§ 132.7     Secured Claim Holders
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 132.7, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

The safest thing that can be said about whether and when secured claim holders should file proofs of claim is: don’t take chances—always file proof of a secured claim in a Chapter 13 case within the 90 days (180 days plus possible additions for governmental units)1 provided in Bankruptcy Rule 3002(c).2 Secured claim holders that fail to file proofs of claim within the deadlines in Bankruptcy Rule 3002(c) invite expensive litigation and may be endangering their liens.3 Something this basic should be clear in the Code and Rules. It isn’t.

[2]

In spite of efforts by many bankruptcy lawyers, judges and trustees, the Advisory Committee on Bankruptcy Rules has persisted in its omission of secured claim holders in the description of creditors that “must file a proof of claim” in Bankruptcy Rule 3002(a).4 There is no statutory foundation for this omission, and, inexplicably, the Advisory Committee Note to an earlier version of Bankruptcy Rule 3002(a) recited that “a secured claim need not be filed or allowed under § 502 or § 506(d) unless a party in interest has requested a determination and allowance or disallowance under § 502.”5

[3]

It tells us nothing that a secured claim holder “need not” file a proof of claim. No claim holder has to file a proof of claim—not even an unsecured claim holder. The issue is not compulsion with respect to the filing of a proof of claim. The issues are what does “timely” mean in § 501 of the Code, and what are the consequences of the failure to timely file a proof of claim? The time for filing proof of a secured claim is clearly an appropriate topic for rule making. Only the rule makers seem to think otherwise.

[4]

We know from Bankruptcy Rules 3002(a) and 3002(c) that an unsecured claim holder must file a proof of claim within 90 days (180 days after the petition, plus possible additions for governmental units)6 of the first date set for the meeting of creditors “for the claim . . . to be allowed.”7 The Rules drafters are correct in their use of the mandatory “must” in Bankruptcy Rule 3002(a); but if an unsecured claim holder can only accomplish allowance by filing a proof of claim that is timely as defined by Bankruptcy Rule 3002(c), then the same is surely true with respect to the holders of secured claims under §§ 501 and 502 of the Code.

[5]

There is a lack of parallelism between Bankruptcy Rule 3002(a) and § 501 of the Code: § 501(a) recites that “a creditor . . . may file a proof of claim.”8 “Creditor” is defined in § 101(10) as any “entity that has a claim against the debtor.”9 “Claim” means “right to payment, whether or not such right is . . . secured, or unsecured.”10 Section 501(a) thus permits secured and unsecured creditors to file proofs of claim. The reference in Bankruptcy Rule 3002(a) to only unsecured claim holders is an imperfect implementation of § 501.

[6]

Under § 502(a), a claim, “proof of which is filed under § 501 of this title,” is “deemed allowed” unless a party in interest objects.11 Section 502 makes no distinction between secured or unsecured claims. There is no provision of the Code for the allowance of a secured claim when no proof of claim has been filed by the claim holder12 (or by some other party on behalf of the claim holder).13 The Code is constructed that no claim holder—secured or unsecured—can have an allowed claim if a proof of claim has not been filed. Why Bankruptcy Rule 3002(a) defines a prerequisite of filing for allowance of only unsecured claims is not just unclear; it is dangerously misleading. The confusing language in Bankruptcy Rule 3002 and the lack of parallelism between Bankruptcy Rule 3002 and §§ 501 and 502 of the Code have led to much litigation over the consequences for the secured claim holder that fails to file a timely proof of claim.14

[7]

The Bankruptcy Reform Act of 1994 cleared up the confusion with respect to the timely filing of proofs of secured claims by governmental units in cases filed after October 22, 1994. Discussed above,15 § 502(b)(9), as amended in 1994, provides that “a claim of a governmental unit shall be timely filed if it is filed before 180 days after the date of the order for relief or such later time as the Federal Rules of Bankruptcy Procedure may provide.”16 The definition of timely in § 502(b)(9) is not limited to any particular kind of claim—even proof of a secured claim held by a governmental unit is untimely if not filed within 180 days of the petition, or such later time as the Federal Rules of Bankruptcy Procedure may provide. Bankruptcy Rule 3002(c)(1) was amended effective December 1, 1996, to permit extension of the 180-day period “for cause” if the governmental unit makes a motion before expiration of 180 days after the date of the order for relief.17 The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA)18 further amended § 509(b)(9) to allow a governmental unit 60 additional days in which to timely file a tax claim, measured from the date on which the debtor files a tax return required by new § 1308.19 Bankruptcy Rule 3002(c)(1) was amended, effective December 1, 2008, to reflect this statutory change.20 The Rule specifies that the governmental unit has 180 days from the petition or, when applicable, 60 additional days after the return is filed, “whichever is later.”21

[8]

Section 502(b)(9) presents the Rules drafters with a dilemma and will create odd outcomes in jurisdictions that resist standardizing the timely filing of proofs of claim by nongovernmental secured claim holders. In bankruptcy cases filed on or after October 17, 2005, governmental units cannot file timely secured claims except within the 180 days (or 60 additional days for tax claims) described in § 502(b)(9). All other secured claim holders tread water in the Neverland of reported cases that refuse to define timely for ordinary secured claim holders.

