U.S. Bankruptcy Courts Hold Onto Owed Money from Very Old Bankruptcy Cases

by San Antonio Attorney

The United States bankruptcy courts are safe guarding money for those who don’t know it’s theirs.

An incredibly large sum of forgotten money, often from businesses and people who didn’t encash checks that were sent to them at the conclusion of bankruptcy cases.

Court authorities are using a tool for linking the excess money with its rightful owner.  They have set-up a user friendly online search, which was launched last year.  It is called Bankruptcy Unclaimed Funds Locator and it can be accessed on 39 court websites, to allow a user to search countless records of unclaimed money.

It is the same with state revenue departments where you can look up your name to find out if you have money from a past tax refund.

It is common for people to forget money that are owed to them after a bankruptcy case.  There are different reasons for this.  Perhaps the address of the creditor was incorrect or outdated because it took a long time before the case was finished.  Maybe the recipient passed away and his next of kin did not know about the claim.  Or possibly the holder just forgot to encash the check.

The bankruptcy courts are doing their best to get the money to the rightful owner.  But there are thousands of claims that need to be distributed by every bankruptcy court.  They hold onto the money for a long period before giving it to the U.S. Treasury.

The actual amount owed to homeless people is not clear.  As of June 30, the U.S. Treasury is safe-keeping $280.8 million in unclaimed money.

Experts in the bankruptcy industry know that the worth of leftover funds can diminish after many years of being stagnant.  Rather than letting the courts put away the money, they should be directed to charitable organizations.

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