Time and Necessity of Filing Proofs of Claims
A “claim” in bankruptcy is (1) a right to payment, whether or not reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (2) 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, legal, equitable, secured or unsecured.
Proofs of Claims
A proof of claim is a document that is 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 as well as the amount of such payment.
Filing Proofs of Claims
A creditor or indenture trustee must file a proof of claim with the clerk of the United States Bankruptcy Court where the case is pending. By filing a document called a proof of claim with the bankruptcy court, a creditor becomes eligible to share in any proceeds of the debtor’s bankruptcy case. An equity security holder may file a proof of interest. If the claim is based upon a written document, a copy of that document should be submitted with the proof of claim. If a security interest is claimed, evidence of perfection or filing of the security interest should be submitted with the proof of claim. An unsecured creditor or an equity security holder must generally file a proof of claim or interest for the claim or interest to be allowed.
The proof of claim must be filed within a limited time after the date set for the first meeting of creditors or after notice from the Bankruptcy Court or Trustee. In a Chapter 7 liquidation, Chapter 12 family farmer’s debt adjustment, or Chapter 13 individual’s debt adjustment case, a proof of claim is timely filed if it is filed not later than 90 days after the first date set for the meeting of creditors except as follows:
* A proof of claim filed by a governmental unit is timely filed if it is filed not later than 180 days after the date of the order for relief. On motion of a governmental unit before the expiration of such period and for cause shown, the court may extend the time for filing of a claim by the governmental unit.
* A court may extend the time for filing a proof of claim by an infant or incompetent person or the representative of either in the interest of justice and if it will not unduly delay the administration of the case.
* An unsecured claim which arises in favor of an entity or becomes allowable as a result of a judgment may be filed within 30 days after the judgment becomes final if the judgment is for the recovery of money or property from that entity or denies or avoids the entity’s interest in property. If the judgment imposes a liability which is not satisfied, or a duty which is not performed within such period or such further time as the court may permit, the claim shall not be allowed.
* A claim arising from the rejection of an executory contract or unexpired lease of the debtor may be filed within such time as the court may direct.
* If notice of insufficient assets to pay a dividend was given to creditors and subsequently the trustee notifies the court that payment of a dividend appears possible, the clerk shall notify the creditors of that fact and that they may file proofs of claim within 90 days after the mailing of the notice.
Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.