by: Baran Bulkat, Attorney
If a creditor wants to get paid in your bankruptcy, it must file a form called a proof of claim with the court. But debtors are also allowed to file proofs of claim for creditors. While this may sound strange, sometimes it can be in your best interest to file a proof of claim on behalf of a creditor. Read on to learn more about when it makes to file a proof of claim for a creditor.
If a creditor doesn’t file a proof of claim, it will not get paid in bankruptcy. But creditors routinely fail to file proofs of claim in bankruptcy cases. The following are some of the most common reasons a creditor may not file a proof of claim in your bankruptcy:
To learn more about what must be included in a proof of claim, see What Is the Bankruptcy Proof of Claim?
You should file a proof of claim for a creditor if you want to pay off the specific debt in your bankruptcy and the creditor did not file a claim in the time allowed by law (discussed below). In most cases, debtors will file proofs of claims for nondischargeable or secured debts they wish to pay off through their Chapter 13 repayment plan.
Nondischargeable debts. If you have any nondischargeable debts (debts note wiped out in bankruptcy), you can’t eliminate them by simply filing for bankruptcy and obtaining a discharge. But you can pay them off through your repayment plan in Chapter 13 bankruptcy. Common examples of nondischargeable obligations include alimony, child support, certain tax debts, and student loans (unless you can prove undue hardship which is extremely difficult to do). If a creditor fails to file a proof of claim for a nondischargeable debt, it will not be paid off in your bankruptcy and you will remain on the hook even after you complete your plan. (To learn more about debts you can’t eliminate in bankruptcy, see Debts That Survive Chapter 7 Bankruptcy and Debts That Survive Chapter 13 Bankruptcy.)
Secured debts. Many debtors file for Chapter 13 bankruptcy to catch up on their missed mortgage, car loan, or other secured debt payments. If you want to cure your arrears and save your home or car, you want to make sure that your lender is getting paid through your bankruptcy. This means that if your lender doesn’t file a proof of claim, it will be in your best interest to file one on its behalf. (For more information on how Chapter 13 plans work, see our topic area on The Chapter 13 Repayment Plan.)
In general, creditors have 90 days from the first scheduled date of your meeting of creditors to file their claims. But governmental entities have 180 days from when your case was filed. You must wait until the creditor's deadline passes before filing a claim on its behalf. Most creditors will file their proofs of claim on time. But if a creditor doesn’t, you have 30 days after the deadline expires to file the claim yourself.