§ 135.5 — Failure to File Proof of Claim

Revised: January 15, 2010

[1]

With a possible exception for priority administrative expenses,1 without regard to when the Chapter 13 case was filed, and without regard to whether the debt is secured, unsecured or entitled to priority, the creditor that fails to file a proof of claim, and on whose behalf no proof of claim is filed by the debtor or trustee,2 cannot have an allowable claim.3 Allowance is prerequisite to the payment of claims through the Chapter 13 plan. Many reported decisions hold that a creditor without a filed proof of claim will not receive distributions under the plan.4 Bankruptcy Rule 3021 provides that after confirmation, “distribution shall be made to creditors whose claims have been allowed.”5

[2]

A creditor that fails to file a proof of claim is at least partially disabled from objecting to confirmation6 and is completely without standing to seek modification of a plan after confirmation.7 A claim holder that fails to file a proof of claim will be bound by the order of confirmation,8 will have no clear ground for relief from the stay after confirmation9 and will typically10 be discharged upon completion of payments under the plan.11

[3]

Some courts have held that in the absence of a filed proof of claim, the lien rights of a secured claim holder can be lost or altered by the effects of confirmation under § 1327.12 Other courts hold that the failure of a secured claim holder to file a proof of claim does not affect the validity of the creditor’s lien.13 Few courts will grant relief from the stay when the confirmed plan provides for payment of a secured claim and the claim holder disables itself from receiving payments by failing to file a proof of claim.14

[4]

A few reported decisions, mostly from the District of Colorado, have recognized a narrow exception to the general rule that the failure to file a proof of claim disables a creditor from receiving distributions under the plan. When the confirmed plan is specific with respect to the allowance and payment of the claim, a few courts have held that the debtor is bound by § 1327(a) and the creditor is entitled to receive the payments provided for by the confirmed plan without regard to the filing of a proof of claim or allowance of the claim.15

[5]

Considered elsewhere,16 there is some attraction to the reciprocal notion that the confirmed plan binds everyone under § 1327(a): if the plan says a claim is to be paid a specific amount of money, then the debtor is bound to pay that amount of money; if all creditors had notice that the plan proposes to pay a claim without regard to whether the creditor files a proof of claim or has an allowable claim, then everyone is bound to that outcome by confirmation.

[6]

But there is much contrary authority holding that no matter how specific the plan provision for payment of a creditor, only allowed claims can be paid through the plan.17 And most Chapter 13 plans are less than specific with respect to the payment of individual creditors. The typical Chapter 13 plan says allowed claims are to be paid as provided. A plan provision for payment of allowed claims limits the universe of possible payees to creditors that file proofs of claim.

[7]

Then there is the question: What provision of the Code prohibits a Chapter 13 plan from providing for the payment of a claim that is not an allowed claim? For example, can the plan pay an unscheduled debt for which no allowable proof of claim could be filed?18 Could the plan provide for the payment of postpetition interest on a student loan or a co-signed debt or to a support creditor notwithstanding that postpetition interest could not be allowed as part of a filed claim?19 Of course, without objection, the confirmed plan can do practically anything. And a filed claim is allowed until someone objects. Does the Chapter 13 trustee have an obligation to object to the payment of claims that are not allowable?20

[8]

The Colorado cases cited above make much of the absence of a requirement in the Bankruptcy Rules that secured claim holders file proofs of claim by any particular deadline.21 Perhaps the real issue in these cases is the binding effect of confirmation of a plan that contains an unconditional provision for payment of a named creditor. Most debtors won’t stray into the Colorado approach because the plan will provide for the payment of only allowed claims.

[9]

There is no sense to any conscious policy of not filing proofs of claims in Chapter 13 cases. The possibility of lien survival in some circuits without involvement in the case will be realized only at the expense of uncertain litigation. Creditors’ rights are amply protected by Chapter 13. Filing a claim is a fundamental part of any creditor’s best strategy for dealing with a Chapter 13 case.


