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Can I take action against a debtor once the debtor has filed a bankruptcy case?
Generally, all collection action to collect a debt is stayed automatically upon the filing of the bankruptcy case. There are some exceptions. See section 362(b) of the Bankruptcy Code.
Action taken in violation of the automatic stay may be void and a creditor may sanctioned (e.g. order to pay money).
A creditor may file a motion requesting, and in some situations, the court may grant the creditor, permission to resume collection activity. See section 362(d) of the Bankruptcy Code. To file such a motion, the creditor should consult the Federal Rules of Bankruptcy Procedure and the Local Rules.
What if I filed a lawsuit before the bankruptcy case was filed?
Generally, a creditor’s lawsuit commenced before the bankruptcy case was filed is stayed automatically unless the bankruptcy court gives permission for it to continue. There are some exceptions. See section 362(b) of the Bankruptcy Code.
The debtor is my employer and I am owed wages, what can I do?
If you are owed money by a debtor, then you are a creditor and you may file a Proof of Claim. You also should consult an attorney about the rights you may have available.
How do I know the debt owed to me is discharged?
The discharge order sent by the clerk’s office will contain a general statement about the categories of debts that are discharged. The individual debts that are discharged will not be listed on the discharge order.
Certain debts are nondischargeable only if the creditor files an adversary proceeding (lawsuit) with the bankruptcy court and proves one of the grounds for denial of the discharge or for a debt to be declared nondischargeable. See sections 523(a)(2), (4) and (6) of the Bankruptcy Code. For other debts, disputes regarding dischargeability may be determined at any time in either the bankruptcy court or in the appropriate state or federal court.
What is a Proof of Claim?
In a chapter 13 case and in a chapter 7 case in which there are assets available for distribution, creditors who are owed money must timely file a Proof of Claim. With some exceptions, the same is true in a chapter 11 case. A notice sent by the bankruptcy court will state the deadline for filing a proof of claim. Failure to file a proof of claim before the expiration of the deadline may result in the loss of important rights. Proof of Claim forms are available on the court’s website.
What is a 341 hearing?
A “341 meeting” is the required “meeting of creditors”under section 341 of the Bankruptcy Code. All creditors are notified of the meeting so that they may attend, but their attendance is not mandatory. Debtors must appear, testify under oath and answer questions from the trustee and any creditors who appear.
This meeting is held within 50 days after the petition is filed. Debtors are required to provide the trustee with photo identification and proof of social security number. A debtor’s failure to appear may result in dismissal of the case.
What is the automatic stay?
The automatic stay is a powerful provision of the Bankruptcy Code. With some exceptions, it requires all creditors to cease collection efforts, harassment, and foreclosure actions. It permits the debtor to attempt a repayment plan or simply to be relieved of the financial pressures that drove them into bankruptcy. The automatic stay also protects creditors. Without it, certain creditors would be able to pursue their own remedies against the debtor’s property. For more information about the automatic stay. See section 362 of the Bankruptcy Code.
What happens if a creditor attempts to collect a debt after a bankruptcy petition is filed?
In some circumstances, parties who violate the automatic stay can be held in contempt of court and held liable for damages. There are exceptions to the automatic stay. For a complete understanding, please read section 362 of the Bankruptcy Code or speak to a competent bankruptcy attorney. In chapter 13 cases, please read all of section 1301.