Every year, millions of dollars remain unclaimed in the United States. This money is held by various branches of federal and state governments, including federal courts. Unclaimed bankruptcy funds are funds that a person is entitled to following a bankruptcy case, but they have failed to claim ownership of the money. Sometimes, the recipient of the funds may not even be aware that they have unclaimed money.
Unclaimed bankruptcy money is far more common than you might think, and depending on your situation, you may have funds waiting for you to claim. Learn about how unclaimed bankruptcy funds come to exist and how you can locate and claim this lost money today!
Unclaimed bankruptcy money is money owed to creditors after someone files for chapter 7 or chapter 13 bankruptcy. When an individual files for bankruptcy, their assets are liquefied and distributed to their creditors (the ones that the individual owed money to).
If a person who files for bankruptcy owed you money, you might be entitled to bankruptcy funds, even if you were unaware that the individual had filed for bankruptcy.
Once a case of bankruptcy has been concluded, the court determines the specific amount of money rewarded to each creditor or recipient. In the case of a chapter 13 bankruptcy, negotiations may also be required to allow the filer to make a repayment plan.
Generally, the federal court will release these funds to the appropriate recipients. However, in some cases, the court or appointed trustee may be unable to locate you.
You may have unclaimed bankruptcy funds for the following reasons:
- The federal court has incorrect information about you, such as an incorrect address or an outdated name (in the event that your name has changed).
- You did not receive or cash a check that was mailed to you following the conclusion of the case.
- The intended recipient for the unclaimed bankruptcy funds has died, and you are the person designated to handle their final affairs and/or inherit these funds.
When bankruptcy funds go unclaimed, the court may turn these funds over to the U.S. Treasury Department until their rightful owner comes forward to claim them.
Fortunately, claiming unclaimed bankruptcy money is a simple process that you can complete once you have determined that you have unclaimed funds owed to you.