multiple collectors of 1 debt, who files the Proof of Claim

[bornfree2]

Suppose Debtor had a debt with original creditor. After defaulting, OC sold off debt for collection to various agencies.

They are all listed on Schedule E/F and the mailing matrix. They can all file claims and objections.

How is that sorted out? First to file the proof of claim wins the pot? Or do they coordinate among themselves? Or does the pot go only to the original creditor?

[despritfreya]

OC sold off debt for collection to various agencies.They are all listed on Schedule E/F and the mailing matrix. They can all file claims and objections. How is that sorted out? First to file the proof of claim wins the pot? Or do they coordinate among themselves? Or does the pot go only to the original creditor?

Stop overthinking this.

1. Unless you filed a Chapter 13 that pays 100% why would you even care?

2. Unless you defrauded a general unsecured creditor, an objection by a general unsecured creditor is highly, highly, highly unlikely.

3. If multiple claims are filed for the same debt by different "holders" of the claim (in over 30 years I recall having seen this happen twice), you call each and ask them to figure it out. If they don't figure it out and you did not file a Chapter 7, you can object to both claims and then they will figure it out. Don't waste your time unless you are in a 100% Plan. If you are in a Chapter 7 you do not have standing to object to the general unsecured claim. That is the job of the Chapter 7 Trustee if there are assets to distribute.

Des.

[bornfree2]

So this is one of those cases where 'Trustee standing in the shoes of Debtor' acts as a Debtor would in objecting to claims if necessary. In Chapter 7, all property non-exempted becomes property of Estate thus its trustee option to object, vs in Chapter 13 all property remains that of Debtor thus they have standing to challenge claims. That makes logical sense. Thanks Des!

[despritfreya]

So this is one of those cases where 'Trustee standing in the shoes of Debtor' acts as a Debtor would in objecting to claims if necessary.

Not quite. A Chapter 7 Trustee would be acting in his/her fiduciary capacity to the creditors. One of his/her duties is to review claims and object as necessary and/or prudent. See 11 U.S.C. 704(a)(5). In general, if there is no money being returned to the debtor after all claims are paid (a solvent estate), the debtor has no pecuniary interest and, therefore, no standing to object.

Des.

[bornfree2]

What i dont get is if any tom dick and harry can file a proof of claim what defense does a debtor have to prevent BS or unsubstantiated submissions? I say this after viewing a couple cases on RECAP of judges ruling proof of claims in dispute had no supporting documentation. The standard for submitting these claims is very shallow... debtor has far more rights to challenge them in state court than in BK court it seems.

[justbroke]

What i dont get is if any tom dick and harry can file a proof of claim what defense does a debtor have to prevent BS or unsubstantiated submissions?

Why would a debtor care about Tom, Dick, or Harry? Especially if it doesn't cost the debtor anything?

I say this after viewing a couple cases on RECAP of judges ruling proof of claims in dispute had no supporting documentation. The standard for submitting these claims is very shallow... debtor has far more rights to challenge them in state court than in BK court it seems.

If you re-read was despritfreya wrote, you don't have standing if you have no upside. In other words, why should the court allow you to intervene when it doesn't affect you or your bottom line? Any proof of claim (POC) is prima-facie evidence of a valid claim. This is done as part of the streamlining of bankruptcy. If the bankruptcy court had everyone litigate nearly everything, the bankruptcy court would grind to a halt instantly.

(In a Chapter 13, it may not even make sense to challenge claims unless you are in a 100% plan or there's a possibility that you'll eventually convert to a Chapter 7.)

[despritfreya]

What i dont get is if any tom dick and harry can file a proof of claim what defense does a debtor have to prevent BS or unsubstantiated submissions? I say this after viewing a couple cases on RECAP of judges ruling proof of claims in dispute had no supporting documentation. The standard for submitting these claims is very shallow... debtor has far more rights to challenge them in state court than in BK court it seems.

A debtor does not need to argue over something that has no meaning. Unless the claim is going to have a detrimental impact on the debtor it simply does not matter.

For example. . . You cause an auto collision that results in injury to the other driver (no DUI issues). The other driver sues you. Before liability and damages are established in state court, you file bk. The injured party files a claim asserting $1,000,000.00 is owed. You obtain your discharge. Do you really care how much the claim was for since you are not liable for payment? Why would you spin wheels objecting to the claim? Any objection would bring you back to state court for a determination of liability and damages thus causing you more grief in "defending". You just don't object unless there is a benefit to you in doing so.

You also must understand that there are consequences to filing a fraudulent claim. The mere threat of such means that a typical creditor is not going to try to pull something.


Des.

[bornfree2]

Ok got im gaining a different understanding cause of info shared. The only frame of reference I have is 'letter of the law' but not actual in the field experience. Obviously wisdom an experienced good attorney has will always trump Pro Se Debtor. thanks guys!