---
title: "Check a swap or master-netting close-out on a bankruptcy filing"
url: "https://ailawframework.com/practice/banking-and-finance/check-a-close-out-netting-clause-on-an-insolvency/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A3-OC20261022-10-US"
practice_area: "Banking & Finance (Lending, Securities, Project Finance)"
tier: "yellow"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# Check a swap or master-netting close-out on a bankruptcy filing

> The tool lists the contract type the lawyer names, the close-out trigger, and whether the party is described as a swap participant, a financial participant, or a master-netting-agreement participant.…

Canonical page: https://ailawframework.com/practice/banking-and-finance/check-a-close-out-netting-clause-on-an-insolvency/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Banking & Finance (Lending, Securities, Project Finance)](https://ailawframework.com/practice/banking-and-finance.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | The tool lists the contract type the lawyer names, the close-out trigger, and whether the party is described as a swap participant, a financial participant, or a master-netting-agreement participant. It does not decide that the contract is a swap agreement or that the clause is effective. |
| What the lawyer must review | 11 U.S.C. §§ 560, 561, and 362(b)(17) and (b)(27). Section 560 provides that the exercise of a contractual right of any swap participant or financial participant to cause the liquidation, termination, or acceleration of one or more swap agreements because of a condition of the kind specified in section 365(e)(1), or to offset or net out termination values or payment amounts arising under that liquidation, termination, or acceleration, shall not be stayed, avoided, or otherwise limited by the Bankruptcy Code or by order of a court or administrative agency. Section 561(a), subject to subsection (b), states a parallel rule for a contractual right to terminate, liquidate, accelerate, or offset under one or more master netting agreements and the contracts they cover. Section 561(b)(1) limits that exercise to the extent the party could exercise such a right under section 555, 556, 559, or 560 for each individual contract. Section 561(b)(2) limits netting where the debtor is a commodity broker. Section 362(b)(17) excepts the exercise by a swap participant or financial participant of the contractual rights described in that paragraph. Section 362(b)(27) excepts the exercise by a master-netting-agreement participant to the extent the participant is eligible to exercise such rights under paragraph (6), (7), or (17) for each contract covered by the master netting agreement. The opened text also states that the exercise of rights not subject to the stay under paragraph (6), (7), (17), or (27) of subsection (b) shall not be stayed by any order of a court or administrative agency. The lawyer decides whether a safe harbor applies. |
| Written for | United States |
| Applies to | [Check a close-out netting clause on an insolvency](https://ailawframework.com/practice/banking-and-finance/check-a-close-out-netting-clause-on-an-insolvency.md) |

## Checking plan

- What the AI does: The tool lists the contract type the lawyer names, the close-out trigger, and whether the party is described as a swap participant, a financial participant, or a master-netting-agreement participant. It does not decide that the contract is a swap agreement or that the clause is effective.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- Paragraphs (6) and (7) of section 362(b) are named in the sentences that were read. Their operative text was not opened, and the tool does not describe them.
- If the debtor is a commodity broker, the lawyer applies the limit in section 561(b)(2).
- The tool does not decide that an agreement is a swap agreement or a master netting agreement. Those definitions were not the text used here.

## Sources

- [11 U.S.C. § 560, Contractual right to liquidate, terminate, or accelerate a swap agreement](https://www.law.cornell.edu/uscode/text/11/560) (checked 2026-10-22)
- [11 U.S.C. § 561, Contractual right to terminate, liquidate, accelerate, or offset under a master netting agreement](https://www.law.cornell.edu/uscode/text/11/561) (checked 2026-10-22)
- [11 U.S.C. § 362, Automatic stay](https://www.law.cornell.edu/uscode/text/11/362) (checked 2026-10-22)

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*