09 Dec What’s a “claim” in bankruptcy? – One of a continuing series
The point of bankruptcy is to get out of debt. You get out of debt by getting a “discharge” in bankruptcy.
What’s the point of getting a discharge? Well, if you get a discharge in bankruptcy, you are no longer liable to pay any creditor on account of a “dischargeable claim.”
Sounds like we are going around in circles, doesn’t it?
Well, the starting point is to figure out what a claim is. Once we know that, we can figure out whether it is “dischargeable”.
Simply stated, a “claim” is the right to payment. Here’s where it gets tricky. In order to be sure that you get the benefit of your discharge in bankruptcy, you have to be sure that you list all your debts. And it’s more tricky than that. You have to list every creditor who has a “claim”.
Claims don’t have be due right now. And you don’t even have to be sure whether you owe the claim at all. You don’t even have to know exactly how much you owe. But if somebody has the right to get paid from you, or maybe does, then that person has a claim.
Claims can be:
- reduced to judgment or not
- liquidated or unliquidated
- fixed or contingent
- matured or unmatured
- disputed or undisputed
- legal or equitable
- secured or unsecured
We’ll talk about the different types of claims which could be made in a bankruptcy case in our next report. In the meantime, remember this: when you see your bankruptcy attorney, if anyone could collect any money against you for anything, or even thinks they might, tell your lawyer to schedule it in your bankruptcy papers. You want to give yourself the maximum chance of getting the fresh start you want and deserve.
Lakelaw represents people and businesses in bankruptcy cases in Illinois and Wisconsin. For more about discharge, click here.
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