Bankruptcy might help individuals and businesses start anew (not, of course, without some long-term consequences) – but what happens to those on the other side of the bankruptcy filing: the creditors?
Creditors, in fact, do have significant rights – and if you are one of them, you can be confident that our team at McCabe and Mack LLP will guide you through the process and protect your rights under state and federal laws.
Here are some key points to remember:
- Respect the Automatic Stay: Be mindful of the time-sensitive nature of these cases. Once someone has filed bankruptcy, an automatic stay acts as a measure of protection for the debtor which (in most cases, not all) prevents creditors from trying to collect debt, evict, garnish wages, and even correspond/communicate about debts with the individual or entity who is filing bankruptcy. Contact us promptly if you receive notice of a bankruptcy filing and we can quickly let you know the ground rules for your situation. There are situations where the court will allow creditors to take certain steps even after bankruptcy proceedings are underway. You may be entitled to obtain a lift of the automatic stay.
- Creditors CAN object to dischargeability of debt. Sometimes a discharge of debt is called into question. With proper proof, it may be ultimately determined that the creditor is still entitled to funds. In such cases, a judgment can sometimes be obtained, which will remain in effect not withstanding the bankruptcy, until the debt is paid in full – despite how many years after bankruptcy it might take for those monies to come through.
- Creditors have the right to attend a 341 meeting, during which a debtor will be questioned about personal finances, assets, and income. During this meeting, creditors in attendance are entitled to share information, and inquire further about the debtor’s finances. By filing an electronic notice of appearance, we will get regular updates on the status of the case and keep you posted.
- When a case is “converted”, creditors can still get paid. If a bankruptcy case evolved into a liquidation, through what is called a “conversion” of the case – shifting it from one chapter into another, creditors still have the right to protect their interests. Our attorneys can work to ensure that the chance of debt collection doesn’t fall away with the first iteration of the filing.
If you get notice of bankruptcy proceedings, our team at McCabe and Mack LLP is here to help. Get in touch with us right away so that you do not inadvertently waive any of your rights by missing important Bankruptcy Court deadlines.
You deserve to recover any funds that are owed to you, and we have extensive experience and knowledge to help achieve the best possible outcomes.
Reach out for a consultation by calling 845.486.6800 or learn more at mccm.com.