Filing a Proof of Claim for a Creditor in Bankruptcy

It may make sense to file a proof of claim on behalf of a creditor who has not filed one on its own in your bankruptcy.

Most creditors will file a proof of claim — a form that provides information about your debt — in order to be paid if you file for bankruptcy. A creditor may fail to file a proof of claim on occasion. In rare cases, you may want to file a proof of claim on behalf of that creditor.

It may make sense to file a proof of claim on behalf of a creditor who has not filed one on its own in your bankruptcy.

Most creditors will file a proof of claim — a form that provides information about your debt — in order to be paid if you file for bankruptcy. A creditor may fail to file a proof of claim on occasion. In rare cases, you may want to file a proof of claim on behalf of that creditor.

What Is a Claim Proof?

Whether or not your creditors receive anything in your bankruptcy case is determined by a number of factors, including:

• the nature of the creditor’s claim
• whether or not you own non-exempt real estate
• whether you have a surplus of cash, and
• whether you file for bankruptcy under Chapter 7 or Chapter 13.

If a creditor wants to be paid in bankruptcy, they must file a proof of claim with the court. The proof of claim gives the court information about your debt and usually includes documentation to back up the creditor’s claim.

Creditors will, in most cases, file their own proofs of claim. If a creditor fails to file a proof of claim, you can file one on their behalf if you want that creditor to be paid in your bankruptcy.

Why Would a Creditor Refuse to Submit a Proof of Claim?

Creditors file proofs of claim in bankruptcy to receive a share of any possible distributions made by the bankruptcy trustee in your case. Even if a creditor has a valid claim, it will not be paid unless it files a proof of claim with the court. Creditors, on the other hand, frequently fail to file proofs of claim in bankruptcy.

In your bankruptcy, a creditor may refuse to file a proof of claim if:

• You have a Chapter 7 bankruptcy with no assets (meaning you don’t have any property that the bankruptcy trustee can distribute to your creditors, so they won’t be paid).
• You owe the creditor a small amount of money, or
• The creditor does not follow the court’s instructions or makes an error in some other way.
• You Might File a Proof of Claim for a Creditor for a Few Reasons

While it may seem strange to file claims on behalf of creditors in your own bankruptcy case, it can sometimes be beneficial. We’ll go over when it’s a good idea to file a proof of claim for a creditor in the sections below.

Certain debts do not disappear just because you file for bankruptcy. These are known as nondischargeable debts, and they include alimony, child support, certain taxes, and student loans. You want your nondischargeable debts to be paid before your other general unsecured creditors (such as credit card companies) in your bankruptcy because you are still responsible for them after your case is closed.

This means that whether you have nonexempt assets to distribute to creditors in Chapter 7 bankruptcy or are paying off a portion of your debts in Chapter 13 bankruptcy, you should make sure that any creditors with nondischargeable debts file proofs of claim with the court. If they don’t, it’s in your best interest to file a claim on their behalf so that they can get a piece of the settlement money.

You need to make up for unpaid secured debt payments.

You can file for Chapter 13 bankruptcy to catch up on your arrears and save your home if you are behind on your mortgage, car loan, or other secured debts. If you want to use your bankruptcy to repay your missed loan payments, make sure the creditors you want to pay (like your mortgage or car lender) file proofs of claim with the court.

If they don’t file proofs of claim, the trustee may ask the court to allow the trustee to pay your unsecured creditors instead. This means that if a secured creditor you intend to pay fails to file a claim, you may be required to do so on their behalf.

When Do You Have to File Creditor Proofs of Claim?

The majority of creditors must file proofs of claim with the court within 90 days of your creditors’ meeting (government entities have 180 days from when you filed your case). Before filing a claim on behalf of a creditor, you must wait until the creditor’s claim deadline has passed. You have 30 days after the deadline to file the claim on behalf of the creditor.