10 Jul Review the Claims File in Your Chapter 13 Case
An experience I had in a Chapter 13 case today reinforces the notion that Chapter 13 attorneys should review every proof of claim carefully, and should not assume that the figures shown on the claim form are accurate.
In my case, my clients had two vehicles financed with a large, well known vehicle finance company. Vehicle one was on track to be paid off in January, 2008 and we estimated that the claim would be around $3,000. Vehicle two was on track to be paid off in January, 2009 and we estimated a claim in the $7,000 range.
Imagine our surprise when the claims actually filed were for $12,500 and $17,000 respectively. When I pulled the claims file I note that the individual who filled out each claim included a cover letter stating that the claim for vehicle one was $3,200 and the claim for vehicle two was $6,800. When filling out the claim form, however, she wrote the NADA valuation figures in the space reserved for “amount of claim.”
The trustee here in the Northern District of Georgia only looks at the actual proof of claim form. Had the mistake not been so obvious, it is possible that this error would have escaped any scrutiny.
Many years ago, I represented a fairly active second tier automobile finance company and part of my responsibility was to calculate the proofs of claim. I did my best to calculate the claims accurately – however, not once in the approximately three years I represented this client did anyone challenge my figures or my methodology for calculating proofs of claim.
I suspect that the individual who fills out proofs of claim for the vehicle finance company in my Chapter 13 case has been making this type of error in numerous cases around the country. Perhaps she is of the mistaken belief that the NADA valuation should be used as the claim in Chapter 13 cases.
In any case, if you are a debtor, ask your lawyer to review the claims file. If you are a lawyer, don’t ignore this vital function.
Jonathan Ginsberg, Esq.
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