Creditor Representation

Creditors who receive a bankruptcy notice that an account-holder has filed bankruptcy need creditor representation and learn quickly that debtors are not the only parties who need help and guidance through a bankruptcy proceeding. When a debtor files bankruptcy, all of the obligations that the debtor owes to creditors prior to the date of filing are brought into the bankruptcy proceeding. Large creditors have large firms on retainer to help them with mortgage debt and business guaranties issues in bankruptcy filings, but where can smaller creditors go when they need help with representation in a bankruptcy filed in South Florida? As a bankruptcy attorney in Miami, I have represented many small creditors in chapter 13 bankruptcy, chapter 7 bankruptcy, and chapter 11 bankruptcy matters. Creditors with smaller debts who can't afford a large firm need representation too. 

If you receive a notification from the bankruptcy court that you have been listed as a creditor in a bankruptcy filing in Miami, Broward or West Palm Beach, call me today to avoid losing your right to receive payment! Waiting and relying on the debtor is not the way to ensure that you receive payment in a bankruptcy filing. Make sure your interests are represented in the bankruptcy.

Small Creditors need representation too. Sitting on your rights is not the way to receive payment in a bankruptcy.

Avoid Violating the Automatic Stay

The hardest part of the bankruptcy filing for creditors is knowing how to operating once the automatic stay is in place. The automatic stay gives bankruptcy protection to the debtor, the person or entity filing the bankruptcy. The bankruptcy stay is an injunction that prevents creditors from attempting to collect a pre-petition debt from the debtor or debtor's assets. Violations of the automatic stay should be avoided and can become expensive as the bankruptcy judge will issue monetary fines for failure to observe the stay. A violation of the stay can come in the form of a letter requesting payment, filing a lien on the property of the debtor, or garnishing a bank account after the filing of the bankruptcy. Frequently, these are the first actions that creditors are inclined to do when they receive a bankruptcy filing and panic that they will not receive payment. Violations of the stay will be reversed and once again can become very expensive for the creditors. Contacting an experienced bankruptcy attorney who practices in South Florida is important.

Your bankruptcy attorney should be able to tell you whether:

(i) the automatic stay is in place;

(ii) whether the bankruptcy is in bad faith and can be dismissed; 

(iii) how and if you are going to be one of the creditors that will receive payment; and 

(iv) whether filing a claim is a precursor to receiving payment in the bankruptcy.


How do Creditors get Paid in a Bankruptcy

Not all creditors receive the same treatment in a bankruptcy filing. Some unsecured creditors can be the first to receive payment because they have priority and some creditors have collateral that they can access to receive payment in place of waiting for the debtor to pay over time. It is important for creditors to know their classification to know whether they will receive payment in the bankruptcy. It is also important to understand the chapter of bankruptcy and how it will operate to pay creditors. An experienced bankruptcy attorney can let a creditor know its classification and how the bankruptcy chapter will operate to pay creditors. 

Unsecured Creditor: A creditor with no collateral attached to its debt. These debts include credit cards, personal loans, hospital bills, 

Priority Creditor: Certain creditors have a classification that puts these creditors first in line for payment ahead of the general, unsecured creditors. For these creditors to receive the proper payment ahead of other creditors, it is important to make a demand for these payments and ensure that the amount that the debtor is proposing to pay is the proper amount.

Creditors with Nondischargeable Debts: The bankruptcy can discharge, or get rid of all or a portion of debts, but not all debts. Some debts have a special classification under the bankruptcy code and are not subject to the bankruptcy discharge. Student loan and recent income tax obligations are examples of nondischargeable debts.

Secured Creditor: A creditor owed a debt that is secured by a piece of real or personal property. It is necessary to evaluate the basis of the lien to ensure that this is the creditor's true classification. Without proper perfection of the security interest, this creditor will be deemed an unsecured creditor instead.

If you are a creditor in a chapter 7, chapter 13, or chapter 11 bankruptcy filed in Miami, Broward, or West Palm Beach, please contact me today for affordable information and representation.