Chapter 13 Bankruptcy – Notice of Allowed Claims
NOTICE OF ALLOWED CLAIMS
|In your Chapter 13 case, part of the Trustee’s job is to pay creditors out of the payments you make to him. In order to get paid, creditors have to file applications with the court. Those applications are called “proofs of claim”. Once the creditors have filed their proofs of claim, the Trustee reviews them for correctness and to make sure they agree with our plan (the document we filed with the court identifying who we are paying and how much). He then will approve the claim or object to it as necessary. Once he is done with this process, he files the Motion to Allow Claims. This is the form he files with the court to get permission from the Judge to begin paying the creditors. He mails copies to both you and us. We review them for accuracy also.
They are confusing, because they include creditors whom we will not be paying as well as those we will be paying. Sometimes, creditors who are not going to get paid will file a claim anyway, just in case extra money turns up (for example, if you win the lottery, they would get paid). If they file a claim, they are listed in the Motion to Allow Claims. This does not mean they will get paid. The easiest way to tell is to look at the column titled “percent forgiven”. If you see 100% next to that creditor, it means that 100% of the debt will be discharged – in other words, 0% will be paid. Sometimes, you will see two claims for one creditor. This is called a “split claim”. It usually happens when you are paying for a car that is worth less than you owe. For example, if you owe $10,000, and the car is worth $7,000, then $7,000 of the claim is “secured” and will be paid. $3,000 of the claim is “unsecured” and will not be paid. To show this, the Trustee would show 2 claims, a $7,0000 secured claim and a $3,000 unsecured claim.