In Defense of Creditor Rights in Bankruptcy Cases

When many think about bankruptcy situations, they will look at Florida law as a tool to protect debtors as opposed to the defense of creditor rights. Although Florida was once considered to serve as a “debtor’s haven” alleviating many obligations and pursuit by creditors to collect owed debts, this has largely changed over time.

Nevertheless, when debt collectors delay in acting against a debtor, this can lead to a situation where they reclaim substantially less or lose out on collecting any of their property altogether for various reasons.

Securing creditor bankruptcy representation in Fort Lauderdale remains crucial to obtain the best possible outcome in dealing with a debtor. A creditor rights attorney can alleviate issues in debt collection through negotiation, as well as litigation.

How Do Florida Bankruptcy Cases Work?

A bankruptcy case will often begin with a debtor filing a petition for bankruptcy with the clerk of court. An individual debtor may file this petition, or spouses can file collectively. Corporations and other business entities can also similarly file for bankruptcy as well.

The documents a debtor must file to begin a bankruptcy case include their assets, income, payment liabilities, in addition to the contact information for any creditors. They must also submit documents that outline how much they owe their creditors.

Once the debtor files bankruptcy, this initiates something the legal system refers to as an “automatic stay”. The automatic stay ceases collection actions against a debtor and their property. If this remains in effect, a creditor must stop every collection activity including phone calls, letter correspondence, lawsuits, and wage garnishment.

After receiving a bankruptcy petition, the court will then disperse notice to creditors informing them of the debtor’s filing. The court will often allow a debtor to plan and reorganize their finances to attempt repayment to creditors. However, they may also require liquidation of the debtor’s assets in an attempt to resolve the debt.

In the case that the court recommends asset liquidation, and the debtor possesses little to no assets or funds to repay a debt, the court may also enable a debtor to discharge owed debts without objection. Discharge allows a debtor to cease payment free from liability for repayment.

Discharged debts are one of the worst things that can happen to a creditor in a debt collection scenario. Creditor bankruptcy representation in Fort Lauderdale from an experienced attorney remains essential to best represent a creditor’s rights and ensure they don’t lose out on a repayment.

What Rights do Creditors Have in Debtor Bankruptcy?

When a creditor receives the notice showing a debtor filed for bankruptcy, giving up is the last thing they should do. Although it may feel like everything is lost, they still have rights to what the debtor owes.

The type of bankruptcy that a debtor files as well as their potential repayment plan will shape the next steps for a creditor.

Creditors still have the right to reclaim at least some of the remaining debt in situations that involve secured loans or property. The debtor bankruptcy process for creditors to reclaim these assets involves filing a proof of claim in the bankruptcy proceeding. Failing to submit proper documentation can jeopardize any creditor’s rights to assets or funds.

An experienced attorney for creditor bankruptcy representation in Fort Lauderdale will help guide clients through these complex legal waters, ensuring the best possible outcome including repayment and recompense for what a debtor owes.

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

A debtor filing for bankruptcy doesn’t mean that creditors have no rights to reclaim their property or obtain recompense for what a debtor owes them. Creditors may claim their right to property or regain their right to begin collection activities again.

Our law firm, the Law Offices of Paul A. Humbert, P.L. serves as a preeminent resource for creditors in the South Florida area, as well as throughout the United States. We guide our clients through the convoluted phases of debtor bankruptcy, representing their best interests in reclaiming their property each step of the way.

Attorneys from our firm regularly handle bankruptcy cases for small and medium-sized businesses. However, large corporations, banks, and credit unions reach out to us for our creditor bankruptcy representation in Coral Gables as well as guidance in these cases.

This is largely due to our knowledge and experience gained over long careers in handling creditor/debtor relationships. To learn more, reach out to the attorneys from our firm today!