Claim in bankruptcy
Bankruptcy in the United States Bankruptcy in the United States Authority · History
Court · BAP
Code · FRBP
Chapters Chapter 7 · Chapter 9 · Chapter 11 · Chapter 12 · Chapter 13 · Chapter 15 Aspects of bankruptcy law Automatic stay · Discharge
Bankruptcy trustee · Claim
Means test · DIP
Employment of Professional Persons
A claim in bankruptcy, in United States bankruptcy law, is a document filed with the Court so as to register a claim against the assets of the bankruptcy estate. The claim sets out the amount that is owed to the creditor as of the date of the bankruptcy filing and, if relevant, any priority status. Although a document called a Claim in Bankruptcy is used in proceedings in both Canada and the United States, in the United States, the document is properly termed a Proof of Claim. The form is different although they share many similar aspects.
Upon receipt of a claim, the Trustee in bankruptcy must notify the claimant (or creditor) whether the estate will object to the claim or whether it will, as is the default case, allow the claim.
Some of the reasons a creditor's claim may be objected to are that:
- the claim is not liquidated, such as a claim for damages for pain and suffering that is not the result of a judgment debt. This assertion is not fatal as the claim may be liquidated in Bankruptcy Court;
- the claim omits appropriate set-offs to which the bankrupt entity ("the debtor") is entitled by operation of law;
- the amount of the claim is in dispute, such as a bill for defective goods, in which case the matter may be litigated in Bankruptcy Court;
- the creditor is claiming a higher priority than they are entitled to, such as an ordinary creditor claiming priority to estate assets.
If a claim is objected to, the bankruptcy court may set a hearing and, if necessary, conduct a trial, in order to resolve the dispute.
There is usually a deadline (termed the Bar Date) for filing claims to allow the trustee to determine the distribution of any funds obtained from the liquidation of the estate. Claims are paid out first to administrative creditors, then to priority unsecured creditors according to their statutory priority, and finally to the non-priority unsecured creditors, with all claims paid pro rata with other members of the class.
Companies buy these bankruptcy claims. One such company is International Funding Corporation (Internationalfundingcorp.com) based out of the USA.
Wikimedia Foundation. 2010.
Look at other dictionaries:
claim in bankruptcy — See: creditor s claim Category: Bankruptcy, Foreclosure & Debt → Bankruptcy Nolo’s Plain English Law Dictionary. Gerald N. Hill, Kathleen Thompson Hill. 2009 … Law dictionary
claim in bankruptcy — The written claim filed by a creditor when a debtor (i.e., an individual or business who owes the creditor money) files for bankruptcy. The known creditors receive notice when a bankruptcy is declared, and will be told if the bankrupt party… … Business law dictionary
claim in bankruptcy — A proof of claim against the bankrupt. See proof of claim; provable debt … Ballentine's law dictionary
filing claim in bankruptcy — The delivery of a proof of claim against a bankrupt to the clerk of the district court, the referee, if the case has been referred, or to the trustee in bankruptcy. 9 Am J2d Bankr § 449 … Ballentine's law dictionary
claim — n [Old French, from clamer to call, claim, from Latin clamare to shout, proclaim] 1 a: a demand for something (as money) due or believed to be due; specif: a demand for a benefit (as under the workers compensation law) or contractual payment (as… … Law dictionary
bankruptcy proceedings — The way a bankruptcy case wends its way through the court system, from the time the bankruptcy petition is filed until the debtor receives a bankruptcy discharge. Category: Bankruptcy, Foreclosure & Debt → Bankruptcy Nolo’s Plain English Law… … Law dictionary
claim — A right to payment (SA Bankruptcy.com) A right to payment, whether or not fixed, contingent, liquidated, disputed, or matured. (Bernstein s Dictionary of Bankruptcy Terminology) BAR DATE The date by which claims must be filed with the Bankruptcy… … Glossary of Bankruptcy
Claim Jumper — restaurant, Fresno, California Claim Jumper is a restaurant chain headquartered in Irvine, California with 45 locations in Arizona, California, Illinois, Colorado, Nevada, Washington, Wisconsin and Oregon. Founder Craig Nickoloff opened the first … Wikipedia
claim provable in bankruptcy — Any claim or liability that is provable in a proceeding under the Bankruptcy and insolvency Act. (Dictionary of Canadian Bankruptcy Terms) United Glossary of Bankruptcy Terms 2012 … Glossary of Bankruptcy
Bankruptcy discharge — Bankruptcy in the United States Bankruptcy in the United States Authority · History U.S. Trustee Court … Wikipedia