Customer name security refers to the protection of assets held in a customer's name during legal proceedings, such as bankruptcy. It includes securities that are:
This term is primarily used in bankruptcy law and financial regulations. It is relevant in situations where a debtor files for bankruptcy, as it helps determine which assets are protected from creditors. Understanding customer name security is essential for individuals and businesses involved in bankruptcy proceedings, as it can affect the distribution of assets.
Here are a couple of examples of abatement:
Example 1: A customer holds stocks in their name that are not transferable by delivery. If the customer files for bankruptcy, these stocks are considered customer name securities and are protected from creditors.
Example 2: A business has bonds registered in its name. Upon filing for bankruptcy, these bonds qualify as customer name securities since they meet the criteria outlined above. (hypothetical example)
The primary legal reference for customer name security is found in the United States Bankruptcy Code, specifically 11 USCS § 741. This statute outlines the definitions and protections related to securities in bankruptcy cases.
| Term | Definition | Difference |
|---|---|---|
| Customer Name Security | Assets held in a customer's name, protected during bankruptcy. | Focuses specifically on securities and their protection in bankruptcy. |
| Secured Debt | Debt backed by collateral. | Secured debt involves loans, while customer name security pertains to specific assets held for customers. |
If you believe customer name security applies to your situation, consider the following steps:
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| Attribute | Details |
|---|---|
| Typical Fees | Varies based on legal representation and filing fees. |
| Jurisdiction | Federal bankruptcy court. |
| Possible Penalties | Loss of assets if not properly claimed as customer name securities. |
It refers to the protection of assets held in a customer's name during legal proceedings, particularly bankruptcy.