question about creditors filing claims

[novemberrain]

i am going to be filing chapter 13 in about a week. there is one thing that i dont understand about the whole chpt 13 thing.
when people say that the creditors did not file any claims against them what does this mean? for example when i file next week and capital one and mervyns get the notice do they have to file a claim against me? And if they do is it for the whole amount i owe them or just a percentage?
thanks for the help

[HHM]

Ok...when you file chapter 13, that means you have some excess income that gets paid to the chapter 13 trustee. The chapter 13, in turn, pays that money to your creditors in order of their priority.

In order to pay creditors, the chapter 13 must receive, from each creditor, a "proof of claim." (the chapter 13 trustee does not just take your word for it that you owe a particular debt, the creditor must come forth and prove that a debt is owed and how much is owed). This is a simple document from a creditor that describes how much is owed the creditor. If a creditor does not file a proof of claim, that creditor does not get paid. If you successfully complete the chapter 13 plan, any debt you owed (that could have been paid through the chap. 13) is discharged.

[novemberrain]

so i understand this right. in 2005 my dh and i purchased a car and the car dealership lied to the finance company about our income and the value of the car. the car ended up getting repoed a couple months later. the finance company (wells fargo financial) sued me for the remaining balance after they sold the car. when i file next week and they dont file a claim that means the $20,000 owed to them is discharged?

[HHM]

If there is a judgment pending, that is a different issue.

If a creditor does not file a claim in a chapter 13 case (assuming you notified them properly), that creditor does not get paid by the trustee...and IF your chapter 13 goes to discharge, that debt (the unfiled claim) gets discharge.

The problem with a judgment is, a judgment acts as a general lien against all non-exempt property. If Wells Fargo does not file a claim, they won't get paid...and the automatic stay of the BK will prevent them from doing anything to seize non-exempt assets. However, once you get your discharge, you will have to take the extra step to have the judgment vacated in the local court where the judgment was issued.