What Rights Do Creditors Have?
Being Prepared for Creditor Claims
With the number of households filing for bankruptcy increasing annually, creditors are becoming more earnest to claim what they believe they deserve. Creditors will fight for every penny they can get back, since it is merely business oriented for them. A creditor wants to have the entitlement to any distribution of a bankruptcy estate, even when they are a low priority claim or an unsecured, non-wage claim.
Once a creditor receives a bankruptcy notice, their rights and options change. They must cease all collection action, which includes phone calls, billing or pending lawsuits if there is an automatic stay. This will keep them from making any attempt of collection from the debtor. They can, however, file a claim against the debtor with the court, which is often the case. In Oklahoma, the creditor must adhere to the Chapter 7 and Chapter 13 provisions that protect a debtor throughout court.
There are specific claims that are non-dischargeable, such as payments that come out of a divorce, debt due to fraud or debt caused by willfully wrong acts. Non-dischargeable acts such as drunk driving and damages incurred from it can bring about huge expenses that creditors can collect on, even if bankruptcy is filed.
Within the process of filing for bankruptcy, debtors can make a mistake or be involved in fraud. If their claims have been discharged and creditors suspect fraud or other dishonesty is involved, they can attempt to contest it with a non-dischargeability suit. They must file an adversary proceeding to preserve a claim after bankruptcy is already filed. All creditors are on a short timeline to contest or file any adversary proceeding against their debtors, causing them to be more aggressive.
Creditors may step over the line with excessive phone calls or threats, even after the bankruptcy automatic stay has been issued. The Law Office of Bryon J. Will, P.L.L.C. is equipped with skilled bankruptcy attorneys who are able to answer your questions and help you take the next step in protecting your assets. If you want more information on creditors or the rights they have in a bankruptcy case, contact our Oklahoma City and Perry firm.