What is a Proof of Claim in Bankruptcy?

If a creditor wants to get paid in bankruptcy, it must file a proof of claim.

In bankruptcy, a proof of claim is a form creditors file to prove that they have a valid claim against the bankruptcy estate. Before a creditor can get paid through your bankruptcy, it must file a proof of claim with the court. Read on to learn more about the bankruptcy proof of claim.

What Is a Proof of Claim?

A proof of claim is a form creditors file with the court to substantiate their claims in bankruptcy. When you file for bankruptcy, all creditors listed in your schedules receive notice of your case as well as a deadline to file their proofs of claim (called the claims bar date). For most creditors, the deadline is 90 days after the initial meeting of creditors (for government entities it is 180 days).

If a creditor doesn’t file a proof of claim, it can’t get paid through your bankruptcy. In a no-asset Chapter 7 case, creditors will typically not file proofs of claim because there are no assets to distribute. However, in Chapter 13 bankruptcy or a Chapter 7 case with nonexempt assets, the bankruptcy trustee will only pay those creditors who have filed a proof of claim with the court.

Who Can File Proofs of Claim?

In most cases, creditors will file their own proofs of claim. But the debtor can also file a proof of claim on behalf of a creditor who has not done so on its own. This usually happens if the debtor specifically wants to pay that creditor through the bankruptcy.

EXAMPLE

If you filed a Chapter 13 bankruptcy to catch up on your mortgage arrears and save your home, you want the mortgage lender to get paid through your repayment plan. If the mortgage company fails to file a claim in your case, you can notify it to file a proof of claim or obtain the necessary information to file it yourself.

What Is Included in a Proof of Claim?

In general, a bankruptcy proof of claim must include:

  • the debtor’s name and case number
  • the creditor’s name
  • notice and payment addresses for the creditor
  • claim amount as of the bankruptcy filing date
  • whether the debt is a secured, unsecured, or priority claim, and
  • the creditor’s basis for the claim.

In addition to completing the proof of claim form in its entirety, the creditor must attach to it all supporting documentation substantiating its claim (such as a promissory note, loan agreement, or deed of trust).

Objecting to a Proof of Claim

If you don’t agree with a creditor’s proof of claim, you can object to it. The specific procedures for objecting to proofs of claim depend on the rules in your jurisdiction. However, you typically must obtain a hearing date, fill out the required forms, explain why you think the proof of claim is wrong (attaching any necessary proof), file the objection with the court, and serve it on the affected creditor.

In most cases, debtors object to proofs of claim because:

  • the amount of the claim is incorrect
  • the claim is incorrectly classified as a secured or priority debt, or
  • there is no supporting documentation attached to the claim form.

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