LAWDOG BANKRUPTCY: CHAPTER 12

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A Proof Of Claim is a document, filed with the Bankruptcy Court, and used to substantiate the claim of a creditor. It is generally filed by a creditor, and it may determine if an unsecured creditor will be paid and the amount of such payment. In the case of a secured creditor, the failure to file a Proof Of Claim generally may not affect that creditor's security interest in the collateral. See Section 501, reproduced here for illustration purposes only.

Unsecured creditors with claims against the debtor must file a Proof of Claim with the court within 90 days after the first date set for the meeting of creditors. A governmental unit may file until the expiration of 180 days from the date the case is filed. An unsecured creditor in a Chapter 12 bankruptcy must file a proof of claim to participate in a distribution. Compliance within the deadline is generally strictly required. If an unsecured creditor fails to file a Proof Of Claim before the last date to file, it may lose its right to be paid. The Bankruptcy Code allows a creditor to seek permission of the Court to file a tardy claim only in certain limited situations. It may be good policy to file a Proof Of Claim on all claims as soon as the creditor is informed of a bankruptcy. See Section 502, and Bankruptcy Rules, Rule 3002(c) reproduced here for illustration purposes only.

A Proof Of Claim form may be provided by the Bankruptcy Court, often printed on the back of the notice of commencement of a bankruptcy. The last date for filing a Proof Of Claim is generally noted on the notice. Completion of the form requires information such as the name of the debtor and case number, name and address of the creditor, the basis for the claim, and many other items of information. The form may request that a copy of any judgment or other supporting documents be attached. A creditor should always consult legal counsel in an actual case to make certain that a Proof Of Claim is properly and timely filed.

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