LAWDOG BANKRUPTCY: CHAPTER 7

Proof Of Claim

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Claim

Under Section 101, the term ''claim'' has a broad meaning, and includes a right to payment, whether or not such right is reduced to judgment, liquidated, fixed, contingent, unmatured, disputed, legal, equitable, or secured. A claim may also consist of a right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured. A claim against a debtor includes claims against the property of the debtor. See Section 101 (5) reproduced here for illustration purposes only.

When Proof Of Claim Filed

A Proof Of Claim is a document, filed with the Bankruptcy Court, and used to document and substantiate the claim of a creditor. In a Chapter 7 proceeding, the Proof Of Claim generally must be filed within 90 days after the first scheduled 341 Meeting. If the case is a "no asset" Chapter 7 case, there may be no need for a creditor to file a proof of claim. The notice of bankruptcy may indicate that fact, and further instruct that certain creditors should not file a proof of claim. In situations like this, a notice and time to file a proof of claim will be given, in the event that a trustee later discovers assets for distribution to unsecured creditors. See Bankruptcy Rules Rule 3002 reproduced here for illustration purposes only.

Effect Of Failure To File

An unsecured creditor must file a proof of claim in accordance with this rule for the claim or interest to be allowed, with certain exceptions. A claim or interest, proof of which is filed under Section 501 of this title, is deemed allowed, unless a party in interest, including a creditor of a general partner in a partnership that is a debtor in a case under chapter 7 of this title, objects. See Section 502 reproduced here for illustration purposes only. The Bankruptcy Code allows a creditor to seek permission of the Court to file a tardy claim under only 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. Actual cases should be discussed with your legal advisor or legal department.

Information Required

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 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. Also see Section 501 reproduced here for illustration purposes only. A creditor should consult legal counsel to make certain that Proofs Of Claim are properly filed.

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