Feb 05, · Each bankruptcy case will (or should) include a list of the top 25 creditors. This is the only information of that type that is typically included in every bankruptcy case. I say typically because on a rare occasion, a case will not have that information filed. Dec 23, · With bankruptcy, original terms of credit, loans and other sources of debt are more or less used as a guide for new liquidation and rehabilitation that try to squeeze as much value as possible out of the debtor’s assets; frequently, creditors will get less through bankruptcy than they stood to get if the loan reached maturity, and will therefore agree to the terms of the plan as somewhat of. Bankruptcy is a process supervised by one of the 90+ Federal bankruptcy courts that aims to return the most value to the creditors of the debtor. How is bankruptcy filed? Bankruptcy can be either voluntary or involuntary. In a voluntary bankruptcy, the debtor directly files a petition with the court, initiating the bankruptcy process.
Related videosHow Does A #Chapter 13 #Bankruptcy Case Work
This is known as a liquidation bankruptcy. A chapter 13 bankruptcy is a repayment bankruptcy. No property is liquidated, and it allows debtors to start payment plans to repay their creditors. Chapters 11 and 12 are also repayment bankruptcies. However, Chapter 11 is used by large corporations, and Chapter 12 is used by farmers and fishermen. The creditor priority rules do apply to all types of bankruptcies, however, the order of priority varies according to the type of bankruptcy.
In Chapter 7, where non-exempt property is sold, the creditors are paid from the profits by priority. In Chapter 11 or 13, the creditors are repaid according to the repayment plan, which must conform to the priority rules.
Creditors are paid in a certain order in order to protect creditors society believes should be protected. Bankruptcy administers are always paid because the law needs administers in order for the bankruptcy system to function, domestic support is protected because society wants to protect families, and so on.
The first party to be paid is the United States Bankruptcy court in which the bankruptcy is filed. The court charges fees for filing. After that, secured creditors are paid. Secured creditors are those who hold a lien on some property in the possession of the debtor. For example, mortgages on homes and unpaid balances on cars are held by secured creditors.
Secured creditors are always paid because the collateral property the secured creditor claims legally belongs to the creditor unless the debtor paid off the loan. The next class of creditors to be paid are unsecured creditors. No property is involved that these creditors may repossess. The first among unsecured debts to be paid is any kind of domestic support, namely, child support or alimony. The second class of unsecured creditors are the costs of administration in bankruptcy.
The next major class of creditors is employees. Employee wages, salaries, commissions and benefit plans are paid after the bankruptcy court, secured creditors, domestic support, and cost of administration have been paid.
Interestingly, employees have a payment cap and a time cap. The last major priority unsecured creditors are government taxes. However, each individual tax is subject to a different time cap. For instance, a property tax can only be collected if the tax was incurred one year before the commencement of the case. Some very simple Chapter 7 bankruptcies can be filed pro se, meaning on your own, without the help of an attorney.
Other bankruptcies will almost always need the assistance of an attorney, and even basic Chapter 7 bankruptcies can be complicated. Her favorite part of the job was writing and editing, and she gradually transitioned to legal writing. She currently stays home with her children and works as a writer.
When she isn't spending time with her family, or writing, you can usually find her reading. You can read more about her at her Linkedin page. Law Library Disclaimer. Can't find your category? Click here. How are Creditors Paid in Bankruptcy? In practical terms, it means that repayments of debts are temporarily suspended while everyone involved in the bankruptcy process figure out how to best handle the financial obligations. A secured creditor is a creditor who has obtained a lien on real or personal property either with the consent of the debtor, such as a mortgage, or involuntarily, such as a tax lien.
A secured creditor has a priority on collection of its debt on the specific property on which it has a lien. An unsecured creditor is a creditor who does not have a lien to secure repayment of its indebtedness. Debts of this type include personal loans, credit cards, cash advance or pay day loans, and accounts payable obligations. If you are bankruptcy creditor, it is important to get involved in the bankruptcy process to make sure you maximize what you get out of it.
For example, if you are owed more than the debtor has told the court, you need to inform the court of the true size of the debt. Getting involved in the creditors committee or unsecured creditors committee can insure that your voice is heard and that any settlement will be in your best interest.
We suggest contacting both the case attorney listed as Represented By and the Trustee for the case listed either as Trustee, U. Trustee, Assistant US Trustee to inform them of your claim.
The docket is the play-by-play history of anything that happens in the case. For example, the docket will include:. Being informed about the case is essential to insuring you receive the maximum compensation for your debt.
Our single case subscription is ideal to track all the details of the case from start to finish. The single case subscription is an inexpensive one-time fee 1 and is available on any case page. If you are already a subscriber to our Starter, Standard, Pro, or VIP subscription plans, you can simply save a case to get all the same benefits of the single case plan.
What is bankruptcy? How is bankruptcy filed?