Debtors often listed more than they owed. Creditor usually listed more than they were due. Porter's extensive analysis suggested the following:
claims may themselves be bloated and overstate the accurate amount of
the debt. Such problems could result from servicers' practices of
loading claims with default fees that are not disclosed to debtors, or
because of mistaken calculations of the amount due in preparing the
proof of claim; case law has documented both effects." K.M. Porter, 2007 p. 34
Once again, the debtors take the hit, the very people lacking the resources to challenge what they strongly suspect are creditor overstatements of debt.
You knew something was wrong but you didn't have the time or money to challenge your creditor's figures.
The Bank Claim is Approved
You suspect errors in the creditor claims but you can't prove that their figures are overstated. You do not know that your creditors are missing documentation, an error that should nullify their claims.
When debtors make a mistake, their case is subject to dismissal and they face severe penalties. When the courts receive and approve flawed, unlawful creditor filings in 50% of the cases, the court isn't even conducting a cursory review of essential documents. With any degree of diligence, most or all of the flawed creditor filings would be dismissed.
This proves, beyond any doubt, that in many cases, bankruptcy proceedings move forward without creditor adherence to clearly stated legal requirements.
The sole purpose of the court is to enforce the law. That simply doesn't happen for at least 50% of the cases judged.
Later, You Find Out that the Critical Documents were Missing and the Charges were Bogus
How could the bank prevail in this matter, you ask. The bank
made a claim that they knew or should have known was false. The bank
failed to present documents required from creditors, documents
essential to judging the claim and making it conform with the law. The
bank also included charges that were wrong and fees that were not
warranted. Will the bank be charged with fraud? You want to challenge
the ruling in favor of the bank but you're out of money. You now
understand why most bankruptcy not contested
Bankruptcy Hell - Abandon hope all ye who enter here
There is no justice guaranteed for the weak, disadvantaged, poor, or dispossessed. Debtors filing bankruptcy operate on a limited budget and simply want the nightmare to end. They want to get on with their lives. They often lack the ability to make legal challenges. When their lawyers don't inform them of those challenges, they have no options.
In the 50% of the cases where critical documents were missing, their lawyers fail to make the challenge. Worse still, in those and other cases where creditor filings are obviously deficient and outside the law, the court misses the error.
Wouldn't it be better if bankruptcy court operated like, let's say, an automobile manufacturer. Honda issued a recall on airbags for 2001 and 2002 models.