Skilled NJ Attorney Handles Proofs of Claim in Bankruptcy Cases
Protecting consumers’ rights against creditors’ overreaching
When you file for bankruptcy, either in Chapter 7 or Chapter 13, you must identify who your creditors are and how much you owe them. However, a debt can often be inflated by interest, fees, late payment penalties and service charges, leading to disagreement between the parties. The U.S. Bankruptcy Code requires creditors to file a document known as a proof of claim to substantiate the alleged debt. At the Law Offices of James C. Zimmermann in Northern New Jersey, we protect our clients in bankruptcy from excessive demands from creditors. For more than 30 years, debtors have trusted us to uphold their rights and to resolve their bankruptcies efficiently and cost-effectively.
What is a proof of claim and how is it filed?
After a debtor files for Chapter 7 or Chapter 13 bankruptcy, the bankruptcy court serves notice on the creditors. From that point, private creditors have 70 days and government entities have 180 days to submit their proofs of claim.
The official proof of claim is a Form 410, on which the creditor identifies itself and then fills in the debtor’s name, the case number, the type of claim, the nature of the debt and the amount of the debt. The creditor may attach additional documentation to support the entries on the form. A representative of the creditor must sign the form.
Proofs of claim are sometimes not filed in a Chapter 7 bankruptcy, especially in a “no-asset” case, where creditors don’t expect to be paid anyway. However, proofs of claim are important in a Chapter 13 bankruptcy, where creditors might be vying for small portions of monthly payment. to
Objections to a proof of claim
Once a proof of claim has been filed, anyone who has a stake in the outcome of the bankruptcy proceeding may file an objection. Objectors may include:
- The bankruptcy trustee
- The debtor
- Other creditors
Common grounds for objections are the following:
- The amount of the debt is excessive.
- A debt stated to be secured is really unsecured.
- There is a lack of documentation to prove the debt or its amount.
- The debt has been improperly augmented with interest, fees and other add-ons.
Objections to proofs of claim should be filed immediately and supported by strong documentation.
Filing proof of claims for your creditors
In a Chapter 13, if a creditor fails to file a proof of claim by the deadline, you have the right to file in their behalf within another 30 days. You might want to do this because of the way bankruptcy prioritizes claims. You must repay unsecured priority claims, like back taxes and child support, in full. The bankruptcy will not discharge them. If you have a secured debt, like an auto loan or a home mortgage, you must pay it in full if you want to keep the property. For that reason, when you are making up your Chapter 13 plan, you want all of that nondischargeable debt figured into your monthly budget. This makes sure that the creditors get payments from the trustee, which will avoid foreclosure or repossession. Otherwise, you’ll spend the length of your plan paying down dischargeable debt, like credit card balances and medical bills, and you’ll still have the same amount of nondischargeable debt at the end of your plan period.
Bankruptcy is supposed to give you a fresh start. But mistakes made in the process, especially concerning the amount and type of debt, can reduce the amount of relief you actually receive for your trouble. To maximize the benefits of your bankruptcy, consult an experienced attorney.
Contact an experienced New Jersey bankruptcy lawyer today
The Law Offices of James C. Zimmermann in Northern New Jersey is a debt relief agency, helping clients discharge eligible debt through Chapter 7 and Chapter 13. We have offices in Vernon, Wayne, Pompton Lakes, Hackensack and Nutley. To schedule a free initial consultation, call 973-764-1633 or contact us online.