Allowed
Claims
UPDATED: 2/3/2006
All proofs of claim filed with the Bankruptcy Court Clerk will be programmed for payment through the plan and are deemed allowed pursuant to 11 U.S.C. § 502 (a). Orders to disallow late-filed claims must be obtained by debtor(s) or debtor(s)' counsel.
The Trustee will not move to disallow late-filed claims,
unless warranted.
Debtor-Filed
Claims
The Bankruptcy
Code allows that a debtor may file a claim on behalf of
any creditor. In the event that a debtor provides specifically
in the Chapter 13 Plan for payment to a particular creditor,
but said creditor does not file a Proof of Claim, the
provision in the Plan shall be construed as a debtor-filed
claim on behalf of that creditor, and shall be administered
by the Trustee as an allowed claim.
Amounts claimed
on a Proof of Claim form filed by a creditor within the
time limits above shall supercede figures listed in the
Chapter 13 Plan.
Amended Claims
A creditor may
file amended claims at any point during the course of
the debtor's plan, provided that the creditor's initial
claim was filed within the time frames outlined above.
Claims not explicitly
marked "amended" shall be deemed such when an account
number or other unique identifier matches that on a previously
allowed claim.
A creditor may
not file an amended claim beyond the bar date based on
a debtor-filed claim. That is, if a creditor fails to
file a Proof of Claim within the time limits above, but
is receiving distributions through the plan based on figures
in the debtor's Chapter 13 Plan, the creditor may not
then file a claim to amend the amount being paid.
Post-Petition
Claims
The treatment of
post-petition debts, typically involving taxes that come
due after the filing of a petition, should be expressly
addressed in a debtor's Chapter 13 Plan. Claims representing
post-petition debts will only be paid through the plan
if provided for in the Plan.
Interest
Claims on which interest is allowed should be filed
with any interest pre-calculated in the amount claimed.
The Trustee's office will not calculate interest on any
claim. Where a claim is filed for a particular amount
"+ x% interest," the claim will be administered based
only on the principal amount listed.
Classification
and Prioritization
Every claim is
subject to a scheme of classification, with each classification
corresponding to a particular priority for payment through
the Trustee's office.
A claim may be
subject to reclassification if the debtor objects to the
claim as filed, and the Court enters an order reclassifying
the claim.
Administrative
claims
Claims which are
administrative typically do not involve a Proof of Claim
form, and include any fees of the debtor's attorney to
be paid through the plan as well as any claim or fee that
is designated administrative by court order. These claims
receive the highest priority and will be paid first.
Creditor attorney
fees: Attorney fees that are awarded to creditors by the
Court in association with the filing of various motions
and consent orders are also deemed administrative, but
receive a lower prioritization than debtor attorney fees.
Secured claims
Claims that are
secured by collateral or tax liens on real property are
prioritized after administrative claims. These claims
typically involve mortgages, loans on motor vehicles,
and real estate taxes, and are most frequently set up
to receive through the plan the amount of arrearages due
at the time that the debtor's petition was filed. In this
case, the debtor continues to make post-petition payments
outside of the plan as they become due.
Strip/Cramdown:
In some instances, when a creditor is owed more than its
security interest, a secured claim may be stripped or
crammed down. A second or third mortgages, or auto loans
whose balance exceeds the value of the vehicle, for instance,
may be crammed down to the actual secured interest or
value of the collateral. In some cases this may be $0.
When a secured claim is crammed down, the balance of the
amount claimed becomes general unsecured debt and is administered
accordingly (see below). Claims pertaining to consumer
goods: Claims pertaining to certain consumer goods, such
as appliances, electronics, jewelry, household fixtures,
and clothing, are typically not classified as secured,
as the actual value of these goods is uncertain, and at
best severely depreciated. However, if secured claims
of this nature are filed, the Trustee shall treat these
claims secured, requiring full payment, unless treatment
of these claims is dealt with specifically in the debtor's
Chapter 13 Plan prior to its confirmation.
Unsecured
priority claims
Claims that fall
into certain categories outlined in 11 U.S.C. ?507(a),
most frequently tax claims, are classified as "Priority,"
even though they are not secured by any collateral. These
claims are paid after all administrative and secured claims
have been paid.
General unsecured
claims
Claims that are
not secured and that do not fall into those categories
that receive Priority status are classified as general
unsecured claims. These often involve consumer debt, including
credit and charge cards.
The treatment of
general unsecured debt under the plan is dictated by the
debtor's Chapter 13 Plan as confirmed. Claims in this
category receive the lowest priority, and may receive
only a portion of the amount claimed. It is not uncommon
that these claims receive no distribution through the
plan.
Special classes
of general unsecured claims: A debtor's Chapter 13 Plan
may subdivide general unsecured claims into special classes
with unique treatment only insofar as this treatment occurs
after the plan has run for 36 months. A Plan that is confirmed
to pay 50% to general unsecured creditors can create special
classes of unsecured debt to pay student loans or municipal
fines at 100%, provided that these debts are paid the
additional 50% after the 36th month of the plan.
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