What is a proof of claim in bankruptcy and when does a creditor need to file one?

When a debtor files for bankruptcy, an automatic stay immediately halts most collection efforts. Creditors who want to recover any portion of what they are owed must file a proof of claim — a standardized court form (Form B 410 in federal bankruptcy) — with the bankruptcy court before the claims bar date specified in the bankruptcy notice.

The claims bar date is a hard deadline. Missing it typically means losing your right to any distribution from the bankruptcy estate, even if the underlying debt is valid. When a client files bankruptcy, the first action is to locate the case on PACER.gov and identify the bar date.

Unsecured trade creditors — typically where an unpaid invoice falls — are treated as general unsecured creditors. In Chapter 7 liquidations, general unsecured creditors often receive little or nothing after secured creditors and administrative expenses are paid. In Chapter 11 reorganizations, the recovery percentage varies by the debtor's plan. Filing preserves your rights; not filing forfeits them entirely.

Supporting documentation required with a proof of claim typically includes copies of the invoice(s), any contract, and a summary of the amount owed including principal, interest, and fees. The form is available free from the bankruptcy court's website.