November 21, 2018
The Federal Rules of Bankruptcy Procedure set forth a relatively short timeline for creditors to file proofs of claim in chapter 13 bankruptcy cases. These deadlines must be followed closely because they impact whether a creditor may be entitled to a distribution or payment through the chapter 13 plan.
A missed claim deadline can have a significant impact on a chapter 13 case from both the perspective of the creditor, and often times the Debtor. It may be advisable in some cases to file a protective claim on behalf of a creditor who has missed a deadline in order to ensure that a claim may be paid through the chapter 13 process. There are also deadlines for protective claims filed on behalf of a creditor that must be followed closely.
The following are a few important Rule sections regarding claims that should be considered in the chapter 13 process:
- Proof of Claim Requirements – Rule 3002(a) requires that secured creditors are required to file a proof of claim in order for their claim to be allowed. This does not mean that the lien is void if a claim is not filed. It only means that in order for treatment in the chapter 13 plan, a claim must be filed. In general, most claims will need to be filed no later than 70 days after the case is filed (not including governmental creditors). The former deadline was 90 days after the 341 meeting of creditors, so this is a significant reduction and will require creditors to act swiftly to ensure their claims are timely filed.
- Secured and Priority Claim Amount Determination – Rule 3012 requires that determinations of the amount of a secured claim may be accomplished by motion, claim objection, or in the chapter 13 plan itself (separate rules for governmental creditors).
- Lien Avoidance and Lien Satisfaction – Rule 4003 permits a lien avoidance action under 11 USC § 522(f) to be made in the chapter 13 plan. Previously this would have been accomplished by Motion. Under Rule 5009(d), a chapter 13 debtor may also request the court to determine a secured claim has been satisfied and the lien released under the terms contained in their confirmed chapter 13 plan.
If you would like to learn more about chapter 13 or the claim process, or other bankruptcy related questions, please visit Keller & Almassian, PLC at www.kalawgr.com, or call us at 616-364-2100. We look forward to hearing from you.