In bankruptcy, creditors usually file their own proofs of claim. However, in certain circumstances the bankruptcy debtor should file a proof of claim on behalf of a creditor. This is because the bankruptcy trustee will usually not pay a creditor unless the creditor (or debtor) has filed a proof of claim. If a creditor does not timely file a claim, and the debtor wants the creditor to be paid out of the bankruptcy estate, the debtor will have to file the claim on the creditor's behalf.
To learn what a proof of claim is, and its role in bankruptcy cases, see What Is a Proof of Claim in Bankruptcy?
When Should a Debtor File a Claim on Behalf of a Creditor?
Here are some circumstances when you would, and would not, want to file a proof of claim on behalf of a creditor.
Creditors holding nondischargeable claims (claims that can’t be eliminated through bankruptcy proceedings) must file a proof of claim if they want to receive payment. Some examples of nondischargeable debts include most federal, state, and local income taxes, child support, alimony, and student loans. (Learn more about which debts are nondischargeable and how they are paid in bankruptcy.)
If the holder of a nondischargeable debt does not file a claim and does not receive payment through the bankruptcy, the debtor will have unpaid debts remaining after receiving a discharge in their bankruptcy case. In this instance, a debtor should file a proof of claim so that the creditor will receive payment.
Secured debts are those debts for which a piece of property serves as collateral, like a house or a car. If you don't pay the debt, the creditor can take the property. Secured creditors are not required to file a proof of claim because their lien is preserved even without a claim on file. However, many bankruptcy trustees will not disburse funds to secured creditors who have not timely filed a claim. A debtor may want to file a proof of claim in this instance to make sure that a delinquency does not arise which could result in the loss of a home or vehicle.
It is almost never necessary for a debtor to file a proof of claim on behalf of an unsecured creditor. The debtor actually benefits if an unsecured creditor fails to file a claim because that is one less debt that must be repaid over the life of the Chapter 13 case.
No-Asset Chapter 7 Cases
The trust will not require creditors to file proofs of claims in a Chapter 7 case if there are no assets to be divided among all creditors. Most Chapter 7 cases are no asset cases so proof of claims rarely need to be filed by a creditor or a debtor. (To learn more, see No-Asset Chapter 7 Bankruptcy Cases.)
Deadline for Filing a Proof of Claim
A debtor must wait until the creditor’s time to file a proof of claim has expired before filing a claim on its behalf. Here are some of the more common deadlines:
- Unsecured creditors have until 90 days from the date of the first meeting of creditors to file a proof of claim.
- Governmental units (such as the Internal Revenue Service) have 180 days from the date that the bankruptcy is filed to file a proof of claim.
Once those deadlines have expired the debtor has 30 days to file a claim. Keep in mind that the bankruptcy rules only permit a debtor to file a claim for a debt that arose before the filing of a bankruptcy case. For example, if you incur income tax debt two years into your bankruptcy case you are not permitted to file a proof of claim on behalf of the taxing authority even if you want the trustee to pay the claim through your bankruptcy case.