How to File a Bankruptcy Claim: 6 Steps for a Creditor Using Form 410

A creditor who does nothing after a customer files bankruptcy has usually made a decision without meaning to, and in most cases the decision is to receive nothing. The proof of claim is the document that prevents that result. It is also, for a form of a few pages, unusually easy to get wrong.

This page is written for the other side of the case: the supplier, landlord, lender, or service business whose customer has filed and who needs to know how to file a bankruptcy claim. It follows the sequence in which the rules ask for things, from the notice that arrives in the mail to the objection that may arrive later.

1. The Notice Sets the Chapter, and the Chapter Sets the Deadline

Everything begins with the case notice the court sends to creditors on the debtor's list. It names the debtor, the court, the case number, and the chapter, and the chapter decides how long the creditor has.

In a voluntary chapter 7 case, or a chapter 12 or 13 case, Bankruptcy Rule 3002(c) treats a proof of claim as timely if it is filed within 70 days after relief is ordered, which in a voluntary case happens on the filing date. In an involuntary chapter 7 the period is 90 days. A governmental unit has 180 days. In chapter 11, including Subchapter V, no fixed number applies; the court sets the deadline, commonly called the bar date, and it will appear in a notice or order that the creditor has to read to the end.

A creditor whose customer filed on the first of the month and who learns of it from a returned invoice six weeks later has already spent most of the chapter 7 period, and the rule's relief for a late claim is narrow: on motion, the court may extend the time by no more than 60 days, and only if it finds the notice "was insufficient to give the creditor a reasonable time to file." Late claims in chapter 7 are not always worthless, since the Code's distribution scheme ranks some tardily filed claims behind timely ones, but behind is a long way back in a case with little money in it.

2. In Chapter 11 the Debtor's Own Schedule May Already Speak for the Creditor

Chapter 11 carries an exception that confuses creditors every time it is explained. Under Bankruptcy Rule 3003(b)(1), a claim listed on the debtor's schedule of liabilities is prima facie evidence of its validity and amount, and filing a proof of claim is unnecessary, unless the claim is scheduled as disputed, contingent, or unliquidated. A creditor in that position, or one left off the schedule entirely, must file, and one who does not "will not be treated as a creditor for that claim for voting and distribution."

The practical rule is to read the schedule. If the amount is wrong, or the claim carries any of those three labels, a proof of claim filed by the bar date replaces the schedule's version. Secured creditors have one further point in their favor, stated in Rule 3002(a): a lien is not void solely because the creditor failed to file.

3. Official Form 410 Is the Claim

A proof of claim is "a written statement of a creditor's claim," and it must substantially conform to Official Form 410, which the judiciary publishes free with instructions and supplements. Only the creditor or its authorized agent may sign it. The amount is stated as of the filing date, and interest that had not yet matured by then is generally not allowed, under section 502(b).

You fill in who you are, what you are owed, why, and whether anything secures it, and then you sign it, which in a federal court is not a formality.

4. The Writing Goes With It, and a Secured Creditor Proves Perfection

If the claim, or the lien securing it, rests on a writing, Bankruptcy Rule 3001(c)(1) requires the creditor to file a copy with the proof of claim; a lost document requires a statement explaining the loss. A creditor claiming a security interest must attach evidence that the interest was perfected, which for most business collateral means the UCC financing statement, and a mortgage or vehicle title where those apply. In an individual debtor's case the rules ask for more: an itemized statement of principal, interest, fees, and charges incurred before the petition, and the cure amount as of the filing date for any claimed security interest, with Form 410A for a lien on the debtor's home. A creditor who omits that information in an individual's case can be barred from using it later and ordered to pay the expenses its omission caused.

Attachments are where claims are won, and they are also where the effort tends to run out. An advance funder filing against an LLC, for example, will need the purchase agreement, any guaranty, the payment history, and whatever UCC filing it relies on, and whether the claim is secured at all depends on that filing and on what the contract actually conveyed, a question the court decides and the form cannot.

5. File Where the Case Is Pending

Rule 3002(b) requires the proof of claim to be filed "in the district where the case is pending and in accordance with Rule 5005," the rule that governs filing with the court. The notice identifies the court. Each court's local rules and published instructions govern the mechanics of submission there, and a creditor should read them rather than reuse an address from an earlier case.

6. The Claim Stands Until Someone Objects

Under section 502(a), a claim filed under section 501 "is deemed allowed, unless a party in interest ... objects," and Rule 3001(f) makes a properly signed and filed proof of claim "prima facie evidence of the claim's validity and amount." That presumption is the reward for filing carefully. It shifts the work of disproving the claim to whoever objects.

Objections come from the trustee, the debtor, or other creditors. Under Bankruptcy Rule 3007, the objection and a notice of it must be filed and served at least 30 days before the hearing, or before any deadline for the claim holder to request one, and served by mail on the person the creditor designated on its proof of claim to receive notices. That designation, a line most creditors fill in without thought, decides whether the objection reaches someone who will read it. On objection, section 502(b) directs the court to fix the amount as of the filing date and to disallow the claim to the extent it is unenforceable under the agreement or applicable law, is for unmatured interest, or was not timely filed, among other grounds.

Whether a creditor that never learned of the case, because its address on the debtor's list was years out of date, should bear the cost of that silence is a question the rules answer only in part.

When the Creditor Is Also a Debtor

Many businesses stand on both sides at once: owed money by a customer in bankruptcy while owing funders of their own. Delancey Street works only on the second side, negotiating a company's merchant cash advance and related balances; it is not a law firm, it files no proofs of claim, and it gives no legal advice. Its opening review of a company's contracts and bank activity costs nothing and stays confidential, and legal work goes to independently licensed counsel. A creditor with a large or secured claim, or one facing an objection, should have a bankruptcy lawyer prepare and defend it.

The form is short. What it asks the creditor to prove, from its own files, is everything that happened between the first invoice and the petition.