The thing to remember is that creditors have options available when responding to bankruptcy, but often will simply jump ship as soon as they see that it’s been filed. A simple and quick investigation of the case in question is all that is going to be required when looking ot see what can be done to deal with the claim or debt.
All that being said, take a look at the most common creditor methods for dealing with bankruptcy from a consumer. Most of these can also apply to business cases, though the complicated design of chapter 11 bankruptcy means that not every single option can be explored properly in this particular section, so keep that in mind.
Remember that the point of a bankruptcy case is that the debtor is trying to get rid as much of the debt as possible, so a creditor may be on the hunt for a judgement to keep his claim from being discharged in the first place. For this to come into play, it means that a complaint must be filed with the bankruptcy court within 60 days of the first date for the creditor’s meeting. The standard categories for the claim would be:
- The debt is from fraud by fault of the debtor
- The debtor embezzled from the creditor
- The debtor was willful or malicious is injury to the creditor and/or its property
Objection to discharge
An objection to discharge in cases that fall into chapter 7 is done by filing a complaint to the bankruptcy court against the debtor. If this is successful, the debtor will not be able to discharge the debt that is owed at the time of petition for bankruptcy. When looking to object to a debtor’s discharge, there are some options to consider:
- Lack of financial records produced by the debtor
- The debtor was not able to explain the loss of assets
- There was a false statement submitted in bankruptcy papers
- The debtor ignored the order of the bankruptcy court
- Property of the bankruptcy estate was transferred, concealed or destroyed without proper authorization or approval
Again, this complaint must be filed before 60 days from the first date set.
Overall, a creditor only will have about 90 days or less after receiving notice of bankruptcy to file the complaint. Since this is a very short time, the creditor is responsible for acting fast to see if there are grounds to object to this discharge.
Relief from the Automatic Stay
Repetitive Chapter 13 Petitions
Low Dividend Chapter 13 Plans
There are other ways in which they can experience the option to fight back against debt dismissal, which is why creditors are recommended to seen a San Diego attorney to make sure that they are being fairly represented and their needs are being met.