 

1  Priority administrative expenses for which a “request” rather than a proof of claim is filed are managed differently by the Code and Bankruptcy Rules than ordinary prepetition claims are. See § 132.6  Priority Claims, Including Requests for Payment of Administrative Expenses and discussion of priority and administrative claims beginning at § 136.1  Treatment of Priority Claims. In Chapter 13 cases filed on or after October 17, 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Pub. L. No. 109-8, 119 Stat. 23 (2005), added the wrinkle that some administrative expenses for taxes are allowable without regard to whether the governmental unit files a request for payment. See 11 U.S.C. § 503(b)(1)(D), discussed in § 133.5  Tax Claim Exception after BAPCPA and § 136.3  Taxes after BAPCPA.

 

2  See §§ 285.1 [ Timing, Form, Superseding and Amended Claims ] § 134.1  Timing, Form, Superseding and Amended Claims before 2005 and 511.1 [ Filing of Claims by Debtor or Trustee: New Rule 3004 ] § 134.2  Filing of Claims by Debtor or Trustee after 2005 Amendments to Bankruptcy Rule 3004.

 

3  11 U.S.C. §§ 501, 502; Fed. R. Bankr. P. 3002. See, e.g., United Feeds, Inc. v. Greenig (In re Greenig), 152 F.3d 631, 633 (7th Cir. 1998) (“[I]f the claim is to be allowed, a proof of claim must be filed.”); Dixon v. IRS (In re Dixon), 218 B.R. 150, 154 (B.A.P. 10th Cir. 1998) (“[W]e believe Congress assumed unfiled claims would be disallowed and discharged, just as late-filed ones now clearly are.”); In re Michels, 270 B.R. 737 (Bankr. N.D. Iowa 2001) (Because bank had not filed a proof of claim at the time of confirmation, bank did not have an allowed claim.); In re Baldridge, 232 B.R. 394, 396 (Bankr. N.D. Ind. 1999) (“No one is ever required to file a proof of claim in any bankruptcy proceeding; it is just that not doing so has consequences. For unsecured creditors, one of these consequences is stated in Bankruptcy Rule 3002(a)—the unsecured creditor must file a proof of claim for that claim to be allowed. . . . Before a creditor can have a secured claim, it must first have an allowed claim . . . and the first step to having an allowed claim is to file a proof of claim.”); Walters v. Sherwood Mun. Court (In re Walters), 219 B.R. 520, 523 n.1 (Bankr. W.D. Ark. 1998) (Municipality that failed to file proof of claim for its nondischargeable restitution debt cannot have an allowed claim. “A claim is allowed when it is filed. See 11 U.S.C. § 502. Until such time as a creditor files a proof of claim, the debt is not an allowed claim.”); Clark v. Transamerica Fin. Servs., Inc. (In re Clark), 205 B.R. 140, 141 (Bankr. S.D. Ill. 1997) (“[I]n order to have an allowed claim entitled to payment under a Chapter 13 plan, a creditor must file a proof of claim.”).

 

