I Received a Notice of Bar Date – Now What?
Updated: Mar 26
How to Prepare and File a Proof of Claim
Be sure to prepare your proof of claim accurately. - Adrienne Woods, Esq.
In our last article My Customer Filed Chapter 11 – Do I Need to File a Proof of Claim? We discussed whether you need to file a proof of claim if a chapter 11 debtor owes you money. We answered that question in detail, but in general, the answer is yes. The next obvious question is how to file a proof of claim.
As discussed in our prior article, if you receive a notice of bar date, it is likely because the debtor indicated on the notice owes you money. Based on your receipt of the notice, even if you don’t think you are owed money you should probably check your records and make sure. If you determine that the debtor does, in fact, owe you money, you will need to prepare and file a proof of claim, the form of which is generally provided with the bar date notice.
Preparing a proof of claim can be time-consuming, depending on calculations and availability and form of supporting documents. Start the process early enough to provide sufficient time for you and your attorney to properly analyze the claim before it’s submitted. This will help avoid later headaches – like missing the bar date. While you can file a claim without an attorney, because of the various requirements of what should be included, filing, service and classification of the claim, it generally makes sense to hire an attorney unless you are intimately familiar with the process. Spending the money upfront will most likely help you protect your interests later.
A proof of claim must set forth the creditor’s claim, be in writing, be signed by the creditor or an authorized agent, and include any documentation that supports the claim.
The proof of claim must also include:
The name of the debtor;
The name of the creditor;
The dollar amount of the claim as of the bankruptcy petition date;
The basis for the claim, including supporting documentation; and
The classification of the claim as either secured or unsecured, and whether it is subject to any special priority in payment.
Your supporting documentation should be as thorough as possible, but where voluminous it is common practice to identify the document and state that it will be made available upon request. This occurs frequently where the underlying debt is based on a lease or mortgage and the supporting documents can exceed several hundred pages.
As a best practice, you should attach an addendum to your proof of claim. The addendum is your opportunity to provide any necessary details as to how the claim arose. If your claim arose from an international contract, for instance, you may wish to include an addendum to explain how you calculated currency conversion. Or, if your claim is for loan debt, the addendum may provide a break-down of principal, interest and fees as well as attorneys’ fees if permitted in the loan agreement. The addendum should also include a reservation of rights if you intend to assert post-petition claims for any reason, such as ongoing attorneys’ fees you incur during the case, as well as a reservation of rights to provide for amending the claim if necessary. The right to amend is crucial, as it provides a mechanism to add in amounts not yet due on the debt as of the petition date, such as contingent or future damages stemming from the same obligation, although these should also be detailed, to the extent possible, in the original claim.
Once the claim is prepared, the creditor, or its authorized representative, must sign the proof of claim form. This is sometimes done by the creditor’s attorney, but as a best practice the creditor, who is most familiar with the facts and circumstances giving rise to the claim, should sign it. At this point, the claim is ready to be filed.
The manner of filing the proof of claim is indicated in the bar date notice sent to creditors providing the deadline to file the claim. If the case is small and a claims agent isn’t retained, then the forms are generally filed with the clerk of the court where the case is pending.
The process for filing a proof of claim is not generally difficult, but it does demand attention to detail best achieved by a lawyer who practices in the area of bankruptcy law. As indicated above, you can generally – but not always – amend a proof of claim. As such, it’s best to get it right the first time. Additionally, a mistake like missing the bar date by an hour can result in denial of your claim entirely. Similarly, in a larger bankruptcy with many related entities, it can be problematic to identify the correct debtor to designate in your claim.
If you are a creditor whose customer has filed for bankruptcy, call us to see if you need to file a proof of claim or take other measures to protect your interests.
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Disclaimer: These materials have been prepared for general informational purposes only, and are not legal advice. This information is not intended to create, and receipt of it does not constitute an attorney-client relationship.