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What to say for a Late Filed Proof of Claim for Bankruptcy

What to say for a Late Filed Proof of Claim for Bankruptcy

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Published by 83jjmack
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Published by: 83jjmack on Aug 25, 2010
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09/03/2014

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Attributed to Woody Allen in Annie Hall (United Artists Entertainment 1977), but
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 possibly dating from the Mesozoic Era.
WHAT TO SAY WHEN YOUR PROOF OF CLAIMIS FILED AFTER THE BAR DATE
“Understandably, creditors of bankruptcy debtors often feellike restaurant patrons who not only hate the food, but think the portions are too small. To press the analogy, they also don’t like
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having to wait in line for a table, possibly being seated only to findout the kitchen has just closed.”
 In re Omegas Group, Inc.
, 16 F.3d1443 (6 Cir. 1994).
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Margaret A. MahoneyJeffery J. HartleyUnited States Bankruptcy CourtSouthern District of AlabamaMobile, Alabama©Margaret A. Mahoney, Jeffery J. Hartley, 1994
 
All subsequent cites of the Federal Rules of Bankruptcy Procedure will simply be to a
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“Rule.”-1-
WHAT TO SAY WHEN YOUR PROOF OF CLAIMIS FILED AFTER THE BAR DATE
This article discusses the common problem of late filed claims. What can creditors’counsel do when a bar date is missed? What should debtors’ counsel argue when faced with alate claim? What plan drafting problems are created by late filed claims?We have identified five “excuses” creditors may have to partially or completely validatelate filed claims. The five arguments are:1.I filed a timely “informal” proof of claim;2.I wasn’t listed as a creditor on the schedules and I never knew about the bankruptcy case until recently or I was scheduled but I never got notice;3.I filed a claim that I can now properly amend to add additional amounts owed;4.I filed the claim late, but I have an excuse; and5.Even if it’s late, it should be allowed and paid as a tardily filed claim.Of course, the end result always depends upon your facts and your judge.
I.I Filed a Timely InformalProof of Claim
Rule 3001(a) of the Federal Rules of Bankruptcy Procedure states in part that “a proof of 
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claim is a written statement setting forth a creditor’s claim . . . .” There is even an official formto be used by creditors.
See Official Form No. 10
. In Chapter 7, 12, and 13 actions, the creditor is given 90 days to file this formal proof of claim. In Chapter 11, the listing of the creditor on theschedules will suffice as a proof of claim unless the debt is determined to be disputed,contingent, or unliquidated, in which case the creditor will be provided at least a 20-day notice of 
 
-2-any bar date in which to file a formal written, or, in some jurisdictions, a local rule will establisha deadline. Rules 2002(a) and 3003(c)(3). When these requirements are not met, the questionarises whether a creditor that gave some written notice of its claim to the debtor and/or the courtcan rely on that notice serving as an “informal” proof of claim.The Seventh Circuit has concluded that while the filing of a written proof of claim is prima facie evidence that the claim is valid, the absence of documentation does not necessarily bar the creditor from ever establishing a claim.
 In re Stoecker 
, 5 F.3d 1022 (7 Cir. 1993). In the
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Stoecker 
case, the court determined that there is no bankruptcy doctrine that seeks to punish thecreditor for a harmless error. In fact, the
Stoecker 
court concurred with two other circuit courtsin concluding that informal proofs of claim are amendable as long as the omission was notintended to mislead or harm anyone.
See
 
 In re Unioil 
, 962 F.2d 988 (10 Cir. 1992);
 In re
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Unroe
, 937 F.2d 346 (7 Cir. 1991);
Wilkens v. Simon Bros.
, 731 F.2d 462 (7 Cir. 1984) (per 
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curiam);
 In re South Atlantic Financial Corp.
, 767 F.2d 814 (11 Cir. 1985). Courts realize, of 
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course, that any time a late or improperly filed claim is allowed, there will be a decrease in assetsavailable to the other creditors; however, absent intentional wrongdoing, the harm is thought to be negligible.
 In re Stoecker 
, 5 F.3d at 1028.If the creditor is to establish the existence of an informal proof of claim, courts clearlyrequire that such informal claims “must state an explicit demand showing the nature and theamount of the claim against the estate and evidence an intent to hold the debtor liable.”
Sambo’s Restaurant’s, Inc. v. Peggy Wheeler 
, 754 F.2d 811 (9 Cir. 1985) (quoting
 In re Franciscan
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Vineyards, Inc.
, 597 F.2d 181, 183 (9 Cir. 1979) (per curiam), cert. denied, 445 U.S. 915, 100
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S.Ct. 1274, 63 L.Ed. 2d 598 (1980)).

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