Anatomy of a Proof of Claim in Bankruptcy

The proof of claim is the document indicating what a particular creditor is claiming that it is owed by a debtor. It is the starting point for receiving a share of any funds distributed by the bankruptcy trustee. The same proof of claim for applies to both Chapter 7 and Chapter 13 bankruptcy cases. In the case of a Chapter 7 bankruptcy case, creditors will only be advised to file proof of claims when indicated by the clerk of court that there may be assets to administer.

The proof of claim will list the debtor's name, case number and name of the creditor filing the proof of claim. The creditor's address and telephone number will also be provided.

Importantly, the creditor will list the amount of the claim as of the date of filing. It will also include the basis of the claim: for example, money loaned, services provided, etc. It is important for the creditor to be as detailed as possible to avoid having the claim stricken or objected to as being vague.

If the claim is secured by property, the type of property will be indicated (real estate, motor vehicle, other). The value of the property as well as the interest rate will be itemized along with any amount of arrearage.

Certain claims are entitled to a priority under the bankruptcy code. These include domestic support obligations, wages, salaries or commissions earned within 180 days of filing, contributions to an employee benefit plan, up to $2,425.00 of deposits toward purchase, lease or rental property or services for personal, family or household ust, taxes or penalties owed to governmental units and others.

Documentation for the claim must be provided. For example, the creditor will attach redacted copies of statements or documents which support the claim. Additionally, a summary may be provided. If documentation is not provided, the creditor is advised to explain.

Lastly, the claim must be signed by the person filing the claim.

In certain cases, there will be a duplicate claim filed by a creditor. When this happens, either the trustee or the debtor's attorney can and should bring a motion striking one of the claims as duplicative. This happens because creditors often have outside collection arms handling certain debtor's cases. Of course, filing a duplicate claim is never purposeful as that would be a considerable violation of bankruptcy laws and ethics.

If an individual is a creditor, that person should consider hiring legal counsel to handle the filing of the claim and the general administration of the case.