4  See, e.g., United States v. Lee, 184 B.R. 257 (W.D. Va. 1995) (Claim for responsible person liability under § 6672 of the Tax Code will be discharged without payment where the IRS failed to file a proof of claim. Upon completion of payments to other creditors, the § 6672 claim will be discharged without payment.); In re Jurado, 318 B.R. 251 (Bankr. D.P.R. 2004) (A consequence of the failure of a secured creditor to file a proof of claim is that the claim is not allowed and the creditor will not receive distributions under the plan. To avoid this outcome, local rule requires the debtor to file a proof of claim on behalf of any creditor that is specifically dealt with in the plan before confirmation of the plan.); In re Stewart, 247 B.R. 515, 520 (Bankr. M.D. Fla. 2000) (“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.”); Cody v. Cody (In re Cody), 246 B.R. 597, 599 n.2 (Bankr. E.D. Ark. 1999) (“Failure to file a proof of claim means that the trustee is prohibited from making any payments to Gina Cody, even though she has been listed as a creditor and the amount of debt is known.”); In re Baldridge, 232 B.R. 394, 396 (Bankr. N.D. Ind. 1999) (“No one is ever required to file a proof of claim in any bankruptcy proceeding; it is just that not doing so has consequences. . . . [T]he majority of the courts that have considered the issue have concluded that, in order to receive a distribution under a confirmed Chapter 13 plan, even secured creditors must first file a proof of claim or have one filed on their behalf.”); Walters v. Sherwood Mun. Court (In re Walters), 219 B.R. 520, 523 n.1 (Bankr. W.D. Ark. 1998) (Municipality that failed to file proof of claim for its nondischargeable restitution debt will not receive distributions under the plan. “Since the municipality failed to file a proof of claim, the Chapter 13 trustee is unable to make any payments to that entity on the debt, despite the fact that it was provided for in the plan. After confirmation of a plan, distribution under the plan is made to creditors whose claims have been ‘allowed.’ Fed. R. Bankr. P. 3021. A claim is allowed when it is filed. See 11 U.S.C. § 502. Until such time as a creditor files a proof of claim, the debt is not an allowed claim. Thus, any failure of the municipality to receive any distribution from the trustee is due solely to its own failure to avail itself of the provisions of the Bankruptcy Code by filing a proof of claim. Until a proof of claim is filed, and thereby allowed, the municipality may not collect the debt, either through the bankruptcy or from the debtor directly.”); Clark v. Transamerica Fin. Servs., Inc. (In re Clark), 205 B.R. 140, 141 (Bankr. S.D. Ill. 1997) (“[B]y failing to file a proof of claim, Transamerica . . . also lost its right to any distributions under the plan.”); Thibodaux v. United States (In re Thibodaux), 201 B.R. 827 (Bankr. N.D. Ala. 1996) (IRS’s failure to file a proof of claim is fatal—claim is discharged upon completion of payments to other creditors. Debtor scheduled IRS with a claim for payroll taxes from a business. IRS had notice of plan that proposed to pay all priority creditors in full. IRS filed a proof of claim for individual income taxes but not for the payroll taxes. Court rejected IRS’s argument that it had insufficient information to determine that it had a claim for the payroll taxes. IRS’s notices and levies after discharge violated the discharge injunction and were punishable as contempt.); In re Lee, 182 B.R. 354 (Bankr. S.D. Ga. 1995) (Secured creditor that failed to file a proof of claim is bound by confirmation to accept no payment in full satisfaction of the debtors’ personal liability and may not seek a deficiency from the debtor. However, because the plan failed to “provide for” the creditor’s lien, in rem rights survive confirmation.); In re Hamilton, 179 B.R. 749 (Bankr. S.D. Ga. 1995) (But for the filing of a proof of claim on behalf of the student loan creditor by the debtor, the creditor would be barred from participating in the bankruptcy case and would receive no distributions through the plan.); In re Schaffer, 173 B.R. 393 (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 will be disallowed and the creditor will not be entitled to distributions under the Chapter 13 plan.); Washington v. Nissan Motor Acceptance Corp. (In re Washington), 158 B.R. 722 (Bankr. S.D. Ohio 1993) (Because undersecured claim holder failed to file a proof of claim, the creditor is not entitled to payments under the plan and the unsecured portion of the claim is discharged.); In re Alderman, 150 B.R. 246, 252–53 (Bankr. D. Mont. 1993) (A secured creditor that has not filed a proof of claim and on whose behalf no proof of claim has been filed may not receive distributions under the plan; however, its lien is not affected. “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.”); In re Sorge, 149 B.R. 197 (Bankr. W.D. Okla. 1993) (The IRS’s failure to file a new proof of claim after conversion from Chapter 11 to Chapter 13 precludes allowance of the IRS’s claim, and the IRS’s claim cannot be paid through the plan because it is not allowed. Because the IRS’s claims for taxes were “provided for” in the debtor’s plan, they are dischargeable under § 1328(a) after the completion of payments under the plan notwithstanding that the contemplated payments to the IRS were not made.); Smoot v. Southtrust Mobile Servs., Inc. (In re Smoot), 134 B.R. 960 (Bankr. N.D. Ala. 1991) (Claim holder with unperfected security interest that intentionally did not file a proof of claim in misguided reliance on Southtrust Bank of Alabama v. Thomas (In re Thomas), 883 F.2d 991 (11th Cir. 1989), is bound by the confirmed plan and is not entitled to any distributions.); In re Weissman, 126 B.R. 889 (Bankr. N.D. Ill. 1991) (Untimely filing of claim by ex-spouse with a claim that is probably nondischargeable under §§ 523(a)(5) and 1328(a)(2) requires disallowance of the claim under Bankruptcy Rule 3002 for purposes of dividend distribution.); 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.”); In re Van Hierden, 87 B.R. 563, 564 (Bankr. E.D. Wis. 1988) (Although a secured claim holder need not file a proof of claim in a Chapter 13 case and a secured creditor does not forfeit its lien if it fails to file a proof of claim, all creditors have an obligation to file a proof of claim if they wish to recover from the bankruptcy estate. “[I]f the creditor has not filed a claim, it is not entitled to distribution under the plan, and the debtor is entitled to a discharge of that debt. . . . [A]n undersecured creditor that does not file a claim can recover only from the collateral and not from the plan payments made to the Chapter 13 trustee.”).

