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Facts About Creditors' Rights in a Bankruptcy Case

Must-know facts from bankruptcy lawyers in Evansville

While much attention has been paid to debtor law and the rights of debtors, it is important to know that there are creditors' rights as well.  Here are some important rights that a creditor has, and ways to protect those rights:

Creditors' rights

  • Bankruptcy creditors are entitled to their share of any bankruptcy distribution.
  • Creditors have the right to be heard in court regarding the liquidation and payments from assets.
  • Creditors can challenge a bankruptcy discharge awarded to a debtor. The challenge may be lodged if:
    • The debtor did not keep adequate financial records.
    • The debtor cannot explain a loss of assets.
    • The debtor made false statements in the bankruptcy filing.
    • The debtor did not obey an order of the bankruptcy court.
    • The debtor committed fraud in transferring, concealing, or destroying property that might have become part of the bankruptcy estate.
  • Creditors have the right to determine whether their claim is secured by the declared assets of a creditor.
  • Creditors can gain relief from an automatic stay under certain circumstances.
  • Creditors can contact a bankruptcy trustee if they suspect that the debtor has not been truthful about concealed or transferred assets.
  • Creditors can question a debtor under oath about assets, liabilities, and financial history.
  • Creditors can monitor the progress of a bankruptcy case and, if the debtor fails to comply with the rules, pursue collection under state law.
  • Creditors can file suit to win the right to collect on a debt and can get a garnishment order to collect from a bank account or employer under certain circumstances.

Exemptions

Creditors may file to exempt a debt from a bankruptcy discharge under the following conditions:

  • The debt was obtained by fraud on the part of the debtor.
  • The debtor embezzled assets.
  • The consumer debt in question was for more than $500 in luxury goods purchased within 90 days of a bankruptcy filing.
  • The debt is for a cash advance for more than $750 made within 70 days of a bankruptcy filing.

The best protection can be offered by the guidance of the experienced bankruptcy lawyers at the Evansville office of Dunlap & Nesmith LLC.  Our attorneys can engage in creditor negotiation, ensure that your debt collection practices are legal, and help you negotiate and litigate as necessary.

We can guide you

The creditor's rights' attorneys at Dunlap & Nesmith can help you negotiate and litigate as necessary to collect on debts legally.  Please call us at 877-823-1264 to discuss your needs or contact us online to schedule an appointment at no cost or obligation.