What Is a Proof of Claim in Bankruptcy?

Information about proofs of claims in Chapter 7 and Chapter 13 bankruptcy, and whether you can object.

By , Attorney University of the Pacific McGeorge School of Law
Updated 6/14/2022

A proof of claim form is the official bankruptcy form a creditor must file before getting paid in a bankruptcy case. The proof of claim form tells the bankruptcy trustee the type of claim the creditor asserts and how much the filer owes the creditor. The bankruptcy trustee needs this information to determine the amount to pay the creditor.

For instance, some debts, like income tax and domestic support obligations, have "priority" status and are paid before other claims. If the proof of claim form doesn't show the debt has priority status, it's unlikely to be paid in full and might receive little or nothing.

Read on to learn who can file a proof of claim form, filing procedures, and how to object when a creditor's proof of claim form is inaccurate.

Who Must File a Proof of Claim?

All creditors seeking payment out of bankruptcy funds must file a proof of claim. (FRBP 3002.)

Early in the case, the bankruptcy trustee tells creditors whether there will be any money for claims. In Chapter 7, it's common for creditors to receive nothing. These cases are known as Chapter 7 "no-asset" cases. If the trustee finds assets or funds for creditors, the status will change, and the trustee will instruct creditors to file a proof of claim.

Creditors always file claims in Chapter 13 cases.

Secured Creditors With Liens and Proof of Claim Forms

Like all creditors, a secured creditor, such as a mortgage or vehicle lender, must file a claim to receive money through the bankruptcy estate (with a few exceptions).

However, even if the secured creditor doesn't file a proof of claim, the creditor won't lose its lien rights allowing the creditor to take the property back if the debtor doesn't pay as agreed.

Understanding when a creditor has a lien on your property is essential in bankruptcy because, in Chapters 7, 12, and 13, if you don't remain current on the monthly payment, you'll lose the car, house, or other property. The lender can recover it using the lien rights, even in bankruptcy.

Learn what you must do to keep a house in Chapter 7 and to keep a house in Chapter 13. The requirements are very different.

What Happens If a Secured Creditor Doesn't File a Proof of Claim Form?

Nothing good. If the lender doesn't file a proof of claim form in Chapter 13, the Chapter 13 trustee won't pay the creditor out of the monthly plan payments, setting the debtor up to lose the property.

As a practical matter, if a secured lender doesn't file a proof of claim in a Chapter 13 case, a debtor who wants to keep the property securing the claim (such as a house or car) has a couple of options.

  • Pay outside of the plan. The debtor can make the payments directly to the creditor instead of through the plan. It's cheaper because it avoids the trustee's fee, which can be up to 10%.
  • File a proof of claim for the creditor. The debtor can file a proof of claim on behalf of the creditor to maintain the secured payment.

Deadline to File a Proof of Claim Form in Bankruptcy Chapters 7, 12, and 13

The deadline for filing a proof of claim form for nongovernmental creditors in Chapter 7, 12, or Chapter 13 bankruptcy cases is 70 days after the petition filing date. Government entities have additional time and must file a proof of claim within 180 days after the "order for relief" or bankruptcy filing date.

The first notice sent to creditors includes the deadline for filing proofs of claim. This notice informs creditors that a petition has been filed and indicates the date set for the meeting of creditors. This notice also sets the last date they can file objections to the discharge.

Although the court doesn't usually permit extensions once the deadline has passed, the court has the power to extend the filing time if a creditor shows extenuating circumstances.

What Must the Creditor Include With the Proof of Claim Form in Bankruptcy?

Here's what the creditor must include in its proof of claim.

Formal Proof of Claim

A proof of claim must conform substantially with the official bankruptcy form, Proof of Claim (Form 410). You can download official bankruptcy forms from the U.S. Courts Bankruptcy Forms page, including Form 410. The information a creditor will need to include is as follows:

  • the debtor's name and the bankruptcy case number
  • the creditor's information, including a mailing address
  • the amount owed as of the petition date
  • the basis for the claim (such as goods or services purchased, a loan or credit card balance, a personal injury or wrongful death award), and
  • the type of claim (secured or unsecured).

The creditor should attach supporting documentation, such as the contract, as evidence of the claim. Official attachment forms are available. Also, the creditor or an authorized representative must sign the proof of claim.

Informal Proof of Claim

Some courts will accept an informal proof of claim from a creditor if it meets the following five requirements:

  • it's is in writing
  • includes a demand against the bankruptcy estate
  • demonstrates the intent to hold the estate liable
  • is filed with the bankruptcy court, and
  • allowing the claim would be fair under the circumstances of the case.

Although a bankruptcy judge will consider these requirements, the decision about whether an informal proof of claim will be allowed is ultimately within the bankruptcy judge's discretion.

Objecting to a Proof of Claim in Bankruptcy

The court usually accepts the proof of claim and its stated amount unless the debtor, trustee, or another interested party objects.

Some of the most common objections someone might make include:

  • incorrect amount
  • improper interest or other penalty charges
  • wrong claim type (incorrectly labels an unsecured claim as a priority claim)
  • serves to harass the debtor, or
  • fails to include supporting documentation.

To object to a creditor's claim, the party objecting must file a written objection with the bankruptcy court and serve a copy and the notice of hearing on the creditor, the debtor, and the trustee at least 30 days before a scheduled hearing.

Who Can Object to a Chapter 7 Bankruptcy Claim?

Only a "party in interest" can object to a Chapter 7 bankruptcy case claim. A "party in interest" is a person or entity with a financial stake in the outcome of the claim.

Generally, in a Chapter 7 bankruptcy case, the Chapter 7 trustee will object to proofs of claim. But a Chapter 7 debtor might also need to object to a claim.

A Chapter 7 debtor will do so if the existing claims will cause the debtor to lose more property than necessary or cause the debtor to owe more than the debtor should after the closure of the bankruptcy case. This will usually happen only if an issue exists with a nondischargeable priority claim, such as taxes or a domestic support obligation.

Additionally, the majority of bankruptcy courts have held that a Chapter 7 debtor can object to claims if he or she shows:

  • the debtor had a financial interest in the result because there is likely to be money left over once all claims are paid (this is rare in a Chapter 7 case)
  • the trustee unjustifiably failed or refused to object to the claim or claims in question, or
  • the debt owed by the debtor is not dischargeable.

The objecting party must present sufficient evidence that demonstrates the creditor's claim should not be allowed. If the objecting party produces such evidence, the burden of proof shifts back to the creditor to prove their claim.

Who Can Object to a Chapter 13 Bankruptcy Claim?

Any party in interest can object to a Chapter 13 bankruptcy case claim.

Need More Bankruptcy Help?

Did you know Nolo has been making the law easy for over fifty years? It's true—and we want to make sure you find what you need. Below you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!

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We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.

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