An administrative expense claim is a type of debt that a debtor incurs after filing for bankruptcy, with the approval of the court. This claim arises after the official bankruptcy filing date and is associated with costs necessary to maintain the bankruptcy estate. Examples of such costs include wages, salaries, court fees, legal fees, accounting fees, and expenses related to trustees.
This term is primarily used in the context of bankruptcy law, especially in Chapter 11 cases where a debtor remains in possession of their assets. Administrative expense claims are crucial for ensuring that the costs incurred during the bankruptcy process are recognized and paid. Users can manage these claims through legal forms and templates provided by services like US Legal Forms, which are drafted by experienced attorneys.
Here are a couple of examples of abatement:
Example 1: A company files for Chapter 11 bankruptcy and hires an attorney to help navigate the process. The attorney's fees incurred after the filing date can be submitted as an administrative expense claim.
Example 2: A business incurs costs for utilities and rent during the bankruptcy proceedings to keep its operations running. These costs can also be classified as administrative expense claims. (hypothetical example)
One of the key statutes governing administrative expense claims is 11 USCS § 503, which allows entities to file requests for payment of these claims. This statute outlines the process and conditions under which these claims can be made.
| Term | Definition | Difference |
|---|---|---|
| Administrative Expense Claim | A claim for costs incurred after bankruptcy filing. | Specific to expenses necessary for the bankruptcy estate. |
| Unsecured Claim | A claim not backed by collateral. | Does not require court approval and is not prioritized in bankruptcy. |
| Secured Claim | A claim backed by collateral. | Has priority over administrative claims in bankruptcy proceedings. |
If you believe you have incurred administrative expenses during bankruptcy, it is essential to file a request for payment with the court. You can use templates from US Legal Forms to assist in this process. If your situation is complex or unclear, consider seeking professional legal advice to ensure your claims are properly submitted.
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