affected by how the proceeds of the bankruptcy estate are divided among unsecured creditors. But if objecting to a proof of claim will benefit you (perhaps by allowing you to keep more of your property or pay more of your nondischargeable debts that survive bankruptcy), then you have a right to challenge the claim.

Chapter 13 bankruptcy. You can always object to proofs of claim in Chapter 13 bankruptcy (even if you are paying nothing to your unsecured creditors) because your repayment plan can be modified to increase the distribution to creditors at a later date.

Reasons You Might Object to a Proof of Claim

The following are some of the most common reasons you may object to a proof of claim filed in your bankruptcy:

  • the claim amount is incorrect
  • the claim is erroneously filed as a secured or priority debt
  • the creditor did not attach any supporting documentation to prove you owe the debt
  • the claim duplicates another filed for the same underlying debt
  • you don’t owe the debt stated in the claim, or
  • the claim was filed after the deadline to file claims has expired.

How Do You Object to a Proof of Claim?

Each bankruptcy court typically has its own procedures for filing an objection to a proof of claim. Review your local court rules to learn how to properly object to a claim in your jurisdiction.

But in general, you must file a written objection with the court and explain why you think the creditor’s claim is incorrect and should be modified or disallowed. In most cases, you will be required to obtain a hearing date from the court prior to filing your objection. You must serve the objection and notice of hearing on the affected creditor and the bankruptcy trustee.

If the creditor doesn’t oppose your objection, the court will grant it. But if the creditor files an opposition to your objection, you will have to argue your position in front of a bankruptcy judge who will decide whether the claim should be allowed or not.

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