Creditors’ Rights: Get What’s Yours

Now more than ever, you or your business can easily find yourself cast as an unwilling participant in a personal or business bankruptcy proceeding. In such a case, you should consult with an attorney as soon as possible to protect your rights.

Filing Proofs of Claim

In general, creditors must file a “Proof of Claim” in order to obtain a distribution from the proceeds of a Bankruptcy Estate. There are strict deadlines for the filing of a Proof of Claim, and our Firm can assist with the preparation and filing of these documents.

Obtaining Relief from the Automatic Stay

The filing of a bankruptcy petition invokes an automatic stay, preventing essentially all actions against the debtor or property of the estate. The automatic stay prevents chaos among creditors seeking repayment upon the initiation of a bankruptcy case and is an effort to strike a compromise between the rights of affected parties and the opportunity of the debtor to rehabilitate or liquidate in an orderly manner. Complementing the stay are procedures to protect lenders, landlords and other secured creditors whose collateral is utilized by the debtor during the bankruptcy case and provisions enabling the debtor or trustee to obtain financing on a going-forward basis. The Firm frequently represents Secured Lenders and Landlords in Commercial Cases to help them obtain relief from the automatic stay to continue commercial foreclosure and eviction proceedings, and also represents Post-Petition Lenders to provide DIP Financing to Chapter 11 Debtors.

Creditors as Defendants in Adversary Proceedings

Frequently, either the Chapter 7 Trustee or the Chapter 11 Debtor will initiate a post-bankruptcy lawsuit, known as an “Adversary Proceeding” in order to attempt to recover money or property for the Bankruptcy Estate. Adversary Proceedings may also take the form of lien avoidance actions, actions to avoid preferential payments/transfers or actions to avoid post-petition transfers. The Firm can represent you in these actions and help you formulate a defense.

Creditors as Plaintiffs in Adversary Proceedings

Creditors may likewise file Adversary Proceedings such as complaints to determine the priority of a lien, to revoke an order of confirmation of a plan, to determine the dischargeability of a debt, to object to discharge, to obtain an injunction or to subordinate a claim of another creditor. The Firm can act as counsel in such an action to protect your rights.

Monitor the Status of the Bankruptcy Case

Some bankruptcies are dismissed for the debtor’s failure to comply with the requirements of the Code. When that happens, creditors are free to pursue collection according to state law. In those instances, the Firm can assist you with your renewed collection efforts and state court litigation.