What happens when a creditor misses their deadline but tries to bend the rules to get paid anyway? That’s the central issue in Duarte v. Hillard, a case before the Ninth Circuit Court of Appeals, where the National Consumer Bankruptcy Rights Center (NCBRC) and the National Association of Consumer Bankruptcy Attorneys (NACBA) have stepped in to defend the integrity of the bankruptcy system.
In this appeal, creditor Jerry Duarte argues that even though he failed to file a timely proof of claim in Jenna Denise Hillard’s Chapter 13 bankruptcy case, he should still be entitled to receive payment. His legal argument? That the debtor’s amended bankruptcy schedules and plan should count as an “informal” proof of claim—something the law does not support.
NCBRC and NACBA have filed an amicus brief urging the court to uphold long-standing bankruptcy rules that require creditors to take affirmative steps to preserve their claims. If Duarte’s argument were accepted, it would create uncertainty in the Chapter 13 claims process, undermining the predictability that debtors and creditors rely upon.
The Legal Issues at Stake
At the heart of Duarte v. Hillard is whether a debtor’s amended schedules or Chapter 13 plan can serve as an informal proof of claim for a creditor who failed to meet the deadline. The case challenges:
✅ The clear legal requirement that creditors must file a timely proof of claim under Federal Rule of Bankruptcy Procedure 3002 to receive distributions.
✅ The Ninth Circuit’s prior ruling in Barker v. Spokane Law Enforcement Credit Union, firmly rejected the idea that a debtor’s schedules alone could serve as a Proof of Claim.
✅ The role of Rule 3004, which allows a debtor to file a claim on a creditor’s behalf but does not permit an “informal” filing—contrary to Duarte’s argument.
Allowing a debtor’s schedules or plan to substitute for a creditor’s proof of claim would set a dangerous precedent, potentially forcing debtors to make payments on debts that might otherwise be disallowed or discharged.
Why This Case Matters
The outcome of Duarte v. Hillard could reshape how claims are handled in Chapter 13 cases nationwide. If Duarte prevails, it could weaken bankruptcy protections by shifting responsibility from creditors—who must file claims—to debtors, who may inadvertently give creditors a second chance at getting paid by simply amending their schedules.
By joining this case, NCBRC and NACBA reaffirm their commitment to protecting consumer bankruptcy rights and ensuring the fair and just application of bankruptcy laws.
We will continue to monitor this case closely and provide updates as the Ninth Circuit deliberates. Stay tuned for further developments in this critical battle for bankruptcy fairness.
You can read the amici brief here: Amici Brief in Duarte v Hillard