Understand the complexities and nuances of the Bankruptcy Code to better advise clients and prepare for court.
By Daniel Gill
A Georgia bankruptcy court approved an order finding that a Chapter 13 debtor owed money to a creditor, but disallowed the claim because the creditor filed the proper paperwork too late to collect ( Solomon v. Wilmington Tr., N.A. (In re Solomon) , Bankr. S.D. Ga., Chapter 13 Case Number: 14-40573- JTL Contested Matter, 6/12/17 ).
The opinion written by Judge John T. Laney III of the U.S. Bankruptcy Court for the Middle District of Georgia serves as a reminder that courts have very limited discretion to extend the time to file the right form, or a proof of claim, in a Chapter 13 case.
Peter Solomon III filed a Chapter 13 bankruptcy case on June 18, 2014. Chapter 13 allows individuals receiving regular income to obtain debt relief while retaining their property. To do so, the debtor must propose a plan that uses future income to repay all or a portion of his debts over a three- to five-year period.
During the case, Solomon filed a lawsuit, called an adversary proceeding, against Wilmington Trust, N.A., to dispute Wilmington Trust’s claim of a lien against him. That was resolved by a consent order, where the parties agreed that Wilmington Trust had a general unsecured claim against Solomon for about $13,000.
Wilmington Trust filed a proof of claim on July 16, 2015, but the deadline for filing proofs of claim was Nov. 3, 2014.
“Both parties are bound by the language of the consent order, but the consent order is silent as to the timeliness of filing a proof of claim,” the court said.
But even if the consent order had addressed the timeliness of filing the proof of claim, “the court does not have the authority to allow an untimely filed claim so that the creditor can receive distributions under the Chapter 13 plan,” it said.
Because the creditor failed to file a proof of claim in a timely manner, it wouldn’t be paid through the plan, notwithstanding the consent order.
Solomon was represented by Valerie G. Long, Columbus, Ga. Wilmington Trust was represented by Brandi R. Lesesne, Addison, Texas.
To contact the reporter on this story: Daniel Gill in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Jay Horowitz at JHorowitz@bna.com
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