How Should South Florida Creditors Handle Debtor Bankruptcy?

Debt collection isn’t easy. Creditors, banks, and other lending institutions often find themselves seemingly at the mercy of a debtor when they declare bankruptcy as if debt collection wasn’t challenging enough getting a debtor that cannot or will not pay what they owe.

However, even in debtor bankruptcy situations, creditors still have rights to a debtor’s money and possibly even property through liquidation or preventing discharged debts. For South Florida lenders, securing creditor bankruptcy representation in Coral Gables remains crucial for a positive outcome.

Unfortunately, many debtors hear the word “bankruptcy” regarding a debtor and stop their collection activities altogether. All is not lost concerning reclaiming a potentially lost debt to debtor bankruptcy, creditors can pursue several avenues to getting their money or property back without ending a relationship with a debtor.

In many bankruptcy situations, creditors remain entitled to at least a share of asset distribution of a debtor’s estate. Nonetheless, time remains of the essence as courts disperse these assets based on the priority of claims.

Creditors must act fast, relying on the court to express their concerns relating to a debtor’s bankruptcy plans. This includes how they liquidate their assets, in addition to the debts they choose to discharge.

Collecting an outstanding debt from a debtor is no easy task. When they declare bankruptcy, it makes the situation exponentially more difficult. This is why hiring creditor bankruptcy representation to represent a lender’s best interests in a debtor bankruptcy case remains so imperative.

Debt Collection and Debtor Bankruptcies

Most debtors and their bankruptcy lawyers begin their bankruptcy proceedings by petitioning the court for an automatic stay. This action protects debtors and their property from the ongoing collections process while they work their way through bankruptcy procedures. An automatic stay will prevent creditors from engaging in common debt collection practices including:

• Sending bills and demand letters
• Making telephone calls, emails, and other collection correspondence
• Continuing legal action, lawsuits, etc.

Although an automatic stay is not good news for a debt collection, assistance from a creditor rights lawyer can help a lender file a claim with the court outlining their right to a portion of a debtor’s bankruptcy assets.

Lenders must act swiftly as the courts impose strict deadlines to file any actions in bankruptcy cases. When a creditor mistakenly misses a date, they will likely find themselves unable to reclaim the debt or enforce their rights to the debtor’s property.

Attorneys providing creditor bankruptcy representation in Coral Gables can guide their clients through a debtor bankruptcy case including the viability of their claim for debtor assets and the potential to contest a debtor discharging certain debts.

Why Hire a Creditor Rights Attorney?

As soon as a lender receives a notice about a debtor’s bankruptcy filing, they may feel like they no longer have any rights to the money or property owed to them by a debtor. Nevertheless, creditors still do have options to pursue recompense when debtors claim bankruptcy.

When a debtor goes through liquidation of their assets, they often have little to nothing left to repay a creditor. The court will likely begin discharging certain kinds of debts during the bankruptcy proceedings as well.

Either of these situations likely means that lenders have a very slim chance of reclaiming the debt or property owed to them by the debtor. The debtor either cannot repay them or remain no longer viable for repaying their debt to a lender.

A creditor rights attorney will defend the lender’s rights to pursue these debts, in addition to staking their claim to the debts themselves. This includes taking all the proper actions to file a proof of claim and contesting discharges of a lender’s debts. 

The truth is, many debtors will even utilize bankruptcy as a form of debt relief, not because they don’t possess the necessary assets to pay. A creditor attorney’s services extend to ensuring that creditors can claim at least part of what remains owed to them during asset liquidation.

Creditor Bankruptcy Representation in Coral Gables | The Law Offices of Paul A. Humbert, P.L.

Our firm the Law Offices of Paul A. Humbert, P.L. represents clients throughout our home community in South Florida and clients all over the United States in their creditor rights cases. We believe that creditors should have the full backing of the law to enforce their rights to collect assets and repayment from their debtors.

To learn more about hiring creditor bankruptcy representation in Coral Gables from our law firm, contact our professional and dedicated attorneys for a comprehensive case analysis and a consultation today!