11 U.S.C. § 502 — Allowance of claims or interests

(a) A claim or interest is automatically allowed once someone files proof of it, unless a party with a stake in the case — including a creditor of a general partner in a Chapter 7 partnership case — objects. (b) If someone does object, the court must decide, after notice and a hearing, how much the claim is worth in U.S. dollars as of the date the bankruptcy petition was filed, and must allow the claim at that amount, unless one of these applies: (1) the claim can't legally be enforced against the debtor or the debtor's property, for a reason other than that it's contingent or not yet due; (2) the claim is for interest that hasn't come due yet; (3) it's a tax claim on estate property worth more than the property itself; (4) it's for an insider's or the debtor's attorney's services, and asks for more than those services were reasonably worth; (5) it's an unmatured debt that would be excused from discharge under section 523(a)(5); (6) it's a landlord's claim for damages from ending a real-estate lease early, and it exceeds a cap — work out the cap by starting with the rent due under the lease (not accelerated) for one year, or 15% of the remaining lease term (whichever is greater, but never more than three years), counted from whichever came first: the petition-filing date or the date the landlord took back the property (or the tenant gave it up); then add any unpaid rent already owed as of that earlier date — anything above that total is disallowed; (7) it's an employee's claim for damages from an employment contract ending early, and it exceeds a similar cap: one year of contract pay (not accelerated) from the earlier of the petition date or the date employment ended, plus unpaid compensation already owed as of that earlier date; (8) the claim is for a reduced tax credit caused by late payment of employment taxes; or (9) the proof of claim wasn't filed on time — except that (A) a government's claim is timely if filed within 180 days after the order for relief, or later as bankruptcy rules allow, and (B) in a Chapter 13 case, a government's tax claim tied to a return filed under section 1308 is timely if filed within 60 days after that return was filed. (c) The court must estimate the value of: (1) a contingent or unliquidated claim, if fixing its exact amount would unreasonably delay the case; or (2) a right to payment arising from an equitable remedy for breach of performance. (d) The court must disallow a claim by anyone who owes property back to the estate under sections 542, 543, 550, or 553, or who received a transfer that could be undone under sections 522(f), 522(h), 544, 545, 547, 548, 549, or 724(a) — unless they've already paid back or returned what they owe. (e)(1) The court must disallow a claim for reimbursement or contribution from someone jointly liable with the debtor, or who secured a creditor's claim, if: (A) the creditor's own claim is disallowed; (B) the reimbursement claim is still contingent when it's being decided; or (C) that entity instead claims subrogation rights under section 509. (2) If such a reimbursement claim becomes fixed after the case starts, it's decided the same way as if it had existed before the petition was filed. (f) In an involuntary bankruptcy case, a claim from the debtor's ordinary business dealings that arises after the case starts but before a trustee is appointed or an order for relief is entered is judged as of the date it arose, using the same allow/disallow rules as if it existed before the petition. (g)(1) A claim from rejecting an unassumed contract or lease — under section 365, or under a Chapter 9, 11, 12, or 13 plan — is treated as if it arose before the petition was filed. (2) The same treatment applies to damages calculated under section 562. (h) A claim from recovering property under sections 522, 550, or 553 is likewise treated as if it arose before the petition. (i) A claim for a tax with priority under section 507(a)(8) that doesn't arise until after the case starts is also treated as if it arose before the petition. (j) An allowed or disallowed claim can be reconsidered for good cause, and reallowed or redisallowed based on the fairness of the case. Reconsidering a claim doesn't undo payments already properly made to other claim holders on their own allowed claims. But if the reconsidered claim is allowed and belongs to the same class as those other claims, its holder doesn't get more payments until they catch up proportionally with what the others already received. None of this limits the trustee's right to recover any overpayment made to a creditor. (k)(1) The court, if the debtor asks and after a hearing, may cut a claim based entirely on unsecured consumer debt by up to 20%, if: (A) the creditor unreasonably refused a reasonable repayment plan the debtor proposed through an approved nonprofit credit-counseling agency; (B) the debtor's offer was made at least 60 days before filing, and offered to pay at least 60% of the debt over the loan's term or a reasonable extension; and (C) none of the debt under that proposed plan would have survived bankruptcy anyway. (2) The debtor must prove, with clear and convincing evidence, that the creditor unreasonably refused the proposal, and that it was made before that 60-day deadline.