[9]

There are two (or more) sets of rules for the timeliness of filing of secured claims by governmental units, depending on the date of filing of the Chapter 13 case. In bankruptcy cases filed before October 22, 1994, governmental units that hold secured claims will be subject to the “ordinary” rules within a district for the timeliness of filing proof of a secured claim. In jurisdictions where Bankruptcy Rule 3002(c) has been interpreted not to apply to the filing of secured claims,22 there is no definition of timely for the filing of pre-1994 secured claims by governmental units. In those same districts, in cases filed after October 22, 1994, a governmental unit must file proof of a secured claim within the 180 days defined in § 502(b)(9)—or within the 60 additional days for tax claims in cases filed on or after October 17, 2005.23

[10]

Hope that the 1994 amendments to § 502(b)(9) would inspire the Bankruptcy Rules Committee to address the definition of timely for the filing of proofs of all secured claims was not realized in 1996. Effective December 1, 1996, Bankruptcy Rule 3002 was amended to conform to new § 502(b)(9); but the offending reference to only unsecured creditors in Bankruptcy Rule 3002(a) was retained. The Rules Committee missed an opportunity to clear up much unnecessary uncertainty about the timeliness of proofs of secured claims. The opportunity was missed again when Interim Bankruptcy Rule 3002 was proposed following enactment of BAPCPA and again when that Rule was formally amended effective December 1, 2008.

[11]

A majority of courts concluded that (former) Bankruptcy Rule 3002 did not require a secured claim holder to file a proof of claim within 90 days of the first date set for the meeting of creditors.24 As explained by one court in a Chapter 13 case filed before October 22, 1994:

Federal Rule of Bankruptcy Procedure 3002 is silent on whether or when a secured claim holder must file a proof of claim to protect its rights in a Chapter 13 case. Nothing in the Bankruptcy Code or Bankruptcy Rule 3002(a) requires a secured claim holder to file a claim. . . . [I]n order for both secured and unsecured claims to be paid, they must be “allowed” after they have been filed under § 501. Consequently, as a practical matter, a secured creditor must file a claim to participate in and receive dividends or other distributions under a Chapter 13 plan. The Court respectfully disagrees with [other decisions] which held that a secured claim holder who seeks to participate in the receipt of disbursements from the Chapter 13 trustee must comply with the same time requirement for filing claims imposed on unsecured creditors. . . . [N]either the Bankruptcy Code nor Bankruptcy Rule 3002(a) requires a secured claim holder to file a proof of claim within 90 days of the first date set for the meeting of creditors.25

Several courts have reported decisions concluding that neither the 1994 amendments to the Code nor the subsequent conforming amendments to Bankruptcy Rule 3002 define “timely” for the filing of secured claims.26

[12]

There is contrary authority holding that the filing of a proof of claim within the time provided in Bankruptcy Rule 3002(c) is prerequisite to the allowance of a secured claim and, to the extent Bankruptcy Rule 3002 suggests otherwise, the Rule is inconsistent with and overruled by the Code.27 In a Chapter 13 case decided after the 1994 amendments to § 502(b)(9), one bankruptcy court observed that the new statute does “presume a ‘timeliness’ feature, without distinguishing between secured or unsecured claims,” but the court found that “the Rules provide no bar date for secured claims [and] [t]he statute itself gives no guidance regarding what ‘timely’ means in the context of secured claims.”28 A few decisions reported after the Rules were conformed to the 1994 Code amendments have taken the bull by the horns and hold that timely filing of a secured claim is defined by Bankruptcy Rule 3002 as 90 days after the first date set for the meeting of creditors (180 days after the petition plus possible additions for governmental creditors).29

[13]

Though the cases are surely correct that secured claim holders cannot be forced to file proofs of claim on any particular schedule, there are consequences to the failure to timely file proof of a secured claim.30 Absent a timely filed proof of claim, the secured claim holder will not have an allowed claim,31 will not share in distributions under the plan32 and will realize on its collateral, if at all, only after further litigation. A majority of courts hold that the lien of a secured claim holder that fails to file a timely proof of claim survives confirmation and probably survives discharge, but there is significant contrary authority.33 A secured claim holder that fails to file a timely proof of claim may or may not be entitled to relief from the stay after confirmation.34 Confirmation of a plan may limit or eliminate the lien rights of a secured creditor that fails to file a timely proof of claim.35

[14]

Given that the failure to timely file proof of a secured claim can have so many important consequences in a Chapter 13 case, it is a wonder that so many years have passed without a clear rule on the subject. The advice for nongovernmental secured claim holders is obvious: never voluntarily fail to file a proof of claim in a Chapter 13 case within the 90 days provided in Bankruptcy Rule 3002. The advice for governmental units that hold secured claims is always file a proof of claim within 180 days after the petition, as described in § 502(b)(9) (or within the additional 60 days provided by BAPCPA for certain tax claims).

[15]

If Bankruptcy Rule 3002(c) does not apply to secured claims, then we have to look elsewhere for the definition of timely for filing proof of a secured claim in a Chapter 13 case. This question is answered by the Code only with respect to secured claims of governmental units and then only in cases filed after October 22, 1994.36 None of the reported decisions rejecting the application of Bankruptcy Rule 3002(c) to nongovernmental secured claims fixes an alternative definition of timely for purposes of § 501 in Chapter 13 cases.37 If Bankruptcy Rule 3002(c) does not apply, can a secured claim holder (other than a governmental unit in a case filed after October 22, 1994) file a timely proof of claim at any time during the Chapter 13 case?

