Claims Trading Resources | Xclaim
Claims Trading Basics
Interested in learning more about trading bankruptcy claims? You’ve come to the right place.
United States Trustee: Watchdog of the Court
The United States Trustee (or U.S. Trustee) is appointed by the Court in every Chapter 11 case to represent the interests of the U.S. bankruptcy system. The U.S. Trustee does not represent the Debtor’s interests or the interests of specific creditors. Rather, the U.S. Trustee is focused on raising issues that may affect the integrity of the bankruptcy process and, if unaddressed, could result in harmful precedent.
Understanding Bankruptcy Claim Status and Its Effects On Creditor Payout
To initiate the process of filing for Chapter 11 bankruptcy, a debtor must file a petition with the court and fill out various forms that outline their financial position, including how many assets they have, how much debt they owe, and the names of the creditors to which they owe these debts. The document in which the debtor lists its obligations is the Schedule of Liabilities.
101: What is Bankruptcy Claims Trading?
What in the world is claims trading? And how does it work? In this article, we provide an in-depth overview on the background of Chapter 11 bankruptcy, the complexities that affect claim recovery and how it yields opportunities for creditors through bankruptcy claims trading.
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FAQs
What is the risk of keeping my stub claim?
You’ll remain eligible for future distributions—but the process may take several years, with payouts spaced out and tied to litigation outcomes, asset recovery, and the efficiency and effectiveness of trust administration. Holding exposes you to risks such as administrative cost overruns that eat into recoveries and other adverse events (e.g., hacking and security breaches) that may erode estate value.
Why would I consider selling my stub claim?
Although you may have just received a partial distribution, the additional distributions could take more time. Selling your stub claim allows you to cash out on the present value of those future expected distributions now. Depending on your financial objectives, capturing that value through a sale could help you free up capital today for other investments and needs. Selling also eliminates the risks associated with collecting distributions over a multi-year period.
What are stub claims?
Stub claims refer to claims that have already received at least one distribution but expect to receive additional distributions in the future.
Will a Buyer definitely purchase my claim?
While we focus on cases with existing buyer interest, we cannot guarantee that you will receive an offer or that a buyer will agree to purchase your claim. Interest in claims is highly dependent on individual claim attributes.
Is Xclaim a buyer or broker of claims?
Xclaim operates the Xclaim Marketplace and related services but does not buy claims for its own account. Xclaim acts as a broker for larger, complex claims on a case-by-case basis. Independent affiliates of Xclaim may purchase claims or identify claims for purchase as a service on behalf of registered buyers.