The Proof of Claim – How Creditors Get Paid
When you file a Chapter 13 bankruptcy case one of the most important responsibilities is to disclose a complete list of your creditors. Once the case is filed this list is filed with the Court and the Court sends out a notice to each creditors listed. Once the creditor receives notice of your bankruptcy case they now have an obligation to file a timely proof of claim in order to receive any money. If you forget to list a creditor and they do not receive notice of your case, that creditor’s debt will exist beyond the conclusion of your case. Even if you do not know the exact amount owed to the creditors it is still important to list every one of your creditors.
The Proof of Claim is a document that the creditor files in your case detailing the nature of the debt, the amount of money owed, and attaches any supporting documents to prove the debt. In order for the creditor to receive any money during the life of your repayment plan they must file this document with the Court.
It’s Up To The Creditor
According to Fed. R. Bankr. P. 3002 your creditors have a deadline of 90 days after the first date set for the Meeting of Creditors in order to get their proof of claim filed. If a governmental unit has a claim in your case they are given additional time to file their claim. If any creditors do not get their claim filed by the deadline they will not receive any funds during the life of the repayment plan. The creditors that do file their proof of claim in the case will receive payments from the payment you make over the 3-5 years the plan is in effect.
The amount of money your creditors will receive depends on how much they are owed and claim through their filing, how many creditors file their proofs of claim with the Court, and how much money you are paying into your Plan. Your creditors could receive 100% of their debt or they could receive 10%; you have to wait and see who decides to be a part of the case. At the end of your case whatever debt is not paid back will be discharged, and if the creditor failed to file a proof of claim the debt owed to these creditors will be completely discharged.