[16]

The absence of one comprehensive definition of timely for the filing of proofs of secured claims is intolerably disruptive of Chapter 13 practice.38 Typically, the debtor proposes to pay allowed secured claims in full over a period that approximates the length of the plan. If the debtor’s financial resources permit the payment of a secured claim in monthly installments over 36 months, what becomes of the plan when the secured claim holder chooses to file its claim two years after confirmation? Is the Chapter 13 trustee required to accumulate funds intended for the secured claim until the claim holder gets around to filing a proof of claim? Why does Bankruptcy Rule 3004 allow the debtor only 30 days after the 90 days (or 180 days plus possible additions for governmental claims) in Bankruptcy Rule 3002(c) in which to file a claim on behalf of a creditor39 if a secured claim holder can file its own claim at any time during the case? When do other creditors have a right to receive the debtor’s disposable income that would have been paid to the secured claim had the holder filed a timely claim?

[17]

It is hard to imagine that the drafters of the Code intended confusion over such a basic component of Chapter 13 practice as the allowance and payment of secured claims. It was a known defect in Chapter XIII of the former Act that secured claim holders could control the terms and success of plans by declining to accept the debtor’s proposal and lying back “outside” the plan.40 This was one of the principal evils eliminated by the cramdown of secured claim holders in § 1325(a)(5).41 Chapter 13 plans have the intended effect of managing the rights of secured claim holders through confirmation only if the claims allowance process described in §§ 501, 502 and 506 functions in the timely manner contemplated by Congress. If there is no requirement of the timely filing of proof of secured claims in Chapter 13 cases, then secured claim holders can veto the plan, not by objecting to confirmation but by simply declining to file timely proofs of claim.42 The Rules drafters have inexplicably sentenced Chapter 13 practitioners and courts to struggle with the vacuum created by the absence of a definition of timely for the filing of nongovernmental secured claims.

[18]

It is not in the economic best interest of a secured claim holder to fail to timely file proof of its claim. The sooner a claim is filed and allowed, the faster the secured claim holder will receive payments. The debtor must propose to pay at least the present value of the creditor’s collateral through the plan;43 thus, the economics of most Chapter 13 plans favors payment of a secured claim through the plan rather than litigation over lien rights or relief from the stay.

[19]

The effects of confirmation on liens under § 1327,44 the voiding of liens under § 506(d) that are not allowed secured claims and the effects of discharge on liens of creditors that have failed to timely file proofs of claim45 are complicated questions much affected by whether secured claims must be timely filed. For example, in Chapter 13 cases filed before the 1994 amendments, it was the (extreme) view of the U.S. Court of Appeals for the Eleventh Circuit that secured claim holders need not file proofs of claim within any particular time but could refuse to file and be entitled to relief from the stay after confirmation, notwithstanding a plan provision for payment of allowed secured claims.46 In the Eleventh Circuit, secured claim holders (other than governmental units in cases filed after October 22, 1994) might realize the greatest leverage by always waiting to file proofs of claim in Chapter 13 cases: they can accept the treatment through the plan if it is favorable or move for relief from the stay and recover their collateral; this decision could be made after confirmation without fear of any deadline for the filing of a timely proof of claim. In the Eleventh Circuit, debtors (or trustees) may have to file proofs of claim on behalf of all secured claim holders, else relief from the stay is a risk before or after confirmation and the debtor loses control of collateral necessary to performance of the plan even when the plan proposes full payment of all allowed secured claims.

[20]

Until the drafters clear up the confusion in Bankruptcy Rule 3002, or until Congress expands the definition of timely in § 502(b)(9) to include nongovernmental claim holders, debtors’ counsel might consider including a provision in the plan fixing a date by which secured claim holders must file proofs of claim to be timely. If all creditors get notice, the confirmed plan will bind secured claim holders,47 and the debtor can rationally design and execute a plan that manages the timely filed claims. Courts that constrain secured claim holders to file timely proofs of claim might be convinced that a provision of the plan applying the time periods in Bankruptcy Rule 3002(c) is not inconsistent with the Code.48


 

1  See §§ 276.1 [ Governmental Units ] § 132.3  Governmental Units and 279.1 [ Priority Claims, Including Requests for Payment of Administrative Expenses ] § 132.6  Priority Claims, Including Requests for Payment of Administrative Expenses for discussion of “timely” filing for proofs of claim by governmental units, including the addition of up to 60 days for tax claims counted from the filing of a return required by § 1308 in a case filed on or after October 17, 2005. See also 11 U.S.C. §§ 502(b)(9) and 1308, as amended by Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Pub. L. No. 109-8, 119 Stat. 23 (2005), discussed in §§ 276.1 [ Governmental Units ] § 132.3  Governmental Units, 279.1 [ Priority Claims, Including Requests for Payment of Administrative Expenses ] § 132.6  Priority Claims, Including Requests for Payment of Administrative Expenses, 508.1 [ New Timing Issues ] § 133.5  Tax Claim Exception after BAPCPA and 513.1 [ Taxes ] § 136.3  Taxes after BAPCPA.

 

2  See §§ 275.1 [ 1994 Code Amendments Changed the Rules ] § 132.1  1994 Code Amendments Changed the Rules and 282.1 [ General Rules: No Enlargement or Exceptions, Except . . . ] § 133.1  General Rules: No Enlargement or Exceptions, Except . . ..

