What Creditors Do After The Debtor Has Filed Petition In A Bankruptcy Court
When a case is filed in a bankruptcy court either voluntarily by the debtor or the creditor, the laws work in a way to protect the interest of both the parties. The laws have provided some powerful tools that the creditors can use in their favor.
Hiring An Attorney
It is very important for you to understand that a bankruptcy attorney is not hired only by the debtors but is also hired by the creditors so that they can recover their amount successfully. The lawyer who works in the favor of creditors performs the following actions.
- The attorney files lawsuits against the debtors in order to collect the debts granted to them. They also use other legal collection techniques in order to collect the amount. The attorneys know which actions have to be taken in case of debts owed by businesses and in case of debts owed by individuals.
- The lawyer also represents the creditor's interest in the bankruptcy court proceedings.
- In case the borrowers default on repayment, the lawyer also plays an important role in the foreclosure or trustee's sale of real estate.
- They also take necessary actions regarding the recovery of secured goods.
Motion For Relief From The Automatic Stay
It is true that when a debtor file a petition in the bankruptcy court, an automatic stay order is granted to them, as per which they get tremendous relief from harassing collection calls. However, you will be glad to know that the laws have also given some flexibility for the creditors, as they can also file a motion for relief from the automatic stay. In order to do that, they first have to file a motion and obtain a notice and certificate of mailing with the court, and then send a notice to all the concerned parties. If the debtor does not file a response and the court signs on such orders, the creditors can go ahead with their collection actions.
Steps After Filing For Bankruptcy
Once you are informed about the filing bankruptcy, the first thing that you have to do is to order a copy of the bankruptcy schedules of the debtor. It is very important for you to check with the clerk's office whether your name and debt has been mentioned properly. This is very important to ensure receipt of notices. You are also recommended to get the schedule reviewed extensively by the attorney. If you find some error, you can file a proof of claim. For example, if you find that your name has not been listed in the schedule filed by the debtor, you can file a proof of claim in the bankruptcy court.
When a debtor files a petition in the bankruptcy court, it does not mean that creditors are left with no options to protect their interest. The bankruptcy laws have offered some powerful tools for the creditors that that they can use to recover their debts successfully. However, as in the case of debtors, the creditors are also recommended to hire a bankruptcy attorney to represent them in the court proceedings.
Source: http://ezinearticles.com/
Added: April 29, 2008
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