Proof of Claim

Before the bankruptcy case, the creditor had a debt to collect, lawsuit, potential lawsuit, grievance, gripe about slow payment, mounting costs caused by debtor’s conduct or failure to act, or (and?) some other right to payment or other legal or equitable remedy that gives rise to a right to payment. The bankruptcy case begins, and now the creditor now has a claim.  The creditor pursues payment of the claim by filing a proof of claim with the bankruptcy court, then fighting off any objection, and then awaiting distribution under a chapter 11 plan or from the proceeds of liquidation of debtor property.   Note: filing the proof of claim on time is crucial to the creditor getting anything (with some exceptions, but why take that chance?).  The timely and meticulous preparation of a proof of claim can clarify the creditor’s stake and strategy, as well as cause it to assemble timely all relevant documentation of the claim (for use contra an objection).  The creditor should review the case docket for any court order that establishes a Bar Date (see Glossary entry), or which sets special procedures for filing proofs of claim, say with a Noticing and Claims Agent (as is done in many large cases).

« Back to Glossary