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a guide for the pro se creditor in a bankruptcy case - District of ...

a guide for the pro se creditor in a bankruptcy case - District of ...

13 The rules that govern

13 The rules that govern adversary proceedings are found in Part VII of the Federal Rules of Bankruptcy Procedure. Fed. R. Bankr. P. 7001 identifies the types of actions that would be considered adversary proceedings. A creditor may find itself as a defendant in an adversary proceeding if it received a preferential payment, or if the a debtor seeks to determine whether a particular debt is discharged. A creditor may also be a plaintiff in an adversary proceeding if the creditor seeks a determination of nondischargeability of the debt owed. Whether you are bringing an adversary proceeding, or find yourself defending an adversary proceeding it is important to know that adversary proceedings can be exceptionally complicated. The procedural rules are identical in most respects to the Federal Rules of Civil Procedure. Discovery mechanisms such as depositions and requests for production might be utilized. The Court’s final decisions will be based on evidence. Those final decisions may be based on motions (see e.g. Fed. R. Bankr. P. 7056) or following a trial, where witnesses are examined and cross examined and documents are admitted into evidence. The rules relating to evidence admissibility are found in the Federal Rules of Evidence. If you are contemplating bringing an adversary proceeding, or if you find yourself as a party in an adversary proceeding, you are strongly encouraged to confer with legal counsel or the Pro se Law Clerk. However, remember that the Clerk’s Office (and this includes the Pro se Law Clerk) cannot give you legal advice. PROOF OF CLAIM THE CLAIMS PROCESS In most bankruptcy cases, creditors are paid by the trustee from the estate. However, the majority of individual chapter 7 cases filed are considered “no asset.” This means that the debtor has no unexempt assets to liquidate to pay creditors. In those cases, unsecured creditors will receive no payment on their claims, and those claims will be discharged unless an objection to discharge is sustained. Additionally, no creditor will be paid from the estate if the creditor has not filed a proof of claim. 8 To file a claim, creditors must use official form B 10. See Appendix B. When completing a proof of claim, creditors should never include the full account number of the debtor’s account, and should never include the debtor’s full social security number. Proofs of claim must be filed by the deadline established by the Court. The failure to file a claim timely may result in it being disallowed. Creditors filing claims should pay special attention to Part III of Fed. R. Bankr. P. 3001 through 3022, as well as Local Rule 3001‐1; Appendix 1, Chapter 13 Rule 13‐13. 8 In certain circumstances, debtors and trustees may file proofs of claim on behalf of creditors, however, they are not required to.

14 Simply filing a claim does not automatically result in it being allowed and paid. Creditors should be mindful that parties in interest (namely trustees and debtors) may object to proofs of claim. A party objecting to a claim must file a written objection with the Clerk. If the creditor disputes the objection, the creditor who is the subject of the claim objection must file a written response with the clerk. If the parties are unable to reach agreement on the issues raised by the claims objection, the Court will schedule a hearing. Additional information concerning the claims objection process may be found in Local Rule 3007‐1; Appendix 1, Chapter 13 Rule 13‐13. In addition, filing a claim does not ensure that you will receive notices of the case. If you want to receive notices and papers filed in the case, please refer to the prior section “Receiving Notices.” In addition, if you file a proof of claim, please be sure you notify the Court and the trustee of any change in contact information (mailing address, telephone number, etc.). Finally, but no less importantly, the Court requires an original signed proof of claim by the deadline established by the Court. ‐Types of Claims On Official Form B 10, you will be required to identify whether your claim is secured, unsecured priority or unsecured. Page 3 of the Official Form contains definitions that may help you determine the nature of your claim. Remember, no one at the Clerk’s office, including the Pro se Law Clerk can analyze your claim and determine what type of claim you have. If you are not sure what type of claim you have, you should consult with an attorney. ‐Unclaimed Funds There is no set time when creditors can expect to receive checks from a trustee. Therefore, you must notify the Court and the trustee if your address changes to avoid your payments being unclaimed. An unclaimed dividend arises when the trustee mails a check to your address of record, but the check is returned because of a bad address (or alternatively, it is never cashed for whatever reason). Under chapter 7, 12 and 13, ninety days after the final distribution of assets, the trustee will stop payment on any nonnegotiated checks and deposit the funds with the Court as unclaimed. The Court then becomes the Custodian of the funds until the person entitled to them files an application/petition with the Court for payment. The funds cannot be released without a Court order. To apply for such an order, the claimant entitled to payment must petition the Court for payment, provide notice of the request to the United States Attorney and other relevant parties and, after providing full proof of their right to the funds, an order providing for distribution will issue. A sample

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