Is There a Deadline for Filing a Proof of Claim?

In a Chapter 13 case, the deadline (bar date) for creditors who have claims against the debtor is detailed in the Notice of Chapter 13 Bankruptcy, Meeting of Creditors and Deadlines. The notice is mailed to all creditors a few days after the case is filed. The date should not exceed ninety days after the first date set for the Meeting of Creditors (most instances the deadline is about 70 days from the petition date).  As described more below, in a Chapter 7 case there is no deadline unless set by the bankruptcy trustee at some point during the administration of the bankruptcy case.

The deadline for filing a Proof of Claim is usually about two months from the bankruptcy petition date.

Government entities (such as the Internal Revenue Service and the California Franchise Tax Board) have 180 days (six months) from the petition date to file a claim whereas general creditors have up to 70 days from the petition date (exact date set by the bankruptcy court).  In most cases, creditors will start filing claims soon after the case is filed.  Creditors are not required to file a claim. The court sends out the notice and it is up to the creditor to fill out and file the claim with the court. It can simply be done electronically. If the bar date has passed and the creditor has not filed its claim, then the creditor cannot participate in the distribution from the bankruptcy estate. What happens in a lot of Chapter 13 cases is that only a certain percentage of the creditors actually file a claim for whatever reason. The Chapter 13 debtor could benefit in these instances and exit the bankruptcy earlier, depending on the language and terms of the confirmed chapter plan.

Once a claim is filed, the debtor has the opportunity to review and object to the claim.

Sometimes there are grounds to dispute the amount of the claim or the priority of the claim. Creditors will often misclassify a claim as priority when in fact it should be a general unsecured claim. Other times secured creditors may list the wrong amount of arrears on a secured claim and the debtor may want to dispute the amount.

In Chapter 7, there is no claims bar date set unless the trustee determines that there may be a distribution to creditors.

Once that determination is made, the court sends out a notice to file claims and a similar process is initiated with similar deadlines. From a creditor's perspective, a creditor should always file a claim in Chapter 13 but not necessarily in Chapter 7. The deadline for filing a proof of claim in Chapter 7 bankruptcy is usually set by the court and is known as the "bar date" or "claims bar date." This date is established to ensure an orderly and efficient administration of the bankruptcy estate. Creditors should receive notice of the bankruptcy case, including information about the bar date, shortly after the case is filed. The notice is sent by the bankruptcy court to all known creditors and parties involved in the case. The bar date is crucial because it represents the last opportunity for creditors to submit their claims for any debts owed to them by the debtor. If a creditor fails to file a proof of claim by the bar date, they may lose the opportunity to participate in any distribution of assets from the bankruptcy estate. In Chapter 7, the bankruptcy trustee liquidates the debtor's assets to pay off creditors, and those creditors who have filed valid proofs of claim are eligible to receive a share of the available funds. Creditors should carefully review the notice they receive, adhere to the bar date, and submit a complete and accurate proof of claim form to the bankruptcy court. If a creditor misses the deadline, they may need to seek court approval to file a late claim.   Approval is not guaranteed, and there must be a valid reason for the delay. It is advisable for creditors to seek legal advice to ensure compliance with the bankruptcy procedures and protect their interests in the case. David Arietta has the experience to review options and file claims. He can advise clients as part of the Chapter 13 process or Chapter 7. Call him at (925) 472-8000 for a review of your situation.