 

5  Fed. R. Bankr. P. 3021 (emphasis added).

 

6  See § 219.1 [ Standing to Object ] § 116.1  Standing to Object. For example, 11 U.S.C. § 1325(b) (emphasis added) permits only “the trustee or the holder of an allowed unsecured claim” to object to confirmation based on the disposable income test. See also § 163.1 [ In General ] § 91.1  In General. See, e.g., Jensen v. Froio (In re Jensen), 369 B.R. 210 (Bankr. E.D. Pa. 2007) (Frank) (Unsecured creditor that failed to timely file proof of claim has standing to object to confirmation on good-faith and feasibility grounds but lacks standing to object to confirmation based on best-interests-of-creditors test in § 1325(a)(4) or disposable income test in § 1325(b).).

 

7  See § 253.1 [ Standing, Timing and Procedure ] § 126.1  Standing, Timing and Procedure.

 

8  11 U.S.C. § 1327(a). 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.

 

9  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., Walters v. Sherwood Mun. Court (In re Walters), 219 B.R. 520, 523 n.1 (Bankr. W.D. Ark. 1998) (Municipality that failed to file proof of claim for its nondischargeable restitution debt will not receive distributions under the plan and is bound by the automatic stay until conclusion of payments under the plan.“[A]ny failure of the municipality to receive any distribution from the trustee is due solely to its own failure to avail itself of the provisions of the Bankruptcy Code by filing a proof of claim. Until a proof of claim is filed, and thereby allowed, the municipality may not collect the debt, either through the bankruptcy or from the debtor directly. It must wait until the conclusion of the bankruptcy case to enforce collection of the debt. The fact that the debt is nondischargeable does not alter this result.”).

 

10  An unscheduled claim holder without notice or knowledge of the bankruptcy case may have protection from discharge, notwithstanding the absence of a proof of claim. See § 349.1 [ Claims Not Provided for by the Plan or Disallowed under § 502 ] § 158.5  Claims Not Provided for by the Plan or Disallowed under § 502. See, e.g., In re Tipton, 118 B.R. 12 (Bankr. D. Conn. 1990) (Unscheduled creditor’s debt is not dischargeable in a Chapter 13 case, notwithstanding the claims bar date in Bankruptcy Rule 3002(c).).

