Proofs of Claim in Chapter 13 Bankruptcy

One of the primary purposes of the requirement that the debtor list all known liabilities in his schedules is to ensure that his creditors receive notice of case. If no notice is received by the creditor, it really has no way of protecting its interests. Once the creditor receives notice of the case, it has the option to file what is a called a "proof of claim", basically a declaration of what the debtor owes the creditor, substantiated with proof of a loan or indebtedness. If the creditor wishes to be paid, it is incumbent upon the creditor to file a claim.

The deadline for consumer creditors to file proofs of claim is 90 days from the date first set for the meeting of creditors, and 180 days for government creditors. The proof of claim itself is a very simple document, which lists the details of the debt and the amount the creditor believes it is owed. Creditors are required to attach evidence of the loan, e.g., a promissory note coupled with a deed of trust, to the claim form. The debtor has the option to object to proofs of claim on meritorious grounds, though if no objection is made, the proof of claim will supersede whatever the debtor had scheduled.

If an unsecured creditor wishes to be paid in the chapter 13 (pursuant to the provisions provided in the debtor's chapter 13 plan), it must timely file a proof of claim. Unsecured creditors who do not file claims or file late claims will not be paid and the debtor's obligation to pay will be discharged in full. Secured creditors are not required to file proofs of claim as long as a lien securing the debt existed prior to the filing of the case.

Some unsecured creditors will omit to file claims in a case, either strategically or simply due to neglect. There are rare instances where debtors who would otherwise have to pay a large dividend to unsecured creditors due to excessive disposable income can get away paying little or no money to unsecured creditors, simply because creditors did not file claims. Nonetheless, it is strongly urged that the debtor and debtor's attorney monitor filed claims to ensure there are no false or excessive claims.