Cite as: Keith M. Lundin, Lundin On Chapter 13, § 131.4, at ¶ ____, LundinOnChapter13.com (last visited __________).
The formality of Official Bankruptcy Form 10 has been tested by creditors that failed to file a proof of claim but took some other action offered in hindsight in substitution for the Official Form. Some circuits require strict conformity with Official Bankruptcy Form 10: letters, motions, pleadings and other documents that might contain similar information are not treated as informal proofs of claim. In other jurisdictions, courts seem to bend over backward to find some document or series of events that mimics a proof of claim. Don’t be misled: there is no sure substitute for the timely filing of good old Official Bankruptcy Form 10; but don’t give up asserting a claim if there has been other participation by the creditor.
If there is a general rule, it is that a claim arises “where the creditor evidences an intent to assert its claim against the debtor. Mere knowledge of the existence of the claim by the debtor, trustee or bankruptcy court is insufficient.”1 Several reported decisions approve a five-part test to determine whether a course of conduct by a creditor constitutes an “informal” proof of claim:
There must be a statement in writing;
There must be a demand on the estate for payment;
There must be an expression of intent to hold the debtor liable for the debt;
The writing must be filed with the bankruptcy court;
It must not be inequitable to allow the “informal” proof of claim.2
Some courts have imposed the additional requirement that a formal proof of claim must be filed to validate the actions or writings that constitute the informal proof of claim.3 That the creditor assisted the Chapter 13 trustee in recovering assets and orally informed the trustee that it had a claim is not sufficient to constitute an informal proof of claim.4 A letter to debtor’s counsel, not filed with the court, that contained no statement of intent to collect from the estate, even coupled with a pleading filed by the debtor against the creditor, does not constitute an informal proof of claim.5 A letter-notice of deficiency mailed to a debtor by the IRS during the period for filing proofs of claim, but never filed with the court, is not an informal proof of claim because the notice made no demand for payment.6 One court held that a letter mailed to the Chapter 13 trustee and to the bankruptcy court clerk in which a creditor expressed “irritation” that the debtor owed more than $20,000 constituted an informal proof of claim that could be amended after the bar date under Bankruptcy Rule 3002(c).7
Some courts have found that an objection to confirmation, if it contains sufficient information to identify the objecting party as a creditor, constitutes an informal claim.8 Other courts have concluded that an objection to confirmation does not constitute a proof of claim and cannot be the basis for a later-filed “amended” proof of claim.9 One court held that a motion to dismiss was not an informal proof of claim, especially when the creditor failed to serve the motion on the Chapter 13 trustee.10 In contrast, another court found that a motion to dismiss coupled with a motion for relief from the stay constituted an informal proof of claim.11 A creditor’s objection to the debtor’s motion for turnover of property qualified as an informal proof of claim that could be amended by an untimely filed formal proof of claim when the objection contained language “sufficient to put the Trustee and Debtors on notice that Creditors intended to hold the estate liable for the prepetition judgment indebtedness” that was secured by the property the debtors sought to recover.12 Several reported decisions struggle to determine whether a confirmed plan is an informal proof of claim when the plan is specific with respect to the treatment of a creditor that has failed to file a proof of claim.13
A creditor desperate to overcome the neglect to timely file a proof of claim might find some solace in the opinion of the U.S. Court of Appeals for the Fifth Circuit in Nikoloutsos v. Nikoloutsos (In re Nikoloutsos).14 In Nikoloutsos, the creditor filed a misguided complaint to determine dischargeability of a state court judgment for assault under § 523(a)(6) after conversion from Chapter 7 to Chapter 13. The complaint was in writing and was filed before the bar date for proofs of claim, but the plaintiff never filed a proof of claim. The bankruptcy and district courts found that the plaintiff “intentionally” did not file a proof of claim based on counsel’s “assumption” that the complaint would be treated as an informal proof of claim.15 The plaintiff participated extensively at every stage of the Chapter 13 case and had several conversations through counsel in open court about the bar date and about filing a proof of claim. Applying the five-part test in Clark v. Valley Federal Savings & Loan Ass’n (In re Reliance Equities, Inc.),16 the Fifth Circuit held that the claim holder’s lawyer’s choice not to file a proof of claim based on his misunderstanding that the bankruptcy court would treat the dischargeability complaint as an informal proof of claim “was reasonable.”17 More recently, the Fifth Circuit recognized the continuing validity of informal proofs of claim in a decision affirming that the 1994 enactment of § 502(b)(9),18 which specifies untimeliness as a ground for disallowance, didn’t eliminate the potential for informal proofs of claim.19
The “intentional” failure to file a proof of claim rewarded by the Fifth Circuit in Nikoloutsos has little to recommend it. No creditor should ever purposefully rely on an informal proof of its claim. If through inadvertence or mistake no proof of claim is filed, the creditor should look for written evidence that it communicated its intent to hold the debtor responsible for the debt. A writing of some sort is almost always required—Bankruptcy Rule 3001 defines a proof of claim as “a written statement setting forth a creditor’s claim.”20 A letter, motion or pleading can be the predicate for an informal proof of claim if it was known to the trustee and the debtor and was filed with the court.
