In bankruptcy court, a judge has to decide the best way for a debtor to realistically satisfy all debt claims placed by creditors. The stipulated claims that result become a legally binding resolution that a debtor must submit to, although stipulated claims often amount to less than the total debt owed. Stipulated claims can specify many different requirements, other than cash payments, that both a debtor and creditor must adhere to.
When a debtor enters into bankruptcy, the bankruptcy court requires publication of a notice to creditors for filing debt claims. Debt claims in bankruptcy are usually stipulated because the debtor doesn't possess the assets or resources to completely satisfy all creditor claims for debts. The bankruptcy court will stipulate claims to amend the amount that a debtor must pay to satisfy the debt, typically lowering the debt to an amount that the debtor can reliably pay.
A creditor attempting to recoup a debt from a debtor in bankruptcy must file a claim with the bankruptcy court handling the case. Contact the bankruptcy court in charge of the case to obtain a proof of claim form. Documentation proving the debt as well as a security interest used as collateral is attached to most proof of claim forms, depending on court rules. The published notice to creditors includes a deadline for filing creditor claims, although a creditor may apply for a time extension before the deadline occurs if they must file a late claim due to excusable neglect, which can include inadvertent mistakes in documentation or other uncontrollable circumstances.
Stipulated claim agreements typically spell out all of the requirements expected of both the debtor and the creditor while a claim is being legally satisfied. Aside from the amount of money owed by the debtor, the court will likely stipulate the type of escrow account funds must be held in, the amount of time a debtor has to deposit funds and any other charges which are the responsibility of the debtor. Once the debtor fulfills these requirements, the court-ordered stipulation will usually state that a creditor relinquishes the debt claim.
Debtors may be able to work out similar agreements with a creditor prior to entering bankruptcy. These workout agreements are freely entered into between a debtor and creditor without the involvement of a bankruptcy court. However, if a debtor uses a workout agreement to pay a higher percentage to some creditors over others, a court may use this as a reason to refuse nullification of other debts if the debtor does pursue bankruptcy. Stipulated claims for a specific bankruptcy case can be found by looking up the case number in the bankruptcy court's records.