external claim

Definition

The ability of a creditor to make a claim against a debtor's business assets should the individual business owner be unable to pay a debt. Limited liability companies and limited partnerships are protected from such claims if the debt is incurred by one of the partners outside of the entity. Additionally, some states only allow creditors to file a claim against the individual debtor and not the entity in which he/she may have an interest. Opposite of internal claim.

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