| Modern bankruptcy legislation arose out of
the Great Depression, with passage of the Bankruptcy Acts
of 1933 and 1934. The Bankruptcy Reform Acts of 1978 and
1994 made it easier for both businesses and individuals
to file, and record numbers did. New rules for filing personal
bankruptcy became effective in 2005 with passage of the Bankruptcy Abuse
Prevention and Consumer Protection Act (BAPCPA). Under
Chapter 7 of the US Federal Bankruptcy Code, a trustee is
appointed to liquidate assets. The money received is used
to pay off creditors and investors, if the filer is a
corporation. Administrative and legal expenses are paid
first. The bankruptcy code determines who will be paid next.
Secured creditors - those with collateral, have priority, followed by unsecured creditors
and lastly stockholders.
A number of large, publicly traded companies
have filed recently filed for bankruptcy protection, including General
Motors, Chrysler, Washington Mutual (WaMu), Lehman Brothers, IndyMac,
Enron, Tyco and Adelphia. There were 1.6 million personal bankruptcies
in 2010, up sharply from previous years due to the poor economy.
As a result, federal bankruptcy
courts are now holding a substantial amount of unclaimed money
consisting of hundreds of millions of dollars in unpaid
distributions to creditors. Because these funds come under the purview of the
federal court system, they will not be included in any state unclaimed property database.
For assistance
tracing unclaimed bankruptcy funds go to:
Bankruptcy
Court Unclaimed Funds Search
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