Having someone who owes you money file bankruptcy is bad enough. Having the trustee, or another creditor, object to your claim adds insult to injury. Attention to detail in the preparation of your proof of claim can help minimize the risk that someone will object to the allowance of your claim. Bankruptcy Rule of Procedure 3001(a) says that a creditor’s claim should “conform substantially to the appropriate Official Form.” In most cases this means conformity with Official Form B-10. See: http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK_Forms_Current/B_010.pdf.
Rule 3001(f) provides that “a proof of claim executed and filed in accordance with the rules shall constitute prima facie evidence of the validity and amount of the claim.” When a claim is “prima facie” valid, the objecting party must come forward with evidence or argument sufficient to overcome the initial validity of the claim. On the other hand, if a creditor has failed initially to adhere to the rule, the objecting party need only point out the deficiency. Some bankruptcy courts will give the creditor a chance to fix a deficient claim. Other bankruptcy courts will not.
Among the most common shortcomings in claims preparation is the failure to attach copies of writings upon which the claim is based, such as the contract, invoice, or promissory note. Another common omission, in the case of a creditor asserting a lien in the debtor’s property, is the failure to attach evidence of the creation of the lien [e.g., security agreement] and evidence of perfection of the lien [e.g., a copy of a financing statement, the vehicle title which bears a notation of the lien, or the recorded mortgage or deed of trust]. However, never attach original documents—attach copies only.
A proof of claim should also be signed by someone who has the authority to sign on behalf of the creditor. The signature of the creditor’s lawyer is not sufficient unless the creditor has previously authorized the lawyer to sign on their behalf.
Careful preparation of the claim will help reduce the potential for an objection, and will ensure a firm foundation from which to defend your claim if someone does object to your claim.
For more information on this topic, please email Pat Autry or call him at (210) 598-5400.