What are the deadlines for filing a proof of claim with bankruptcy courts?
A proof of claim tells the bankruptcy court how much a debtor owes a creditor at the time the bankruptcy case is filed. The proof of claim establishes what remedies, if any, you as a creditor will be afforded during a bankruptcy action. Filing a proof of claim is necessary for creditors that are owed unsecured debts, such as credit cards. However, creditors with liens or secured creditors may not have to file a proof of claim at all in order to participate in the Chapter 7 bankruptcy. Further, in a no asset Chapter 7 bankruptcy case, creditors will not have to file a proof of claim, because there will be no distribution.
Filing a Proof of Claim
The form to file a proof of claim is usually provided by the bankruptcy court. After an individual or business files for Chapter 7 bankruptcy, they will have an initial meeting of creditors, or a 341(a) meeting, within the first 30 days of commencement. After this initial meeting, a creditor will usually have ninety days to file their proof of claim. This deadline is called the “claims bar date” or the “bar date.” Governmental creditors, such as the IRS, follow a different timeline for filing a proof of claim. These creditors have 180 days from the commencement of the action to file a proof of claim.
Filing a Late Proof of Claim
The bankruptcy code does provide limited exceptions to these general deadlines. Claims that are filed in a timely manner are considered to be valid on their face. However, tardy claims may not be valid. A creditor may who files a tardy claim must be prepared to show that there is mistake or carelessness amounting to “excusable neglect.”
When determining if there is excusable neglect, the bankruptcy court will look to see the reason for delay, the length of delay, and the potential impact on the bankruptcy proceeding. They will also determine whether the creditor has acted in good faith and whether allowing the late claim will prejudice the debtor. The most important thing the creditor must show is that filing a late proof of claim will not prejudice the debtor. If the creditor did not have notice of the bankruptcy proceeding until after the claims bar date, the court is more likely rule in the creditors favor.
To ensure that you are included within the debtor distribution, consult with a bankruptcy attorney to see if and when filing exceptions will apply, and how to best perfect a tardy proof of claim filing in your jurisdiction.