Top 10 List for Creditors

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  1. To receive payments under a Chapter 13 plan, creditors are required to file a proof of claim form pursuant to 11 USC Section 501.  The claim form must be filed with the US Bankruptcy Court where the debtor filed their case.  Click here for a copy of the proof of claim form. If you are a secured creditor (meaning you hold a lien on the debtor’s real or personal property), you must attach proof of the security to the proof of claim form.
  2. Once a person files for bankruptcy, the US Bankruptcy Court will issue a notice of important dates, including the deadline for filing a claim.  It is imperative that creditors follow these deadlines.   Failure to follow these deadlines can result in the claim being disallowed, meaning the creditor is not eligible to receive payment under the plan.  Further, upon the debtor earning a discharge, the creditor, in most cases, would be prohibited from seeking payment from the debtor after completion of the case.
  3. If a Chapter 13 case is dismissed, the legal effect is that the bankruptcy is void and the creditor can pursue collection under applicable state law.  For a full discussion, please see Discharge v. Dismissal.
  4. Once a person files bankruptcy, the automatic stay attaches to the debtor’s real and personal property pursuant to 11 USC Section 362.   Creditors may NOT attempt to recover the debtor’s property without first filing a motion to lift the automatic stay and have a subsequent order approved by the US Bankruptcy Court.   Creditors who violate the automatic stay can face monetary and other sanctions.
  5. Only individuals may file Chapter 13 and the automatic stay only extends to assets titled in the debtor’s name.  For example, if the debtor owns a small incorporated business and has a car titled in the corporation name, the creditor is permitted to seek or continue collection actions against the corporation (but not the debtor personally due to the Chapter 13 filing).
  6. It may take several months before a case can be confirmed (approved) by the US Bankruptcy Court. Under the Bankruptcy Abuse Protection and Consumer Protection Act of 2005 (“BAPCPA”) creditors are entitled to adequate protection payments.  Absent an order for adequate protection, the Chapter 13 Trustee is not authorized to pay creditors prior to confirmation.  Click here for a copy of the adequate protection order used in Akron, Ohio.
  7. Creditors lose millions of dollars each year by not cashing payments processed by Chapter 13 Trustees.  If a creditor moves, the creditor should file an amended claim with the US Bankruptcy Court which reflects the creditor’s current address.  Additionally,  creditors too often fail to cash checks because they cannot find the debtor in their records.  Creditors should always include account information and numbers on their proof of claim as trustee checks can include this information to assist creditors in posting payments.
  8. All debtors are required to attend a 341 meeting of creditors.  Please See 341 Meeting.  Creditors may attend the meeting and question the debtors about the Chapter 13 plan and how the creditor is to be paid under the plan.   Creditors are not required to be an attorney to participate in 341 meetings.  Some Chapter 13 Trustees will allow creditors to participate telephonically at the 341 meeting.  The Akron, Ohio trusteeship does allow telephonic participation by creditors provided the creditor makes the request at least three days prior to the scheduled 341 meeting.
  9. Due to the number of cases administered by Chapter 13 Trustees it is imperative that most Trustee resources are applied to process claims and expedite payments to creditors.  Therefore, Trustees have limited staffing to answer creditors questions such as “how soon will I get paid” and “is the debtor making plan payments.”  To assist creditors, the Akron trusteeship (and most trusteeships nationwide) has two online resources to allow creditors to review the status of the case.  These resources are Bankruptcy Link (signed agreement required) which is free to all parties and the National Data Center (which is a third party provider not managed by the Chapter 13 Trustee) which does have a cost to creditors.  See external resources under the creditor section of this web page to access these on line resources.
  10. If the creditor is a holder of a domestic support obligation (meaning the debtor owes alimony and/or child support payments), please note that the debtor must continue to make those payments in addition to the Chapter 13 plan payment.  Alimony and child support cannot be discharged in bankruptcy and must be paid in full for all amounts ordered by the state domestic court.  Please note that in Chapter 13, property settlements can be paid a fraction of the original amount and the balance can be discharged (meaning no further collection efforts can be made against the debtor if the debtor successfully completes the Chapter 13 plan.  For a more complete discussion of bankruptcy and domestic support obligation issues, please access the “For Family Law Attorneys” section of this web page.


This information is not meant to convey legal advice to an individual seeking Chapter 13 bankruptcy reorganization, but is meant strictly as an educational tool.