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Protecting creditors’ rights in bankruptcy – part 2
This post is the second in a three part series on bankruptcy and creditors’ rights. If you haven’t already read part 1, I recommend you do before continuing.
What should you do if you receive a notice of bankruptcy? (continued)
- File a claim on the debt. You or your attorney will need to file a Proof of Claim with the court. There should be instructions on where to send the claim included with the notice you received, so bring it when you speak to your attorney.
- Decide if you want to challenge a discharge. In bankruptcy, debts are categorized as dischargeable or non-dischargeable. Non-dischargeable debts will stick with a debtor through bankruptcy, while dischargeable ones will not. Keep in mind that any debts incurred through fraud, debts that could be classified as willful and malicious on the part of the debtor, or certain debts from divorce are non-dischargeable. If you believe your debt falls into this category, it’s important you speak with an attorney as soon as possible. You will need to file an adversary proceeding in order to fight the discharge of the debt. Deadlines are strict in bankruptcy cases, which is why it’s a good idea to get the ball rolling as soon as you can if you plan to pursue this course of action.
- Evaluate whether your claim is secured on unsecured. A claim is called secured when there is collateral for the debt. If your debt is secured, you typically will be much better off, as secured debts receive the highest priority in bankruptcy cases.
- Monitor the progress of the case. If for one reason or another, you decide not to consult an attorney, you’ll need to keep yourself updated on the bankruptcy filing. Some bankruptcy cases are dismissed. If this happens, you will be free to resume collection actions, lawsuits, and other remedies. It’s also important to follow the details of the case so that you become aware of any inaccuracies, misrepresentations, or mistakes that may affect your interests, unless you have retained an attorney to do this monitoring on your behalf.
Check back soon for Protecting creditors’ rights in bankruptcy – part 3
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