Spokane Law Enforcement Federal Credit Union v. Barker, No. 14-60028 (9th Cir. 2016)
Annotate this CaseBarker filed a Chapter 13 bankruptcy petition; the bankruptcy court issued a notice that the deadline for creditors to file a proof of claim was January 8, 2013. On September 8, 2012, the Bankruptcy Noticing Center sent the notice to the Credit Union by first class mail. In September 2012, Barker filed her Chapter 13 plan, which was sent to the Credit Union that day via first class mail. Barker’s schedules of assets and liabilities listed the Credit Union as a secured creditor holding a $6,646.00 purchase money security interest in a Ford F-150 and as an unsecured creditor holding a $47,402.00 claim. Barker amended the plan several times over the next few months. Each time, Barker sent a notice to the Credit Union; the Bankruptcy Noticing Center notified the Credit Union of each court order. More than four months after the deadline expired, the Credit Union filed claims. The Trustee sent a “Notice of Late Filed Claims” to the Credit Union, which requested a hearing, asserting that a “disgruntled employee” failed to timely file the claims. The court disallowed the claims. The Ninth Circuit Bankruptcy Appellate Panel and the Ninth Circuit affirmed. If a creditor wishes to participate in the distribution of assets under a Chapter 13 plan, it must file a timely proof of claim. The debtor’s acknowledgment of debt in a bankruptcy schedule does not relieve the creditor of this affirmative duty.
Court Description: Bankruptcy. The panel affirmed the Bankruptcy Appellate Panel’s affirmance of the bankruptcy court’s decision to disallow a creditor’s late-filed claims in a Chapter 13 proceeding. Agreeing with the Seventh Circuit, the panel held that if a creditor wishes to participate in the distribution of a debtor’s assets under a Chapter 13 plan, it must file a timely proof of claim under Federal Rule of Bankruptcy Procedure 3002. The debtor’s acknowledgment of debt owed to the creditor in a bankruptcy schedule does not relieve the creditor of this affirmative duty.
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