 

3  See below in this section, and see §§ 233.1 [ Notice and Due Process Considerations, Including Claims Allowance and Valuation ] § 121.2  Notice and Due Process Considerations, Including Claims Allowance and Valuation, 288.1 [ Failure to File Proof of Claim ] § 135.5  Failure to File Proof of Claim and 358.1 [ On Liens ] § 162.3  On Liens.

 

4  See § 275.2 [ In General: Filing is Required for Allowance ] § 132.2  In General: Filing is Required for Allowance.

 

5  Advisory Committee Note, Fed. R. Bankr. P. 3002(a) (1983 version).

 

6  Fed. R. Bankr. P. 3002(a).

 

7  See §§ 276.1 [ Governmental Units ] § 132.3  Governmental Units, 279.1 [ Priority Claims, Including Requests for Payment of Administrative Expenses ] § 132.6  Priority Claims, Including Requests for Payment of Administrative Expenses, 508.1 [ New Timing Issues ] § 133.5  Tax Claim Exception after BAPCPA and 513.1 [ Taxes ] § 136.3  Taxes after BAPCPA for discussion of additional time BAPCPA granted governmental units to file proof of tax claims, counted from the date the debtor files a return required by § 1308.

 

8  11 U.S.C. § 501(a).

 

9  11 U.S.C. § 101(10)(A) (emphasis added).

 

10  11 U.S.C. § 101(5)(A) (emphasis added).

 

11  11 U.S.C. § 502(a).

 

12  See, e.g., In re Michels, 270 B.R. 737, 741 (Bankr. N.D. Iowa 2001) (“In order to be an ‘allowed’ secured claim, a proof of claim must be filed under § 501. 11 U.S.C. § 502(a).”).

 

13  See 11 U.S.C. § 501(c) (“If a creditor does not timely file a proof of such creditor’s claim, the debtor or the trustee may file a proof of such claim.”) and Bankruptcy Rule 3004, discussed in §§ 285.1 [ Timing, Form, Superseding and Amended Claims ] § 134.1  Timing, Form, Superseding and Amended Claims before 2005 and 286.1 [ Strategic Considerations: When to File Claims for Creditors ] § 134.3  Strategic Considerations: When to File Claims for Creditors. See, e.g., In re Jurado, 318 B.R. 251, 255–57 (Bankr. D.P.R. 2004) (Although neither Code nor Rules require a secured creditor to file a proof of claim by any particular time, local order requires debtor to file claim on behalf of creditors provided for by the plan prior to confirmation. Debtor’s proof of claim on behalf of car lender in 54th month of 60-month plan was timely, but car lender was limited to distributions during last six months of plan. Chapter 13 trustee was not required to recover monies that were distributed to other creditors that would have gone to the car lender had an earlier proof of claim been filed. “The Bankruptcy Code and Rules do not provide the time within which secured claims may be filed, or the consequences of a secured creditor’s failure to file a proof of claim. . . . Although there is no statutory requirement for the filing of a proof of claim to confirm a chapter 13 plan, this court’s Administrative Order 97-03 so requires. The basic reason for the requirement to file a proof of claim for a creditor specifically dealt with in the Chapter 13 Plan is to implement the intent of the plan for the benefit of both the debtor and the particular creditor.”).

 

14  See §§ 289.1 [ Untimely Filed Claims in Cases Filed before October 22, 1994: The Hausladen Phenomenon ] § 135.6  Untimely Filed Claims in Cases Filed before October 22, 1994: The Hausladen Phenomenon and 290.1 [ Untimely Filed Claims in Cases Filed after October 22, 1994 ] § 135.7  Untimely Filed Claims in Cases Filed after October 22, 1994.

 

15  See §§ 276.1 [ Governmental Units ] § 132.3  Governmental Units and 279.1 [ Priority Claims, Including Requests for Payment of Administrative Expenses ] § 132.6  Priority Claims, Including Requests for Payment of Administrative Expenses.

 

16  11 U.S.C. § 502(b)(9), as amended by Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, § 213, 108 Stat. 4106 (1994).

 

17  Fed. R. Bankr. P. 3002(c)(1) (as amended effective Dec. 1, 1996).

 

18  Pub. L. No. 109-8, 119 Stat. 23 (2005).

 

19  11 U.S.C. § 502(b)(9), as amended by Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. No. 109-8, 119 Stat. 23 (2005), discussed in §§ 276.1 [ Governmental Units ] § 132.3  Governmental Units, 279.1 [ Priority Claims, Including Requests for Payment of Administrative Expenses ] § 132.6  Priority Claims, Including Requests for Payment of Administrative Expenses, 508.1 [ New Timing Issues ] § 133.5  Tax Claim Exception after BAPCPA and 513.1 [ Taxes ] § 136.3  Taxes after BAPCPA.

 

20  Fed. R. Bankr. P. 3002(c)(1) (as amended effective Dec. 1, 2008).

 

21  Fed. R. Bankr. P. 3002(c)(1) (as amended effective Dec. 1, 2008).

 

22  See below in this section.

 

23  See 11 U.S.C. § 502(b)(9), as amended by Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, § 213, 108 Stat. 4106 (1994), and as further amended by Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. No. 109-8, 119 Stat. 23 (2005).

