In chapter 13 New York bankruptcy, creditors usually promptly file proofs of claim with the bankruptcy court. If they don’t do so, they might not receive a disbursement from the bankruptcy estate. Nevertheless, sometimes a creditor might neglect to file a proof of claim but a debtor might want it to do so. Why would this be the case? The reason is that such creditors are owed unsecured debts and figure they will receive few if any disbursements and the debts will be discharged.
However, there are circumstances when creditors that don’t file proofs of claim can cause problems for debtors, for example, if the debts aren’t dischargeable. According to Rule 3004 of the Federal Rules of Bankruptcy Procedure, if a claim on a nondischargeable debt isn’t filed, the creditor won’t be paid out of the bankruptcy estate, and the funds might go to a different creditor whose debts were dischargeable all along. After the bankruptcy, the debtor will be stuck with large liabilities without doing anything wrong. This defeats the goals of bankruptcy, which is to give the debtor a fresh start. In other instances, debtors might want to file claims if they want to cure any arrears on debts or pay on liens.
Consequently, debtors or the bankruptcy trustee can file proofs of claim on behalf of creditors that choose not to in order to force it to receive a disbursement from the bankruptcy estate. Normally creditors have 90 days after the meeting of the creditors to file their claims. If any creditors miss that deadline, debtors or the trustee can file proofs of claim on behalf of those creditors within an additional 30 days of the applicable deadline. The clerk of the bankruptcy court will then notify the creditor, trustee, and debtor that the claim has been filed.
The trustee can gather supplementary evidence to ensure a claim filed by a debtor and the amount owed on it are valid, and the trustee can object to the claim if it contains any defects. The bankruptcy court will decide on any objections.
Most chapter 13 bankruptcies don’t require all creditors to submit proofs of claim, but sometimes it’s necessary for debtors to bring creditors into bankruptcy to ensure that there aren’t any non-discharged debts leftover after the case is closed, cure arrears, or pay on liens. An experienced New York bankruptcy lawyer will file proofs of claim if it suits the debtor’s best interests.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy lawyers near me Bruce Weiner for a free initial consultation.