At some point in their lives many people will receive a notice, that some company they have done business with has filed a Chapter 11 bankruptcy. The bankruptcy court sends the notice, because the company supposedly owes the person some money, and after reading the notice an ordinary person seldom has a good idea of what they need to do to protect themselves. As a creditor the person has the right to hire a bankruptcy lawyer to participate in the court proceedings on their behalf, but this is rarely a practical approach except for very large debts.
What the individual should do is to file a proof of claim with the bankruptcy court stating the amount of money that is owed to him or her. The form is available on the bankruptcy court web site. This will allow you to participate in the payments distributed by the court to creditors.
In most cases filing a proof of claim is in fact probably not necessary, but it is a good precaution to take. In a Chapter 11 bankruptcy a scheduled debt will normally participate in the distribution without the necessity to file a proof of claim. Presumably the reason a person receives the notice of bankruptcy is because their debt has been listed among the creditors.
The amount scheduled by the bankrupt company however, might be less than is actually owed and the only way to contest its sufficiency is to file a proof of claim. Furthermore, while bankruptcy petitions are public records, and you can go on line to figure out if your debt was scheduled, trying to find your way through a complex bankruptcy petition is no easy task. Filing a proof of claim to make sure you are in there tends to be a more feasible approach to protecting your interests.
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