Unclaimed Funds Arising from Bankruptcy Cases
Unclaimed Dividends/Funds
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An unclaimed dividend arises when a trustee mails a check to a creditor pursuant to the settlement of a bankruptcy case, but the check is returned because of a bad address or is never cashed for whatever reason.
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Ninety days after the final distribution of assets under chapters 7, 12 or 13, the trustee will stop payment on any non-negotiated checks and deposit the funds with the Court as unclaimed.
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The Court becomes the Custodian of the funds until the person entitled to them files an application/petition with the Court for payment.
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A court order is necessary before any money can be withdrawn. To apply for such an order, a claimant entitled to payment of the funds must petition the court for payment, provide notice of the request to the United States Attorney and other relevant parties and, after providing full proof of their right to the funds, an order providing for distribution of the funds will issue.