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Creditor bankruptcy. Defending creditors’ rights in Chapters 7, 11, 12, and 13 bankruptcies.

Target audience for creditor bankruptcy: corporate / business clients, banks, people whose spouses filed bankruptcy but owes person money per divorce judgment.

Type of bankruptcy work we do: Creditor bankruptcy. Defending creditors’ rights in Chapters 7, 11, 12, and 13 bankruptcies.

Considering hiring an attorney? Here are bullet points to consider.

1. What happens to creditors in bankruptcy:?
A: When a person/entity files bankruptcy, an automatic stay automatically goes into effect, prohibiting creditors from initiating or continuing collection efforts – including phone calls, letters, filing lawsuits, or any other collection activity.

2. Do creditors get paid in bankruptcy?
A: It depends on what chapter a debtor files and if there are any non-exempt assets that can be given to Trustee to sell in order to distribute funds to creditors. Bankruptcy can be voluntarily filed by a debtor or forced by a creditor.

3. Are all creditors treated equally in a debtor’s bankruptcy?
A: No. Creditors are entitled to a share of payment, but it is according to the priority of their claims.

4. What happens if a debtor paid a creditor within the 90 days prior to filing bankruptcy?
A: Any payments made on a debt in the 90 days before filing of a debtor’s bankruptcy are recoverable by a trustee unless you meet requirements for one of the defenses.

5. Should a creditor file a proof of claim?
The answer depends on the following:
What chapter did the debtor file?
B: If Chapter 7, is it an asset or no-asset case?
C: How much debt is owed to the creditor?

6. Reasons a creditor may not file a proof of claim in bankruptcy:
A: Debtor filed a no-asset case (meaning there are no non-exempt assets for Trustee to sell to pay to creditors).
B: The amount of debt owed by debtor is minimal.

7. How and when do creditors receive payment?
A: The answer depends on what chapter the debtor filed and what the Plan says.

8. Is all debt discharged in bankruptcy?
A: No, there are debts that are considered non-dischargeable and must continue to be paid after bankruptcy.

9. What happens if the creditor is a bank and the debtor stops paying the mortgage? Can the creditor commence foreclosure?
A: Depends on what debtor’s intentions are for property secured by mortgage – i.e. does debtor want to reaffirm and keep the house? Has the debtor walked away from the property and intends to surrender the property?

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Our expert attorneys are ready to provide comprehensive representation of creditors in all aspects of bankruptcy law. Contact us by filling out this form or call us at 207.947.4501 to set up an appointment.