During bankruptcy in Hamilton, OH, a debtor obtains a discharge of some of their debts, leaving creditors to wonder if they will ever be repaid. In this guide, clients can learn about creditors’ rights during bankruptcy, and they can learn how an attorney can protect their interests.
Determining Claim Priority
Secured debts are given high priority in bankruptcy claims. A secured debt is one that has collateral such as a person’s house or car. Unsecured debts such as doctor bills and credit card debts are given lower priority, and some creditors may receive little to no money from a debtor. Some debts are high-priority and can’t be discharged, such as child support and student loan payments. A bankruptcy attorney can help one determine whether they can discharge a particular debt.
What A re Creditors’ Rights When They Receive Notice of a Debtor’s Bankruptcy?
If a creditor receives notice of a debtor’s bankruptcy, they should immediately cease all further collection activity, including phone calls, mailed bills, and debt-related legal actions. From there, the creditor should file a claim with the local bankruptcy court. Deadlines for filing are very strict, and creditors should act quickly to maximize their chances of making a recovery.
Consumer Protection from Creditor Harassment
In most instances, when a person files for bankruptcy protection, their creditors stop all types of contact right away. Most creditors are aware that they could find themselves in serious legal trouble if they continue trying to collect a debt after the debtor files for bankruptcy, but others continue their harassments. Thankfully, the US Bankruptcy Code protects the debtor against harassment and other illegal conduct by creditors.
Hiring an Attorney
If a creditor has received notification of a debtor’s impending bankruptcy in Hamilton, OH, they should call an attorney. A lawyer can tell whether a debt is secured or not, and they can give an idea as to the size of a potential recovery. Consumers can click here to find out a lawyer can offer protection from creditor harassment, and they can help the client file the suit in a timely fashion.