Related videosObjections to Your Bankruptcy by Angry Creditors
Monitor the progress of the case. When that happens, creditors are free to pursue collection according to state law. Make sure the court has your current address until the case is closed so that you get notice if there will be a dividend. When you need to act to preserve your claim. What happens at the first meeting of creditors. Image courtesy of edinburghcityofprint. Bankruptcy Basics. Should You File For Bankruptcy? Impact of Filing Bankruptcy. Business Issues in Bankruptcy.
Your Home and Bankruptcy. With redemption, the debtor redeems the property by buying it back in a lump sum that is the replacement value of the collateral. Often, the replacement value is less than what is owed on the debt. In some cases, if the debtor and the creditor cannot agree on the replacement value of the property, the court can hold a valuation hearing and determine the replacement value.
After redemption, the debtor owns the property free and clear. When a debtor files Chapter 13 bankruptcy, the debtor must either surrender the secured collateral to the creditor, pay off the debt over the course of the reorganization plan in years, or pay the debt off outside the reorganization plan, usually within a shorter period of time.
While a creditor with a lien is entitled to the value of the debt or collateral, whichever is less, an unsecured creditor does not have the same right. In general, unsecured debts, such as medical debt or most credit card debt, are given the lowest priority. As an unsecured creditor, you can file a proof of claim, attend the first meeting of creditors, and file objections to the discharge.
You can review the bankruptcy papers that were filed to determine whether there are any inaccuracies. However, many unsecured creditors will not be paid in Chapter 7, and they may not be entitled to be paid in Chapter 13, depending on how many priority and secured debts the bankruptcy filer has incurred.
In some cases, the bankruptcy trustee will contact a creditor and ask that the creditor return money the debtor paid before filing bankruptcy. The bankruptcy code prohibits a debtor from preferring one creditor over another. Any payments made on a previous debt in the 90 days preceding a bankruptcy filing may be recovered by the bankruptcy trustee unless you meet requirements for one of the defenses.
If you are a relative or friend of the debtor, payments made on a previous debt in the one year preceding the filing date can be similarly recovered. Last updated April Bankruptcy Contents. Automatic Stays in Bankruptcy. Means Test. No-Asset Cases in Chapter 7. Checking Accounts in Chapter 7. Impact of Chapter 7 on Your Home. Impact of Chapter 7 on Your Vehicle. Chapter 13 Bankruptcy and Your Credit. Best Effort Requirement in Chapter Impact of Chapter 13 on Your Home.
Impact of Chapter 13 on Your Car. Tax Refunds in Chapter Cramdowns in Chapter Chapter 13 Confirmation Hearing. Second, if you decide to use annuities for creditor protection, don't wait until financial trouble hits. The sooner you take action, the less likely it will be that a court will strike down your purchase as being intended to defraud creditors. This article is part of The Motley Fool's Knowledge Center, which was created based on the collected wisdom of a fantastic community of investors.
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