Objecting to Proof of Claims

In some Chapter 7 bankruptcies, particularly those where assets are found and thus available for distribution to unsecured creditors, and all Chapter 13 bankruptcies, creditors get paid by filing proof of claims. These proof of claims. These claims are governed by Bankruptcy Rule 3001, which states on a basic level that it is "is a written statement setting forth a creditor’s claim." Rule 3001(c) lays out the requirements of what is required to be filed with the proof of claim to establish that it is in fact a debt owed to that creditor from the debtor. Included in this is proof of the writing the claim is based on, itemized statements if required, etc

If a debtor feels that the claim was filed incorrectly or for the wrong amount, their attorney can file an objection to the claim. These objections are made because of deficiencies the debtor finds in the claim under Rule 3001 and made pursuant to 11 USC 502. That code section gives the court authority to disallow a claim, decide the correct amount, or overrule the debtor's objection as a whole.

Objections can be made if the proof of claim does not demonstrate the accurate amount of debt owed to the creditor, if it was a security interest and there was no proof of perfection filed with the proof of claim, or if there is no supporting documentation attached at all. These objections, because they are a contested matter, require 30 days notice to the creditor and a hearing in court. If they are granted, the court still has the power to give leave to the creditor to amend their proof of claim.

Because these happen most frequently in Chapter 13 cases, and because they involve a court hearing and complex concepts, it is best to consult an experienced bankruptcy attorney to handle these matters.

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