Claim in Bankruptcy Law & Legal Definition
A claim in bankruptcy is a written claim filed by creditors, to whom money is owed by a debtor who files for bankruptcy, in order to benefit from the distribution if money becomes available. 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. Claims are first paid out to administrative creditors, then to priority unsecured creditors according to their statutory priority, and finally to the non-priority unsecured creditors. 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.
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