534 B.R. 228
1st Cir. BAP2015Background
- Debtor filed Chapter 13 (Mar. 19, 2014). Schedules listed Nationstar as secured creditor with a reverse mortgage; bankruptcy set July 14, 2014 as the claims bar date.
- Debtor’s plan (Apr. 4, 2014) estimated Nationstar’s prepetition arrearage at $10,000 and provided plan cure for that amount; Nationstar filed a written objection to confirmation (May 28, 2014) asserting a secured claim and an arrearage of $21,690.80.
- Nationstar did not file a formal proof of claim before the July 14 bar date. Debtor filed Claim No. 4 (Jul. 25, 2014) on Nationstar’s behalf (arrearage $10,000). Nationstar filed Claim No. 6 (Sep. 9, 2014) asserting arrearage $21,690.80.
- Debtor objected to Claim No. 6 as untimely. Nationstar argued its earlier plan objection constituted a timely informal proof of claim and Claim No. 6 should be treated as an amendment to Claim No. 4.
- Bankruptcy court concluded the combination of Nationstar’s pre‑bar written objection, the debtor’s claim filed on Nationstar’s behalf, and Nationstar’s later filed claim provided adequate notice and equity to permit the late formal claim; it overruled the untimeliness objection.
- On appeal, the Panel affirmed: Nationstar’s plan objection qualified as an informal proof of claim under the circumstances and Claim No. 6 was a permissible amendment to Claim No. 4.
Issues
| Issue | Belser's Argument | Nationstar's Argument | Held |
|---|---|---|---|
| Whether Nationstar had standing to object to plan confirmation | Nationstar lacked standing because it had not filed a formal proof of claim and thus had no allowed claim | A secured creditor is a "party in interest" under §1324(a) and may object before the bar date; creditor status gives standing | Nationstar had standing; filing a proof of claim is not a prerequisite to §1324(a) party‑in‑interest status |
| Whether an objection to confirmation can constitute an informal proof of claim | An objection to confirmation cannot serve as an informal proof of claim and Nationstar’s objection lacked sufficient detail (denies due process) | A written, timely objection that states existence, nature, and amount can serve as an informal proof of claim when it fairly alerts the debtor | Court held the objection, read with the record (schedules, debtor‑filed claim), provided adequate notice and qualified as an informal proof of claim |
| Whether Claim No. 6 was untimely and must be disallowed | Claim No. 6 was filed after the bar date and therefore untimely | Claim No. 6 related back as an amendment to a timely informal claim (the objection) or to Claim No. 4 filed by the debtor | Claim No. 6 was not disallowed for timeliness; it could be treated as an amendment and deemed timely under these facts |
| Whether Claim No. 6 was a permissible amendment to Claim No. 4 | Debtor implied amendment would improperly expand the claim beyond what he was notified of | Creditor may amend a debtor‑filed claim to assert the same right to payment in a larger amount if not inequitable or prejudicial | Court held Claim No. 6 was an amendment (same underlying mortgage claim) and allowing it was within the court’s equitable discretion |
Key Cases Cited
- In re Soares, 380 B.R. 109 (Bankr. D. Mass. 2007) (sets four‑part test for informal proof of claim: timely filing, existence/nature, amount, and intent to hold debtor liable)
- In re Harper, 138 B.R. 229 (Bankr. N.D. Ind. 1991) (holds objection to confirmation may constitute informal proof of claim when record as a whole fairly notifies debtor)
- United States v. Kolstad (In re Kolstad), 928 F.2d 171 (5th Cir. 1991) (creditor may amend a debtor‑filed claim; bankruptcy court has discretion to allow amendment rather than treat late filing as new claim)
- Gens v. Resolution Trust Corp., 112 F.3d 569 (1st Cir. 1997) (informal proof of claim doctrine requires adequate notice of existence, nature, amount, and intent)
- In re Gomes, 525 B.R. 862 (Bankr. D. Mass. 2015) (applies multi‑factor McCoy test and emphasizes equity in allowing an objection to serve as informal claim)
- In re Hemingway Transp., 954 F.2d 1 (1st Cir. 1992) (amendments to proofs of claim are freely allowed; court must guard against amendments that assert a distinctly new claim)