Creditor Bankruptcy Protection
Bad Debt Consolidation by splinder
Filed under Bankruptcy
Filing claims and disputing bankruptcy both call for an attentive approach by the creditor. Creditor bankruptcy, contrary to perceptions, offers almost similar protection to the creditors as it does to the debtors. Though it is typically a time-adhering procedure, it calls for a proactive approach by the creditors. They need to file claims as early as possible or else, ‘miss the bus.’[br]
What to Do When Faced with Creditor Bankruptcy
There are many situations which leave you confused as a creditor. These cannot be listed on the bankruptcy file or discussed at a meeting.
However, the following points explain what to do if you face certain situations:
Missed 341 meeting: There is nothing to be bothered about as the first meeting is usually a fact gathering meeting. As a creditor, you can request the court for its approval for collecting the debtors’ disposition.
Not listed in the bankruptcy file: In situations where the debt is not listed on the file and thereby, it is not eligible for being discharged, the court extends time for filing claims, provided a creditor has sufficient proof for objecting to a debtor’s discharge.
Feeling suspicious of debtor’s intentions: The best way is to get your debt reaffirmed. Reaffirming debt makes the pre-bankruptcy debt into a post-bankruptcy obligation and thus, it is payable.[br]
Client pays money before filing for bankruptcy: This is a tricky situation as such payments are usually asked back by the trustee. This is done in order to remain balanced to all the creditors. Any payment made 90 days before filing for bankruptcy are recoverable by the trustee though a creditor can challenge it with some defenses.
Missed filing for claims: Unfortunately, there is nothing that can be done once the notice was collected and the creditor, due to any circumstances, missed the claim.
Defender files for bankruptcy in the middle of a law suit: Based on the ‘automatic stay,’ the creditors have to stop the lawsuit. However, they may pursue their case after taking permission from the bankruptcy court.
Another point to consider is that even if creditors are allowed for collection in law suit, they have to stop all collection activity once the debtor files for bankruptcy.
The best approach is to seek law intervention once the debtor files for bankruptcy and refers to an attorney for consultation.