Can I Net Amounts Owed to the Debtor Against Amounts Owed to Me?
Creditor's Rights Toolkit
There are two similar but distinct mechanisms through which a creditor might net amounts owed to the debtor against amounts owed by the debtor — setoff and recoupment. Understanding the distinction between them, and how bankruptcy affects those rights, is crucial to maximizing a creditor's recovery and minimizing exposure.
This article discusses the key issues of setoff and recoupment in a Chapter 11 bankruptcy. To access this article and read other insights from our Creditor's Rights Toolkit, please click here.