Filer Beware: Proof of Claim changes may lead to increased sanctions

The proof of claim form creditors file to evidence claims in bankruptcy has undergone a serious facelift to comply with amended Bankruptcy Rule 3001(s) and new Rule 3002.1, and the results mean increased burdens and requirements for filers.

The proof of claim form is revised to clarify that, consistent with Rule 3001(c) writings (i.e., loan documents) supporting the claim or evidencing perfection of a security interest must be attached to the proof of claim. If the documents are not available, the filer must provide an explanation for their absence.

The individual who completes the form must sign it and note his or her authority, whether as a creditor, guarantor, debtor, trustee or authorized agent thereof. By doing so, he or she declares under the penalty of perjury that the information provided “is true and correct to the best of my knowledge, information and reasonable belief.”

In addition to the revised proof of claim form, a new Attachment A must be completed when the claim is secured by a security interest in the debtor’s principal residence. The form, which implements Rule 3001(c)(2), requires an itemization of the prepetition interest, fees, expenses, and changes included in the claim amount, as well as a statement of the amount necessary to cure any default as of the petition date. If the mortgage installment payments include an escrow deposit, an escrow account statement must also be attached per Rule 3001(c)(2)(C).

Additional forms implement Rule 3002.1 and must be filed as supplements to the claim holder’s proof of claim when the claim is secured by a security interest in the debtor’s principal residence.
Supplement 1 is used to provide notice at least 21 days prior to a change in the amount of the ongoing mortgage installment payments. The form requires the holder to indicate the basis for the changed payment and when it will take effect. Supplement 2 is used to file a notice of all postpetition fees, expenses, and charges within 180 days after they are incurred.

Finally, Rule 3002.1 also creates a “Final Cure Notice” in Chapter 13 cases. Within 30 days of the debtor’s completion of all plan payments, the trustee must file and serve on the holder of the claim a notice stating that the debtor has paid in full the amount required to cure the default on the creditor’s claim. Upon receipt of such notice, the creditor has 21 days to respond with a statement (i) specifying whether it agrees that the debtor has cured the default due on the creditor’s claim; (ii) specifying whether the debtor is otherwise current on all payments outside the plan; and (iii) if the debtor has failed to cure the default, providing an itemized statement of the cure amount or other amounts the creditor contends remain unpaid as of the date of the statement. Failure to respond to the Final Cure Notice may result in a waiver of any outstanding amounts due to the creditor.

Rule 3002.1 provides that if a creditor failed to provide any information required under the new rule, the court may, after notice and hearing, preclude the creditor from presenting the omitted information, in any form, as evidence in any contested matter or adversary proceeding in the case, or award other appropriate relief, including reasonable expenses and attorney’s fees caused by the failure.

While burdensome to creditors, the consequences for failure to comply with these rules can be significant, so it is extremely important for lenders to familiarize themselves with these new forms and requirements prior to filing any claims in bankruptcy.