 

24  Southtrust Bank of Ala. v. Thomas (In re Thomas), 3 F.2d 991 (11th Cir. 1989); Simmons v. Savell, 765 F.2d 547 (5th Cir. 1985); Alabama Power Co. v. Gleason (In re Gleason), 95 B.R. 801 (N.D. Ala. 1988); In re Hydorn, 94 B.R. 608 (Bankr. W.D. Mo. 1988); In re Van Hierden, 87 B.R. 563 (Bankr. E.D. Wis. 1988); Bender v. Commonwealth Mortgage Co. of Am. (In re Bender), 86 B.R. 809 (Bankr. E.D. Pa. 1988); In re Burrell, 85 B.R. 799 (Bankr. N.D. Ill. 1988); In re Gracey, 79 B.R. 597 (Bankr. E.D. Pa. 1987); In re Harris, 64 B.R. 717 (Bankr. D. Conn. 1986).

 

25  Strong v. United States (In re Strong), 203 B.R. 105, 111–13 (Bankr. N.D. Ill. 1996).

 

26  See, e.g., In re Stiller, 323 B.R. 199, 216 (Bankr. W.D. Mich. 2005) (“[T]he Bankruptcy Rules impose no bar date upon the filing of secured claims in a Chapter 13 proceeding.”); In re Hudson, 260 B.R. 421, 438 (Bankr. W.D. Mich. 2001) (There is no deadline fixed by the Bankruptcy Rules within which a secured claim holder must file a proof of claim. Without identifying the specific point in time when it is too late to file a secured claim, the court observed: “There is a point in time when it will be too late for a secured creditor to file a proof of claim and hold an allowed claim.”); In re Stewart, 247 B.R. 515, 520 (Bankr. M.D. Fla. 2000) (“Rule 3002 does not address the filing of a proof of claim by a secured creditor.”).

 

27  Still v. Tennessee Dep’t of Revenue (In re Rogers), 57 B.R. 170 (Bankr. E.D. Tenn. 1986). Accord In re Hogan, 346 B.R. 715, 721 (Bankr. N.D. Tex. 2006) (Lienholder must timely file proof of claim to have an allowed secured claim over objection of trustee or debtor; upon objection, untimely filed claim is disallowed and lienholder is not entitled to distributions under the plan. “Section 502(b)(9) has made clear, for over a decade now, that a proof of claim not timely filed, regardless of whether it is secured or unsecured, should not be allowed if there is an objection made on grounds of timeliness. . . . [T]he Fifth Circuit indeed suggested in [Simmons v. Savell (In re Simmons), 765 F.2d 547 (5th Cir. 1985),] that Rule 3002(c)’s deadline for proofs of claim applies to all parties in Chapter 13.”); In re Schaffer, 173 B.R. 393, 395 (Bankr. N.D. Ill. 1994) (Secured claim holder must file proof of claim within the 90-day limitation fixed by Bankruptcy Rule 3002, else the claim is disallowed. “[C]ertain circumstances warrant the filing of a proof of claim by a secured creditor. The most obvious circumstance is when a secured creditor seeks distribution from the Chapter 13 plan. . . . ‘[I]n order for a secured claim to receive a distribution under a Plan pursuant to F.R.B.P. 3021, it must first be allowed pursuant to 502(a).’ . . . [T]he only legitimate outcome is that for both secured and unsecured claims to be allowed, they must be filed under Section 501.”).

 

28  In re Macias, 195 B.R. 659, 661, 662 (Bankr. W.D. Tex. 1996).

 

29  See, e.g., In re Nwonwu, 362 B.R. 705, 709 (Bankr. E.D. Va. 2007) (Rule 3002 claims bar date applies to secured creditors even though lien may survive discharge. “Although a secured creditor is not required to file a proof of claim in order to preserve its lien, Rule 3002(c) does not exclude secured creditors from the need to file a proof of claim by the bar date in order to receive a distribution under the plan.”); In re Mickens, No. 04-1324, 2005 WL 375661, at *1 (Bankr. D.D.C. Feb. 14, 2005) (unpublished) (Teel) (“Despite F.R. Bankr. P. 3002(a) stating only that an unsecured creditor must file a proof of claim for the claim to be allowed, the deadline of Rule 3002(c) is not limited to unsecured creditors, and the Bankruptcy Code itself makes clear that filing of a timely proof of claim is necessary for a holder of a secured claim to have an allowed secured claim.”); In re Michels, 270 B.R. 737, 741 (Bankr. N.D. Iowa 2001) (“If an objection is filed, a secured claim is not an allowed claim if a proof of claim was not timely filed. 11 U.S.C. § 502(b)(9). The deadline for filing a proof of claim is 90 days after the first date set for the creditors’ meeting. Fed. R. Bankr. P. 3002(c).”); In re Kelley, 259 B.R. 580, 584 (Bankr. E.D. Tex. 2001) (“[T]he Court believes that the proper statutory construction of the Bankruptcy Code and Rules, as well as strong policy considerations, mandate a conclusion that secured creditors are, in fact, bound by the bar date established by Rule 3002(c) and must timely file a proof of claim if they desire to receive a plan distribution.”).

 

30  See §§ 289.1 [ Untimely Filed Claims in Cases Filed before October 22, 1994: The Hausladen Phenomenon ] § 135.6  Untimely Filed Claims in Cases Filed before October 22, 1994: The Hausladen Phenomenon and 290.1 [ Untimely Filed Claims in Cases Filed after October 22, 1994 ] § 135.7  Untimely Filed Claims in Cases Filed after October 22, 1994.

 

31  In re Michels, 270 B.R. 737, 741 (Bankr. N.D. Iowa 2001) (“If an objection is filed, a secured claim is not an allowed claim if a proof of claim was not timely filed. 11 U.S.C. § 502(b)(9).”).

