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Does the Bankruptcy Court Owe You Money?

October 20, 2015

In a strange case of irony, the Wall Street Journal recently reported that the federal bankruptcy courts around the country are sitting on money that belongs to others. The Wall Street Journal reports that

Each bankruptcy court holds onto unclaimed money for several years before turning it over to the U.S. Treasury. The exact amount of homeless money is unclear. For all of the U.S. Judiciary, the U.S. Treasury held $280.8 million in unclaimed money as of June 30.

Apparently, the amount of money in court accounts is large enough to compel some action. Bankruptcy courts around the country are adopting a new financial program initially developed by the U.S. Bankruptcy Court for the Eastern District of Virginia. The Judiciary Financial System is a court financial system which includes an Unclaimed Funds Locator service that a court can make available to the general public for unclaimed funds searches. Through the Unclaimed Funds Locator, creditors can search for leftover money. Currently, 39 of the country’s 94 court websites permit access to the Unclaimed Funds Locator.

Usually, “leftover” funds result at the end of the case when a creditor doesn’t cash the bankruptcy court’s check, but can also happen when the court loses contact with the creditor, or the creditor dies and heirs are not aware of the funds. A simple search of the Unclaimed Funds Locator for the Northern District of Texas turned up 24 creditors owed more than $10,000 each, and three owed more than $60,000. Many of these creditors are owed money from cases filed more than 20 years ago.

The procedures for collecting these leftover funds varies from court to court. Most bankruptcy courts have local rules for establishing the procedures and practices, and many include an application to the bankruptcy court and service to the US Attorney. For an example of this, see the Application for Payment of Unclaimed Funds for the bankruptcy court for the Northern District of Texas.

If you are considering filing for bankruptcy please call the experienced attorneys at Fears Nachawati Law Firm to set up a free consultation. Call 1.866.705.7584 or send an email to


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