unsecured debt to family member

[5yrplan]

When listing a family member as a creditor what proof is required for the amount owed? TIA

[justbroke]

You don't need any proof.

The creditor, a friend, family member or any other creditor, would need to file a Proof of Claim. The creditor may need to provide proof if you, the debtor, or the Trustee objects to the claim. Typically this means that the creditor has something in a writing that can demonstrate the indebtedness and the terms. I've never had this per se issue, so I don't know if people have ever experienced challenges.

You could also file a claim on their behalf after the period expires for them to file a claim. Again, whether the Trustee would object without documentation is something of which I have no personal tangible experience.

[5yrplan]

If I'm out of line here please let me know.
So if I report I owe a family member 25K or 50K doesn't matter as long as they file a claim for the same amount?
This amount determines their % of claim of what my plan pays so it can make a big difference over 60 payments.
I want my family member that I owe to get 50% of the total of my 60 payments. So I just adjust the amount he owes
me to 50% of my total unsecured debt? I don't have any priority debts to speak of in my plan.
Thanks

[justbroke]

What a debtor puts on their forms (Schedules A-F) and what the creditor actually claims, are usually different. The differences can be in interest, penalties and just that the debtor does not know the exact amount.

I would not get involved in any claim fraud. If you owe someone $25K, then you schedule it as $25K. If they file a fraudulent claim for $50K, you are to object to the claim. I rarely see Chapter 13 Trustees get involved in objecting to claims in Chapter 13s, but I'm sure they'll jump in if it appears to be fraud (or turn it over to the U.S. Trustee and/or U.S. Attorney).

I would say that suborning or filing a false claims is a very bad idea and could lead to criminal prosecution as it's a criminal offense. That would be out of line.

18 USC 152(4)... A person who...knowingly and fraudulently presents any false claim for proof against the estate of a debtor, or uses any such claim in any case under title 11, in a personal capacity or as or through an agent, proxy, or attorney;...shall be fined..., imprisoned..., or both.

[newlife13]

If I'm out of line here please let me know.
So if I report I owe a family member 25K or 50K doesn't matter as long as they file a claim for the same amount?
This amount determines their % of claim of what my plan pays so it can make a big difference over 60 payments.
I want my family member that I owe to get 50% of the total of my 60 payments. So I just adjust the amount he owes
me to 50% of my total unsecured debt? I don't have any priority debts to speak of in my plan.
Thanks

That sounds like fraud. You are risking your case being dismissed. Perhaps even criminal penalties, though I'm not sure.

[LadyInTheRed]

That sounds like fraud. You are risking your case being dismissed. Perhaps even criminal penalties, though I'm not sure.

Yes, there could be criminal penalties for bankruptcy fraud. See the law that justbroke quoted. Cooperating with a creditor in the filing of an inflated proof of claim would be conspiracy to commit fraud, which I believe makes it even more serious a crime. Also, add perjury to the list of offenses because the bankruptcy petition and proof of claim are both signed under penalty of perjury.

5yrplan, you should list the debt accurately and your family member should file an accurate proof of claim. You can always pay your family member whatever portion of the debt they don't get paid from your bankruptcy.