Charles Anthony Braden

Jun 20, 2025
24-20187

ORDER OVERRULING CHAPTER 13 TRUSTEE’S OBJECTION TO CLAIM

This matter is before the Court on the Chapter 13 trustee’s Objection to the late claim filed by Creditor Memphis Light Gas & Water Division [Claim #20]. This is a core proceeding under 28 U.S.C. § 157(b)(2)(A) and (B). This Court has subject matter jurisdiction under 28 U.S.C. § 1334(a)-(b). Accordingly, the Court has both the statutory and constitutional authority to hear and determine these proceedings.

Under Bankruptcy Code § 502(a), a proof of claim is deemed an allowed claim unless objected to by a party in interest. 11 U.S.C. § 502(a). Subsection (b) then provides that “... if such objection to a claim is made, the court, after notice and a hearing, shall determine the amount of such claim ..., and shall allow such claim in such amount,” but then provides several exceptions to the allowance of claims. Subsection (b)(9) excepts from allowance claims for which “proof of such claim is not timely filed ....” 11 U.S.C. § 502(b)(9). Bankruptcy Rule 3002(c) sets the deadline for non-governmental creditors to timely file proofs of claim in voluntary Chapter 13 cases as not later than 70 days after either the order for relief or entry of an order converting the case to Chapter 13. FED. R. BANKR. P. 3002(c).

The Chapter 13 trustee’s Objection to the claim in this matter focuses on the fact that the claim was not timely filed. A Chapter 13 trustee has the statutory responsibility of reviewing and contesting claims filed in a Chapter 13 case where a purpose would be served. 11 U.S.C. §§ 704(a)(5) (emphasis added) and 1302(b)(1). The Chapter 13 trustee administering this case routinely files objections to all late-filed claims (without consideration as to whether the claim evidences a security interest in the debtor’s only vehicle, the debtor’s mortgage or whether it is the claim of a general unsecured creditor). However, the trustee’s objection to claim process has become burdensome and creates inconsistent rulings before this Court. Relevant creditors, once an objection is lodged by the trustee, routinely file motions to allow late-filed claims under FED. R. BANKR. P. 3002(c)(6). See FED. R. BANKR. P. 9006(b)(3) and 3002(c). Instead of objecting to said motions, the Chapter 13 trustee simply does not oppose the motions and agrees to grant the motions to file late-filed claims. This Court has very little authority to grant motions to allow late-filed claims. See FED. R. BANKR. P. 3002(c) (if notice was insufficient to give the creditor a reasonable time to file); United States v. Chavis (In re Chavis), 47 F.3d 818 (6th Cir.1995); see also In re Tench, No. 15-8026, 2016 WL 2858792, at *3 (B.A.P. 6th Cir. May 11, 2016) (“Bankruptcy Rule 9006(b)(1) provides for the allowance of late-filed claims due to ‘excusable neglect.’ However, this Rule is not applicable to deadlines set by Rule 3002(c). FED. R. BANKR.P. 9006(b)(3).”).

The Court questions whether “a purpose is being served” by what appears to be inconsistent positions by the Chapter 13 trustee. The Court finds that no purpose is being served by the trustee’s routine objections.

Further inconsistency is occurring, as the Western division of this district has two Chapter 13 trustees which have differing practices. This Court routinely enters administrative orders submitted by the other Chapter 13 trustee in this division, which allow late-filed claims (subject to debtor’s objection). This creates inconsistency in practice before this Court (and more troubling, unpredictability of this Court—and potential forum shopping of Chapter 13 trustees). Given these reasons, this Court hereby overrules the Chapter 13 trustee’s Objection to the late-filed claim without prejudice and defers to Debtor’s counsel to file (or not file) the relevant objection to claim. A debtor is in the best position to know the debtor’s financial obligations and creditor relations, and can exercise informed judgment to discern whether or not to object to late-filed claims (or whether to oppose any creditors’ motions to allow late-filed claims). This Court is not making any determination as to the allowance or disallowance of the claim at issue. The Court is reserving said issue for determination if and when the Debtor files a relevant objection to the claim.

The Bankruptcy Court Clerk is directed to serve a copy of this Order on the interested parties listed below.

cc:

Debtor
Debtor’s Attorney
Creditor Memphis Light Gas & Water Division
Creditor’s Attorney
Chapter 13 trustee
United States Trustee

M. Ruthie Hagan

UNITED STATES BANKRUPTCY JUDGE