How to File a Claim in a Chapter 7 Bankruptcy
Although Chapter 7 petitioners are required to disclose their creditors, this does not guarantee the security of your claim. Creditors must still take quick and decisive action to protect their interests once a debtor files for Chapter 7 bankruptcy in Colorado.
For over 30 years, the dedicated creditors’ rights lawyers at Brown Dunning Walker Fein Drusch PC have been representing lenders throughout Colorado. Discuss your rights and obligations once a debtor files for Chapter 7 liquidation with our commercial business team today.
Overview of Creditors’ Rights During Liquidation Proceedings
If a debtor files for Chapter 7 bankruptcy, his estate is likely insolvent. The trustee will liquidate all non-exempt assets and distribute the proceeds in accordance with the creditors’ priority. This leaves all but secured and some preferred creditors–such as the IRS–with the ability to recover partial compensation. Creditors have the right to object to Chapter 7 filings and to participate in 341 creditors’ meetings. However, they must assert their claims quickly to protect these rights and obtain partial compensation when possible.
Filing a Proof of Claim in Chapter 7 Bankruptcy Cases
Even if the petitioner discloses and admits to owing the debt, creditors must still file a ‘Proof of Claim’ form no later than 70 days after the debtor filed the Chapter 7 petition or the deadline fixed by the Court. This is called the ‘bar date’. This form generally requires creditors or their lawyers to provide the following information with supporting documentation:
- Debtor’s information and identification number, if any
- Creditors’ information, including proof of debts legally acquired from an original creditor
- Amount owed
- Claim basis, i.e., credit card, medical debt, or personal injury judgment
- Security and property lien information, if any
- Priority status
The United States Bankruptcy Court for the District of Colorado allows creditors to file their Proof of Claim forms either electronically or directly with the Clerk’s office in Denver. Experienced creditors’ rights attorneys in Colorado can quickly and accurately submit these forms through the ePOC system, especially if time is of the essence.
Submitting Evidence of Money Owed and Priority Status in Colorado
Debtors, especially those represented by legal counsel, might raise numerous defenses to an otherwise valid claim. These could include arguments that you failed to negotiate in good faith, waived your collection rights, or did not lawfully obtain the debt from the original creditor.
High-value creditors should always work with a creditors’ rights law firm to ensure their Proof of Claim form includes legally admissible documentation such as the original signed promissory note or assignment contract, payment history, collections efforts, and good-faith settlement attempts.
Colorado Chapter 7 Bankruptcy Creditors’ Rights Attorneys
Even if the debtor has no readily available assets, creditors should always file a Proof of Claim form with supporting documentation within 70 days or the deadline set by the Bankruptcy Court. Many debtors unlawfully transfer their assets before filing a Chapter 7 petition, which the court can re-secure, or have undisclosed resources. Discuss filing Proof of Claim Form B 410 with our experienced Colorado creditors’ rights lawyers today by calling (303) 329-3363 or connecting with us online.