In the bankruptcy case of Caplan, Trustee, v. B-Line LLC (In re Kirkland), No. 08-2017 (10th Cir. 07/14/09), the 10th U.S. Circuit Court of Appeals found that a creditor must provide supporting evidence to support their claim or provide an explanation for its failure to do so.
The details of the bankruptcy case:
A Chapter 13 bankruptcy debtor scheduled a credit card debt for $5,004 with an account number ending in 2787. NextBank, N.A./B-Line, LLC filed a claim against the debtor with the same account number for $5,328.19; but failed to include supporting documents with the claim. After the debtor's bankruptcy case was converted to a Chapter 7 bankruptcy, the trustee objected to B-Line's claim on the grounds that the company did provide supporting documents for the claim and the appeals court upheld his decision.
The court said:
"B-Line has failed to produce a single document to support its proof of claim. B-Line has also failed to ex-plain its failure to provide supporting documentation. Although the bankruptcy court took judicial notice of the debtor's appended schedules of unsecured creditors, it correctly determined that the schedules were of no evidentiary value against the trustee. Therefore, B-Line has failed to present prima facie evidence of the validity and amount of the claim."
This is good news for debtors who may have been struggling to fight false or inaccurate claims against them by credit card companies or other bill collectors. The bankruptcy court requires that creditor provide accurate information and will not accept unproven claims against any debtor.