Ignoring your claim is a bad idea

I cannot even count the number of creditors in both consumer and commercial bankruptcy cases who have just ignored their rights in a bankruptcy case.  In fact, it is so frequently the case that Debtor’s attorneys can almost count on the fact that the total amount of debt that they have to deal with will be substantially reduced just because so many creditors just don’t show up.

Part of the reason that people do not show up is that they get a notice from the Bankruptcy Court telling them that the case has been filed and warning them about the bad consequences of continuing any action to collect from the Debtor.  What is not exactly clear from that notice is that the creditors are stayed (enjoined) from proceeding against the debtor everywhere EXCEPT the Bankruptcy Court.

So, if you receive a notice that someone who owes you real money (enough to want to pay a lawyer for advice) you should immediately contact a bankruptcy attorney and get advice on how, and whether, to proceed.  Often just the act of filing a proof of claim may be enough to get you some return on the debt. Rarely, but significantly, yours may even be one of those debts that is non-dischargeable in a Bankruptcy proceeding.

Large scale lenders all have legal departments that pay attention to these things and many file proofs of claim before anyone else even shows up.  Knowing your rights and paying attention to deadlines, may be the key to preventing an even larger loss.

This article is written by an attorney at Attorney Donald Wyatt PC. Always consult an attorney before making any legal decisions. To make an appointment today, please click here to contact us.

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