 

11  11 U.S.C. § 1328(a). See §§ 344.1 [ Broadest Discharge Available ] § 157.1  Broadest Discharge Available and 542.1 [ In General ] § 157.2  BAPCPA Shrank the Discharge. See, e.g., Dixon v. IRS (In re Dixon), 218 B.R. 150, 154 (B.A.P. 10th Cir. 1998) (Tax claim for 1992 is a prepetition claim in Chapter 13 case filed on April 9, 1993, and is discharged without payment where plan provided for full payment and IRS failed to file a proof of claim. “We must concede that no Code provision expressly provides that unfiled claims are discharged by a chapter 13 discharge, but we think that result necessarily follows from various provisions. . . . The Debtors’ plan provided for the IRS’s claim to be paid, and it was not paid only because no proof of claim was filed. Except when a lack of notice to the creditor is involved, the reported decisions considering the question . . . have ruled such a claim is nevertheless ‘provided for’ by the plan within the meaning of § 1328(a) and is therefore discharged. . . . Congress amended § 502(b) to overrule cases that had held a claim could not be disallowed in a chapter 13 case on the ground the proof of the claim was not timely filed. . . . [W]e believe Congress assumed unfiled claims would be disallowed and discharged, just as late-filed ones now clearly are.”); Mini v. California Bd. of Equalization (In re Mini), Nos. 01-43201 TG, 06-4219 AT, 2007 WL 2223820 (Bankr. N.D. Cal. July 30, 2007) (unpublished) (Tchaikovsky) (Discharge of responsible person tax liability is consequence of State Board of Equalization’s failure to file proof of claim after notice of Chapter 13. Plan provided for full payment of priority claims.); Akincibasi v. Moscaritolo (In re Akincibasi), 372 B.R. 80 (Bankr. M.D. Fla. 2007) (When secured creditor’s proof of claim was disallowed and order gave creditor opportunity to file unsecured claim, creditor’s failure to file unsecured claim, along with subsequent confirmation and discharge order, resulted in discharge of all debt to creditor.); In re Jukel, No. 99-13833/JHW, 2002 WL 31002913, at *1 n.1, *2 (Bankr. D.N.J. July 23, 2002) (Letter opinion) (Debtor can use Bankruptcy Rule 3004 to file a proof of claim on behalf of the IRS for § 6672 responsible person liability for withholding taxes not remitted by the debtor’s corporation; “Bankruptcy Rule 9006(b)(1) permits enlargement of time for a debtor to file a proof of claim after the expiration of the specified period where the failure to act was the result of excusable neglect, and where the enlargement is requested by formal motion.” If neither the IRS nor the debtor files a proof of claim, § 6672 tax liability “will be discharged upon successful completion of her Chapter 13 plan.”); In re Bryant, 294 B.R. 791, 798 (Bankr. S.D. Ala. 2002) (Failure to file a proof of claim discharges portion of IRS’s claim provided for by plan. Confirmed plan proposed to pay the IRS $18,000 and excepted from discharge $38,751.12 that would still be owed to the IRS at the end of the Chapter 13 case. The IRS did not file a proof of claim. The debtor completed the plan and received a discharge. In the debtor’s subsequent Chapter 13 case, the IRS filed a proof of claim that included the $18,000 provided for in the first case. “[S]ince the IRS did not file a proof of claim or contest confirmation, the IRS is bound by the terms of Ms. Bryant’s plan and only $38,751.12 remained to be paid to the IRS after her discharge in her first bankruptcy case.”); Cody v. Cody (In re Cody), 246 B.R. 597, 600 (Bankr. E.D. Ark. 1999) (Debt in the nature of property settlement and not support that survived discharge in a prior Chapter 7 case is dischargeable without payments through the plan when the ex-spouse had notice of the Chapter 13 filing but failed to file a proof of claim. “In the instant case, the confirmed plan provided for payment of the debt in dispute. Having provided for the debt, if the debtor fulfills his obligations under the Bankruptcy Code by completing the plan . . . the debtor will be discharged of the debts, even those where payments cannot be made by the trustee because the creditor has failed to file a proof of claim.”).

