How do Proofs of Claim affect your bankruptcy?

Can it be too late to file a Proof of Claim?

What are the deadlines for filing a proof of claim?

If a creditor is too late in filing a Proof of Claim, they cannot be paid in your bankruptcy.

Creditors need to file their Chapter 13 Bankruptcy Proof of Claims in a timely manner.

A question I often receive is: Should I tell creditors when I file a Chapter 13 bankruptcy?

The answer is No.
When a bankruptcy is filed, the bankruptcy court automatically sends creditors a Chapter 13 bankruptcy notice. Bankruptcy creditors have rights, too.

After a bankruptcy, a creditor receives notice and must file a Bankruptcy Proof of Claim.

One way bankruptcy can negatively affect a creditor is by filing their proof of claim late. Even the IRS makes mistakes in bankruptcy.

Background:

A creditor has 70 days from the Bankruptcy Petition Date to file a proof of Claim.
The debtor provided an incorrect address for one of the Creditors.
Although the incorrect address was provided, the Post Office was able to deliver the notice before the 70 days from the Petition.
The Creditor attended the Meeting of Creditors and expressed her views on bankruptcy creditors’ rights.
The Creditor had time to attend the Chapter 13 Bankruptcy Meeting of creditors, but did not file a Proof of Claim.
The Meeting of Creditors was delayed and rescheduled since the Debtor was not present and suggested that the Creditor obtain Counsel.
The Debtor showed up at the next Chapter 13 Bankruptcy Meeting of Creditors.
The creditor claimed that she was unaware of the rescheduled date.
The creditor files a proof of claim more than 70 days after the deadline.
Debtor and Chapter 13 Bankruptcy Trustee objected.
The creditor states she should have been allowed to file a Proof of Claim as part of her bankruptcy creditor rights.
Her reason to be able to file is that she was not allowed the “full 70 days” to prepare her Proof of Claim.

Court Ruling:

The rules do not require the creditor to receive notice for the full 70 days from the filing of the Petition.
The Creditor admitted she received a notice, which the post office delivered to her on the 68th day. This is also evidenced by her appearance at the Meeting of Creditors.
The Proof of Claim was not allowed.
It is not clear why the Creditor attended the Meeting of the Creditors but did not file the Proof of Claim in a timely manner.
The creditor did not seek Counsel, as was suggested.

Late is Late – Filing for NJ Bankruptcy has very strict and clear deadlines to follow.

You cannot come to Court with an exception – there are very definite deadlines, and if you sit on your rights, you could lose. Counsel should have represented the Creditor in this Chapter 13 bankruptcy case. The advice given was not taken.