 

32  See, e.g., Bisch v. United States (In re Bisch), 159 B.R. 546, 549 (B.A.P. 9th Cir. 1993) (“Failure to file a secured proof of claim in a bankruptcy case might mean that the lienholder will not receive a distribution from the estate. This may mean forfeiting any right to a deficiency, but it does not waive the lien.”); Kleibrink v. Kleibrink (In re Kleibrink), No. 3:07-CV-0088-K, 2007 WL 2438359, at *10 (N.D. Tex. Aug. 28, 2007) (unpublished) (Kinkeade) (“[T]he disallowance of a proof of claim, without more, does not extinguish a lien. The disallowance of a claim only means the creditor . . . would not be entitled to a distribution from the estate.”); In re Workman, 373 B.R. 460 (Bankr. D.S.C. 2007) (Secured creditors are not required to file proof of claim except to receive distribution under plan.); In re Michels, 270 B.R. 737, 741 (Bankr. N.D. Iowa 2001) (“If an untimely secured claim is disallowed, the creditor would receive no distribution under the plan.”); In re Hudson, 260 B.R. 421, 438 (Bankr. W.D. Mich. 2001) (The secured claim holder is not entitled to distributions under the confirmed plan until it files a proof of claim. Without identifying the specific point in time when it is too late to file a secured claim, the court observed: “There is a point in time when it will be too late . . . . After this point in time, a secured creditor will not be able to receive any distribution from the estate.”); In re Kelley, 259 B.R. 580, 584 (Bankr. E.D. Tex. 2001) (“[S]ecured creditors are, in fact, bound by the bar date established by Rule 3002(c) and must timely file a proof of claim if they desire to receive a plan distribution.”); In re Stewart, 247 B.R. 515, 520 (Bankr. M.D. Fla. 2000) (Secured claim holder need not file a proof of claim in a Chapter 13 case, but if it doesn’t, it will not receive distributions under the plan. “Although it is clear that a secured creditor is not required to file a proof of claim . . . distributions pursuant to a chapter 13 plan are predicated upon the filing of a proof of claim.”); In re Alderman, 150 B.R. 246, 252–53 (Bankr. D. Mont. 1993) (“Rule 3021 provides that after confirmation of a Plan, distribution shall be made to creditors whose claims have been allowed. Claims are deemed allowed under § 502(a) by the filing of a Proof of Claim under § 501. Under § 501(a) a creditor may file a Proof of Claim. . . . [T]he filing of a Proof of Claim is not mandatory and a secured creditor’s lien survives a bankruptcy case if no Proof of Claim is filed. . . . In order for a claim to be allowed, a Proof of Claim must be filed. . . . Section 101(5)(A) states that ‘claim’ includes both secured and unsecured rights to payment. Section 502(a) requires proofs of claims to be filed under § 501 in order to be allowed. . . . Since the Bank’s claim has not been allowed under § 502(a), it may not share in any distribution under the Plan under Rule 3021. . . . This ruling works no great hardship on the parties. A creditor has within 90 days after the date of the § 341 meeting of creditors in which to file a Proof of Claim. . . . If a secured creditor fails to timely file, . . . [t]he Debtor may file proof of a secured creditor’s claim and thereby provide that the secured claim be allowed and share in distributions, under § 501(c).”); In re Wells, 125 B.R. 297, 300 (Bankr. D. Colo. 1991) (“While the Rules do not explicitly require a secured creditor to file a claim, 11 U.S.C. §§ 1325, 502(a) and 506 effectively create that requirement if the creditor is to participate in distributions from a confirmed plan.”).

 

33  See discussion beginning at § 120.2  11 U.S.C. § 1327(a): Binding Effect on Creditors and Debtors and § 162.3  On Liens. See, e.g., Kleibrink v. Kleibrink (In re Kleibrink), No. 3:07-CV-0088-K, 2007 WL 2438359, at *10 (N.D. Tex. Aug. 28, 2007) (unpublished) (Kinkeade) (Bankruptcy Code does not require secured creditor to file proof of claim to preserve lien, but disallowance means no distributions through plan.); In re Ninas, No. 05-50342, 2009 WL 136683 (Bankr. D.S.D. Jan. 20, 2009) (Nail) (Debtors must file adversary proceeding to determine whether judgment debt not provided for in plan and for which no claim was filed has been discharged.); In re Burner, 321 B.R. 432, 436 (Bankr. N.D. Ohio 2004) (Lien of a secured claim holder that does not file a proof of claim travels through the Chapter 13 case and is not subject to avoidance by motion or as a result of a confirmed plan but can only be challenged through the filing of an adversary proceeding. “[N]othing in the Bankruptcy Code or Bankruptcy Rules requires that a secured creditor file a proof of claim: See § 506(d)(2), a lien may not be avoided solely because a creditor does not file a proof of claim; and Bankruptcy Rule 3002(a), providing that an unsecured creditor, but not a secured creditor, must file a proof of claim for their claim to be allowed. . . . [I]t has been fundamental to bankruptcy jurisprudence that liens and other secured interests in property pass through bankruptcy.”); In re Michels, 270 B.R. 737, 741 (Bankr. N.D. Iowa 2001) (“If an untimely secured claim is disallowed, . . . the creditor’s lien may be at risk under § 506(d). . . . The conditions for voiding a secured creditor’s lien under § 506(d) are present when an untimely proof of a secured claim is filed and a party successfully objects to that claim.”).

