When a debtor files for bankruptcy, the court establishes a process for creditors to formally assert their claims. The mechanism for doing so is a proof of claim, a document filed with the bankruptcy court stating the amount of your claim, the basis for it, and whether it is secured or unsecured.
A creditor who lets the deadline pass takes a real risk. That deadline, called the claims bar date, is one a creditor who misses it can lose the right to receive anything from the bankruptcy estate, even if the debtor clearly owes you money.
The Bar Date and Why It Controls
The bar date is the cutoff for filing your proof of claim, and the timing depends on the chapter. In a Chapter 7, Chapter 12, or Chapter 13 case, it falls roughly 70 days after the bankruptcy petition is filed, and the court states the date in the notice it mails to creditors when the case opens. Because that notice arrives looking like routine correspondence, many creditors set it aside and let the deadline slip past.
A Chapter 11 case works differently, with no automatic bar date. The court fixes the deadline through a separate court order, called a bar date order, that goes out to all known creditors and can land anywhere from 30 to 90 days out from that order. We monitor every Chapter 11 case involving our clients for the bar date order and do not rely on the mail to catch it.
The consequence of missing the bar date is steep. A late-filed claim is disallowed in most cases. In a Chapter 13 case, the debtor’s plan may propose to pay nothing to creditors who have not filed claims, and that plan can be confirmed, leaving you with nothing even though the debtor owed you money and had income to pay.
What Goes Into a Proof of Claim
The proof of claim is filed on a standard court form that calls for several things.
The amount of your claim as of the filing date, broken down into principal, accrued interest, late charges, and attorney fees if your note or agreement provides for them.
The basis for the claim, meaning what gives rise to the obligation: a promissory note, a deed of trust, a lease, or a guaranty.
Whether the claim is secured or unsecured. A secured claim is backed by a valid lien on property. An unsecured claim has no lien. Your treatment in the bankruptcy case depends heavily on this classification.
Supporting documentation. We attach copies of the note, deed of trust or security agreement, guaranty if applicable, and a payment history showing how the claimed amount is calculated. A claim without documentation is more easily challenged.
Secured Claims and Their Treatment
As a secured creditor, your claim is treated differently from an unsecured creditor. You are entitled to be paid at least the value of your collateral through the plan or from the bankruptcy estate. The portion of your debt above the collateral value may be treated as an unsecured claim that receives a much smaller recovery.
To assert a secured claim, you must demonstrate that your lien was validly created and properly recorded before the bankruptcy was filed. A lien that was not properly perfected can be avoided by the bankruptcy trustee, converting your secured claim to an unsecured one.
Objections to Your Proof of Claim
Once filed, a proof of claim is considered allowed unless someone objects. The debtor, the trustee, or another party in interest can file an objection asserting that the amount is wrong, the claim is unenforceable, the lien is not properly perfected, or the claim is a duplicate. We respond to claim objections on behalf of our clients, presenting the evidence necessary to support the full amount and secured status of the claim.
Related: The Claims Bar Date: the deadline to file your proof of claim, how it is set, and what happens if you miss it.
In this section: Proof of Claim · Automatic Stay Relief · Reaffirmation Agreements · Plan Negotiation
Frequently Asked Questions
Do I need to file a proof of claim if I am a secured creditor with a valid lien?
Yes, in most Chapter 13 and Chapter 11 cases. Without a filed proof of claim the plan may not propose to pay your claim, and may be confirmed on that basis. In Chapter 7 no-asset cases, filing is less critical because there may be nothing to distribute. But if assets are later discovered a new bar date will be set, and having a filed claim puts you in line. As a general rule: file the claim.
Can we include attorney fees in the proof of claim?
Yes, if your note or agreement contains a provision allowing recovery of attorney fees upon default. Most Texas commercial promissory notes contain this language. The fees included should be those actually incurred through the date of filing. We prepare a detailed fee itemization for attachment to the proof of claim.
What if the debtor's plan proposes to pay less than what we claimed?
File a timely objection to confirmation of the plan. A plan that treats your claim for less than the allowed claim amount must be challenged at the confirmation stage, not after the plan has already been confirmed. We review every plan affecting our clients and file objections when warranted.
What if the debtor did not list us as a creditor and we never received notice?
If you had no actual notice of the bankruptcy filing and the bar date has passed, you may be able to file a late claim based on lack of notice. Courts evaluate these situations on a case-by-case basis. Contact us immediately, the sooner we act the more options you have.
How do we know the amount to put in the proof of claim?
We calculate the claim amount by reviewing the loan documents and payment history. The claim should include all principal outstanding, all accrued and unpaid interest through the petition date, all unpaid late charges and fees under the note, and attorney fees incurred to the date of filing if contractually allowed. We prepare this calculation for every proof of claim we file.
What happens after we file the proof of claim?
Once filed, the claim is reflected in the court's claims register. It is deemed allowed unless someone objects. In Chapter 13 and Chapter 11 cases, the plan will then propose treatment of your allowed claim, and if that treatment is deficient, we object to the plan at the confirmation stage.