If you’re a creditor in a Chapter 11 filing, then you’ve probably been receiving a fair amount of information in the mail regarding the status of the debtor’s bankruptcy proceedings. While you might have a habit of tossing most of those bankruptcy-related documents in the trash rather than waste your time trying to understand all of the legal mumbo jumbo, one piece of paper you’ll really want to hold onto – your proof of claim form.
Stephen Graves of the Graves Law Firm is a Texas bankruptcy attorney with over 20 years of experience, and he thinks that it’s important for anyone who’s a creditor in a Chapter 11 bankruptcy to understand how to file a claim against a debtor. When a company files for Chapter 11 protection, it is required to produce a schedule of all its assets and liabilities. The latter is where you, as an individual creditor, come in. On the schedule, the debtor will indicate the amount of money that it thinks it owes you based on its records. The debtor will also provide this information to its claims agent, who is in charge of managing the claim filing process.
When the time comes for you to file a proof of claim, you’ll receive notice via a proof of claim form that should be sent to the mailing address that the debtor has on file for you. Once you receive this form, you’ll want to follow its instructions carefully. You might notice that your name (or company name) is pre-printed on the form, which will save you the trouble of having to add in this information yourself. You might also find a claim amount listed on your proof of claim form, which will represent the scheduled amount that the debtor thinks it owes you. If the amount looks right to you, then you’re in luck. But if it doesn’t match your records, then you’ll need to indicate what you think is the proper claim amount on your form. You’ll also need to check off the appropriate box that describes the type of claim you are filing (good, services, and so forth).
While filling out a proof of claim form is generally a simple matter of reading what it has to say and following suit, the challenging part comes in the form of attaching supporting invoices and documentation to back up your claim amount. This is especially important if you are disputing the claim amount that the debtor thinks it owes you. Even if you are in agreement with the debtor as to how much money you are due, it’s still a good idea to provide backup that can be used during the claims evaluation process. Remember, just because a debtor has indicated that it owes you a certain amount does not mean that your claim will end up being approved in its entirety. By offering proof of what you are owed, you’ll be putting yourself in the best position to get as much money out of the bankruptcy as possible.
When filing your proof of claim with the bankruptcy court, do keep in mind that you’ll need to adhere to the deadline as indicated on the form in order to have it counted. Additionally, don’t forget to sign and date your claim, as your failure to do so could end up rendering it invalid. Finally, if you simply don’t have the time or ability to produce the supporting documentation to back up your claim, then at the very least, make sure to fill out the proof of claim form to the best of your ability and send it in. Your failure to file a proof of claim against the debtor could result in a full disallowance of your scheduled claim amount, which means that come payout time, you might not see a cent if you don’t file your claim accordingly.
Finally, if you know that a bankrupt company owes you money but have not received a proof of claim form in the mail, then make certain to get in touch with its claims agent so that you can get your hands on the form and file it in time. Most proof of claim forms are available online, and if you think you’re owed money, then you have every right to state this fact in an official capacity.
Although the idea of filing a claim in a Chapter 11 bankruptcy might seem overwhelming at first, it’s actually a fairly painless process provided that you follow directions. And as aggravating as it might be to have to spend your time dealing with a proof of claim form, when it comes to bankruptcy proceedings, you’ll want to do everything in your power to ensure that your claim is allowed to the fullest.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
