If you are currently in a Chapter 13 bankruptcy, you may receive a copy of a document called a Proof of Claim. This document is important in your Chapter 13 case because it plays a major role in determining which of your creditors the Chapter 13 Trustee is paying.

When you filed your Chapter 13 case, you listed all of the creditors you owe, and the amount you owe to each of them (to your best knowledge). Upon the filing of your case, the bankruptcy court sends a letter to each of those creditors giving them notice of a certain deadline by which they must file a Proof of Claim.

The creditor must then file a Proof of Claim document with the court, stating who they are, how much money you owe them, on what basis is the money owed (mortgage, auto loan, credit card, etc.) and usually they must submit some proof of the debt that is owed. The proof is required because it helps to prevent random “creditors” – who you do not actually owe money to – from filing claims in your case.

The Court then compiles a list of all creditors who have filed a Proof of Claim in your case, and usually the Trustee will send a letter to you and your attorney stating which creditors have filed claims and for how much. You will want to glance at this letter to be sure your mortgage company, vehicle creditor(s), and any taxing authorities you owe money to have filed claims.

If a creditor does not file a claim in time – by the deadline – they are likely not going to be paid any money in your bankruptcy case. If it is an unsecured creditor such as a credit card or medical bill, this is usually not an issue for you because the debt will still be discharged upon completion of your bankruptcy. However, if it is a secured or priority creditor (mortgage for a house you are keeping, vehicle creditor for a vehicle you are keeping, secured loan, taxes, etc.) this can be a huge issue for you. For example, if your mortgage company does not file a claim in your case, they will not be paid any money during your bankruptcy and when your bankruptcy is complete, you will still owe everything you owed them when you filed bankruptcy plus the amount that has accumulated during your Chapter 13 bankruptcy.

As you can see, it is very important for you to review the list of creditors who have filed a Proof of Claim in your case to be sure all creditors who should be receiving money actually are. Your Chapter 13 bankruptcy attorney can help answer any questions you have about your creditors and the Proof of Claims.