What is an allowance of claim?

An allowance of claim is a type of recognition given to creditors in New York by a court of law. This allowance is an acknowledgement that the creditor is owed money, and the amount of money they are owed is recognized by the court. In New York, creditors have the right to take action to collect on their claims. This can involve filing a lawsuit in civil court and obtaining a judgment. Once the judgment is obtained, the court recognizes the claim and issues what is known as an allowance of claim. This allowance can then be presented to the debtor, or person who owes the money, as proof that the creditor is legally owed the amount specified in the judgment. If a creditor chooses to pursue action to collect their debt, they must file an appropriate motion to the court in order to receive an allowance of claim. The court will then review the motion and render a decision about whether or not to grant the allowance. If the allowance is granted, the creditor will have legal proof that the amount claimed is due and collectable. An allowance of claim is an important tool for creditors in New York, as it provides them with legal recognition of the debt and can often help them collect on what they are owed.

Related FAQs

What is the meaning of “executory contract”?
What are the appeals rights of creditors?
How can creditors collect on bad debts?
What is the difference between state and federal creditors’ rights law?
What is a discharge in bankruptcy?
What is a post-judgment discovery?
What is equitable subordination?
What is a non-dischargeable debt?
What is a “bankruptcy trustee”?
What is a real fraudulent transfer?

What is an allowance of claim?

Related FAQs

Related Blog Posts