Boedelschuld
Debt of the estate
An estate debt is a debt borne by the estate in bankruptcy that enjoys priority in the distribution of the proceeds.
A claim against the estate comprises claims arising after the declaration of bankruptcy or directly connected with the administration and realisation of the estate. This includes, without limitation, the costs of the bankruptcy, the trustee’s remuneration and liabilities incurred by the trustee in legal acts concluded on behalf of the estate.
Claims against the estate rank in priority to ordinary estate claims and are therefore satisfied first from the proceeds of the assets. This regime is set out in the Bankruptcy Act and ensures that the bankruptcy can be administered and concluded in an orderly manner.
In practice, the trustee determines which claims qualify as estate claims and settles them in priority to those of other creditors.
“The trustee first paid the estate debts from the sale proceeds before proceeding to distribute to the ordinary creditors.”
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