Tell Me Creditors Don’t Know When You File for Bankruptcy!

28 Jun Tell Me Creditors Don’t Know When You File for Bankruptcy!

I filed a Chapter 13 case for a debtor at 4:15 p.m. Thursday afternoon. At 11:15 a.m. Friday morning, less than 24 hours later and before I could notify the creditor of the bankruptcy filing, the creditor filed a Proof of Claim in the case with a copy of the purchase agreement.

It is not unusual for creditors to file a proofs of claim in a bankruptcy proceeding within a week or so of filing a case, but in less than 24 hours of the filing and with supporting documentation is pretty amazing.

For those of you who don’t know what a proof of claim is, it is a document a creditor must file with the court in order to receive payment on their claim in a Chapter 13 proceeding and in an asset Chapter 7 case. The majority of proofs of claim I see filed in bankruptcy cases are filed without documentation to support the creditors’ claim – usually because it is a debt collector (we refer to them as “bottom feeders”) who has bought the debt from the original creditor.

There are services, such as Banko, who provide up-to-date information on all bankruptcy filings, discharges, dismissals and conversions nationwide. According to information from Banko’s website, “each bankruptcy filed is tracked on a case-by-case basis in order to collect all filings, 341 dates, discharges, dismissals and conversions”. Banko also offers a database that allows creditors to search for deceased individuals.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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