Secured Creditor Files Unsecured Claim

A creditor believes it has a secured claim. The creditor files a proof of claim form which is blank. The proof of claim does not assert a secured claim, an unsecured claim, or an amount of the debt owed. A bankruptcy judge asked myself and another attorney last week if the filing of a blank proof of claim in any way affects the creditor’s right to be a secured creditor. The judge had no experience with a blank proof of claim.

I do not think the blank proof of claim would diminish or waive an otherwise effective security interest. The general rule is that secured creditors so not have to file claims in bankruptcy, and that valid, perfected security interest flow through the debtor’s bankruptcy. I found a recent case in Hawaii with similar facts where a creditor filed an unsecured claim and found after the discharge order that its claim really was a secured claim. That court held that the filing of an inaccurate proof of claim does not by itself waive an otherwise valid security interest and that the creditor is not precluded from asserting its security interest unless the debtor has reasonably relied on the unsecured claim to his detriment.

posted by Jonathan Alper, bankruptcy and asset protection lawyer, Orlando, Florida