Administrative Convenience Exception Law and Legal Definition

Administrative convenience exception is a bankruptcy related term. It is a provision allowing a bankruptcy plan to have a separate classification for small, unsecured claims, to the extent that the separate classification will help in more efficient disposition of the estate. For example, by paying or eliminating small claims earlier than other claims. This exception relates to a bankruptcy convenience claim.

The requirements of an administarive convenience exception is articulated in 11 USCS § 1122 (b).

11 USCS § 1122(b) reads as follows:

A plan may designate a separate class of claims consisting only of every unsecured claim that is less than or reduced to an amount that the court approves as reasonable and necessary for administrative convenience.