After the filing of a Chapter 7 case, creditors generally have the opportunity to file a claim for money they believe is owed to them. This is generally done through an official “Proof of Claim” form. In “no asset” cases, there is generally no claim form mailed out to creditors since there will be no funds to distribute. However, if the Trustee does locate assets to pay creditors, they will request a “Bar Date” for filing claims, and creditors will be notified of a deadline for filing claims. What if one of your creditors files a claim you believe is either not owed at all, or is for more than you believe is really owed to them? Can you object to the claim? In most cases, you cannot, but it really should make no difference to you.
Keep in mind that the creditor is filing a claim against the Chapter 7 “Estate” and not you personally. The creditors, as a group, just want a portion of what the Trustee has to distribute (and that might be the important part of the case for you). The more “legal” and technical issue is that in most cases you will not have “standing” to object. Standing is a legal term that basically means you do not have an actual personal stake in the subject matter, so you do not get to “stand” and contest the matter in court. If you disagree with a claim, you should let your lawyer know and they will notify the Trustee of the basis of your objections. Otherwise, the Trustee generally reviews all claims and compares them with your Schedules, and files objections as they deem necessary.
There are some exceptions to the general rule. If a creditor is asserting that a debt is non-dischargeable, you will certainly want to make sure the claim is filed in the correct amount even if you do not contest the dischargeability. However, these matters are not typically resolved in the normal claims and objections process, so your lawyer will know how to handle these claims. Another exception is where the Trustee recovers sufficient assets to not only pay creditors in full, but to pay all expenses of the case and return some money to you, the debtor. Although these cases are relatively rare, they do happen, particularly when the Trustee is able get a large recovery from a lawsuit, sell valuable property, or otherwise locate significant assets. In these cases, the debtor does have standing in the funds (or potential funds) coming back to them and they and their lawyer should pay attention to the case at every step.