claim in bankruptcy


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claim in bankruptcy

n. the written claim filed by persons or businesses owed money (creditors) by a party who files for bankruptcy (debtor) to benefit from the distribution if money becomes available. The known creditors receive written notice of the bankruptcy and will receive a creditor's claim form. They may also receive notice that the bankrupt party has no assets to distribute and that they should not file a claim until further notice (this is bad news for the creditor.) (See: bankruptcy, bankruptcy proceedings)

References in periodicals archive ?
(91) The state law-minority contextualizes recharacterization as a part of the process used in determining whether the claim is an "allowed" claim in bankruptcy under [section] 502.
Illinois Department of Revenue, (188) the Court addressed the question of "who bears the burden of proof on a tax claim in bankruptcy court when the substantive law creating the tax obligation puts the burden on the taxpayer." (189) The Petitioner argued that state law was not controlling because Erie does not apply in bankruptcy, (190) and because the allowance of a claim in bankruptcy is "a question of federal law to which federal burdens of persuasion should apply." (191) In addition, the Petitioner argued that, in contrast to Butner, "in the present case, fundamental federal interests and the specific objectives and goals of the bankruptcy process are frustrated unless all creditors ...
(2) As arbitration clauses become more prevalent in contracts, bankruptcy courts will often have to determine if to submit a claim in bankruptcy court to arbitration, as arbitration clauses are generally broad, encompassing "all disputes arising out of or in connection with" that contract.
(30) "Federal courts have consistently ruled that filing a proof of claim in bankruptcy court (even one that is somehow invalid) cannot constitute the sort of abusive debt collection practice proscribed by the FDCPA, and that such a filing, therefore, cannot serve as the basis for an FDCPA action." (31) The rationale being that:
Two circuit courts of appeal have held that, notwithstanding the well established doctrine of independence regarding letters of credit, the amount a landlord recovers on a third party's letter of credit reduces the total amount recoverable by the landlord on its claim in bankruptcy, (7) a claim which has already been reduced by the damages cap of [section] 502(b)(6).
Stonebridge appears to leave open the possibility that a landlord who files a proof of claim in bankruptcy may be required to disgorge amounts received on a letter of credit if those amounts exceed the statutory damages cap.
How Can Landlord Maximize Allowed Claim in Bankruptcy Case?
(48) The 11th Circuit, however, rejected this argument, finding that the defendants, who were not parties to the bankruptcy proceedings, did not have a full and fair opportunity to litigate the judicial estoppel claim in bankruptcy court.
First, "[t]he preferred creditor's claim in bankruptcy can be disallowed as a result of the preference, and the amounts paid to that creditor can be recovered by the trustee." (54) Second, the preference claim arises under the federal Bankruptcy Code.
A brief examination of legislative history will be helpful to understanding the scope of a claim in bankruptcy. Under the Bankruptcy Act of 1898, creditors were not allowed to participate in a bankruptcy for purposes of distribution unless their claims were "allowed." If a claim was not allowed, then it was not discharged.
Such a right is not a claim in bankruptcy and, as such, is not subject to discharge in bankruptcy.