Why Filing a Statement of Claim in a Bankruptcy Proceeding is Important even if you are not a Secured Creditor.

It is important to know your rights and options if a debtor files for bankruptcy. Even if you are not a secured creditor, you should consider filing a Statement of Claim.

What is a Statement of Claim?

A Statement of Claim is a document filed by a creditor in a bankruptcy proceeding. It is a written statement that outlines the creditor’s claim against the debtor. The claim includes the amount owed, the nature of the debt, and any supporting documentation. Filing a Statement of Claim is the creditor’s way of asserting their rights to the bankruptcy estate.

Filing a Statement of Claim is a way to protect your rights as a creditor. By filing a claim, you are asserting your right to receive a distribution from the bankruptcy estate. If you fail to file a claim, you may forfeit your right to receive any payment.

Further, filing a Statement of Claim is necessary to be included in the distribution of funds from the bankruptcy estate. The bankruptcy trustee will review all claims and determine the amount that each creditor will receive. If you do not file a claim, you will not be included in the distribution.

Additionally, if the debtor files for Chapter 7 bankruptcy, their debts may be discharged, meaning they are no longer responsible for paying them. However, if you file a Statement of Claim, you may be able to prevent your debt from being discharged. This is because the bankruptcy court will review all claims and determine which debts will be discharged.

Finally, filing a Statement of Claim may also preserve your right to sue the debtor. If you do not file a claim, you may lose your right to sue the debtor for the debt owed.

In conclusion, filing a Statement of Claim in a bankruptcy proceeding potentially protects your rights and increases your odds of being included in the distribution. If you have a claim against a debtor in a bankruptcy proceeding, we recommend you seek legal counsel to discuss filing a Statement of Claim and any other rights that you may have.