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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 111549
Experience:  Attorney At Law handling education matters.
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Two questions. Can an unsecured creditor on a Chapter 11 withdraw

Customer Question

Two questions. Can an unsecured creditor on a Chapter 11 withdraw their claim? What are the mechanics? Can a non-profit church corporation can unpaid housing allowance payable to a minister/pastor on their books? How long? Can they pay it in years when funds are available?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only. Yes, an unsecured creditor can withdraw their claim at any time from the bankruptcy. This is done by filing a withdrawal and release of claim with the clerk of the bankruptcy court in the case. It is a short motion to the court stating that they are a creditor in the case and that they are withdrawing and releasing their claim in the bankruptcy case. A non-profit church can pay for their employees, including minister for living expenses and they can pay it for as long as he performs services for the church. They can enter into a contract with the pastor and agree to pay for his living expenses under any conditions they want to agree upon.
Customer: replied 1 year ago.
My question was not understood. The pastor was not paid what was agreed in the past, and a balance accrued. There was no prior agreement to pay arrearage. Can this money be paid later when money is available.
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply and for clarifying your question. No, the non-profit cannot just choose to pay when money is available. They have to pay when agreed upon with the pastor and if the pastor agrees to wait for payment then they can enter into such an agreement to do so. If the pastor does not agree and the pastor was to be paid as part of his agreement with the church, he has a right to sue the church for the money due as a breach of contract.

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