A dividend in the context of a proposal or bankruptcy is a distribution of money to creditors who have filed a claim and proven an amount owed.

In a proposal, the amount of the dividend depends on the offer made by the debtor. In a bankruptcy, it depends on the amount of money collected by the trustee from monthly payments made by the debtor or from realized assets, if applicable. Each creditor receives a portion of the total dividend paid that corresponds to the percentage their claim represents among the total claims filed in the case. This distribution formula is referred to as “pro rata.”