Proof-of-Claim Deadline Applies to Secured and Unsecured Alike

“The deadline for filing a proof of claim in Federal Rule of Bankruptcy Procedure 3002(c) applies to all claims, including those of secured creditors.” In re Pajian, No.14-2052 (7th Cir. May 11, 2015).

More than 90 days after the date set for the first creditor’s meeting, the creditor, Lisle Savings Bank, filed its proof of claim. The bank argued that the 90 day limitation period set forth in Rule 3002(c) applied only to unsecured creditors and that secured creditors may file proofs of claim any time prior to confirmation. The bankruptcy court agreed and, noting a conflict among the bankruptcy courts on the issue, certified a direct appeal to the Seventh Circuit.

The confusion arises out of Rule 3002’s reference to unsecured creditors in paragraph (a) and the absence of a reference to secured creditors in paragraph (c) (or anywhere else in the rule). Rule 3002(c) provides that a “proof of claim is timely filed if it is filed not later than 90 days after the first date set for the meeting of creditors.” In contrast, 3002(a) provides that “[a]n unsecured creditor or an equity security holder must file a proof of claim or interest for the claim or interest to be allowed.” Some courts have found that, because there is no specific reference to secured claims in Rule 3002, the deadline in paragraph (c) does not apply to secured creditors. The Seventh Circuit, concluded that the deadline applies to all creditors, secured and unsecured. It reasoned that while, on its face, Rule 3002(c) does not distinguish between secured and unsecured, the Code defines a “claim” as including both types. The fact that the Rule singles out unsecured claims in 3002(a) indicates that Congress would have made the same specification in paragraph (c) had it intended to exclude secured claims from that deadline. From a logical standpoint, the application of 3002(a) to only unsecured creditors makes sense in that the rule deals with the requirement of filing a proof of claim in order to reach allowance of the claim: a topic inapplicable to secured claims for which no proof of claim need be filed to preserve lien rights.

Requiring all creditors to file by the same date harmonizes with considerations of judicial administration by preventing new claims from cropping up after time has been expended on a plan that does not include those claims.

The court also took into consideration a proposed amendment to Rule 3002(a) under which the U.S. Judicial Conference Advisory Committee has recommended a clarification making clear that both secured and unsecured creditors must file a proof of claim in order for their claims to be allowed, though a secured creditor’s failure to file the proof of claim would not void the lien.

Pajian 7th Cir opinion