BANKRUPTCY
CS 890P-6 Bankruptcy – Proof of Claim Procedures
09/86 Revised 01/17/24 Training Completed 01/31/24 Last Reviewed
12/02/24
11 U.S.C. § 501(a); 11 U.S.C. § 502(a); 11 U.S.C. § 507(7)(B);
18 U.S.C. § 152; 18 U.S.C. § 158; 18 U.S.C. § 3571; U.C.A. 78B-2-112; Bankruptcy Court Local Rule; FRBP 5005(a)(2); 9011(b)
Proof of Claim Definitions
The following definitions are a general explanation of the law according to the United States Bankruptcy Court of the District of Utah. They are intended to help in understanding the Proof of Claim form for purposes of filing a claim with the Bankruptcy Court for the Office of Recovery Services/Child Support Services (ORS/CSS).
1.
Claim
– A claim is the creditor’s right to receive payment on a debt owed by that
debtor that arose on the date of the bankruptcy filing. Claims may be secured
or unsecured.
2.
Claim
Entitled to Priority under 11 U.S.C. 507(a) – Priority claims are certain
categories of unsecured claims that are paid from the available money or
property in a bankruptcy case before the other unsecured claims.
3.
Creditor
– A creditor is any person, corporation, or other entity owed a debt by the
debtor that arose on or before the date of the bankruptcy filing.
4.
Debtor
– The person, corporation, or other entity that has filed a bankruptcy case is
called the debtor.
5.
Evidence
of Perfection – Evidence of perfection may include a mortgage, lien,
certificate of title, financing statement, or other
document showing that the lien has been filed or recorded.
6.
Proof of
Claim – A form used by the creditor to indicate the amount of the debt
owed by the debtor on the date of the bankruptcy filing. The creditor must file
the form with the clerk of the same bankruptcy court in which the bankruptcy
case was filed.
7.
Redacted –
A document has been redacted when the person filing it has marked, edited
out, or otherwise deleted, certain information. A creditor should redact and
use only the last four digits of any social security, individual’s tax
identification, or financial account number, all but the initials of a minor’s
name and only the year of any person’s date of birth.
8.
Secured
Claim – A secured claim is one backed by a lien on property of the debtor.
The claim is secured so long as the creditor has the right to be paid from the
property prior to other creditors. The amount of the secured claim cannot
exceed the value of the property. Any amount owed to the creditor in excess of
the value of the property is an unsecured claim.
Examples of liens on property
include a mortgage on real estate or a security interest in a car. A lien may
be voluntarily granted by a debtor or may be obtained through a court
proceeding. In some states, a court judgment is a lien. A claim also may be
secured if the creditors owed the debtor money (has a right of setoff).
9.
Unsecured
Claim – An unsecured claim is one that does not meet the requirements of a
secured claim. A claim may be partly unsecured if the amount of the claim
exceeds the value of the property on which the creditor has a lien.
Filing a Proof of Claim Procedures
It is necessary to file a Proof of Claim with the appropriate federal Bankruptcy Court whenever the noncustodial parent (NCP) has a child support/spousal support/medical support obligation that is in arrears (the case must meet enforcement criteria, see CS 801P General Enforcement) and the bankruptcy case has assets (some Chapter 7 cases may have assets). If the individual files for bankruptcy in another state, there may be more than one court in the state for bankruptcy. Make sure that the proof of claim is sent to the appropriate court. Generally, this will be the address listed on the Notice of Bankruptcy.
If there is an established child support order or judgment for current support and the case has an enforceable arrears balance, always file a Proof of Claim on a Chapter 13 bankruptcy when notification of the bankruptcy is received. In a Chapter 7 bankruptcy, only file the Proof of Claim after notification to do so from the Bankruptcy Court or the Attorney General’s Office (AGO). For more information on Chapter 7 and 13 bankruptcies, refer to CS 890P-3 Bankruptcy – Chapter 7 Procedures and CS 890P-5 Bankruptcy – Chapter 13 Procedures.
The Proof of Claim must be filed in a timely manner, which for a government agency is defined as within 180 days of the bankruptcy filing date and prior to the confirmation hearing. However, the Local Utah Rule 3007-1 requires that an objection to a claim be filed by a date which permits a timely response prior to the confirmation hearing date (i.e., the deadline date established by the court). This means that if an objection to an ORS Proof of Claim is received, it must be sent to the appropriate attorney in the Salt Lake City (SLC), Ogden or St. George office based on where the bankruptcy was filed and according to the regional Attorney General’s Office (AGO) alpha split 20 days prior to the confirmation hearing date.
