After you file for bankruptcy, all of your creditors will be notified of your action. The creditors have the right to file a proof of claim to request that a debt be paid even if a discharge is granted in your case. Before you file for bankruptcy, here is what you need to know about the proof of claim.
Is a Proof of Claim Always Filed?
Although creditors have the right to file a proof of claim, many opt not to. There are several reasons that a creditor does not file. For instance, if you are filing for a Chapter 7 bankruptcy and have very few assets, the creditor might not believe there is enough financial reason to file.
Creditors also routinely pass on filing a proof of claim for small debts or if there is some confusion about how much is owed. When the creditor files the proof of claim, it must show proof of what is owed. Without this proof, it is likely that the court will dismiss the claim.
Can You File a Proof of Claim?
Filing a proof of claim is not just for the creditors. In some situations, it is in your best interests to file a claim for certain debts.
For instance, you can file a claim for secured debts. Secured debts are those which are backed by collateral, such as your home or car. By filing the claim, you retain responsibility for the debt and can sometimes save them from being taken by the creditor.
You might also want to file a proof of claim if you have a debt that was co-signed by someone else. If the debt is discharged for you, the responsibility for paying it falls to the co-signer. Retaining responsibility for the debt not only allows you to pay it off, but it saves your relationship with the co-signer.
What If You Object?
In the event that you do not agree with a proof of claim that was filed, you have the right to object to it. All claims are reviewed by the court during a hearing.
During the hearing, you can present your argument as to why the debt should not stand. You can even argue that you do not owe the amount that the creditor is claiming.
If you have evidence to support your argument, take it to court with you. The judge will review it and determine if the debt should be reduced, stand as is, or be discharged. To improve your defenses against a proof of claim or to determine if you should file one yourself, consult with a bankruptcy attorney.
For a bankruptcy attorney, click on this link http://timgeorgelaw.com or do an online search.
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