A proof of claim is a document filed with the court in a bankruptcy case that registers a creditor’s claim against assets of the bankruptcy estate. A more simplified explanation is that it’s the form the creditor completes and files that tells the bankruptcy court how much that creditor is owed and why. It must be filed in the same bankruptcy court in which the bankruptcy case was filed.
The proof of claim is filed using Official Form B10. The Official Form B10 requires the name of the debtor (person(s) who filed bankruptcy), the case number, and of course the creditor and claim information. The form further sets forth the amount that is owed to the creditor as of the date the bankruptcy case was filed, the basis for the amount (e.g. “statutory lien”), and whether the claim is secured or unsecured. Claims that include interest, fees, expenses, or other charges must also file an attachment itemizing the interest, fees, expenses and other charges in addition to filing copies of lien documentation. The Bankruptcy Code (11 U.S.C. §§501 and 502) and the Federal Rules of Bankruptcy Procedure (Rules 3001-3003 and 3005-3008) govern the who, what, when, where, why and how of filing proofs of claim.
In the majority of proofs of claim filed on behalf of an association or district, the claim will be filed as a secured claim under Bankruptcy Code 11 U.S.C. § 506 since the association’s or district’s liens are secured by property of the debtor. Further, the Official Form 410-A will be filed with the proof of claim whenever the association or district lien is secured by the debtor’s principal residence.
Now, here’s an important part you’ll want to remember – there are deadlines to filing Proofs of Claim! And if you fail to file the proof of claim and related attachments by the deadline (which for an association, happens to be 70 days from the date the bankruptcy petition was filed if the case is a Chapter 13), well… that can be a bit of a mess. And while there are some options for creditors who miss the proof of claim deadline (or “claims bar date”), it’s simply easier and most cost effective to file that proof of claim prior to the claim deadline.
So here’s the takeaway – if one of your owners files bankruptcy, please send that bankruptcy notice to one of our debt recovery attorneys as soon as possible so that we draft and file the required paperwork for the proof of claim before the claim deadline. Of course, we will also review the Chapter 13 Plan to ensure the association or district is adequately provided for and monitor the bankruptcy through the court ordered bankruptcy discharge. We worry about all of those pesky rules so that you don’t have to.
If you have any questions or would like further information, please reach out to our office!