Recent developments in the bankruptcy arena have placed a greater burden on claimants. Creditors are now required to make additional disclosures in their proof of claim forms, and courts are under no obligation to recognize late-filed claims. Proposed changes to the Bankruptcy Rules, including an amendment slashing the time to file a proof of claim, highlight the need for creditors to exercise extra vigilance.


Since 2011, the proof of claim form creditors file to evidence their claims in bankruptcy has undergone a significant makeover. The result is increased burdens and requirements for filers. The most important changes to the proof of claim relate to the supporting document and signature requirements.

The previous form allowed creditors to attach summaries in addition to the documents evidencing the claim. Despite Bankruptcy Rule 3001's clear requirement that the documents themselves be attached to the proof of claim, some creditors interpreted this language as allowing document summaries in lieu of producing the actual documents. Section 7 of the current proof of claim form removed any reference to document summaries and now mirrors the language of Rule 3001, which explicitly states that all writings supporting a claim or evidencing perfection of a security interest must be attached to the proof of claim. If supporting documents are not available, a creditor must provide an explanation for the documents' absence.

The signature block has also been revised to require greater disclosure from the claimant. The signature block now includes check boxes for the signer to declare the basis for the claim and requires more detailed identifying information, including, title, company, address, and telephone number. Claimants must also include a declaration under penalty of perjury that all information provided in the claim is "true and correct to the best of [the signer's] knowledge, information, and reasonable belief." This requirement imposes a significantly higher standard than the previous form, which provided for personal liability for presentation of a fraudulent claim only. Also new since 2011, if a creditor's agent (rather than the creditor) is signing the proof of claim form, the form must include a power of attorney authorizing the agent to sign on the creditor's behalf.

Greater detail is now also required of creditors filing proof of claim forms for secured claims. Section 4 of the previous proof of claim form has been expanded so that claimants with secured claims must now report the annual percentage interest rate as of the date the case was filed and whether the interest rate is variable or fixed.

In addition, if the debtor is an individual, a commercial creditor must now file an itemized statement of the interest, fees, expenses, or charges incurred before the bankruptcy petition was filed. The claimant must also indicate the amount to cure the default as of the petition date unless the filer is not claiming any security interest in the debtor's property.

If a creditor fails to provide this statement or the required writings evidencing the claim with the proof of claim, the court may, after notice and hearing, preclude the creditor from presenting that evidence at any subsequent hearing or proceeding. Additionally, the court may impose sanctions in the form of reasonable expenses and attorneys' fees if a creditor does not comply with any of these requirements. The practical effect of these requirements is that creditors themselves should personally review all information and supporting documentation with greater scrutiny than ever before. As the likely signers of proofs of claim, they will be personally certifying, under penalty of perjury, the accuracy and completeness of all documents and information provided.


Creditors are also carrying a heavier burden in terms of when they must file their materials. Bankruptcy Rule 3003(c)(3) requires bankruptcy courts to set a bar date after which proofs of claim are untimely. However, Bankruptcy Rule 9006(b)(1) also gives the courts discretion to enlarge the time to file claims where the failure to act was the result of excusable neglect. In the landmark case Pioneer Investment Services Company v. Brunswick Associates LP, 507 U.S. 380 (1993), the U.S. Supreme Court set out four factors to guide the excusable neglect analysis: "[1] the danger of prejudice to the debtor, [2] the length of the delay and its potential impact on judicial proceedings, [3] the reason for the delay, including whether it was within the reasonable control of the movant, and [4] whether the movant acted in good faith."

The Second Circuit has since indicated in In re Enron Corp., 419 F.3d 115 (2d Cir. 2005), that its excusable neglect analysis would focus on the third factor: the reason for the delay. In affirming the lower courts' determinations that there was no excusable neglect, the Second Circuit echoed the Pioneer Court, stating that "inadvertence, ignorance of the rules, or mistakes construing the rules do not usually constitute 'excusable' neglect." The Bankruptcy Court had cited the substantial length of the delay (6 months), the lack of a genuine reason for the late filing (the creditor had already filed a claim and this was merely an amended claim), and the potential prejudice to the reorganization proceedings from the possible opening of the floodgates to similar late claims.

Relying on Enron, in In re Lehman Bros. Holdings, Inc., 433 B.R. 113 (Bankr. S.D.N.Y. 2010), Judge Peck denied seven motions for leave to file late claims, rejecting the claimants' proffered explanations that their late-filed claims were due to mistakes by their agents, attorneys, or advisors, and that they should not be penalized for the errors of their representatives. Judge Peck's decision and more recent cases following it[1] underscore the need for extra vigilance by creditors, and demonstrate the harsh potential outcome -- the lack of a party's ability to participate in plan distributions—for failing to exercise such vigilance.


Additional changes to the proof of claim process will likely take effect next year. These amendments relate to who must file a proof of claim and when the form must be filed. The Bankruptcy Rules Advisory Committee issued its preliminary draft of amendments to the Bankruptcy Rules on August 15, 2013. All written comments were due by February 18, 2014. And, the Bankruptcy Rules Advisory Committee has recommended that the amendments take effect on December 1, 2015.

Currently, Bankruptcy Rule 3002(c) states that in a Chapter 7 liquidation, a Chapter 12 family farmer's debt adjustment, or a Chapter 13 individual debt adjustment case, a proof of claim is timely filed if it is filed not later than 90 days after the first date set for the meeting of creditors. The rule as written only requires unsecured creditors to file proofs of claim. This has caused some confusion about whether and when secured creditors must file claims.

Proposed amendments to the Rules would shorten the time within which proofs of claim must be filed and alleviate the confusion regarding the obligations of secured creditors. First, the proposed amendment to Rule 3002(c) would change the calculation of the claims bar date to 60 days after the petition is filed in a voluntary Chapter 7 case, a Chapter 12 case, or a Chapter 13 case. Second, the proposed amendment to Rule 3002(a) would explicitly require a secured creditor, as well as an unsecured creditor, to file a proof of claim in order to have an allowed claim.


The increased disclosure requirements and likely shortening of time within which to file proofs of claim may seem onerous, particularly in light of the recent spate of high profile bankruptcy cases involving frauds. But if companies are to restructure efficiently and resume business, or liquidate and have creditors be returned some of their investments, greater disclosure by creditors seeking to retrieve their money is necessary. Where claimants are represented, counsel should be contacted earlier rather than later to ensure claims are filed timely and completely. The concern however, remains for those claimants that cannot afford representation. It is hoped that courts will consider cases of late-filing claimants on their individual merits, especially when common sense suggests that claimants had a genuine reason for mistaking their obligations. After all, the two primary purposes of bankruptcy are to relieve the unfortunate debtor of its outstanding entanglements, and equally important, to make a fair, equitable adjustment of the assets among the creditors.