§1111 Claims and interests

Summary

If a debt or ownership interest appears on the debtor’s official schedules filed under section 521(a)(1) or 1106(a)(2), it is treated as if a claim or interest was filed under section 501, unless the schedule shows it is disputed, contingent, or unliquidated. A claim backed by a lien on estate property is decided under section 502 the same way as if the creditor could go after the debtor personally, even if the creditor actually cannot, unless one of two things happens. The class of similar claims can vote to use paragraph (2) instead, but the vote must be at least two-thirds in dollar amount and more than half in number of the allowed claims in that class. Also, the rule does not apply if the creditor has no recourse and the property will be sold under section 363 or under the plan. A class cannot choose paragraph (2) if the creditor’s interest in the property is of inconsequential value or if the creditor has recourse and the property will be sold under section 363 or the plan. If the class makes the election, then, despite section 506(a), the claim is treated as secured up to the allowed amount.