Filing with the court is critical.21 Telephone calls or conversations with the debtor or the trustee can be supporting evidence of an informal proof of claim, but talk alone is not sufficient. There is no rule or statute in Chapter 13 similar to § 1111(a), which relieves the creditor of responsibility to file a proof of claim.22 All creditors, without regard to whether or how scheduled by the debtor, must file proofs of claim to participate in Chapter 13 cases.
Failure to file a proof of claim has trapped the debtor’s attorney as well as other creditors. For example, when there were unpaid fees from a prior case, the attorney’s failure to file a proof of claim in a subsequent case was not saved by an agreement with the debtor that the fees would be paid, since the agreement did not contain a demand for payment.23
In general, that a proof of claim was filed in a prior case does not act as a claim, informal or otherwise, in a subsequent case. As one court stated, a proof of claim must be of record in the case from which payment is expected: “[T]he bankruptcy estate created on the date one petition is filed is not the same as the estate that is created on an entirely different date when another petition is filed, even if those petitions involve the same debtor.”24
1 Wilkens v. Simon Bros., 731 F.2d 462 (7th Cir. 1984).
2 See Clark v. Valley Fed. Sav. & Loan Ass’n (In re Reliance Equities, Inc.), 966 F.2d 1338, 1345 (10th Cir. 1992) (five-part test); Uwimana v. Government of Rwanda (In re Uwimana), 284 B.R. 218 (D. Md. 2002) (Complaint to determine dischargeability was in writing, contained a demand for payment, expressed an intent to hold the debtor liable, and was filed with the bankruptcy court. It was not inequitable to treat adversary proceeding as an informal proof of claim.); In re Brooks, 370 B.R. 194, 200–02 (Bankr. C.D. Ill. 2007) (Perkins) (Motion for stay relief does not qualify as informal proof of claim under five-part test of Clark v. Valley Federal Savings & Loan Ass’n (In re Reliance Equities, Inc.), 966 F.2d 1338, 1345 (10th Cir. 1992). Informal claim must be written, contain demand on debtor’s estate, express intent to hold estate liable, be filed with bankruptcy court, and “based on the facts of the case, it must be equitable to allow the claim. . . . Allowing stay relief motions and other pleadings to be treated as informal claims would emasculate the claim filing requirement and the accompanying bar date.”); In re Thompson, No. 00-11209(1)(3), 2006 WL 2385337 (Bankr. W.D. Ky. Aug. 17, 2006) (unpublished) (Cooper) (Motion to modify stay and motion to amend order of confirmation constitute an informal proof of claim that was in writing, contained a demand for payment, expressed an intent to hold the debtor liable and were filed with the bankruptcy court; discharge is set aside to permit informal claim holder to file adversary proceeding to determine whether claim was discharged. Not inequitable to allow informal claim because other unsecured claimants received 15% but would have received only 10% had informal claim been allowed. Prejudice is manifest only with regard to excluded informal claim holder.); In re Edwards, 162 B.R. 868, 869 (Bankr. D. Colo. 1993) (Confirmed plan fails the five-part test to be an “informal” proof of claim because the plan does not contain a clear demand for payment by the creditor and it would be inequitable to treat the plan as an informal proof of claim.); In re Babbin, 156 B.R. 839 (Bankr. D. Colo.), rev’d on other grounds, 160 B.R. 848 (D. Colo. 1993) (Confirmed Chapter 13 plan can be an “informal” proof of claim if it meets the five-part test for informal proofs of claim accepted by the Tenth Circuit.); In re Sorge, 149 B.R. 197 (Bankr. W.D. Okla. 1993) (IRS’s actions after conversion from Chapter 11 to Chapter 13 are insufficient to constitute an informal proof of claim under the five-part test.).
