To participate in a bankruptcy case, a creditor must file a proof of claim. When it’s properly filed, this document can allow a creditor to take part in the liquidation of the estate in Chapter 7, or be paid under a Chapter 13 repayment plan. Read further for an explanation of the proof of claim and to learn how a bankruptcy attorney in St. Charles, MO, with the Law Offices of Steven K. Brown, can help one dispute such a claim.
What is a Creditor’s Proof of Claim?
The proof of claim document shows evidence of the amount and validity of a debt. A properly filed claim is automatically assumed to be accurate, meaning that a creditor does not have to prove that the debtor owes, unless an objection is filed. An unsecured creditor will not receive a distribution unless they file a proof of claim within 90 days of the setting of the creditors’ meeting.
Creditors’ Rights During Consumer Bankruptcy Cases
Creditors have the legal right to get a fair share of a debtor’s non-exempt personal assets during Chapter 7, and they have the right to fair treatment during Chapters 11, 12 and 13. A secured creditor, or one who has a lien on the debtor’s property, has the right of adequate assurance that one will pay debts (including past-due debts).
Debt Reaffirmation
In debt reaffirmation, the creditor asks the debtor to pay the debt after a discharge. There are multiple reasons why debt reaffirmation may be advantageous:
• There’s a guarantor or co-signer such as a friend, employer or family member that the debtor does not want to leave liable for the debt.
• The debtor wants to avoid seizure of collateral by a secured creditor.
• The creditor may require debt reaffirmation before doing additional business with the debtor.
Should a Debtor Hire Legal Help?
In all bankruptcy cases, one must protect their interests where creditor claims are concerned. A creditor may file a claim, but it is up to the debtor to file an objection if they believe that the claim is illegitimate or inaccurate. A bankruptcy attorney in St. Charles, MO, can help a debtor file those objections, and they can recommend the appropriate bankruptcy chapter.
