Are you receiving more bankruptcy notices than payments from debtors? Not sure how to respond, protect your interests and collect on debts?
Here are steps every creditor should take upon receipt of a bankruptcy notice:
1. Cease all collection actions against the debtor. This includes pending lawsuits. Failure to do so violates federal bankruptcy laws and can result in stiff penalties.
2. Review the bankruptcy notice thoroughly for key dates:
- Date, time and location of the debtor’s 341 hearing
- Deadline for filing your “proof of claim”
- Deadline for filing objections to the debtor’s discharge
3. Confirm whether your claim is secured or unsecured. Secured claims (i.e. mortgages, vehicle loans, etc.) are given high priority in bankruptcy cases. You’re less likely to collect payment for unsecured claims (i.e. credit card bills).
4. File a timely “proof of claim” with the bankruptcy trustee to make sure your debt is recognized.
5. Hire an experienced attorney to analyze, oppose or negotiate a reasonable debt reorganization plan, while you focus on running your business.
Navigating the chapter 11 bankruptcy process is tricky business. One mistake can result in you not collecting on your debt.
Learn more about our bankruptcy team, how we can prevent you from making that mistake and protect your interests as a creditor.
Call 302.225.8340 to schedule a consultation with our Delaware bankruptcy team or use this online form to contact us.