Objecting to Unsecured Creditor Claims

[greenthinker]

Hi All,

I was just reviewing the proof of claim submitted by each creditor so far, and there are two that I am questioning. (I care about the validity of claims because I am in a 100% plan.)

One proof of claim is for almost $23K deficiency balance on a boat that we surrendered to B of A. The supporting documentation submitted with their claim shows the original installment contract, original vessel report of sale showing us as the new owners, and nothing more. There is no documentation whatsoever showing the auction sale price of the boat after we surrendered it. This seems like an obvious case of insufficient supporting documentation.

The second proof of claim is from Discover Card, and the supporting document is a statement summary listing the following information:
BK filing date
Account opened date
Date of last payment
Balance as of BK filing date
I would think something more substantial, such as printouts of account activity leading up to the BK, would be required. There is nothing showing how they arrived at the claim amount.

So, is there any basis of objecting to these proofs of claim?

Thanks!

[justbroke]

Yes, there is a basis. You just described it! First, the Chase credit card claim, is probably from some junk debt buyer (JDB) like B-Real, B-Line, LVNV Funding, Roundup Funding, or eCast Settlement. They are notorious to provide "one-page" claims and that's it. Some of them, after you object, will file an updated claim with 6 months of statements. In some cases, they never respond at all so their claim is "disallowed".

As for the boat deficiency, you can challenge that there is even a deficiency since there is no evidence of a deficiency at all.

Remember, "a proof of claim executed and filed in accordance with these rules shall constitute prima facie evidence of the validity and amount of the claim" (FRBP 3001). It is quite simple to put the burden on the creditor (claimant) by filing an objection to the claim with a valid reason. Some creditors give up and never respond to the objection, while some do. It may come down to a hearing in the end... if there is still a dispute/objection.

[frogger]

JB is right on track. One thought for you in this is the term "proof of claim". A proof of claim is exactly what it states that it is.

Proof.

It supporting documentation is not provided, it is not proof and gives you reason to fight it.

Good luck.

[greenthinker]

Thanks justbroke and frogger. For clarification, both of these debts were scheduled to be paid back in the plan, but the documentation is so sloppy and lacking any sort of proof that I can't help but feel the need to object to them. The attorney said he would file objections, but that usually the courts go with the creditor if the debt was scheduled in the plan, but that it is worth a try in case they don't respond.

Thanks again for your replies.

[justbroke]

I'm glad my court sides with the law and not the creditors. If you raise a valid issue, the claim loses it's prima facie status as allowed. The creditor usually has 30 days to "fix" the issue and if they don't, then the objection is sustained and the claim disallowed. I think only 2 of my objections ever tried to "correct" the claim (amend it) and not one was successful in having their claim allowed. I also never had a hearing on any issue since I used negative noticing.

[greenthinker]

Thank you all for your responses to my post last month. I'm revisiting this subject now that the claims bar date has passed, and have a follow up question. I have to confirm this with our attorney, but now that our plan has been confirmed, I believe we would have pay for any additional services, such as filing claim objections. If that's the case, is it possible or advisable to file objections on our own?

[justbroke]

You should have filed claim objections before confirmation! Confirmation basically adjudicates all claim issues, at lease in Florida. I don't know how Washington handles claims versus confirmation, but in Florida, we don't get confirmed until after 30 days has passed since the claims bar date. This is to help ensure a "clean" confirmation.

[greenthinker]

Not so in Washington State. There's no tie between the claims bar date and confirmation, and according to our attorney, claims can be objected to after confirmation.

[justbroke]

In Florida, there's no tie either. The court just does it for convenience of a clean confirmation and to have adjudicated all matters upon confirmation making almost all issues "res judicata" after confirmation. The normal process for claims objection still exists. You should, generally, object to claims immediately (as they come in). You can wait some time, maybe even a month or so, but the entire process is about efficiency (Rule 1001).

You are correct that most attorneys charge extra for post-confirmation services; some even charge for objections, lien strips, and other "special" services. You would need to speak with your attorney.