What is a Proof of Claim in Bankruptcy?

Filing for bankruptcy allows you to eliminate your debts or set up a reasonable schedule to pay back creditors. As a result, creditors are prevented from threatening you or demanding payment. However, they are also provided with notice that they are eligible to have the debt owed paid back to them.

Once they have received this notice, creditors file what is called a proof of claim with the bankruptcy court by the required deadline, which, along with other documents, proves that they are owed money. This allows creditors to be a part of the repayment plan or property liquidation, depending upon which type of bankruptcy you are pursuing.

When Debtors File

Creditors will sometimes fail to fill out a proof of claim form if they fail to receive notice of the bankruptcy, the consumer files a no-asset bankruptcy, or the debt owed is minimal. As a result, debtors also have the option of filing the proof of claim document in order to ensure that certain lenders are placed on notice. For example, some who are filing for Chapter 13 bankruptcy choose to ensure that the mortgage lender is placed in their repayment plan, or even to ensure that non-dischargeable debts are included, such as child support.

If lenders fail to file proof of claims, they will not be paid as part of the bankruptcy proceedings, which could result in a debtor being responsible for the debts after the repayment plan ends. For many, this can cause financial problems.

Information Included

The proof of claim form typically requires the following information:

  • The debtor’s information
  • The bankruptcy case number
  • The address of the creditor
  • The amount of money owed (as of the date of the petition)
  • A description of the basis of the claim (i.e. a description of the goods or services behind the debt)
  • Whether the debt is secured or unsecured
  • The proof included must be in writing, include a demand against a bankrupt estate, be filed with the bankruptcy court, and accept that the claim is fair.
  • Creditors do have the ability to amend the document if they find out that more debt is owed after filing it. They also have the ability to appeal a late filing of the proof of claim document, where the court will evaluate that late claim based on its effect on the debtor, the length of the delay and its effect on the bankruptcy process, the reason for the delay, and whether the credit acted in good faith.

    Contact Our Jacksonville, Florida Bankruptcy Law Firm with Questions

    The Jacksonville, Florida Adam Law Group is here to help – we have saved our clients’ homes from being auctioned, and we provide free consultations and the very best in customer service. Our team is here to help: Contact us today to schedule your free consultation.