Unfortunately, due to either bad economic conditions, bad business practices, or some combination thereof, sometimes a company which owes money to you is forced to voluntarily file for bankruptcy to either liquidate (Chapter 7) or reorganize (Chapter 11) under the United States Bankruptcy Code. In either case, creditors, if they wish to pursue possible recovery of their legitimate claims against the debtor, must file a Proof of Claim with the appropriate Bankruptcy Court to protect their right to payment. The time limits in which to file a Proof of Claim are strictly construed and late filings are rarely allowed. Therefore, it is important to make sure that any Proof of Claim is filed before the “bar date” established by the court.
After the filing of a Proof of Claim, it is sometimes a mistake for creditors to simply forget about the case. Depending upon the particulars of the proceedings associated with the bankruptcy, creditors may have the opportunity to raise objections throughout the course of the case which could be beneficial to their interests. For these reasons, a creditor might find it in its best interest to retain an attorney to not only file a Proof of Claim on their behalf, but also monitor the bankruptcy proceedings to make sure that the creditor’s interest is being protected. This is particularly important with respect to large dollar volume claims.