 

12  See discussion beginning at § 120.1  11 U.S.C. § 1327: Overview

 

13  See discussion beginning at § 121.1  Overview. See, e.g., In re Ninas, No. 05-50342, 2009 WL 136683 (Bankr. D.S.D. Jan. 20, 2009) (Nail) (Judgment lien is not avoided simply because creditor failed to file proof of claim; debtor must file adversary proceeding to determine whether debt has been discharged); In re Burner, 321 B.R. 432 (Bankr. N.D. Ohio 2004) (Leinholder’s failure to file proof of claim does not affect validity of lien notwithstanding that it will not receive distributions through confirmed plan; debtor cannot avoid lien through confirmed plan or by motion but must file an adversary proceeding.).

 

14  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 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 debtor [sic] 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 (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. 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.”). Compare Young v. Young (In re Young), No. 1:06CV00781, 2007 WL 676689 (M.D.N.C. Feb. 28, 2007) (unpublished) (Osteen) (Failure to file proof of claim did not prevent stay relief for pursuit of litigation for nonmonetary remedy of rescission based on debtor’s fraud.); In re Lee, 182 B.R. 354 (Bankr. S.D. Ga. 1995) (Secured creditor with notice of bankruptcy that is not “provided for” by the plan and that fails to file a proof of claim is bound by confirmation to accept no payment in full satisfaction of the debtors’ personal liability; however, that secured creditor’s in rem rights against its collateral survive confirmation, and the bank may protect its security interest after confirmation by relief from the stay.).

 

