Object to ALL claims?

[FranksMom]

I am wondering if anyone has ever objected to ALL (or most) of the claims that were filed in their case, either pro se or through their attorney? I realize that the claims that are filed are prima facie, however, when there are thousands of dollars on the line, I think it's beneficial for a debtor to attempt to reduce their unsecured claims as much as possible. I'm not referring to omnibus objections; I'm talking about objecting to each claim individually and disputing them in hopes that the creditor will not respond, and the claim will be disallowed. Of course, you would need a valid reason to dispute, such as questioning the amount owed, or not having knowledge of the claim. Without getting too deep, I'm wondering if anyone has had any experience with this, and if so, what the outcome was? Do the creditors tend to respond to or ignore the objections? My concern would be that the judge would find excessive objections fraudulent. On the other hand, Debtors have the right to object to claims if they have reason to do so. Anyone?

[HHM]

First off, what is the end game scenario, what do you hope to accomplish.

Unless you are in a 100% plan (i.e. meaning you have disposable income to payback 100% of the amount due to unsecured creditors), it really doesn't matter what your creditors claim since your repayment is based on your disposable income, not on how much you owe. As for the unsecured credit limit, that is based on YOUR schedules, not what creditors claim.

As for objections to claims, you do need a basis (as you are already aware, the POC is prima facia accepted, you need evidence to rebut it)...you either need to present evidence in your objection that the claim in inaccurate, OR, there must be some defect, procedural or substantive, in the claim itself (there are usually defects in claims). Simply claiming lack of knowledge will not sustain an objection (assuming the creditor has filed a well formed proof of claim with supporting docs).

Now, if you are in a 100% payment plan, you should find any reason you can to object to claims that are filed, as doing so will shorten the plan (but will not reduce your monthly payment), but again, you need some "affirmative" reason why the proof of claim should be denied or is otherwise defective.

[FranksMom]

I understand your point about a 100% plan, and no, I'm not even close, I'm more like, at 10% right now. However, if my income were to change in the future (which it may), and I'm stuck having to pay a higher percentage to my unsecured creditors, I want to ensure that the claims that need to be paid are minimal.

The proofs of claim I've seen are a joke. They use the proof of claim form, and nothing further. A couple of creditors included a statement saying that they certify that they own "the debt". No account numbers are provided, nothing. Half of them I don't even know of, and can't fathom the risk of having to pay a claim that may not belong to me.

I have reviewed the claims register, and added these creditors to my schedules just in case, as disputed amounts, but it's still scary to look at.

[FranksMom]

That's what I was asking- I wondered if, even though I may have a valid reason to object, if excessive objections would decrease my credibility.

I haven't been able to find an actual deadline as to when a debtor can no longer object to a proof of claim. If I've been paying on it for, say, 2 years or so... it would be hard to object to, wouldn't it?

[HHM]

Filing many objections is not, by itself, a problem so long as there is a legitimate basis each objection.

As for timing, you are correct, neither the BK code nor the BK rules give a specific deadline for objecting. However, non-governmental creditors have 90 days form the first scheduled date of the 341 meeting. For administrative efficiency, you would want to file a proof of claim as soon as you know, or have evidence, for the basis of the objection. There is no strict time bar, you can object to claims at ANYTIME before discharge in a 13, or in an asset chapter 7 case, at anytime before closing, but there is a good faith requirement. As your instinct is telling you, if you had a basis for a claim objection at the time the claim was filed but waited 2 years to file your objection, you run the risk the court may bar that objection on the basis of bad faith. Strategically, there would be no reason to wait, anyway.

[justbroke]

I am wondering if anyone has ever objected to ALL (or most) of the claims that were filed in their case, either pro se or through their attorney?

I have objected to about 50% of my claims. Most of the objections were when the dierct creditor didn't file the claim. This is because I didn't recognize the new creditor (the JDB) and/or they had a MUCH different and higher amount than I scheduled... or had other problems with their paperwork. This included a creditor who filed two claims from a debt 20 years ago. I have a final evidentiary hearing in 2 weeks on that one... as I asked to expunge them.

