What kind of “claims” are there in bankruptcy? One of a series

12 Dec What kind of “claims” are there in bankruptcy? One of a series

People considering bankruptcy must tell their lawyer every claim that anyone has against them.  A claim is basically a right to payment.  Somebody who holds a claim is a “creditor”.

Claims can come in many varieties.

Claims may be:

  • reduced to judgment or not

A judgment is a court order to pay money immediately to the creditor – who as a result of the judgment is called a “judgment creditor”.  The debtor must also pay interest.  The judgment creditor has the right to use the courts to help collect the judgment. He can garnish wages, seize real estate or personal property, impound bank accounts and take many other remedies under state law.  A creditor still holds a claim against a debtor in bankruptcy even if a court has not yet declared the creditor entitled to a judgment

  • liquidated or unliquidated

A liquidated claim is for a specific amount of money.  A claim in a pending lawsuit may not yet be liquidated. The plaintiff may contend that a lot of money is owed not exactly how much.  That kind of claim is unliquidated.  You have to schedule an unliquidated claim in bankruptcy even if you don’t know exactly how much is due.

  • fixed or contingent

A fixed claim is definitely due.  A contingent claim may be due or not depending whether something else happens first.  A contingent claim is still a claim in bankruptcy even if the claim is not definitely due and may never be

  • matured or unmatured

A matured claim is due right now.  An unmatured claim isn’t due yet.  It might not be in default.  It is still a claim in bankruptcy and must be scheduled.

  • disputed or undisputed

A disputed claim is one which you deny owing.  You still have to schedule it on your bankruptcy case along with those claims you acknowledge are due.

  • legal or equitable

An equitable claim might arise because you did something you shouldn’t have or didn’t do something you should have. A court might be able to make you do what you should do or not do what you shouldn’t.  If the value of the equitable claim could be quantified in money, then it’s a claim to be scheduled in your bankruptcy.

  • secured or unsecured

A secured claim is backed by collateral.  An unsecured claim is not.

All claims must be listed in bankruptcy cases.  If you don’t, you could remain liable on the claim even if you get a discharge in bankruptcy.

For more information about “claims” click here.  Lakelaw represents people in bankruptcy in Illinois and Wisconsin.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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