FAQs
Bankruptcy 101
Here are some steps that we suggest to learn about your specific bankruptcy case and claim recovery:
Review Court Documents: These documents are typically available through the bankruptcy court's website or office. Look for your claim's status, the debtor's financial disclosures, and any proposed reorganization plans.
Attend Creditor Meetings: These meetings provide an opportunity for creditors to ask questions about the bankruptcy case and the debtor's finances.
Monitor the Case: Stay informed about the progress of the bankruptcy case by regularly checking the court's docket or case updates. This will allow you to track any developments that may impact your claim.
Review the Reorganization Plan: If the bankruptcy case is under Chapter 11, carefully review the proposed reorganization plan. The plan outlines how creditors will be treated and how much they are expected to receive. This can give you insights into your potential recovery.
Consider Claim Trading: If you need liquidity or want to exit the bankruptcy process, you can explore the option of selling your claim to another party through the bankruptcy claims market. This can provide immediate cash, even if it's at a discount.
Seek Legal Advice: If you are unsure about the legal aspects of your situation, it's advisable to consult with an attorney experienced in bankruptcy law. An attorney can provide guidance on your rights, options, and potential recovery.
Your privacy and the protection of your personal information is of utmost importance to us. We will only upload redacted copies of your documentation to your listing. Furthermore, all of our registered buyers are subject to a confidentiality clause prohibiting them from disclosing any seller's private information acquired at the time of a trade.
The closing process can be broken down into the following steps:
1. Buyer has two business days to communicate any additional diligence requests
2. Seller must provide all of the necessary documentation in under seven business days
3. Once the buyer has reviewed the seller’s diligence packet, Xclaim will send a Trade Agreement via DocuSign for completion
4. Buyer will be asked to initiate payment upon contract execution
5. Seller to confirm receipt of funds 6. Xclaim files the transfer of claim with the court
Xclaim is lead by it's Founder and CEO, Matt Sedigh. Xclaim has a handful investors including First Round Capital, Freestyle Capital, venture capitalist Josh Jones and many more.
Selling on Xclaim
When you transact through the Xclaim Marketplace, Xclaim takes the hassle out of trading. We handle all required filings so you can quickly move on with your business. As soon as a trade closes, Xclaim submits all necessary documentation to the Court.
We independently verify each buyer during the registration process and before they are permitted to purchase claims using the Xclaim Marketplace. Using the latest technologies, we ensure a safe environment that protects your data and payment information.
Buyers pay us a small fee when they purchase a claim on the Xclaim Marketplace.
The level of interest in your claim may vary based on the attributes of your claim and as the status and timeline of the bankruptcy case. Uploading accurate and complete supporting documents can help expedite Xclaim's ability to find you a buyer faster.
Xclaim works with more registered claim buyers than any other broker or marketplace to find you the best price in the market for your claim at any given time. Market pricing will vary based on the attributes and size of your claim.
Simply reach out to Xclaim Trade support and we'll help onboard other authorized users from your organization.
Xclaim operates the Xclaim Marketplace and related services but does not buy claims for its own account. Xclaim acts as a broker for larger, complex claims on a case by case basis. Independent affiliates of Xclaim may purchase claims or identify claims for purchase as a service on behalf of registered buyers.
While we focus on cases with existing buyer interest, we cannot guarantee that you will receive an offer or that a buyer will agree to purchase your claim. Interest in claims is highly dependent on individual claim attributes.
We firmly believe that every claim holder should be entitled to recover the highest possible amount on their claim. That is why we charge zero fees to claim holders to register, list, sell, or transfer claims or to access resources on the Xclaim Marketplace.
Evaluating the worth of a bankruptcy claim is a complex task, influenced by various factors, including the nature of the claim, the financial situation of the debtor, and the specific circumstances of the bankruptcy case. Sometimes, the bankrupt company may provide information about the expected payouts to claim holders. Additional methods to assess your claim's value include examining the company's reorganization plan, attending creditor meetings, staying informed about the case's progress, and seeking advice from legal and financial professionals. Notably, Xclaim, which operates the largest open marketplace for claim trading, regularly updates market pricing information for ongoing cases.
Nothing. Xclaim collects a fee from the buyer of your claim. As a seller there is no cost to our service. We firmly believe that every claim holder should be entitled to recover the highest possible amount on their claim. That is why we charge zero fees to claim holders to register, list, sell, or transfer claims or to access resources on the Xclaim Marketplace.
Selling a bankruptcy claim can offer several advantages, including immediate liquidity for pressing financial needs, risk mitigation by transferring uncertainty to the buyer, reducing administrative burdens associated with bankruptcy participation, and avoid potential legal costs and recovery delays associated with the bankruptcy process. The decision to sell should be based on individual circumstances and financial goals.
While buyers can vary, most are experienced individual or institutional investors who have a willingness to take high-risk long-term investments. We every buyer in our network.
