Briefly Explain the Three Classes of Creditors Specified in the Bankruptcy

question 39

Essay

Briefly explain the three classes of creditors specified in the Bankruptcy Code.

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Definitions:

Federal

Federal refers to the national level of government, and the system of government that unites states or provinces within a country under a central authority.

State Court

A court that is established by the laws of a state within the United States, having jurisdiction over matters specific to that state.

Diversity of Citizenship

A basis for federal court jurisdiction when parties in a lawsuit are citizens of different states or a foreign country, allowing for disputes to be heard in federal court.

Citizens

Members of a state or nation who are legally recognized and entitled to its protection and to political rights.