A proof of claim is a creditor’s written statement, usually filed in a Chapter 13 or Chapter 11 bankruptcy case, for the purpose detailing the basis and amount of the creditor’s claim against the debtor. Creditors have many reasons to file a proof of claim:
- To share in the distribution of any estate assets;
- To provide notice of a claim against the estate;
- To participate in the election of a trustee in cases under Chapter 7 or Chapter 11;
- To establish the creditor’s right to receive notices from the court or other parties relating to the bankruptcy case; and
- To vote for a Plan of Reorganization.
Secured creditors do not have to file a proof of claim in order to have their liens preserved in a bankruptcy case. Moreover, in Chapter 11 cases, claims and interests listed in the schedules filed by the debtor are deemed to be allowed unless they are listed on the schedules as being disputed, contingent, or unliquidated. In the event a Chapter 11 case is converted to a case under Chapter 7 or Chapter 13, however, a proof of claim must be filed in order for the claim to be allowed. Accordingly, it is wise to file a proof of claim at the outset of a Chapter 11 case to preserve a claim in the event of conversion.
A properly completed and filed proof of claim is prima facie evidence of a creditor’s claim or interest in the bankruptcy estate, and should include as an attachment any supporting documentation. Once filed, a proof of claim may be objected to by either the debtor or another party of interest. A proof of claim is required to conform substantially with the approved official form. The basic information contained in the official form includes:
- Debtor identity and bankruptcy case number;
- Creditor identity and mailing address;
- Amount of and basis for the claim; and
- Type of claim.
The deadline for filing proofs of claim is 90 days after the first date scheduled for the Section 341 meeting of creditors. Although relatively simple to accomplish, the filing of a proof of claim is a crucial step that must be undertaken in a timely and thoughtful manner to assure a creditor’s participation in distributions made in a bankruptcy case, as well as in the proceedings in general.
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- The Very Complete Glossary of Bankruptcy Terms
- The Meeting of Creditors: Who Will Show Up?
- Business Bankruptcy: Chapter 7
- What are the Bankruptcy Chapters?
- 16 Most Frequently Asked Questions About Bankruptcy
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