Creditor Rights
Helping Your Business Secure Payments
When a company with which you are doing business files for bankruptcy, you probably have many questions. Will you receive payment for the products and services you provided? What happens with your contracts for future work? How do you alert the bankruptcy court about your claim? Skolnick Legal Group, P.C., can answer these questions for you and help you recover as much debt as possible.
Our attorneys have over 60 years of combined legal experience, including the knowledge and resources necessary to pursue credit issues through litigation. We also partner with out-of-state firms who need local, on-the-ground assistance for a client.
Creditors’ Rights In The Bankruptcy Process
If you are a creditor, you will receive notice in the mail that a company that owes you money has filed for bankruptcy. The process for debt collection in bankruptcy depends on the type of bankruptcy filed and the type of debt at issue. At this point, you may not collect money directly from the debtor, but you may have options through the bankruptcy process.
If your debtor files for Chapter 7 bankruptcy, it will liquidate every asset its business owns. If you file with the court as a creditor, you may have a chance of being paid something after the liquidation occurs, along with other creditors. If your debtor files for Chapter 11, including Subchapter V, however, the debtor will reorganize its debt and try to pay most of its creditors a portion of what they are owed.
Either way, you need an attorney familiar with the bankruptcy process in order to file the proper documentation with the court, such as your proof of claim or a relief from automatic stay motion to continue a pending lawsuit, such as a lawsuit to foreclose a mechanic’s lien. These filings have a strict timeline. We will make sure to take every step necessary to protect your interests. Certain types of debt have priority over other debt, and we will explain to you where you fall.
Secured Vs. Unsecured Debt
The type of debt you own affects your treatment as a creditor in the bankruptcy process. Most debt falls into two general categories – secured and unsecured. The law views secured debt separately because the creditor has access to some type of collateral in case of default. In bankruptcy, most debtors will have to continue to pay on their secured debt or risk losing their collateral. Unsecured debt is not backed by collateral.
No matter the type of debt involved, we understand the best tactics to recover the greatest amount possible on your behalf. Our representation extends to lien avoidance, defending creditors who are alleged to have received preferential and fraudulent transfers, treatment of leases, mortgage modification, claim disputes, discharge issues, automatic stay issues and more. No matter what issues arise during your collection efforts, we will vigorously defend your rights and pursue collection for you.
Let Us Answer Your Questions
We are ready to help you find the answers you need to protect your business’s future. Speak with one of our lawyers in a free initial phone consultation by calling any of our three offices, or you can contact us online.
