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My Favorite Myths about the U.S. Bankruptcy Code
By Steven Kozack.

There are many widely held myths and misconceptions about the U.S. Bankruptcy Code, including:

  • Myth: Trade creditors can ignore notices from the Bankruptcy Court except for the Proof of Claim form. Reality: Every document received is potentially important. Missing a deadline, failing to perform a required task, or simply failing to respond to an action brought against you could result in the dismissal of your claim or other consequences.

  • Myth: Proof of Claim forms must be postmarked before the Bar Date. Reality: Proof of Claim forms must be received by the Bar Date, not postmarked by the Bar Date.

  • Myth: If you fail to file a Proof of Claim by the Bar Date, don't bother to file at all. Reality: If you fail to file by the Bar Date, there may be extenuating circumstances that would cause your Claim to be accepted by the Court without penalty.

  • Myth: General unsecured trade creditors do not need to provide supporting documentation when they file a Proof of Claim form. Reality: Creditors need to submit documentation supporting the amount claimed as owed by the debtor.

  • Myth: Creditors can report only open debits [and fail to report open credits] when filing their Proof of Claim. Reality: Creditors are required to report the net amount due; they cannot ignore or fail to report open credits.

Reprinted with permission from the Covering Credit Newsletter 10/19/02 Edition © 2002 All Rights Reserved

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