11 USC § 508 - Effect of distribution other than under this title

---
identifier: "/us/usc/t11/s508"
source: "usc"
legal_status: "official_legal_evidence"
title: "11 USC § 508 - Effect of distribution other than under this title"
title_number: 11
title_name: "BANKRUPTCY"
section_number: "508"
section_name: "Effect of distribution other than under this title"
chapter_number: 5
chapter_name: "CREDITORS, THE DEBTOR, AND THE ESTATE"
subchapter_number: "I"
subchapter_name: "CREDITORS AND CLAIMS"
positive_law: true
currency: "119-84"
last_updated: "2026-04-17"
format_version: "1.1.0"
generator: "[email protected]"
source_credit: "(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2585; Pub. L. 109–8, title VIII, § 802(d)(7), Apr. 20, 2005, 119 Stat. 146.)"
---


# § 508. Effect of distribution other than under this title

If a creditor of a partnership debtor receives, from a general partner that is not a debtor in a case under chapter 7 of this title, payment of, or a transfer of property on account of, a claim that is allowed under this title and that is not secured by a lien on property of such partner, such creditor may not receive any payment under this title on account of such claim until each of the other holders of claims on account of which such holders are entitled to share equally with such creditor under this title has received payment under this title equal in value to the consideration received by such creditor from such general partner.

---

**Source Credit**: (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2585; Pub. L. 109–8, title VIII, § 802(d)(7), Apr. 20, 2005, 119 Stat. 146.)

### Historical and Revision Notes

### legislative statements

Section 508(b) of the House amendment is new and provides an identical rule with respect to a creditor of a partnership who receives payment from a partner, to that of a creditor of a debtor who receives a payment in a foreign proceeding involving the debtor.

### senate report no. 95–989

This section prohibits a creditor from receiving any distribution in the bankruptcy case if he has received payment of a portion of his claim in a foreign proceeding, until the other creditors in the bankruptcy case in this country that are entitled to share equally with that creditor have received as much as he has in the foreign proceeding.

## Editorial Notes

### Amendments

2005— designated subsec. (b) as entire section and struck out subsec. (a) which read as follows: “If a creditor receives, in a foreign proceeding, payment of, or a transfer of property on account of, a claim that is allowed under this title, such creditor may not receive any payment under this title on account of such claim until each of the other holders of claims on account of which such holders are entitled to share equally with such creditor under this title has received payment under this title equal in value to the consideration received by such creditor in such foreign proceeding.”

## Statutory Notes and Related Subsidiaries

### Effective Date of 2005 Amendment

Amendment by  effective 180 days after , and not applicable with respect to cases commenced under this title before such effective date, except as otherwise provided, see , set out as a note under .