When you sell a bankruptcy claim, there are several options for receiving payment, depending on the terms of the sale and the agreement between you and the buyer. Some common payment options include lump sum payments, installment payments, deferred payments, escrow or trustee services, or contingent payments. Recently we have seen sellers get paid in crypto.
No it does not. While we have the largest nextwork of vetted bankruptcy claim buyers competing on the market, we firmly believe that every claim holder is entitled to pursue the higest recovery possible for their claim, even if that is not with Xclaim. In some incidences, exclusivity can work in favor of the seller.
The market is where sellers can list claims with a fixed price (with the option for buyers to counter offer) and provides flexibility in terms of timing - think of it like Amazon but buyers can send offers under the list price. Auctions involve set time periods where bids can be submitted with the final price being determined by the highest bidder (pending a reserve was met) - similar to an Ebay auction.
Buying on Xclaim
Bids made by buyers are non-binding offers subject to diligence and definitive documentation. All bids on the Marketplace are on Xclaim Standard Terms unless otherwise specified. After a claim holder accepts a bid on the Marketplace, Xclaim will reach out to the claim holder to confirm their willingness to proceed with the bid on the proposed terms. If the claim holder confirms their willingness to proceed, Xclaim will confirm the trade and at that point, the claim holder is obligated to act in good faith to satisfy the buyer's remaining diligence requests and to complete the transaction on the proposed terms.
Xclaim will immediately notify you of any response from a creditor. All trading activity can also be viewed in your private activity logs.
Easy. Request access to the Marketplace and we will schedule a conversation to get you started in no time.
We are able to fully settle a claim transfer in less than a minute from the time both parties have signed the transfer agreement. Through integrations with the bankruptcy court and claims agents we handle all of the administrative work of noticing the court and getting the claims register updated.
Although the Xclaim Marketplace does not include secured claims, we have over a million priority, administrative, 503b9 and general unsecured claims available for trading.
About Xclaim
Xclaim operates the world’s largest online trading platform for the $1 trillion bankruptcy claims market, aggregating all U.S. bankruptcy claims in a centralized, searchable database with intelligent sourcing and diligence and end-to-end transactability. With over 1.8M claims listed and a buyer network of investment funds managing more than $90B of capital, investors can efficiently bid on claims at scale and creditors can discover market pricing through buyer competition and transparency.
The bankruptcy claims market has a long history dating back to ancient times, evolving through various federal bankruptcy laws in the United States, including the lasting federal bankruptcy system established by the Bankruptcy Act of 1898 and the modern rules introduced by the Bankruptcy Reform Act of 1978. In recent decades, the market has grown with increased investor participation, but it previously relied on paper-based processes. Today, Xclaim, as the largest online platform for trading claims, has digitized and streamlined the process, making it more efficient and transparent for both creditors and investors.
Bankruptcy claims trading is a flexible investment strategy. One of the primary reasons individuals and institutions invest in bankruptcy claims is to make money by buying claims at lower prices, thinking they'll get more money back when the bankrupt person's assets are sold or the case ends. Some do it because they're predict that the assets or the bankrupt organization's financial situation will get better in the future, leading to a bigger payout. It's also a way to add variety to their investments, including distressed assets in their portfolio along with other investments.
A bankruptcy claim sale involves a structured process that allows creditors or claim holders to sell their claims to interested buyers.
Typical steps include
1. Obtaining necessary documentation about your claim.
2. Listing the claim on a marketplace like Xclaim.
3. Evaluate offers and make a deal.
4. When you transact through the Xclaim Marketplace, Xclaim takes the hassle out of trading and handles all required filings so you can quickly move on with your business. As soon as a trade closes, Xclaim submits all necessary documentation to the court and sellers are generally paid within two days.
The market is where sellers can list claims with a fixed price (with the option for buyers to counter offer) and provides flexibility in terms of timing - think of it like Amazon but buyers can send offers. Auctions involve set time periods during which bids can be submitted and the final price being determined by the highest bidder (pending a reserve was met) - similar to an Ebay auction.
The size of the bankruptcy claims market can vary significantly from year to year and is influenced by economic conditions, business cycles, and other factors. It can be challenging to provide precise figures but is generally listed at over $1 trillion dollars.
Xclaim’s vision has always been the same - to revolutionize claims trading by taking an archaic industry into the modern era. We do this by offering and offer sellers and buyers a streamlined, secure and transparent platform for trading bankruptcy claims and other types of distressed assets.
Xclaim supports both claim sellers and buyers with the most streamlined, secure and transparent platform for trading bankruptcy claims. Buyers can efficiently bid on claims at scale while creditors can recover market pricing through competition and the largest network of bankruptcy claim investors.
Xclaim collaborates with creditors, debtors, and investors globally, but at present, it exclusively manages bankruptcy claims arising from Chapter 11 bankruptcy cases within the United States bankruptcy courts.