3 See, e.g., Washington v. Nissan Motor Acceptance Corp. (In re Washington), 158 B.R. 722, 724 (Bankr. S.D. Ohio 1993) (“[W]e agree with debtor that generally a formal claim must eventually be filed for an informal proof of claim to be valid.”).
4 In re Voccola, 234 B.R. 239, 240 (Bankr. D.R.I. 1999) (“[I]n order for a claim to be considered as filed informally it ‘must manifest on the judicial record’ the existence, nature and amount of the claim. . . . Cooper-Lewis’ undocumented verbal communication to the Trustee did not manifest itself on the judicial record and therefore may not constitute an informal proof of claim.”).
5 In re Laprade, No. 07-80001-WRS, 2007 WL 2301101 (Bankr. M.D. Ala. Aug. 9, 2007) (unpublished) (Sawyer) (Scheduling of claim and letters between creditor and debtor’s attorney are not sufficient to be informal proof of claim under Charter Co. v. Dioxin Claimants (In re Charter Co.), 876 F.2d 861, 863 (11th Cir. 1989).); In re Stern, 70 B.R. 472 (Bankr. E.D. Pa. 1987).
6 In re Burrell, 85 B.R. 799 (Bankr. N.D. Ill. 1988).
7 In re Dietz, 136 B.R. 459 (Bankr. E.D. Mich. 1992). See also § 284.1 [ Amended Claims ] § 133.4 Amended Claims.
8 Hardgrave v. La Rock (In re Hardgrave), Case No. 94-4832, 1995 WL 371462, at *3–*4 (4th Cir. June 21, 1995) (Table decision at 59 F.3d 166) (In a Chapter 13 case with one unsecured creditor, creditor’s objection to Chapter 13 plan constituted an “informal claim” that should be allowed. “Courts have recognized informal claims where the creditor has actively participated in the bankruptcy proceedings. . . . La Rock actively participated in the bankruptcy proceedings from its inception. He attended the first creditors’ meeting and questioned Hardgrave about certain representations in Hardgrave’s Statement of Financial Affairs. He filed an objection to Hardgrave’s Chapter 13 Plan and argued against the plan at both confirmation hearings. Through his efforts, La Rock singlehandedly increased the value of the bankruptcy estate. He convinced the bankruptcy court that Hardgrave could afford to contribute more than $240 per month. . . . [T]he bankruptcy court refused to confirm a plan with payments below $500 per month. . . . La Rock’s efforts more than doubled the amount of money available for distribution to all of the creditors. . . . La Rock’s claim caused Hardgrave to file bankruptcy in the first place. . . . [A]llowing his informal claim will have no adverse impact on any party. . . . [T]he Trustee had only to recompute the percentages of payments to the unsecured creditors; with only two unsecured creditors, La Rock included, this is hardly a burdensome task. Although . . . the other unsecured creditor will receive a smaller percentage of its claim because of the allowance of La Rock’s informal claim, [the other creditor] did not object to La Rock’s motion.”); Maynard Sav. Bank v. Michels (In re Michels), 286 B.R. 684, 692 (B.A.P. 8th Cir. 2002) (Bank’s objection to confirmation, substantial participation in litigation of confirmation and acknowledgments of the bank’s claim by the bankruptcy court and in the plan constitute an informal proof of claim. “Prior to the August 29, 2001, deadline for timely filing a claim, MSB filed a response to Debtor’s motion for injunctive relief, an objection to confirmation of Debtor’s initial Chapter 13 plan, an objection to Debtor’s first amended plan, and a separate memorandum . . . . MSB made clear its desire to have its rights dealt with in Debtor’s chapter 13 . . . . MSB also made clear the amount of interest it expected and the monthly payments it sought . . . . [W]ell in advance of the claims filing deadline, the bankruptcy court found that MSB held a first lien on Debtor’s equipment and a second lien on real estate. The bankruptcy court also found the precise amount of the debt and the amount of the arrearages. Debtor, on his part, also acknowledged the amount of the claim, the secured nature of the claim, and how he proposed to pay the claim. MSB’s actions, coupled with a specific finding by the bankruptcy