Legal Question in Bankruptcy in Texas

Convenience Claim

We have an unsecured claim for aprox $12,000 and have been asked to accept or reject their plan in Chapter 11.

The ballot also includes an election to reduce our unsecured claim to $1000 and be treated as a convenience claim.

What exactly is a convenience claim and does it guarantee payment if you elect your claim to be treated as such?


Asked on 4/22/03, 12:58 pm

2 Answers from Attorneys
Michael Dover Michael A. Dover, PC

Re: Convenience Claim

A convenience claim is a small claim that is reduced to a nominal sum and usually paid in full upon confirmation of the chapter 11 plan. The reason for convenience claims is that it is frequently more efficient for the debtor to pay small claims than to analyze and determine the validity of the claims.

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Answered on 4/22/03, 2:35 pm
Lawrence Maun Lawrence J. Maun, P.C.

Re: Convenience Claim

You should have received a copy of the Disclsure Statment and Plan that defines the claim. You could object to the treatment but you may be worse off by being put in a larger class of usecured creditors who are getting less. Also, the debtor may be "cramming down" another class of creditors besides you and needs your vote to do so. That would give you some negotiation power. Complex area where you can easily get lost if you are not knowlegeable. Larry Maun 713.266.2560

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Answered on 4/22/03, 2:57 pm


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