What Is a Proof of Claim in Bankruptcy?

Understanding the function of a proof of claim form.

As creditor with a debtor in bankruptcy, you must take all necessary steps to protect your interests. You need to understand the elements of bankruptcy law pertaining to creditors, including how to use a Proof of Claim form in bankruptcy.

Function

When a debtor files for bankruptcy, he is required to provide the court with a list of all creditors. The court, in turn, sends what is known as a Proof of Claim form to these creditors.

Effects

The Proof of Claim form allows you to file a claim with the bankruptcy court for the money the debtor owes to you.

Chapter 7

If the debtor files a Chapter 7 bankruptcy, your claim is likely to be denied and the debt discharged. Nonetheless, you need to file the form in the event the debtor's circumstances change and funds become available.

Chapter 13

In a Chapter 13 bankruptcy, the court develops a plan through which creditors are repaid by the debtor over the course of two to five years. Only by filing a claim will your debt become part of the Chapter 13 plan.

Time Frame

Check the deadline printed on the Proof of Claim form. Only if you submit your claim to the court within the established time frame will your claim be recognized.

References

• Cornell Law School, Legal Information Institute
• Cornell Law School, U.S. Code Collection
• "Strategies for Creditors in Bankruptcy Proceedings;" Lynn M. Lopucki & Christopher R. Mirick; 2006

Resources

• American Bar Association, Bankruptcy & Insolvency Litigation Committee