Do Creditors Need to File a Proof of Claim to Protect Their Rights to Property in a Chapter 7 Bankruptcy Proceeding?
The Proof of Claim helps preserve the rights of creditors by notifying all interested individuals involved in the bankruptcy proceedings that you intend to pursue a distribution from the bankruptcy estate. However, the form is not required in all cases. An experienced creditor’s rights lawyer in Los Angeles can help you determine when and if you need to file this form.
Generally, creditors holding outstanding secured debt do not need to file a Proof of Claim, as long as they have the documentation granting the right to take the collateral assets covering the loan. Although creditors of unsecured debt must file the Proof of Claim along with specific documentation supporting a claim, there is generally no need to file a claim for most no-asset Chapter 7 cases. If the trustee later recovers assets, the bankruptcy court notifies creditors and allows extra time to file a Proof of Claim.
In spite of the overall recommendations, creditors holding secured or unsecured debt can benefit by filing a Proof of Claim. Before deciding to file or not, a Los Angeles creditor’s rights attorney can provide assistance when it may benefit you to file — and provide vital representation if an interested party objects to the claim.
The Law Offices of Michael Jay Berger act quickly and effectively to get creditors the maximum possible relief to which they are legally entitled. The firm has 30 years of bankruptcy experience and familiarity with both the law and the bankruptcy court judges to help ensure your rights are protected in these complex legal proceedings.