There is also one lawyer in our District who seems to object to EVERY CLAIM unless it has statements attached. I tend to have followed that practice too... unless it's very easy to decipher and match to my schedules.

Having wrote all that, you shouldn't just object just to object! You could end up explaining yourself in a Rule 9011 hearing. The last set of amendments in BAPCPA 2005 specifically tried to get the Judges out of the Claims Policing business. However, some of these JDBs are atrocious with what they file!!! I do it just for the principal.

I don't do it just because I can. I make sure I state a factual and legal basis for the denial. Almost all of mine end up with some 11 USC 502(b) section because that's the only part of the code and the only reasons for disallowance of a claim.

[justbroke]

There is no strict time bar, you can object to claim at ANYTIME before discharge in a 13, or in an asset chapter 7 case, at anytime before closing, but there is a good faith requirement.

Interesting.

I just reviewed a case from a Florida Judge in which res judicata was mentioned when a Debtor filed a belated Objection to a claim. The memorandum opinion cited In Re Bateman (Universal Am. Mort. Co. v. Bateman (In re Bateman), 331 F.3d
821 (11th Cir. 2003)) which is a well known 11th Circuit case on the affects of the "anti-modification" provisions and the res judicata affect of Plan confirmation on secured claims (and liens). Very interesting stuff.

Anyhow, the Judge concluded that objections to claims must be filed prior to confirmation, or within the Bar Date set by the Order of Confirmation.

... an objection to a proof of claim must be filed prior to plan confirmation. Bateman, 331 F.3d at 827

Of course, this could be District specific.

[justbroke]

I haven't been able to find an actual deadline as to when a debtor can no longer object to a proof of claim. If I've been paying on it for, say, 2 years or so... it would be hard to object to, wouldn't it?

See Universal American Mortgage Company v. Bateman (In re Bateman), 331 F.3d 821 (11th Cir. 2003). Please note that the 11th Circuit covers my District and not yours... so it is of no binding affect to you.

[HHM]

Interesting.

I just reviewed a case from a Florida Judge in which res judicata was mentioned when a Debtor filed a belated Objection to a claim. The memorandum opinion cited In Re Bateman (Universal Am. Mort. Co. v. Bateman (In re Bateman), 331 F.3d
821 (11th Cir. 2003)) which is a well known 11th Circuit case on the affects of the "anti-modification" provisions and the res judicata affect of Plan confirmation on secured claims (and liens). Very interesting stuff.

Anyhow, the Judge concluded that objections to claims must be filed prior to confirmation, or within the Bar Date set by the Order of Confirmation.



Of course, this could be District specific.

That makes sense, but the code and national rules are actually silent on the issue. There can be some problems because confirmation can be scheduled before the claim bar date and the debtor would obviously be granted some leeway if the creditor filed their claim on the last day of the bar date. Bottom line, don't wait to file objections.

[justbroke]

That makes sense, but the code and national rules are actually silent on the issue.

And that's one of the areas, of course, that I don't understand. That's where something is jurisdictional or not.

There can be some problems because confirmation can be scheduled before the claim bar date and the debtor would obviously be granted some leeway if the creditor filed their claim on the last day of the bar date. Bottom line, don't wait to file objections.

I found that my District's Orders of Confirmation, include the following text, which seems to address your specific issue with bar dates;

If bar date to file proofs of claim has not yet expired:

a. The debtor shall have thirty-five (35) days following the expiration of any bar date to object to any claim filed after entry of this order.

b. The debtor shall have thirty-five (35) days following the filing of an untimely claim to file an objection.

c. Failure to timely object to a claim shall result in the allowance of the claim and the Trustee shall include payments to these creditors in addition to those creditors currently listed on attached Exhibit "A".

d. The Trustee shall review the Claims Register after all bar dates have passed and file a motion to dismiss if the debtor fails to timely take appropriate action to address all filed claims.

[HHM]

Correct, the timeline issues with regard to objections is probably going to be handled with the LOCAL bk rules for your district.

[FranksMom]

That's why I say, the quicker, the better... just to be safe. JB- about how many of your objections were responded to versus ignored and subsequently disallowed.

HEY- that's a good question... what's the difference between disallowing a claim and having it expunged?