Ashworth, No. 09-03648-TLM (Bankr. D. Idaho, January 28, 2011)
When you file for bankruptcy, you have to tell all your creditors that you file. Once you have notified them of the case, they are required to file a proof of claim, which is paperwork establishing to the court that you owe them something. If they fail to file the proof of claim, they may lose any chance to recover what they were owed.
In this case, an individual filed for Chapter 13 and proposed to completely get rid of her second mortgage. The second mortgage lender failed to submit his proof of claim to the court within a reasonable time, and the filer’s debt was discharged, or wiped clean. After the case was long over, the lender to court, claiming they should have a second chance to file a proof of claim and object to the plan.
The court disagreed with the lender, because it had offered no reason why it should receive special treatment. Although there were ways the lender might be granted an exception to the filing, it had not successfully brought up any of those exceptions.
If you are struggling with any of these issues please contact a Tucson bankruptcy attorney today.
Stephen M. Trezza