Creditors Rights

When bankruptcy is filed, a trustee may be nominated to administer the case and ensure that creditor’s claims are paid back as fully as possible before considering the debtor’s debts discharged. Being a creditor in a bankruptcy case means you have a right to a portion of the debtor’s non-exempt assets (in Chapter 7 bankruptcies) or to be considered under the debtor’s repayment plan (if Chapter 13 has been filed). You also have a right to challenge the debtor’s right to a discharge. If you are a creditor in a bankruptcy case, you may benefit from the legal expertise of bankruptcy attorney Andrew S. Bisom. Make an appointment today to talk about your situation and understand the options available to you.

Creditor’s Rights in Bankruptcy

If you are a creditor in a bankruptcy case, you should not be scared off as soon as you receive notice of the bankruptcy filing. Also, never assume that you have no rights or that there is nothing for you to do but give up. You do have some rights, among them:

  1. You have a right to share in any distribution from the bankruptcy estate. The portion is determined by the priority of your claim. Keep in mind that if you have an unsecured, non-wage claim, you will likely fall low on the priority scale and may end up receiving very little or nothing.
  2. You also have a right to be heard by the court regarding the debtor’s plan, finding out what will happen to the debtor’s non-exempt assets, and receiving payment from the assets in the estate.
  3. You have a right to challenge an individual debtor’s rights to a discharge. Also, you may have a right to discharge the debt owed to you.

Actions A Creditor Should Take

If you are a creditor and are facing the consequences of a bankruptcy filing, there are certain steps you must follow once you find out about the filing:

Stop any collection proceedings – This means desisting from collecting what you are owed, including making phone calls, sending bills, or threatening lawsuits if you are not paid. The automatic stay is protection for filers against collections during bankruptcy.

File a claim with the court – As soon as you receive a notice of bankruptcy, read through it. You will find out that the court clerk informs you where you have to file a proof of claim and how long you have to do so. Waste no time in doing this since deadlines are always strictly enforced in bankruptcy cases.

Get The Legal Help You Need Now

Andrew S Bisom, bankruptcy attorney, can help you if you are a creditor in a bankruptcy filing. Under his legal advice, you will find out whether your claim is dischargeable, whether you have a priority for payment, or if the debtor’s assets will secure your claim. He will also help you file an adversary proceeding to preserve your claim after bankruptcy whenever needed. Call him today.