Proof of Claim

Proof of claim summary: 

• A proof of claim is an important legal document that creditors file during the bankruptcy process to try and get money for an unpaid debt. 

• Proof of claim is most often used in Chapter 13 bankruptcy. 

• Talk to your bankruptcy attorney if you want to object to a proof of claim to challenge an incorrect or invalid debt. 

Proof of Claim Definition and Meaning

A proof of claim is a legal document that creditors have to file with the court when a person declares bankruptcy. The proof of claim helps creditors legally validate that you owe them a debt. It’s also a way for creditors to get in line and be included in your bankruptcy process, in hopes of getting paid some partial amount of money for your unpaid debt. 

Proof of claim documents must be filed with the court within a specific time frame after you declare bankruptcy. This gives the bankruptcy court time to decide how to discharge the bankrupt person’s debts, or assign payments to creditors after the bankruptcy.  

Creditors won’t get paid if they don’t file a proof of claim. Unsecured debts (such as credit card debt) often get discharged by Chapter 13 bankruptcy, so some credit card companies might not bother to file a proof of claim. 

Other creditors might fail to file their proof of claim. You might think this would be helpful to the person filing bankruptcy—but it could cause other problems. Consult with your bankruptcy attorney and decide if it makes sense to file a proof of claim for any of your creditors, even if they don’t do it in time. 

A proof of claim document is an essential part of the bankruptcy process, because it helps list and clarify all of your debts in one place. It gives the court an official record of every debt you owe, with the valid amounts and creditors. It helps bankruptcy judges make accurate decisions and help you find a financial path forward. 

Accurate proof of claim documents is critical, because each proof of claim gives you a chance to go to a judge and object to any incorrect, inaccurate, or out-of-date (time-barred) debts. Having the proof of claim from each creditor could help you avoid getting charged for extra debts that you don’t deserve to pay.   

Key Features of a Proof of Claim 

If you’re declaring bankruptcy, here are a few key features of a proof of claim.

Mainly used for Chapter 13 bankruptcy 

Individuals can declare bankruptcy under Chapter 7 or Chapter 13. Chapter 13 tends to offer better flexibility to keep your property and assets. A proof of claim is mostly used for Chapter 13 bankruptcy cases. Some creditors might file a proof of claim for Chapter 7 bankruptcies, but it’s not as important for that type of case. 

Limited time to file 

Creditors are required to file a proof of claim within a specific deadline after you declare bankruptcy. For example, after you file Chapter 13 bankruptcy, within 21 to 50 days there is a meeting of creditors, where you (the debtor) answer questions under oath about your personal finances and share details about your plan to emerge from bankruptcy. Unsecured creditors are required to file a proof of claim within 90 days of this meeting. 

Required details 

Creditors are required to use Form 410 to file a proof of claim with U.S. federal bankruptcy court. This form asks creditors to provide details about the claim, such as:

• Amount of debt 

• If the debt is secured (such as an auto loan or home mortgage) 

• If the debt is unsecured (such as credit card debts)

• Where notices and any payments to the creditor should be sent

Talk to your bankruptcy attorney if you have any questions. Understanding how a proof of claim works could make it easier to get through the bankruptcy process. Make sure you know your rights to object to a proof of claim—and avoid getting stuck with any invalid or time-barred debts that you don’t actually owe.