Anatomy of a Proof of Claim in Bankruptcy
Author: David Siegel
The proof of claim is the document indicating what a particular creditor is claiming that it is owed by a debtor. It is the starting point for receiving a share of any funds distributed by the bankruptcy trustee. The same proof of claim for applies to both Chapter 7 and Chapter 13 bankruptcy cases. In the case of a Chapter 7 bankruptcy case, creditors will only be advised to file proof of claims when indicated by the clerk of court that there may be assets to administer.
The proof of claim will list the debtor's name, case number and name of the creditor filing the proof of claim. The creditor's address and telephone number will also be provided.
Importantly, the creditor will list the amount of the claim as of the date of filing. It will also include the basis of the claim: for example, money loaned, services provided, etc. It is important for the creditor to be as detailed as possible to avoid having the claim stricken or objected to as being vague.
If the claim is secured by property, the type of property will be indicated (real estate, motor vehicle, other). The value of the property as well as the interest rate will be itemized along with any amount of arrearage.
Certain claims are entitled to a priority under the bankruptcy code. These include domestic support obligations, wages, salaries or commissions earned within 180 days of filing, contributions to an employee benefit plan, up to ,425.00 of deposits toward purchase, lease or rental property or services for personal, family or household ust, taxes or penalties owed to governmental units and others.
Documentation for the claim must be provided. For example, the creditor will attach redacted copies of statements or documents which support the claim. Additionally, a summary may be provided. If documentation is not provided, the creditor is advised to explain.
Lastly, the claim must be signed by the person filing the claim.
In certain cases, there will be a duplicate claim filed by a creditor. When this happens, either the trustee or the debtor's attorney can and should bring a motion striking one of the claims as duplicative. This happens because creditors often have outside collection arms handling certain debtor's cases. Of course, filing a duplicate claim is never purposeful as that would be a considerable violation of bankruptcy laws and ethics.
If an individual is a creditor, that person should consider hiring legal counsel to handle the filing of the claim and the general administration of the case.
Article Source: http://www.articlesbase.com/law-articles/anatomy-of-a-proof-of-claim-in-bankruptcy-379072.html
About the Author
David M. Siegel is the author of Chapter 7 Success: The Complete Guide to Surviving Personal Bankruptcy. He is a member of the American Bankruptcy Institute and currently practices bankruptcy law in Chicago and its surrounding suburbs. Additional information is available at:
Chapter 7 Bankruptcy
Can a secured creditor repossess AFTER Chpt 13 Bankruptcy is completed?
Creditor’s Secured claim was reduced and ALLOWED as paid. It was split claim with VALUE of collateral paid at 100% and excess at 1%. Secured debt was DISCHARGED as paid zero balance. Does it matter if creditor claims to have gotten relief from stay BEFORE discharge? Creditor also took possession of hurricane insurance proceeds. (extra windfall for them)
It was a chapter 13 plan completion discharge.
Claim paid through the plan. Original value was 20 grand and reduced and allowed at 15 grand. Plus they got the 20 grand insurance.
Creditor is reporting delinquent account after bankruptcy, how do you fight that?
Right off the bat, I will have to say that prior to bankruptcy I had absolutely ZERO delinquent accounts, no late payments, etc. I know hard to believe, but I split with my wife, and had to make the choice of paying creditors, or paying child support. Well, I took the most logical of the two, started paying child support!
It’s my understanding that once you have made the humiliating choice of having to claim bankruptcy, the creditors are no longer allowed to file negative reports to the credit agencies regarding your accounts that were included in the bankruptcy. However, I noticed that there are 2 entries on my credit report, one by one creditor about a month after the bankruptcy, and another by different creditor about a month after even being discharged a year later, that there are delinquent accounts.
I called Equifax, they told me that I would have to get a letter from the creditors…like that is going to happen. When I tried to argue the fact that the creditors legally cannot submit such entries past bankruptcy, the agent at Equifax hung up on me.
Should I sell my assets to pay off creditors before claiming bankruptcy?
I only have 1 asset worth paying off and thats one of my cars. If I sell this car, I can pay some of the creditors, but not all. I assume I will have to show proof of payng creditors if I claim BK after I have done this.
I see your point rpg, but the exemptions for Arizona will cause my vehicle to be taken because it is paid off and they will take this asset, sell it, and use the money from that asset to pay off the creditors.. granted, i see what your saying, because i would pay off the creditors that I would want to pay off.. so its good knowing that they will take the money back..
If you file for bankruptcy, can your creditors claim your house, car, or retirement account money?
If your business if failing do you file a Chapter 11 or Chapter 13; how do you go about doing it?
If I was listed as a Creditor in a Bankruptcy Case, can I claim the money as a loss on my taxes?
I loaned my daughter and her husband $4500. They paid us back about $1200. Last year they filed for bankruptcy. Can I claim the balance as a loss? Loan was made in 2006 they filed in 2009.
Revised answer:
The deduction for a bad business debt does not apply, because this is a personal loan to a family member and does not qualify.
To deduct it, “you must show that there was an intention at the time of the transaction to make a loan and not a gift. If you lend money to a relative or friend with the understanding that it may not be repaid, it is considered a gift and not a loan.”
If it is a loan, as defined above, then it may be a “nonbusiness bad debt [that] is reported [and deducted] as a short–term capital loss in Part 1 on Form 1040, Schedule D (PDF). It [the deduction] is subject to the capital loss limitations. A nonbusiness bad debt deduction requires a separate detailed statement attached to your return.
“For more information on nonbusiness bad debts, refer to Publication 550, Investment Income and Expenses.”
They can and will take your house and car(s). It only makes sense. If you could go bankrupt yet keep all your major assets, then everybody would do it…… just think! Everyone could get a ‘free house’ and ‘free car!’
As far as retirement account, I think it depends on the kind it may be. In general I don’t think they can grab that. You have to be more specific though. Generally pension plans and 401k plans are exempt and are not considered to be part of the bankruptcy estate.
You need to contact your creditors and send them copies of your discharge papers, they cannot legally keep reporting those accounts. You can also send copies to Equifax.
I don’t understand why you are going to all this effort to help some of your creditors and not others. If you are going to lose the care in a Chapter 7 anyway, you might be better of selling to the car to pay for living expenses like rent, health insurance or debts that won’t be discharged in bankruptcy, You might even consider converting the proceeds to an exempt assets that you could keep after the bankruptcy.
Favoring one creditor over another can result in the litigation to get the money bank. It is called a preferential transfer and bankruptcy law says that the creditors must receive equal treatment. You cannot favor one over the others.
You need to consult a qualified bankruptcy attorney, one who is a member of the National Association of Consumer Bankruptcy Attorneys.
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good luck.