483 B.R. 871
Bankr. E.D. Wis.2012Background
- The Chapter 13 trustee objected to a late proof of claim by GLES on behalf of the US Department of Education.
- The claims bar date was December 26, 2011; the claim was filed July 31, 2012 and admitted as late by the Creditor.
- The Creditor had no notice of the bankruptcy because the Debtor’s schedules did not list it and notice was not provided before the bar date.
- Upon learning of the case, the Creditor promptly filed a proof of claim, arguing due process and equity allow late filing.
- The Trustee cites Wright to strictly enforce the bar date; the Creditor cites Tarbell and other authorities permitting late filing when notice is lacking.
- The court weighs the absolute bar date with due process considerations in the Chapter 13 context and the nondischargeable nature of the student loan.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether lack of notice justifies late filing in Chapter 13 | Kelley (Trustee) argues strict bar date enforcement; no notice does not excuse late claim. | GLES argues due process and equitable relief permit late filing when notice was deficient. | Yes; due process and equity allow late filing where creditor had no notice. |
| Whether the late claim prejudices other creditors or bona fide interests | Disallowing late claim preserves finality and distributions. | Allowing claim protects creditor's rights and avoids prejudice to debtor/creditor by delaying discharge. | No undue prejudice to other creditors; inequity of harsh deadline favored allowance. |
Key Cases Cited
- In re Tarbell, 431 B.R. 826 ((Bankr.W.D.Wis.2010)) (late filing with no notice permitted by due process)
- In re Wright, 300 B.R. 453 ((Bankr.N.D.Ill.2003)) (strictly apply bar date absent notice considerations)
- In re Jensen, 333 B.R. 906 ((Bankr.M.D.Fla.2005)) (bar date strict; exceptions limited)
- In re Brooks, 370 B.R. 194 ((Bankr.C.D.Ill.2007)) (bar date strict; treat as statute of limitations)
- In re Unroe, 937 F.2d 346 ((7th Cir.1991)) (equitable power to permit late amendments; separates scheduling impact)
- In re Greenig, 152 F.3d 631 ((7th Cir.1998)) (absolute bar date absent notice; not all exceptions apply in Chapter 13)
- In re Edwards, 962 F.2d 641 ((7th Cir.1992)) (notice defects may justify relief; due process favors creditors)
- In re Schultz Mfg. & Fabricating Co., 956 F.2d 686 ((7th Cir.1992)) (standing and due process when proper notice lacking)
- In re Global Precious Metals, Inc., 143 B.R. 204 ((Bankr.N.D.Ill.1992)) (unscheduled creditors and § 501(c) analysis; limited relevance to Chapter 13)
- In re Collier, 307 B.R. 20 ((Bankr.D.Mass.2004)) (bar date purpose and excusable neglect limits in Chapter 13)
- In re Dodd, 82 B.R. 924 ((N.D.Ill.1987)) (notice-based due process considerations)
- In re Yoder, 758 F.2d 1114 ((6th Cir.1985)) (notice requirement for due process)