What is a Proof of Claim and Why Might Creditors File One?
When a debtor files for bankruptcy, a creditor might look to file a proof of claim. In Arizona bankruptcy law, a proof of claim is a documenting setting forth that creditor’s rights to funds from the debtor. Without filing such a proof of claim, the creditor might miss its chance at collecting distributions during the bankruptcy filing.
For the courts to accept a proof of claim, it must follow certain guidelines and adhere to the court’s official forms and requirements. This means including required documentation and supporting information so the courts can validate the creditor’s claims.
Proof of claim in Arizona bankruptcy law
While a creditor is not required to file a proof of claim during an Arizona bankruptcy, it could mean that the creditor will be excluded from conversations and voting on a bankruptcy plan, should the opportunity present itself.
Regardless of whether or not the creditor files a proof of claim or is involved in the legal proceedings, the debt that the individual or business owes the debtor will be discharged alongside other debt. This means that these creditors have a vested interest in voting for the plan the courts set forth for the debtor to pay back as much as possible of the amount owed.
Creditors must follow the dates that the courts set forth for filing a proof of claim on time. The courts take these deadlines very seriously and only in special circumstances would they consider extending the deadline for filing a proof of claim.
Under the federal law for bankruptcy, the proof of claim form can be filed by the creditor or the creditor’s agent. For the debt to be valid, there must be written proof of the debt. In cases where the written proof of the contract is lost or destroyed, the creditor must present information as to why and how it was lost or destroyed.
As part of the proof of claim, the creditor must include information on the original principal amount that the debtor borrowed. The claim must also provide the amount owed in interest, fees and other expenses with an itemized statement of this information.
Click here for an article on what is a proof of claim in bankruptcy.
Hiring an Arizona bankruptcy attorney
An attorney plays many roles and helps in a variety of ways throughout your bankruptcy filing. The number one reason to hire an Arizona bankruptcy attorney is to ensure that your petition for bankruptcy is free of errors and filed properly. Errors and issues with a bankruptcy filing can lead to a denial of your petition to file for bankruptcy.
Additionally, an attorney can make the creditors stop calling and collecting debts while you go through the court process for filing for bankruptcy. In fact, some attorneys handle calls and interactions with creditors to give relief to their clients and ensure that their clients don’t make payments they shouldn’t or do not have to make.
When the individual filing for bankruptcy appears in court, the attorney represents them. And, the attorney can stand-in for the client during the process of preparing and filing the proper documentation for an Arizona bankruptcy. This way, you can get back to enjoying life and relax a bit more while your attorney does the work for you.
Let us show you how working with us can improve your current situation and ensure that your bankruptcy filing goes through smoothly. We offer a free consultation to discuss the process with you and answer any questions you have. And once we begin working together, we’ll be your advocate fighting to make sure that you receive the best terms and treatment throughout your filing.
Find out the Arizona law concerning receivership and bankruptcy.