A Complete Guide On Creditors’ Rights In Bankruptcy Cases

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A Complete Guide On Creditors’ Rights In Bankruptcy Cases

Call: 888-297-6203

Someone who you owe money to recently filed for bankruptcy. You want to know what to do next and how to do it.

There is now a federal court order prohibiting you from pursuing your claim anywhere other than bankruptcy court. If you wilfully break that order, you will be responsible for paying the debtor, not the other way around. Let’s go over some of the most typical inquiries a creditor has regarding the bankruptcy of a debtor.

Who is the trustee in bankruptcy?

The notification of the first meeting of creditors for a Chapter 7 case is issued to each listed creditor and includes the trustee’s name. Additionally, that information is accessible over the phone in some districts as well as in the bankruptcy court’s case file.

Most Chapter 11 cases do not have a trustee; instead, the debtor takes over the trustee’s responsibilities. If you are around Los Angeles or Texas, you can consult a renowned firm named Recovery Law Group who can help you with all your issues related to Bankrupcy, You can get in touch with them using this phone number – (888-297-6203) or the link: https://recoverylawgroup.com/bankruptcy/

The fact that the debtor received a discharge has no bearing on whether you will be compensated for your claim. Until the work is finished, the creditors are compensated to the extent that there are assets in accordance with the priority of the claim, the trustee continues to manage the case’s assets. However, keep in mind that the majority of individual Chapter 7 filings have no assets that may be used to pay creditors. Only creditors who submitted claims to the court are entitled to receive distributions in Chapter 7 and Chapter 13 cases.

Through PACER, information about bankruptcy cases that have been filed is accessible online. Once you have the case number, submit a request to be included to the Master Address List in the case at the bankruptcy court where it is now ongoing. If your address changes, let the court know.

Does my claim have to be paid at the 341 meeting?

No. The initial creditors’ meeting is a fact-finding exercise. Your attendance at the 341 meeting is not required for your claim to be accepted and paid. However, in order for the trustee to pay claims, they must be submitted by the deadline set by the court, which is often stated in the notice of the 341 meeting.

Do I require legal counsel for bankruptcy as a creditor?

Not typically. A proof of claim form must often be filed by the creditor in order to receive payment during a bankruptcy procedure. The claim and its primacy are summarized.

To complete the form, you don’t need to be an attorney. A copy of the disputed invoice, contract, or a list of the claim’s constituent parts should be included to the form. If you make a mistake or forget to include something, claims are easily amendable. Get a proof of claim form if you didn’t receive one by going online.

Can I collect my claim from the shareholders or company officers?

It depends on whether there are specific circumstances that render the executives or shareholders accountable for the debt. Simply holding a share of stock—even the only share—does not make a person accountable for the corporation’s obligations.

They may be held accountable if they guaranteed the debt or disregarded the corporation’s independent legal status to the point where creditors might breach the corporate veil.

What if the debtor is selling assets falsely?

Depending on the chapter the debtor filed under, a creditor’s options in this situation vary. A creditor is only precluded from collecting from other obligors by a bankruptcy filing if the debtor filed a Chapter 13 bankruptcy. The co-debtor stay in Chapter 13 safeguards co-obligors and guarantors on consumer loans. A creditor must get relief from stay in order to continue against them.

Can I have my judgement thrown out?

Even if your obligation has been reduced to a judgement, it may still not be exempt from discharge. The judgement is probably dischargeable if it relates to a contract debt, such as a trade account or promissory note. If you bring a non dischargeability case and the judgement is for fraud, it cannot be dismissed in Chapter 7, but it can be discharged in Chapter 13. However, keep in mind that you are a secured creditor, a prestigious character in the world of bankruptcy, provided the judgement is supported by a judgement lien that attaches to property owned by the debtor.

What can I do about my tenant’s bankruptcy filing?

You may apply for relief from the automatic stay to start or prolong the eviction process if the terms of the agreement under which the debtor inhabited the property were broken prior to the filing. In cases where the leased property is not the debtor’s primary residence, the trustee or debtor in possession must take the lease quickly after filing; otherwise, it would be regarded to have been rejected.

However, be aware that post-petition rent is an administrative claim with the same legal standing as the trustee’s fee when it comes to payment from the estate’s assets. In order to timely assert your rights as the landlord of a bankruptcy debtor, you might require legal assistance.