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.

A proof of claim is a written statement that notifies the bankruptcy court, the debtor, the trustee, and other interested parties that a creditor wishes to assert its right to receive a distribution (pay out) from the bankruptcy estate. In most Chapter 7 and Chapter 13 bankruptcy cases where there are assets to distribute, creditors must file a proof of claim in order to get paid.

Read on to learn who can file a proof of claim, procedures for filing one, and how to object to a proof of claim.

(For an overview of Chapter 7 and Chapter 13 as well as comprehensive articles on how they work, see our Chapter 7 Bankruptcy and Chapter 13 Bankruptcy areas.)

Who Must File a Proof of Claim?

In Chapters 7 and 13 bankruptcy cases, all unsecured creditors must file a proof of claim for their claim to be allowed.

Certain secured creditors, however, do not have to file proofs of claim to participate in a bankruptcy case. For example, lien holders and other secured creditors do not have to file a proof of claim to preserve their liens in a bankruptcy case.

When Must a Proof of Claim Be Filed in Chapter 7 and Chapter 13 Bankruptcy Cases?

The deadline for filing a proof of claim for non-governmental creditors in a Chapter 7 or Chapter 13 bankruptcy case is 90 days after the first meeting of the creditors.

Government entities must file a proof of claim within 180 days after the date of the order for relief.

The deadline for filing proofs of claim is usually included with the first notice sent to creditors. 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 on which they may file objections to the discharge.

Although the court generally does not permit extensions once the deadline has passed, the court has the power to extend the filing time if a creditor shows extenuating circumstances or excusable neglect.

What Must Be Included in a Proof of Claim?

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

Formal Proof of Claim

A proof of claim must conform substantially with Official Bankruptcy Form 10. You can get Form 10 from the U.S. Courts website at www.uscourts.gov.

The basic information contained in the Official Form includes:

  • identification of the debtor and its bankruptcy case number
  • identification of the creditor and the mailing address for receipt of notices whether or not 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, and
  • identification of the type of claim (secured or unsecured).

The proof of claim should also include as an attachment any supporting documentation, particularly in situations involving secured claims. (To learn if a claim is secured, see What Is a Secured Debt? ) The creditor must file its proof of claim with an original signature.

Informal Proof of Claim

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

  • the proof is in writing
  • the writing includes a demand against the bankruptcy estate
  • the writing demonstrates the intent to hold the estate liable
  • the writing 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 discretion of the bankruptcy judge.

No Proof of Claim for No-Asset Chapter 7 Bankruptcy Cases

In no-asset Chapter 7 bankruptcy cases, a court may instruct creditors not to file a proof of claim because there will be no money to distribute.

If assets become available later, the trustee must provide creditors with notice, and at that point the creditors must file a proof of claim.

Objecting to a Proof of Claim

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 reasons that someone might object to a claim include:

  • the amount is incorrect
  • the claim includes improper interest or other penalty charges
  • the claim indicates that it is a priority or secured claim when it is not
  • the creditor filed the claim with the purpose of harassing the debtor, or
  • the creditor did not attach supporting documentation.

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

Who May Object to a Claim in a Chapter 7 Bankruptcy Case?

Only a “party in interest” may object to a claim in a Chapter 7 bankruptcy case. A “party in interest” is a person or entity that has a financial stake in the outcome of the claim at issue.

Generally, in a Chapter 7 bankruptcy case, only the Chapter 7 trustee has standing to object to proofs of claim.

In most cases, a Chapter 7 debtor will not qualify as a party in interest for the purpose of objecting to a claim. However, 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 has the burden of presenting 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 May Object to a Claim in a Chapter 13 Bankruptcy Case?

Any party in interest may object to a claim in a Chapter 13 bankruptcy case. This often includes the debtor.

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