Smart Summary for Creditors

  • If your claims are not absolutely filed before the claims bar date, there are very few exceptions that allow for a time extension.
  • A court has ruled that “excusable neglect” is no excuse for a claim to be filed late.
  • Be wary of filing claims late in ANY bankruptcy chapter.

A recent decision from the Sixth Circuit Bankruptcy Appellate Panel, In re Tench (6th Cir. BAP May 11, 2016), No. 15-8026, gives ample warning to creditors who plan to assert claims in a Chapter 13 repayment plan: Get your claims filed timely! In that case, an unsecured creditor filed its claim a mere eight days after the claims bar date passed, and the claim was not allowed.

Initially, the bankruptcy court allowed the claim upon a motion from the creditor in support of the same, finding there was excusable neglect by the creditor. However, the Bankruptcy Appellate Panel (BAP) reversed, finding that the Code specifically did not allow "excusable neglect" to be a grounds for untimely filing of a Chapter 13 claim. It reviewed §509(b)(9), which allows certain categories of claims when a proof of claim is not timely filed. It also reviewed Rule 3002(c), which defines a timely filed claim for non-governmental entities as one filed no later than 90 days after the first date set for the meeting of creditors.

Rule 9006(b)(1) discusses the allowance of later-filed claims because of excusable neglect. However, this Rule specifically states it is not applicable to the deadlines set forth in Rule 3002(c), instead stating that the limitations set forth in Rule 3002(c) are the only applicable ways to gain an extension of the time period. Therefore, excusable neglect is no excuse for a late filed claim.

Although this case concerns a Chapter 13 claim, creditors should be wary of filing a claim late in any bankruptcy chapter. Rule 3002(c) specifically talks about Chapter 7, 12 and 13, giving only the same limited ways to gain an extension of time in all of those chapters. Those six exceptions are for:

  1. a governmental unit;
  2. an infant or incompetent person or their representative;
  3. an unsecured claim that arises in favor or an entity or becomes allowable as the result of a judgment;
  4. a claim arising from the rejection of an executory contract or unexpired lease;
  5. a notice of insufficient assets was given and then there are enough assets to make a distribution, and the clerk gives notice of the same; or
  6. the notice was sent to a foreign address, and, upon motion, the court finds the notice was insufficient under the circumstances.

Even when filing a proof of claim in a Chapter 11 case, Rule 3003, which governs the filing in that chapter, references back to the conditions in Rule 3002(c), but allows only 4 of the 6 exceptions set forth in Rule 3002(c) for late filed claims, making it even more stringent about timely filing a claim.

Bottom line then for creditors? Get those proofs of claim filed in a timely manner!