Distribution of Assets

[krystyne20]

Just a few questions....

1) How does the court determine which creditors will be paid?

2) Does a creditor have to file a claim in order to receive any of the funds? If so, would the debtor receive a copy of the claim?

3) If there are funds remaining, does the debtor get it back?

[Help!]

Going through this right now myself, learning as I go... Don't know the answer to (1) and (3), but I do know the answer to (2):

Yes. You won't receive copies of the claims but you can see them on PACER if you click on the Claims Register link.

[lrprn]

Since you posted in the Ch 7 area, I assume you intend to file Ch 7 - correct?

In Ch 7...

1) How does the court determine which creditors will be paid?

The only time creditors are paid in Ch 7 by the trustee is if your Ch 7 is an asset case. (An asset Ch 7 is one where all secured assets can't be protected by your state's bk exemptions.) Is your case going to be a Ch 7 asset case?

2) Does a creditor have to file a claim in order to receive any of the funds? If so, would the debtor receive a copy of the claim?

In Ch 7 unsecured creditors don't file claims unless (again) your case is an asset case. If your case is an asset Ch 7 case, then unsecured creditors can file within 90 days of the date your first 341 meeting is set (the govt gets 120 days) to get a % of whatever the trustee can collect by selling your assets (or asking you to pay him/her fair market price minus whatever amount is protected by your exemptions). You won't receive notice in the mail about every creditor who filed (unless you file without a lawyer - not a good idea at all if you are a Ch 7 asset case), but you will be able to see on PACER who filed claims for a portion of whatever the trustee can collect.

[3) If there are funds remaining, does the debtor get it back?

In Ch 7, if the trustee sells an asset because it could not be protected by your state exemptions, you get back whatever portion of the sale price that is protected by your state's bk exemptions.

If your case is *not* a Ch 7 asset case, then these answers are wrong for your situation. And if you are filing Ch 13, then these answers aren't right for that either.