15  See In re Dennis, 230 B.R. 244, 247–53 (Bankr. D.N.J. 1999) (Secured claim holder must file a timely proof to have an allowed secured claim; however, confirmed plan provision to pay Chrysler $8,000 binds the debtor to pay that amount notwithstanding that Chrysler failed to timely file a proof of claim. “[T]he code clearly requires a proof of claim to be filed for a claim to be allowed. No exception is made for secured creditors in section 502, thereby indicating that a secured creditor’s failure to file in accordance with section 501 will prohibit allowance of its claim. . . . If Congress intended tardily filed claims in chapter 13 to be allowed, they too would have been excepted from § 502(b)(9) as were tardily filed claims under § 726(a). . . . [A]ny claim tardily filed in a chapter 13 case to which an objection has been raised based on tardiness shall be disallowed. . . . If a chapter 13 plan does not propose to modify a secured claim, then by virtue of Rule 3002(a) the secured creditor is not required to file a proof of claim and the lien will pass through bankruptcy unaffected. If, however, a plan does propose to modify a secured claim, by paying the secured creditor less than the creditor believes is due, the secured creditor who objects to such treatment must file a timely proof of claim and objection to confirmation or it will be bound by the plan under Code section 1327(a). . . . Similarly, since Code section 1327(a) also binds the debtor, a debtor’s proposal in a plan to pay a ‘cram down’ amount to a secured creditor is an admission by the debtor that such creditor has an allowed secured claim to the extent provided by the plan. Confirmation of the plan allows the secured claim to such extent because all parties are bound by the confirmation under Code section 1327(a). . . . To the extent that [In re Schaffer, 173 B.R. 393 (Bankr. N.D. Ill. 1994),] and other courts have held that a secured creditor must file a proof of claim even to receive the amount which a debtor’s plan proposes to pay it, this court disagrees, because such holdings overlook the fact that confirmation binds the debtor under Code section 1327(a).”); In re Holmes, 225 B.R. 789, 793 (Bankr. D. Colo. 1998) (“[A] secured creditor need not file a proof of claim to receive distributions under a Chapter 13 plan. In re Babbin, 160 B.R. 848, 849 (D. Colo. 1993).” Court can resolve the allowable amount of a secured creditor’s claim at the hearing on confirmation. To do otherwise would permit secured claim holders to disrupt the confirmation process by strategically filing their proofs of claim just before the hearing on confirmation.); In re Rome, 162 B.R. 872, 875–76 (Bankr. D. Colo. 1993) (Secured claim holders need not file proofs of claim to be entitled to receive the amounts specified in the confirmed plan. “‘Nowhere in the Rules is there a mandate that a secured creditor file a proof of claim.’ . . . [T]he plan . . . explicitly advised the creditor that if no objection was filed, the creditor would receive the amount specified in the plan. . . . [T]he Chapter 13 Trustee is bound to distribute funds to secured creditors in accordance with a confirmed plan even absent a proof of claim being timely filed. ‘Section 1326(c) of the Code directs the trustee to “make payments to creditors under the plan.” It does not say “in accordance with the proof of claim,” but according to “the plan.”’ . . . [S]ecured creditors need not file proofs of claim in order to receive payment on their secured claims according to the terms of a confirmed plan. This Court believes that timely filed proofs of claim for unsecured claims, pursuant to Rule 3002(c) . . . [are] legally required, appropriate, and necessary in Chapter 13. This Court would respectfully disagree with the [In re Hausladen, 146 B.R. 557 (Bankr. D. Minn. 1992),] line of cases[.]”); In re Edwards, 162 B.R. 868, 872 (Bankr. D. Colo. 1993) (Acknowledging the “variety of approaches” taken by the courts in Colorado and elsewhere with respect to the consequences of untimely filing of proofs of claim, and notwithstanding that the confirmed plan itself is not an informal proof of claim on behalf of a creditor, the creditor is entitled to be paid consistent with the confirmed plan because the creditor and the debtor are both bound by § 1327(a) to the provisions of the confirmed plan and § 1326(a)(2) requires the Chapter 13 trustee to make payments in accordance with the confirmed plan without regard to whether a creditor has filed a proof of claim. The confirmed plan apparently provided for a secured claim holder to receive payment totaling $7,899.48. The secured claim holder did not file a proof of claim, and the debtors did not file a proof of claim on behalf of the creditor. The creditor asserted that the confirmed plan itself was an informal proof of claim, but the court found that the plan failed to meet the five-part test for allowance of an informal proof of claim. However, the court held that the creditor was entitled to payment consistent with the confirmed plan: “The treatment of a creditor under a confirmed plan, whether or not that creditor’s claim is allowed, or even filed, must take place unless the plan is modified through the appropriate motion and notice to all creditors. The language of § 1327(a) must be accorded its clear meaning.”); In re Babbin, 156 B.R. 839, 850 (Bankr. D. Colo.) (Secured claim holder is not required by the Code or the Rules to file a proof of claim to accomplish allowance of its claim. Trustee is bound to distribute funds to secured creditors in accordance with the confirmed plan without regard to whether the secured claim holder has filed a proof of claim. “Section 1326(c) of the Code directs the trustee to ‘make payments to creditors under the plan.’ It does not say ‘in accordance with the proof of claim’, but according to ‘the plan.’ Section 1327 of the Code . . . specifies . . . [t]he import of these two provisions, . . . that the confirmed plan controls the Trustee’s distribution and fixes the rights of creditors in accordance with its terms. . . . [T]he Trustee must distribute in accordance with the confirmed plan notwithstanding the lack of a timely filed proof of claim.”), rev’d on other grounds, 160 B.R. 848 (D. Colo. 1993). See also In re Cameron, 274 B.R. 457, 459, 461 (Bankr. N.D. Tex. 2002) (Notwithstanding that lienholder never filed a proof of claim, debtor cannot modify confirmed plan to surrender car. Confirmed plan valued car at $5,628 and provided for payment in full with interest in monthly installments. Lienholder did not file a proof of claim. After the claims bar date, an order was entered sustaining the debtor’s objection to the (unfiled) claim. Bankruptcy court described effect of these orders which “was to grant CPS an allowed secured claim in the Case in the amount of $5,628.00 . . . and to disallow any unsecured deficiency claim that CPS could have asserted in the Case.” Court concluded that § 1329(a) did not permit modification to surrender the car because “having elected payment as the method by which CPS’ allowed secured claim will be satisfied here, the Debtor has no right to modify the Plan under section 1329(a) to elect a different method—surrender—as the way in which CPS’ allowed secured claim will be satisfied.”).

 

16  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 274.1 [ Is a Plan Provision a Proof of Claim? ] § 131.5  Is a Plan Provision a Proof of Claim?.