court as to the existence of a lien in favor of MSB and the amount owed, and further coupled with Debtor’s consistent articulated willingness to pay the claim, are sufficient to establish the elements of an informal proof of claim. The documents filed by MSB and the facts found by the court prior to the deadline, established both the nature and amount of the claim and MSB’s intent to hold Debtor liable for and to pursue the claim.”); In re Hickman, No. 05-40267-DOT, 2007 WL 656572 (Bankr. E.D. Va. Feb. 27, 2007) (unpublished) (Tice) (Objection to confirmation filed by Commonwealth of Virginia Department of Taxation prior to claims-filing deadline put debtor on notice of claim and constituted informal proof of claim. City of Richmond also had informal proof of claim based on collection lawsuit in state court, continuous negotiations with debtor in related Chapter 11 case, scheduling of City’s claim by debtor and provision for payment of City in related Chapter 11 case.); In re Fries, No. 04-40523, 2005 WL 4705223 (Bankr. D. Idaho July 15, 2005) (unpublished) (Pappas) (Objection to confirmation meets requirements for a timely filed informal proof of claim.); In re Gonzalez, 295 B.R. 584, 589 (Bankr. N.D. Ill. 2003) (Objection to confirmation meets the requirements for an informal proof of claim. “The objection was filed with the court . . . well before the bar date . . . . It states the existence and nature of the debt . . . . It provides the amount of the claim . . . . [T]he objection rather obviously manifests FMCC’s intent to hold Mr. Gonzalez liable . . . . When the necessary elements are present, objections to confirmation have been treated as informal proofs of claim[ ].”); In re Larson, 245 B.R. 609 (Bankr. D. Minn. 2000) (Objection to confirmation meets the requirements for an informal proof of claim and establishes standing to object to confirmation notwithstanding that the creditor failed to file a timely, formal proof of claim.); In re Joiner, 93 B.R. 130 (Bankr. N.D. Ohio 1988); In re Benedict, 65 B.R. 95 (Bankr. N.D.N.Y. 1986); Lazar v. Sullivan, 36 B.R. 771 (Bankr. E.D.N.Y. 1984); In re Sinykin, 37 B.R. 688 (Bankr. D. Minn. 1983). See Washington v. Nissan Motor Acceptance Corp. (In re Washington), 158 B.R. 722 (Bankr. S.D. Ohio 1993) (An objection to confirmation, coupled with a confirmation order itself that contained a settlement of the objection to confirmation, contained sufficient information to constitute an informal proof of claim on behalf of the objecting creditor.). See also § 274.1 [ Is a Plan Provision a Proof of Claim? ] § 131.5 Is a Plan Provision a Proof of Claim?.
9 Fossler v. Antonich (In re Antonich), 251 B.R. 441 (B.A.P. 10th Cir. 1999) (Applying Clark v. Valley Federal Savings & Loan Ass’n (In re Reliance Equities, Inc.), 966 F.2d 1338 (10th Cir. 1992), creditor’s objection to confirmation was not an informal proof of claim that could be amended after the claims bar date because the creditor was aware of the need to file a proof of claim and simply didn’t do so in a timely manner.); In re Rolyn, 266 B.R. 453 (Bankr. N.D. Cal. 2001) (Neither objection to confirmation nor prepetition complaint can be an informal proof of claim because neither contained both a statement of the nature and amount of the claim and the present intent to hold the debtor’s estate liable.); In re Sorge, 149 B.R. 197 (Bankr. W.D. Okla. 1993) (IRS objection to confirmation of plan after conversion from Chapter 11 to Chapter 13 is not sufficient to constitute an informal proof of claim. Nothing in Bankruptcy Rule 1019 or in any other rule relieves a creditor of the obligation to file a new proof of claim upon conversion from Chapter 11 to Chapter 13. The IRS indicated that it intended to file a formal proof of claim once it received tax computation documents from the debtor. The IRS never filed that proof of claim even though it obtained information from the debtor as requested. The IRS’s actions fail the five-part test for an informal proof of claim.); In re Stewart, 46 B.R. 73 (Bankr. D. Or. 1985).
