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 all creditors (secured, unsecured or equity-secured) in order to participate and receive money in a Chapter 7, 12 and 13 bankruptcy. 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 seventy 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 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 creditor’s favor.

Getting Help

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.

Case Studies: Deadlines for Filing a Proof of Claim With Bankruptcy Courts

Case Study 1: Timely Filing of Proof of Claim

John, a creditor in a Chapter 13 bankruptcy case, promptly filed his proof of claim within the 70-day deadline after the initial meeting of creditors. By meeting the claims bar date, John ensured that his claim would be considered valid and included in the distribution process. Filing on time allowed him to maximize his chances of receiving payment.

Case Study 2: Governmental Creditor Exception

Emma, a small business owner in a Chapter 11 bankruptcy, closely monitored the timeline for filing a proof of claim as a governmental creditor. She ensured that the IRS filed its claim within the 180-day period from the commencement of the action. Emma’s proactive approach safeguarded her interests and maintained transparency throughout the bankruptcy process.

Case Study 3: Late Filing With Excusable Neglect

Sarah, a creditor in a Chapter 7 bankruptcy, filed a late proof of claim due to an unintentional oversight. With her attorney’s assistance, Sarah convinced the court that accepting her late claim would not prejudice the debtor. The court granted her request, allowing her to participate in the distribution and recover a portion of her debt.