In some situations, if a creditor doesn't file a proof of claim in your bankruptcy, you should file one for the creditor.
If a bankruptcy creditor wants payment, 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, and it can be in your best interest to do so. Read on to learn more about when to file a proof of claim for a creditor.
Reasons Why a Creditor Might Not File a Proof of Claim
If a creditor doesn't file a proof of claim, it will not get paid in the 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:
- you filed a no-asset Chapter 7 bankruptcy
- the amount of your debt is minimal, or
- the creditor made a mistake.
To learn more about what a creditor must include in a proof of claim, see What Is the Bankruptcy Proof of Claim?
Reasons to File a Creditor's Proof of Claim
You should file a proof of claim for a creditor if you want to pay off a specific debt in your bankruptcy and the creditor did not file a claim in the time allowed by law (discussed below). In most cases, a debtor will file a proof of claim for nondischargeable or secured debts they wish to pay off through their Chapter 13 repayment plan.
Nondischargeable debts. If you have a nondischargeable debt that won't be wiped out in bankruptcy, you can't eliminate it in bankruptcy. But you can pay it off through your repayment plan in Chapter 13 bankruptcy. 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 won't be paid off in your bankruptcy. You'll remain responsible for it even after you complete your plan.
Learn more in Debts That Are Discharged in Chapter 7 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'll want to be sure that your lender is getting paid through your bankruptcy. Although secured creditors must file claims (it hadn't been that way in the past), if the lender doesn't, it will be in your best interest to file one on its behalf. For more information, see The Chapter 13 Repayment Plan.
When to File a Proof of Claim for a Creditor
All creditors other than governmental creditors have 70 days from the filing of the bankruptcy to file a claim. The claims bar date used to be measured by the meeting of creditors, but that has changed.
Governmental entities have 180 days from the filing of your case. 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.