10 Pabis v. Associated Fin. Servs. Co., 62 B.R. 633 (Bankr. D. Conn. 1986).
11 Cooper v. Kramer (In re Cooper), 139 B.R. 736 (D. Colo. 1992). Compare Grubb v. Pittsburgh Nat’l Bank (In re Grubb), 169 B.R. 341, 348 (Bankr. W.D. Pa. 1994) (The informal proof of claim doctrine “does not apply to [the bank’s] Motion for Relief. . . . In this case, the equites [sic] of the situation do not warrant recognizing [the bank’s] Motion for Relief as an informal proof of claim. [The bank] was intimately familiar with and actively engaged in the Debtors’ case. . . . [The bank] received notice of the claims bar date and filed three other proofs of claim. . . . Moreover, when [the bank] filed its Motion for Relief to repossess and sell the Cadillac, it anticipated a deficiency. However, [the bank] failed to file its proof of claim for the deficiency for almost 19 months. [The bank] has not alleged any facts which support a finding of ‘excusable neglect.’”).
12 In re Johnson, 262 B.R. 831, 846 (Bankr. D. Idaho 2001).
13 See §§ 229.1 [ 11 U.S.C. § 1327(a): Binding Effect on Creditors and Debtors ] § 120.2 11 U.S.C. § 1327(a): Binding Effect on Creditors and Debtors, 233.1 [ Notice and Due Process Considerations, Including Claims Allowance and Valuation ] § 121.2 Notice and Due Process Considerations, Including Claims Allowance and Valuation and 274.1 [ Is a Plan Provision a Proof of Claim? ] § 131.5 Is a Plan Provision a Proof of Claim?. See, e.g., In re Townsville, 268 B.R. 95, 107–08 (Bankr. E.D. Pa. 2001) (Equities do not favor treating Chapter 13 plan as an informal proof of claim when debtor filed untimely $1 claim on behalf of mortgage holder. Deadline for filing claims under Bankruptcy Rule 3004 was February 22, 2001. On March 1, 2001, debtor filed a proof of claim for $1 on behalf of mortgage holder. Mortgage holder objected to debtor’s untimely proof of claim. Debtor responded that earlier filed Chapter 13 plan was an informal proof of claim that could be amended by the (untimely) formal proof of claim filed by the debtor. “[T]he equities of the instant situation do not support treating the Plan as an informal proof of claim. . . . Debtor did not have a good faith basis for limiting Bankers’ claim to [$1]. . . . Since Debtor did not file the Proof of Claim until March 1, 2001, . . . Bankers could not file a superseding claim. . . . Debtor is seeking, by filing the Proof of Claim and seeking to have the Plan treated as an informal proof of claim, to do an end run around Bankers and force it to be treated as a secured claimant with a mere $1.00 claim. I view this strategy as misguided and not deserving of the protection which equity can provide. . . . [Debtor] has offered no explanation whatsoever for her delay. In the absence of such an explanation, which would similarly be necessary under Rule 9006(b) to obtain an extension of the claims deadline imposed by Rule 3004, I find that it would be inequitable to apply the informal claims doctrine to treat the Plan as a claim filed by Debtor on Bankers’ behalf.”).
14 199 F.3d 233 (5th Cir. 2000).
15 Nikoloutsos v. Nikoloutsos (In re Nikoloutsos), 222 B.R. 297, 308 (E.D. Tex. 1998).
16 966 F.2d 1338 (10th Cir. 1992).
