Oklahoma City Bankruptcy Attorneys - Creditor Protection

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Oklahoma City Bankruptcy Lawyers Explain Creditors’ Rights

Most of the information you hear and read regarding bankruptcy cases involves the debtor, or the person seeking relief from financial difficulties. There are many reasons for this reality, but it’s also worthwhile for anyone considering bankruptcy as an option to understand the basic concepts surrounding creditors’ rights as they pertain to bankruptcy filings.

Creditors have rights after extending credit to debtors, and these rights exist and are different before a bankruptcy case is filed and afterwards, such that before the filing, the creditors can take collection steps that include foreclosure and repossession if the debt is secured in nature. After the filing, creditors can have input in repayment plans and challenge both the Automatic Stay and the discharge of debt if they prove wrongdoing.

Below you’ll find information regarding creditors’ rights before a bankruptcy case is filed, their role after the case is filed, their options and strategic decisions available to them when a petition for relief is received by the bankruptcy court and finally how you should proceed if you need to put an end to your financial struggles and stress.

Hiring an Oklahoma Bankruptcy Lawyers

Ultimately, creditors’ rights are limited in nature, but that does not mean that they are without options and without the ability to scuttle a bankruptcy filing if they prove wrongdoing or even a serious mistake in the petitions or statements. Rather than take the risk of having your Automatic Stay lifted or your bankruptcy case dismissed altogether because of an unintentional error, make sure that you take every step necessary to ensure that your bankruptcy case proceeds smoothly. Contact the Oklahoma City bankruptcy lawyers at the law firm of Atkins & Markoff today to schedule an initial consultation.

Our attorneys will evaluate your situation for FREE with no obligation. Pick up the phone and call us at (877) 491-8818 today.

Creditors Can Make Bankruptcy Difficult

Before and During the Bankruptcy Process, Creditors Can Make Keeping Up With Your Debt More Difficult By:

Hassling Consumers Relentlessly
Increasing Your Interest Rates Enormously
Passing Your Debt to Collection Agencies
Filing for Bankruptcy on YOUR Behalf
Disputing the Discharge of Debt
Disallow You to Begin Building New Credit

Oklahoma City Bankruptcy Attorneys

Creditor Actions During Bankruptcy

When Proceeding With Bankruptcy Filing, Credits Are Only Entitled to:

Cease Any Collection Actions
File a Claim With The Court
Consider Whether Your Claim is Dischargeable
Decide Whether Your Claim is Secured by Assets
Share Information With the Court Appointed Trustee
Monitor Your Case

Post-Bankruptcy Rights
Pre-Bankruptcy Rights

Creditors’ Rights Post-Bankruptcy Petition

After a bankruptcy petition has been filed, the creditors’ rights change significantly. One of the first steps taken by the bankruptcy court is to file an Automatic Stay, which is basically a court order that prevents creditors from taking any additional steps in an attempt to collect the debt. At this point, the creditors are left to participate in the legal process and follow the procedures and guidelines set out by the court and the law.

Once again, creditors’ rights will depend on the nature of the debt. If it’s a secured debt, the creditor can be quite involved in making sure that either the debt is repaid or the property is recovered, almost regardless of the type of bankruptcy involved. However, there are exceptions, and this involves the situations where there are several secured creditors attached to one piece of collateral.

In terms of unsecured creditors, their role will depend largely on the type of bankruptcy that’s been filed. If the debtor files under Chapter 11 or Chapter 13 of the United States Bankruptcy Code, the creditors can be involved in approving or challenging the proposed repayment plan such that it’s as satisfactory as possible under the circumstances. This input is in addition to the legal options present for creditors in Chapter 7 filings, which are discussed below.

If the case is a Chapter 7 filing, the creditors do not have many options. Generally, a creditor should file a notice of claim with the court after receiving notice from the court that the case has been filed. Creditors can also move to lift the Automatic Stay if certain conditions such as fraud are believed to be afoot. In addition, creditors can move to avoid the discharge of the debts owed to them if they can convince the court that the debtor incurred the debt by fraudulent means.

The most common example that leads to these remedies being successfully obtained include the debtor obtaining a credit card shortly before filing for bankruptcy and then charging large amounts of debt with no intent to repay it. Fraud can also be proven if the creditors can show the court that the debtor has hidden assets or has not fully disclosed his or her financial situation in some way.

Creditors’ Rights Pre-Bankruptcy Petition

Prior to a debtor filing for bankruptcy protection, a creditor has several rights, but some depend on whether or not the credit that’s been extended to the debtor is secured or unsecured. The initial steps almost every creditor takes are similar regarding the nature of the debt, and these steps involve attempts to collect past-due amounts. Examples of these collection steps include:

Letters of reminder
Letters of collection
Phone calls
Passing the debt off to collection agencies
Filing lawsuits
Obtaining judgments
Remedies that include wage garnishment in furtherance of a judgment

The biggest difference between secured and unsecured creditors when attempting to collect a debt involves a secured creditor’s right to ultimately repossess the property that secures the extension of credit. Specifically, this can involve the re-taking of a vehicle if a car loan is in default or foreclosure on a home if the mortgage is seriously delinquent.