Creditor’s claim (sometimes referred to as a proof of claim) is a filing with a bankruptcy or probate court to establish a debt owed to that individual or organization. The claim usually gives specific details of the debt, how it came about, and includes evidence of the debt, but the contents will vary based on the jurisdiction and context. In order to regain any debt, a creditor must file a creditor’s claim whether it be during bankruptcy or probate proceedings or risk other creditors and beneficiaries gaining all the assets. This is necessary in order for estates to properly distribute the assets as directed by wills and bankruptcy courts to ensure creditors are paid. State and Federal statutes give specific amounts of time for creditors to file a claim before a court closes the proceedings regarding the bankruptcy or estate issue. In many situations, there will be multiple creditors with debts owed by the debtor, and only the creditors who have filed a claim within the appropriate time and proved their debts will receive anything from the bankruptcy or estate proceedings. There are situations where a creditor may not have to file a creditor’s claim or prefer not to file one such as if the creditor wishes to challenge the jurisdiction of the court.
[Last updated in February of 2022 by the Wex Definitions Team]