If the bankruptcy case has assets, include all child support, spousal support, and medical support debts (all debts that CSS is currently collecting on, e.g., genetic testing) in the Proof of Claim form.
There may be other ORS debts on ORSIS from other program areas (e.g., overpayments). Therefore, once the bankruptcy information is added to ORSIS, the Bankruptcy Filed alert is sent to all ORS agents with a case with the NCP.
If the NCP is current on his/her child support obligation, do not file a Proof of Claim. The NCP must continue to meet his/her monthly current support obligation; failure to do so is cause for the bankruptcy to be converted to a Chapter 7 or to be dismissed. Continue to monitor the case to ensure that the obligation remains current. If/when the NCP fails to meet his/her domestic support obligations (child support obligations), immediately consult with the appropriate attorney, based off of where the bankruptcy was filed and the regional AGO alpha split, to determine the next appropriate action.
Take the steps below to file a Proof of Claim with the Bankruptcy Court:
1. Obtain a copy of Proof of Claim – The Proof of Claim form can be found at https://www.uscourts.gov/forms/bankruptcy-forms.
NOTE: If the bankruptcy was filed in a state other than Utah, use the federal form B 410 to file a Proof of Claim unless you are notified by the Clerk of Court for the Bankruptcy Court where the bankruptcy was filed that their jurisdiction uses a different version of the Proof of Claim form.
2. Complete Proof of Claim (Federal Form B 410).
3. Update ORSIS.
4. Write a case narrative.
5. Mail the Proof of Claim – Send the Proof of Claim and/or copies to the following:
a. Courthouse – Send the original Proof of Claim, one copy (clearly labeled “COPY”, either handwritten or stamped), and a self-addressed envelope.
NOTE: If the NCP has multiple cases (multiple Proof of Claims), you may send all of the forms together in one envelope.
The Bankruptcy Court will date stamp the copy and return it to the assigned worker confirming that the claim has been put on the docket.
NOTE 1: The court will notify the trustee of any updates on the bankruptcy case.
NOTE 2: If the bankruptcy was filed in a state other than Utah, send the Proof of Claim, one copy, and envelope to the appropriate state bankruptcy court where the bankruptcy was filed.
b. NCP – Send one copy.
c. NCP’s attorney, if applicable – Send one copy.
6. Send a copy of the Proof of Claim to the Central Imaging Unit to be imaged into Content Manager.
7. Follow-up on the Proof of Claim – Make sure you receive verification that the Bankruptcy Court has received the Proof of Claim and it has been put on the docket.
NOTE: If a self-addressed envelope is sent along with a copy of the Proof of Claim, the Bankruptcy court will date stamp the copy and return it to the assigned worker confirming that the claim has been put on the docket.
Objection to Bankruptcy Procedures
If you receive an objection to the Proof of Claim(s) after it has been filed with the Bankruptcy Court, complete the following:
1. Review the Objection – Carefully review the form to determine:
a. If there are any other claims listed on the form in addition to the CSS claim; and/or,
b. If the CSS claim has been combined with any other issues, instead of being addressed separately.
NOTE: The NCP or trustee may file the objection. It may appear on the backside of the form (the Bankruptcy Court prints on both sides of their papers).
2. Update ORSIS.
3. Notify the appropriate attorney in the SLC, Ogden or St. George office based on where the bankruptcy was filed and the regional AGO alpha split immediately – Let the AGO know about the objection and, if appropriate, make a referral to the AGO to prepare a written answer. CSS must respond to the objection within a certain time frame or it is possible that the Bankruptcy Court will waive the arrears.
4. Request Bankruptcy Documents – If necessary, request actual bankruptcy documents from the court by contacting ORS Administrative staff. The Administrative staff will obtain the documents through the Web PACER (Public Access to Court Electronic Records).
Bankruptcy with Assets (Posting Instruction)
When a bankruptcy has assets (e.g., automobile, house, boat, etc.) which will be auctioned or sold with the proceeds to go to the Bankruptcy Court, there is a possibility that a lump sum may be sent to CSS in accordance with the Proof of Claim that has been filed on the case.