My question is in chapter 11 how come being a creditor, there are 6 sections for claim nature and all can be different?

Question

I am a creditor in a class action law suit. When I check the website there is a long page that has 5 different sections that says claim nature. The first is General Unsecured. The second says Priority. The third one says Secured. The fourth says 503(b)(9) Admin Priority. The fifth says Admin Priority. So what does this all mean? Did it start off as general unsecured and ended up. Admin Priority? It's all confusing on what the nature of my claim because this is on the same page though broken down into 6 sections. Any help is greatly appreciated!!

Martha Warriner Jarrett · Answer

A secured claim is one in which the creditor has a lien on as asset of the debtor, such as a mortgage or a car loan. A priority unsecured claim is generally for taxes or other administrative expenses. Most claims are general unsecured claims. While there are certain claims actions claims that might fall into a priority class, most are general unsecured. You haven't given enough information to determine whether your claim is anything other than general unsecured. Hope this helps.

James L. Arrasmith · Answer

In a Chapter 11 bankruptcy case, different types of claims are categorized based on their legal nature and priority. This categorization affects how claims are treated and the order in which they are paid. 
 
"General Unsecured" claims are typically debts that don't have collateral backing them and aren't entitled to priority treatment under the bankruptcy code. These are often the last to be paid and may only receive a portion of what is owed. 
 
"Priority" claims are those that the bankruptcy code gives special status, often due to public policy reasons. Examples include certain taxes and employee wages. These claims are paid before general unsecured claims. 
 
"Secured" claims are backed by collateral, such as a mortgage on property or a lien on a vehicle. These creditors have the right to seize the collateral if the debt isn't paid. 
 
"503(b)(9) Admin Priority" refers to claims for goods received by the debtor within 20 days before the bankruptcy filing. These are treated as administrative expenses and are given a higher priority. 
 
"Admin Priority" claims are expenses that arise during the bankruptcy proceedings, like attorney fees, which are necessary for administering the bankruptcy. 
 
Your claim might appear in different sections depending on its nature and how it's treated in the bankruptcy process. It's not unusual for a claim to have multiple aspects that fit into different categories. To fully understand the implications for your specific claim, it might be beneficial to consult with an attorney who can explain how these classifications apply to your situation and what they mean for the likelihood and extent of your recovery. Remember, bankruptcy proceedings can be complex, and professional guidance is key to navigating them effectively.

Q: My question is in chapter 11 how come being a creditor, there are 6 sections for claim nature and all can be different?