August 1, 2020
Bankruptcy Lawyer Representing Alabama Debtors
Unsecured creditors must file proofs of claim in order to participate in the distribution of a bankruptcy estate. Unsecured creditors are those whose claims are not secured by property. Generally, credit card companies and medical providers are unsecured creditors. In contrast, secured creditors, such as a bank that provided a mortgage, do not need to file a proof of claim in order to get paid. The proof of claim is the creditor’s written statement of the claim. The time frame for a creditor to file a proof of claim depends on which chapter of bankruptcy you use. The claims bar date is the date by which the proof of claim must be filed. An Alabama bankruptcy attorney at Grainger Legal Services will be able to guide you through each step of the legal process.
The Claims Bar Date
In both Chapter 7 and Chapter 13 bankruptcy cases, creditors need to file a proof of claim by the claims bar date in order to get repaid. In most Chapter 7 and Chapter 13 cases, your creditors will need to file a proof of claim within 90 days of the first meeting of creditors. A government entity to which you owe money must file a proof of claim during the first 180 days after an order for relief.
The first meeting of creditors is usually called about a month after you file for bankruptcy. Creditors may attend a Chapter 13 meeting if they have concerns about some aspect of your repayment plan, but it is rare for them to attend a Chapter 7 meeting. The meeting is usually very brief.
Creditors who fail to meet the deadline for filing a proof of claim may later make arguments that they gave written notice of the claim to you and that this is an informal proof. Generally, this rule applies to unsecured creditors. Many secured creditors are not required to file a proof of claim.
The claims bar date is usually specified in a first notice of your bankruptcy, which is sent to creditors by the court. This notice tells creditors of your petition and the first meeting of creditors. It also specifies the date by which they must object to the discharge if they do. The court is empowered to extend a claims bar date when a creditor’s neglect is excusable, or there are other circumstances that would make it fair to extend the time.
Generally, the proof of claim is submitted on a Form 10 and will include your name, your case number, the creditor’s name and mailing address, the amount you owe, a description of whether the claim is secured or unsecured, and the basis for making the claim. It is supposed to include documents that support the claim.
If a creditor that is supposed to file a proof of claim fails to do so, it can argue that it gave you informal proof. That informal proof must be in writing, include the creditor’s demand against your bankruptcy estate, show intent to hold the estate liable for the debt, and be filed with the bankruptcy court. In addition, the court will need to find that allowing the claim is fair under the circumstances.
You are entitled to object to a proof of claim in writing in a Chapter 13 case. Some reasons that a claim might be objectionable include when the amount is not correct, the claim is incorrectly identified as a secured or priority claim, there is no supporting documentation attached, or it includes improper penalty charges. If you choose to object to a proof of claim, you bear the burden of showing that the creditor’s claim is improper.
Consult an Experienced Bankruptcy Attorney in Alabama
In a Chapter 13 case, it may be appropriate to pay attention to a claims bar date. There are certain circumstances in which a debtor deserves a hardship discharge, and an Alabama bankruptcy lawyer at Grainger Legal Services can represent you in your efforts to secure this relief. We can represent people throughout the state from offices in Montgomery, Prattville, and Troy. Call us at (334) 260-0500 or contact us online for a free consultation with a knowledgeable debt relief attorney.