Definition - What does Claim mean?
A claim refers to the legal grounds that are asserted in a court of law. It is the reason or reasons why a plaintiff is suing a defendant. These are more generally known as legal claims. A claim can also mean to assert or demand a right, such as when a tenant claims a right of residence in a home due to having paid rent. Any fact that a person states over which they create a legal issue is considered a claim until proven as a fact in a court of law.
A claim can also refer to an application for financial recompense through an insurance company, to a pension, or to any business establishment that may pay out a financial sum in exchange for an existence of fact. This fact can be that a person was employed for over 40 years and earned a pension, therefore the pension must be paid. It could mean that someone feels another person owes them financially; the assertion is considered a claim no matter how it is delivered or in what context the claim appears.
In bankruptcy, a claim is a notice filed by a creditor against a person filing for bankruptcy stating the amount of debt that the debtor owes to the creditor.
Justipedia explains Claim
When a person files for bankruptcy, they are required to place a notice in their local newspaper calling on any creditor to file a claim with the court against the debtor. If the creditor does not file a proper claim in court, they will not be able to recoup any outstanding debt from the bankrupt individual. Claims are considered by the court and can be rejected or be the subject of amendments if the amount of the claim is deemed to be excessive or based mainly around interest. It is usual for claims to consist of principal amounts only, minus any compounded interest that could be owed on the amount.
Claims in a bankruptcy proceeding are paid and satisfied in a specific order. This order and preference of credits is based on the relevance of the claim to the client's daily life. The first claims that are paid are administrative ones, followed by secured creditors, and then unsecured creditors. There may not be enough money for all claims to be paid. This is why they have to be paid according to a certain order. In cases where assets are not even enough to be distributed among the claimant creditors, the court notifies the creditors that they will not be receiving any repayment from the debtor, and are prohibited from following up or collecting on the outstanding debt. The court effectively tells the claimant creditor that they have to forget the debt.
As noted above, there are several definitions for the term claim, but they all fall into one of two categories: a claim for money or an assertion of a fact.