Late filing of Proof of Claim

[Lexie]

Trustee requested an extension to obtain additional information from me. Does this extension also apply to creditors. Creditor filed a proof of claim more than 60 days past the 341 meeting. Will creditor still receive a payment. This is a Chapter 7 asset case that was discharged about 2 months ago and still no asset distribution list.

[justbroke]

It is up to the Trustee or you to object to the late filed claim. It also depends on what the late file claim is. If it's the IRS or a municipality then they actually get 180 days.

[Lexie]

Is there a timeline that my attorney has to object to the late filing

[justbroke]

Preferably before the Trustee writes an Interim Distribution Report. Typically, the Trustee won't pay a late claim, but you need to be sure. However, if there will be no money left over anyhow -- you're not going to pay 100% of the claims -- then it really doesn't matter if some creditor gets $2.

So, you must balance if it's worth the attorney's effort and time to prevent a creditor from getting a couple of dollars or not. If you are in a 100% situation, then it could mean more money back to you. In most cases, no-one pays the unsecured creditors 100% in a Chapter 7.

[frogger]

So, you must balance if it's worth the attorney's effort and time to prevent a creditor from getting a couple of dollars or not. If you are in a 100% situation, then it could mean more money back to you. In most cases, no-one pays the unsecured creditors 100% in a Chapter 7.

Agreed. And in addition to that, if you already have your asset $$$ value locked in with the trustee, then it really doesn't matter if they have a claim in late or not. If it slips by, then it might take some dollars from another creditor, but no more from your pocket.

[Lexie]

The initial assets have been submitted, but not any additional assets that may result from the trustee requesting the additional time to review the additional documents that were requested. I have requested to buy back the assets, car & house equity. There is only 1 creditor.

[justbroke]

There's only one creditor and they filed late??? Now, that may be a situation in which I'd certainly exhaust time and energy to have the claim denied! Please speak with your attorney!

[frogger]

There's only one creditor and they filed late??? Now, that may be a situation in which I'd certainly exhaust time and energy to have the claim denied! Please speak with your attorney!

Exactly right. Bankruptcy has rules, timetables, and deadlines. In your particular case, you need to make sure your attorney has those rules enforced.

Good luck!

[Lexie]

If as you say there are rules and timelines why would the trustee accept the creditors late filing. The trustee should be required to follow the law. It has not been denied. My attorney has not objected to this late filing because he said the trustee is going to allow it.

[justbroke]

If as you say there are rules and timelines why would the trustee accept the creditors late filing. The trustee should be required to follow the law. It has not been denied. My attorney has not objected to this late filing because he said the trustee is going to allow it.

You and your attorney can still object. However, if the filing was due to a genuine error, then it will be allowed. Say, for example, the Trustee didn't send out the notices that set a bar date for filing a claim until real late... then the creditor would be able to file under excusable neglect -- on the part of the Trustee. You have to remember that the Trustee works for the creditors, not you.

There is nothing that says that a claim will not be paid if it's filed late. It's just loses it's prima-facie status as a valid claim. The Trustee can still pay it. Unless someone objects to it... it will likely be paid.

Additionally, if this creditor is a municipality (state, city, town, county, federal), then it gets 180 days anyhow.

[Lexie]

The creditor is not a municipality, etc. Creditor just missed the deadline. Everything was timely on the part of the trustee. So what your saying is that my attorney should object to the late filing, but the trustee can still pay it.

[justbroke]

The creditor is not a municipality, etc. Creditor just missed the deadline. Everything was timely on the part of the trustee. So what your saying is that my attorney should object to the late filing, but the trustee can still pay it.

No the Trustee can't just pay it. If the claim is objected to, then a hearing will be set. Then the Judge will make a decision based on testimony from the creditor. The creditor would need extenuating circumstances, excusable neglect or proof that the filing was late due to things outside their control. They just can't "forget" to file or the mail went to the wrong mailbox. That is not an excuse.

If there's a good amount of money in that claim... I might talk to my attorney about objecting to the claim. Keep in mind that your attorney may incur costs and these fees would need to be paid.