17 Accord Uwimana v. Government of Rwanda (In re Uwimana), 284 B.R. 218 (D. Md. 2002) (Republic of Rwanda’s dischargeability complaint in prior Chapter 7 case is an informal proof of claim. Debtor filed Chapter 13 case while prior Chapter 7 case was still pending. Bankruptcy court treated second filing as the conversion of the Chapter 7 case to Chapter 13. Republic of Rwanda filed dischargeability complaint in Chapter 7 case but did not timely file a proof of claim in the Chapter 13 case after “conversion.” Complaint to determine dischargeability was in writing, contained a demand for payment, expressed an intent to hold the debtor liable, and was filed with the bankruptcy court. It was not inequitable to treat adversary proceeding as an informal proof of claim.); In re Lacks, No. 03-39295-DOT, 2006 WL 3099646 (Bankr. E.D. Va. Oct. 30, 2006) (unpublished) (Tice) (Adversary proceeding to determine dischargeability and other pleadings in subsequent state court action, including monetary judgment, were informal proof of claim; late-filed formal proof of claim allowed as amendment.). But see Fossler v. Antonich (In re Antonich), 251 B.R. 441 (B.A.P. 10th Cir. 1999) (Applying Clark v. Valley Federal Savings & Loan Ass’n (In re Reliance Equities, Inc.), 966 F.2d 1338 (10th Cir. 1992), objection to confirmation was not an informal proof of claim that could be amended after the bar date. The creditor was aware of the need to file a proof of claim and simply didn’t do so in a timely manner.); In re Brooks, 370 B.R. 194 (Bankr. C.D. Ill. 2007) (Motion for stay relief does not qualify as informal proof of claim under five-part test of Clark v. Valley Federal Savings & Loan Ass’n (In re Reliance Equities, Inc.), 966 F.2d 1338, 1345 (10th Cir. 1992)); U.S. Bank, Nat’l Ass’n v. Roberts (In re Roberts), 367 B.R. 677 (Bankr. D. Colo. 2007) (Tallman) (Motion for stay relief to evict debtor was not informal proof of claim.).
18 See § 275.1 [ 1994 Code Amendments Changed the Rules ] § 132.1 1994 Code Amendments Changed the Rules.
19 Garza v. J.D. Foods, Inc. (In re Garza), No. 4:05-CV-694-A, 2006 WL 1317015 (N.D. Tex. May 15, 2006) (unpublished) (McBryde) (Enactment of § 502(b)(9) in 1994 did not abrogate informal proof of claim doctrine; motion for relief from stay constituted timely informal proof of claim that could be amended.), aff’d, 222 Fed. Appx. 350 (5th Cir. 2007) (1994 enactment of § 502(b)(9) did not abrogate informal proofs of claim.)
20 See Fed. R. Bankr. P. 3001(a), discussed in § 131.1 Official Bankruptcy Form 410 and Variations and § 131.2 Official Form 410 after BAPCPA.
21 See, e.g., In re Luther, No. BK 05-73529-CMS-13, 2006 WL 2385004, at *6 (Bankr. N.D. Ala. Aug. 3, 2006) (unpublished) (Stilson) (No informal proof of claim was filed to which an untimely formal claim could relate when creditor’s counsel was informed three weeks before claims bar date that electronic filing was required but counsel did not file a proof of claim—electronically or otherwise—until two days after claims bar date. “None of the cases suggest that non-record action by individual attorneys outside the knowledge of the court constitutes a ‘filing,’ constructive or actual.”).
22 It has been held that, notwithstanding Bankruptcy Rules 3002(a) and 1019(4) [now 1019(3)], claims actually filed in a superseded Chapter 11 case need not be refiled upon conversion to Chapter 13. In re Adams, 76 B.R. 908 (Bankr. D. Conn. 1987). See § 327.1 [ Conversion from Chapter 11 to Chapter 13 ] § 149.1 Conversion from Chapter 11 to Chapter 13.
23 Holland v. EMC Mortgage Corp. (In re Holland), 374 B.R. 409 (Bankr. D. Mass. 2007).
24 In re Harris, 341 B.R. 660, 663, 664–65 (Bankr. N.D. Ind. 2006) (Proof of claim timely filed in prior, dismissed Chapter 13 case cannot be an informal proof of claim in subsequent case. Credit union filed proof of claim before bar date with caption of earlier dismissed case for same debtor. Credit union discovered its error after bar date and filed new proof of claim in correct case. Rule 5005(c) did not help creditor because “[t]he problem here does not involve to whom the claim was delivered but, instead, where the creditor chose to place that claim when it was first submitted for filing . . . . There was no erroneous delivery and without that there is no basis for invoking Rule 5005(c).” With respect to informal claim argument: “[T]he question is whether the informal claim must be submitted in connection with the bankruptcy case in which the ‘amended claim’ is now being asserted. The court holds that it must. . . . [B]efore a filing can relate back to something else, there must be something in the record to which it can be related. Without an earlier submission, there is nothing that is capable of being amended. . . . ‘A proof of claim formal or informal, filed in one case has no effect as a claim in another case. To be effective, a claim against a debtor must appear of record in the debtor’s case.’”).