What is a Proof of Claim?
A Proof of Claim is a written assertion to the bankruptcy court, trustee, debtor and other interested parties that you, the creditor, wish to assert your rights to a distribution in a bankruptcy case. Filing a Proof of Claim may be your only avenue of potentially being paid by a bankrupt debtor.
Who must file a Proof of Claim?
A Proof of Claim may be filed in a Chapter 7, Chapter 11 or Chapter 13 bankruptcy filing. If you are an unsecured creditor and the bankrupt debtor has assets available to creditors, you must file your claim within 90 days of the date of the first creditors meeting. The deadline for filing is typically provided on the initial Notice of Bankruptcy.
Secured creditors with a perfected lien typically do not need to file a Proof of Claim.
“No Asset Chapter 7 Bankruptcies” do not accept Proof of Claims. If a No Asset Chapter 7 is converted to an asset case, the trustee must notify the creditors and they must file a claim at that time.
What is included in a Proof of Claim?
A Proof of Claim is a Form 10 in the U.S. Bankruptcy Courts. (Click here to access an editable Form 10.)
All Proof of Claims must include:
- The Bankruptcy Court (i.e., Middle District of FL, Northern District of NY, etc.)
- Who the debtor is and bankruptcy case number
- Who the creditor is and their mailing address
- If the claim is filed as an original claim or an amended claim
- The amount owed as of the petition date
- The basis for the claim
- The type of claim (secured or unsecured).
The Proof of Claim should also include as an attachment any supporting documentation.
Filing a Proof of Claim is typically your best possibility for recovering anything from a bankrupt debtor; however filing a Proof of Claim is voluntarily subjecting yourself to the bankruptcy court’s jurisdiction to make a determination in the claim. Doing so may cause you to lose rights you may otherwise have, including a right to a jury trial and fraudulent transfer actions. Creditors should carefully consider this prior to filing a claim. If there is any concern, seek legal counsel.
Is there anything you would like to know about Proof of Claims that wasn’t discussed in this blog post? What about more details on the information presented above? Address your questions here by using the comment field below!