Filing for bankruptcy does not mean that the creditor has no means to get their claims. If the creditor is aware of the laws, it may be possible to ensure there is no violation of their rights. How does a creditor approach the matter? Consulting a bankruptcy attorney is the first step in this regard.
What rights does the creditor have if the debtor files for bankruptcy? Here is the answer.
1) The creditor may get a share from the bankruptcy estate at the time of distribution. Whether they get a share, and if they do, the amount of it depends on the priority and type of the claim.
2) The creditor may put forward arguments in a bankruptcy court regarding matters like the liquidation of the debtor's assets (non-exempt ones) and payments, as well as he debtor's plan for repayment.
3) The creditor may challenge a debtor's right to get a discharge of debts. They could also raise a question pertaining to the discharge of their particular debt. However, these require help from a capable bankruptcy attorney.
Getting advice from a legal professional in Maryland helps make sure there is no violation of the creditors' rights. Here are a few more tips for creditors.
Do not involve in any collection action. No phone calls, no messages, no collection agents on the doorstep. The automatic stay the debtor gets, because of bankruptcy filing, makes all these unlawful.
File a claim at court immediately. Get the claim form, fill it out, and submit along with a copy of the contract/judgment of the claim. The notice of bankruptcy would mention the date and place of filing this.
Find out whether the claim is dischargeable. Ask your Maryland Bankruptcy Attorney to help in this. If it is non-dischargeable, your attorney has to file an adversary proceeding. This would preserve your claim even after bankruptcy.
Ascertain the status of the debt (secured or unsecured). The possibility to get a share in the distribution increases for secured debts; in which case the creditor would have a lien on the collateral. This may not be the case for unsecured claims.
Provide information to the court-appointed trustee. If you think that the debtor is misusing the option of bankruptcy, you have the right to go ahead and provide any details that could help the trustee unearth the truth.
Getting adequate legal help and guidance is the first thing you need to ensure the proper resolution to the matter.
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