 

34  See § 247.1 [ Effect of Failure to File Proof of Claim on Postconfirmation Relief from the Stay ] § 124.7  Effect of Failure to File Proof of Claim on Postconfirmation Relief from the Stay. See, e.g., In re Michels, 270 B.R. 737, 741 (Bankr. N.D. Iowa 2001) (“If an untimely secured claim is disallowed, . . . the creditor may be precluded from seeking relief from the stay during the term of the plan.”); In re Macias, 195 B.R. 659, 662, n.5, 663 (Bankr. W.D. Tex. 1996) (“If a secured claim is untimely filed, the trustee is entitled (perhaps even obligated) to object to its filing as untimely. Such disallowed claims will not be entitled to any distribution under the plan, nor will the creditor’s failure to timely file permit the [creditor] to later argue a lack of adequate protection.” In a note, “a secured creditor cannot simply absent itself from the bankruptcy process in chapter 13, then hope to obtain easy relief from the automatic stay after confirmation. Such a creditor could hardly maintain that cause existed for relief from stay where the debtor had made provision for the creditor in the plan and only the creditor’s refusal to file a claim prevented it from receiving the adequate protection that had been offered.”); In re Schaffer, 173 B.R. 393, 395–98 (Bankr. N.D. Ill. 1994) (Secured claim holder must file proof of claim within the 90-day limitation fixed by Bankruptcy Rule 3002, else the claim is disallowed. “Nothing in the Bankruptcy Code or Rules requires a secured creditor to file a claim. . . . A reason for not requiring the filing of a claim by a secured creditor is that the creditor ‘may ignore the bankruptcy proceeding and look to the lien for the satisfaction of the debt.’ . . . The Supreme Court in [Dewsnup v. Timm, 502 U.S. 410, 112 S. Ct. 773, 116 L. Ed. 2d 903 (1992),]  . . . reemphasizes this reasoning by concluding that failure to file does not affect a lien’s validity. However, certain circumstances warrant the filing of a proof of claim by a secured creditor. The most obvious circumstance is when a secured creditor seeks distribution from the Chapter 13 plan. . . . ‘[I]n order for a secured claim to receive a distribution under a Plan pursuant to F.R.B.P. 3021, it must first be allowed pursuant to 502(a).’ . . . [T]he only legitimate outcome is that for both secured and unsecured claims to be allowed, they must be filed under Section 501. . . . [T]he Court . . . declines to follow [In re Hausladen, 146 B.R. 557 (Bankr. D. Minn. 1992)]. . . . [T]he Court concludes that Bank One’s late filed claim is barred thus disallowed for the purpose of distribution by the Chapter 13 Trustee.” In dicta, “[i]f the admittedly late filed claim is disallowed, the Debtor may be able to retain the collateral, a 1993 Nissan Truck, throughout the administration of the case and Bank One will have to await the closing of the case before pursuing its remedies. . . . Or, of course, Bank One could move to vacate the stay for cause. Cause would not likely flow from an omission (the late filing) by the party seeking relief from the stay.”).

 

35  See discussions beginning at § 120.1  11 U.S.C. § 1327: Overview and § 121.1  OverviewSee, e.g., Miller v. Countrywide Home Loans (In re Miller), No. 99-25616JAD, 2007 WL 81052 (Bankr. W.D. Pa. Jan. 9, 2007) (unpublished) (Deller) (Although Countrywide was not obligated to file proof of its secured claim, it was bound by confirmation; when Countrywide received notices of amendments to the confirmed plan, accepted payments under amended plan and filed no proof of claim for unpaid pre- or postconfirmation arrearages, payment of arrearage of $6,400 in amended plan satisfied and discharged claim.).

 

36  See 11 U.S.C. § 502(b)(9), discussed in this section and in §§ 275.2 [ In General: Filing is Required for Allowance ] § 132.2  In General: Filing is Required for Allowance, 276.1 [ Governmental Units ] § 132.3  Governmental Units, 279.1 [ Priority Claims, Including Requests for Payment of Administrative Expenses ] § 132.6  Priority Claims, Including Requests for Payment of Administrative Expenses, 508.1 [ New Timing Issues ] § 133.5  Tax Claim Exception after BAPCPA and 513.1 [ Taxes ] § 136.3  Taxes after BAPCPA.

 

37  See, e.g., In re Hudson, 260 B.R. 421, 438 (Bankr. W.D. Mich. 2001) (There is no deadline fixed by the Bankruptcy Rules within which a secured claim holder must file a proof of claim, and confirmed plan binds secured claim holder without regard to when a claim is filed; secured claim holder that seeks treatment different from the proposed plan must object to confirmation to preserve its position. A secured proof of claim filed after confirmation that is inconsistent with the confirmed plan allows the claim in the total amount set forth in the proof of claim (absent objection) but does not trump the plan with respect to characterization and treatment. The secured claim holder is not entitled to distributions under the confirmed plan until it files a proof of claim, and the trustee must retain payments from the debtor consistent with the plan on account of each secured claim provided for by the plan until the secured creditor files a claim. Without identifying the specific point in time when it is too late to file a secured claim, the court observed: “There is a point in time when it will be too late for a secured creditor to file a proof of claim and hold an allowed claim. After this point in time, a secured creditor will not be able to receive any distribution from the estate. The debtor will have received a chapter 13 discharge . . . . The secured creditor is then limited to its in rem lien rights in the collateral.”).