 

17  See, e.g., United Feeds, Inc. v. Greenig (In re Greenig), 152 F.3d 631, 633–36 (7th Cir. 1998) (In a Chapter 12 case, untimely filed proof of unsecured claim is not allowable notwithstanding that confirmed plan named the creditor, stated that the creditor’s claim was allowed and specified a fixed percentage of repayment. “[I]f the claim is to be allowed, a proof of claim must be filed . . . . [I]n the event a proof of claim is not filed in a timely fashion, and if no exceptions apply, a hearing is not required because the claim is statutorily barred . . . . In a Chapter 12 bankruptcy case, the creditor has 90 days to file a proof of claim, unless an exception of Fed. R. Bankr. P. 3002(c) applies. This requirement may not be circumvented, either by the existence of a confirmed plan, or by the presence of equitable considerations. Because UF failed to file its proof of claim within the 90-day time limitation, its claim is barred.”). See also § 274.1 [ Is a Plan Provision a Proof of Claim? ] § 131.5  Is a Plan Provision a Proof of Claim? for discussion whether a confirmed plan can function as the filing of a claim on behalf of a creditor.

 

18  For discussion of management of unscheduled claims see § 41.2  Preconfirmation Amendment of Petition, Statements, Schedules and Lists, § 89.9  Miscellaneous Classes of Unsecured Claims, § 121.3  Failure to Provide For, § 127.3  To “Add” Prepetition Creditors, § 133.2  Unscheduled Creditors before BAPCPA, § 133.3  Unscheduled Creditors after BAPCPA§ 134.2  Filing of Claims by Debtor or Trustee after 2005 Amendments to Bankruptcy Rule 3004, § 134.3  Strategic Considerations: When to File Claims for Creditors§ 158.5  Claims Not Provided for by the Plan or Disallowed under § 502 and § 159.4  Unscheduled Creditors: § 523(a)(3).

 

19  See 11 U.S.C. § 502(b)(2). See §§ 89.1 [ Postpetition Interest, Attorneys’ Fees, Costs and Other Charges ] § 67.3  Postpetition Interest, Attorneys’ Fees, Costs and Other Charges, 150.1 [ Co-signed Debts ] § 87.3  Co-signed Debts, 152.2 [ Alimony, Maintenance and Support ] § 88.4  Alimony, Maintenance and Support, 153.1 [ Student Loans ] § 88.6  Student Loans, 171.1 [ Curing Default and Maintaining Payments on Unsecured Debt ] § 101.4  Curing Default and Maintaining Payments on Unsecured Debt, 301.1 [ Alimony, Maintenance and Support in Cases Filed after October 22, 1994 ] § 136.20  Alimony, Maintenance and Support in Cases Filed after October 22, 1994, 345.1 [ Alimony, Maintenance or Support ] § 158.1  Alimony, Maintenance or Support and 346.1 [ Student Loans ] § 158.2  Student Loans for discussion of the payment of postpetition interest on student loans, co-signed debts and support claims before enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Pub. L. No. 109-8, 119 Stat. 23 (2005). BAPCPA amended 11 U.S.C. § 1322(b)(10) to permit a plan to “provide for the payment of interest accruing after the date of the filing of the petition on unsecured claims that are nondischargeable under section 1328(a), except that such interest may be paid only to the extent that the debtor has disposable income available to pay such interest after making provision for full payment of all allowed claims[.]” See §§ 459.1 [ Postpetition Interest on Nondischargeable Claims: § 1322(b)(10) ] § 88.3  Postpetition Interest on Nondischargeable Claims after BAPCPA: § 1322(b)(10) and 520.1 [ Postpetition Interest on Priority Claims ] § 136.17  Postpetition Interest on Priority Claims after BAPCPA.

 

20  See § 62.1 [ Review Claims, Object to Claims and File Proofs of Claim ] § 53.15  Review Claims, Object to Claims and File Proofs of Claim.

 

21  See § 280.1 [ Secured Claim Holders ] § 132.7  Secured Claim Holders.