No one wants to see one a customer file for bankruptcy. Not only does it mean potential lost revenue, but it also creates a series of headaches if you hope to get paid at all. While there are many types of bankruptcy, any creditor who hopes to receive any form of payment from the debtor must file a proof of claim with the courts.
Does a proof of claim guarantee payment?
No, a proof of claim is used to inform the courts of the amount of debt owed, the type of debt owed, and other information regarding the debt in order to decide how any funds will be distributed. If there are no assets to help finance payment, then no party will be paid. If other debts have priority over yours, then you may not be paid. The important thing to note is that if you do not file a proof of claim correctly, securing payment will be much harder or en impossible.
How long do you have to file a proof of claim?
While this can vary based on the type of bankruptcy and the creditors/debtors involved, in most cases you have 70 days from the time filing date. In rare cases, the courts may allow a claim to be filed after the deadline.
What must be included on a proof of claim?
The following information must be included on any formal proof of claim. If you wish to see the form yourself, here is a link to the official bankruptcy court’s 410 form.
- The debtor’s name and the bankruptcy case number
- The creditor’s information, including a mailing address
- The amount owed as of the petition date
- The basis for the claim (such as goods or services purchased, a loan or credit card balance, a personal injury or wrongful death award), and
- The type of claim (secured or unsecured).
Who can object to a proof of claim?
The short answer is anyone with a financial interest in the case. This could be the debtor, the bankruptcy trustee, or even another creditor who feels you are trying to get more than your fair share.
Can you change your proof of claim once it has been filed?
Yes, but the court has the right to reject amendments made to the claim. The courts will typically reject a proof of claim if too much time has passed since the original claim was made or if the new claim amount far exceeds the original without substantial evidence to back it up. While this can be arbitrary, if you are simply amending you claim to change a few minor details you should be fine. If you are attempting to drastically alter your claim, especially if a considerable amount of time has passed, you will be in for an uphill battle.
A proof of claim does not guarantee anything, but if you fail to file one you will almost certainly be giving up any possibility of recouping some of the funds you are owed. Bankruptcy proceedings can be complicated, that is why we recommend staying on top of things and not putting anything off for later.