 

38  See, e.g., In re Nwonwu, 362 B.R. 705, 709 (Bankr. E.D. Va. 2007) (“‘Without a deadline for the filing of claims, secured creditors could file at any time during the term of the confirmed plan, which in chapter 13 cases may be as long as sixty months[,]’” impairing case administration and making modification “‘necessary each time a secured creditor filed a claim at variance with the plan.’”).

 

39  See §§ 285.1 [ Timing, Form, Superseding and Amended Claims ] § 134.1  Timing, Form, Superseding and Amended Claims before 2005 and 286.1 [ Strategic Considerations: When to File Claims for Creditors ] § 134.3  Strategic Considerations: When to File Claims for Creditors.

 

40  See Report of the Commission on the Bankruptcy Laws of the United States, H. Rep. Doc. No. 93-137, Pt. I at 165–66 (1973). See § 234.1 [ Failure to Provide For ] § 121.3  Failure to Provide For.

 

41  See §§ 101.1 [ General Rules ] § 74.1  General Rules before BAPCPA, 104.1 [ The Power to Modify ] § 74.11  The Power to Modify, 231.1 [ 11 U.S.C. § 1327(c): Free and Clear Effect on Liens ] § 120.4  11 U.S.C. § 1327(c): Free and Clear Effect on Liens and 234.1 [ Failure to Provide For ] § 121.3  Failure to Provide For. See also H.R. Rep. No. 95-595, at 124 (1977).

 

42  See discussion of allowance and objections to claims beginning at § 135.1  Timing, Procedure and Evidence Presumption.

 

43  See § 113.1 [ Full Payment of Allowed Secured Claim ] § 78.1  Full Payment of Allowed Secured Claim. Unless the debtor treats the secured claim holder as a long-term creditor who will receive regular contract payments during the life of the plan under § 1322(b)(5). See also § 115.1 [ Curing Default, Waiving Default, Maintaining Payments and Combinations ] § 78.4  Curing Default, Waiving Default, Maintaining Payments and Combinations.

 

44  See discussion of effects of confirmation on liens beginning at § 120.1  11 U.S.C. § 1327: Overview.

 

45  See § 358.1 [ On Liens ] § 162.3  On Liens.

 

46  Southtrust Bank of Ala. v. Thomas (In re Thomas), 883 F.2d 991 (11th Cir. 1989). See § 247.1 [ Effect of Failure to File Proof of Claim on Postconfirmation Relief from the Stay ] § 124.7  Effect of Failure to File Proof of Claim on Postconfirmation Relief from the Stay. But see In re Macias, 195 B.R. 659 (Bankr. W.D. Tex. 1996) (A secured claim holder that fails to timely file a proof of claim cannot have an allowed claim and will not be entitled to distributions under the plan. The creditor’s failure to timely file a proof of claim cannot be the basis for the creditor to argue a lack of adequate protection, and the secured claim holder will not be entitled to relief from the stay after confirmation based on the creditor’s failure or refusal to file a timely proof of claim.); In re Schaffer, 173 B.R. 393, 395 (Bankr. N.D. Ill. 1994) (Secured claim holder must file proof of claim within the 90-day limitation fixed by Bankruptcy Rule 3002, else the claim is disallowed. “If the admittedly late filed claim is disallowed, the Debtor may be able to retain the collateral, a 1993 Nissan Truck, throughout the administration of the case and Bank One will have to await the closing of the case before pursuing its remedies. . . . Or, of course, Bank One could move to vacate the stay for cause. Cause would not likely flow from an omission (the late filing) by the party seeking relief from the stay.”).

 

47  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 and 233.1 [ Notice and Due Process Considerations, Including Claims Allowance and Valuation ] § 121.2  Notice and Due Process Considerations, Including Claims Allowance and Valuation. See, e.g., In re Babbin, 164 B.R. 157, 163 (Bankr. D. Colo. 1994) (On remand, plans called for payment of “allowed” claims. However, the notice sent to all creditors contained the following: “Except as otherwise provided by law, in order to share in any payment from the estate, a creditor must file a proof of claim by the date set forth above in the box labeled ‘Filing Claims.’” This notice was “an implicit part of the plan confirmation process. The language of the Official Form accomplishes . . . a mechanism by which all interested parties can determine which allowed claims will be permitted to participate in distributions out of the Chapter 13 plan. Only those unsecured claims which are both ‘allowed’ and ‘timely’ will receive distributions from a confirmed plan.”). But see Cen-Pen Corp. v. Hanson, 58 F.3d 89, 91, 94 (4th Cir. 1995) (Failure of a secured claim holder to file a proof of claim does not affect the validity of the creditor’s lien, notwithstanding that the plan treated the lienholder as an unsecured creditor and the plan explicitly provided that “all claims to be allowed must be filed; to the extent that the holder of a secured claim does not file a proof of claim, the lien of such creditor shall be voided upon the entry of the Order of Discharge.” “11 U.S.C. § 501 provides for filing proofs of claim but it clearly does not make such a filing mandatory. . . . The language in [the debtors’ plan] attempts to circumvent the clear import of this section. Because an unchallenged lien survives the bankruptcy discharge of a debtor, however, a creditor with a loan secured by a lien on the debtor’s property is free to ignore the bankruptcy proceeding and look solely to the lien for satisfaction of the debt.”).

 

48  See 11 U.S.C. § 1322(b)(10).