Creditors' Rights

Worcester Creditors' Rights Attorney

Protecting Creditors' Rights in Bankruptcy

For creditors that are owed money, the filing of bankruptcy by a debtor can be a difficult period. In certain circumstances, the creditor may be able to commence collection efforts prior to the filing of bankruptcy. In other cases, the creditor's options for collecting the obligation are limited.

If you are a creditor and an individual or business that owes you money has filed for bankruptcy, you should get in touch with a reputable creditors' rights lawyer in Worcester. As a creditor, you also have rights. Learn more about the options available to you and protect yourself by speaking with a creditors' rights attorney near you!

Our Worcester creditors' rights lawyer at Morrison & Associates, PC can help you understand and navigate the bankruptcy process as a creditor. We can assist you in filing a proof of claim, objecting to a debtor's discharge, and much more.

Contact us online or call our office at (508) 928-3038 to learn more about how we can help you in the face of a debtor's bankruptcy.

How to Protect Your Rights as a Creditor

Whether you are a secured or an unsecured creditor, there are some steps you can take to protect your rights when an individual or business owes you money. Before you begin the repossession or foreclosure process or file a lawsuit, below are some ways you can protect yourself.

Some of the most important steps to take as a creditor include:

  • Documenting the debt: Keep copies of all invoices, bills, and other documents that show the debtor owes you money.
  • Checking for bankruptcy filings: Because an automatic stay goes into effect when a debtor files bankruptcy, it is important to check if your debtors have filed. If they have, there are certain steps you may take to protect your rights.
  • Understand your rights: Discuss your situation with a skilled creditors’ rights attorney in Worcester to learn more about what your rights are and what actions you may take based on the law.

How to Collect a Debt After Bankruptcy

When an individual or business files for bankruptcy, creditors will often be left with unpaid debts. However, this does not mean that the creditor has no options for collecting the debt.

There are several steps you can take to collect a debt after the debtor files for bankruptcy.

File a Proof of Claim

As a creditor, you have the right to file a proof of claim with the bankruptcy court. A proof of claim is a document that outlines the debt owed to you. You must file a proof of claim in order to have your debt considered for discharge.

Object to a Debtor's Discharge

As a creditor, you have the right to object to a debtor's discharge if they have committed fraud, concealed property, or otherwise acted inappropriately.

For example, if you are a credit card company and the debtor made numerous large purchases on the card before filing for bankruptcy, you may be able to object to the discharge of the debt.

Reaffirmation Agreements

In some cases, a debtor and creditor may enter into a reaffirmation agreement. A reaffirmation agreement is a legally binding contract that replaces the original debt with a new one.

The debtor agrees to repay the debt in exchange for the creditor agreeing to not seek discharge. A reaffirmation agreement is typically used when the debtor wants to keep the property securing the debt.

Our Worcester creditors' rights attorney can help you file a proof of claim with the bankruptcy court. Contact us at (508) 928-3038 for a consultation.

As a creditor, you can also take steps to collect a debt from a debtor after they have received a discharge.

Some of the most common methods of post-bankruptcy debt recovery include:

  • Informal payment arrangements
  • Forbearance agreements
  • Structured settlements
  • Bankruptcy litigation

Informal Payment Arrangements

After a debtor has been discharged, you may seek to reach an informal payment agreement with them. An informal payment arrangement is a plan in which the debtor repays the debt in installments over time.

Forbearance Agreements

A forbearance agreement is a legally binding contract that allows the debtor to temporarily stop making payments on the debt. In exchange, the creditor agrees to not take any further collection action against the debtor.

Forbearance agreements are typically used when the debtor is facing a temporary financial hardship and is expected to be able to resume making payments in the near future.

Bankruptcy Litigation

If you believe a debt was illegally discharged, you might bring a lawsuit against the debtor to collect it. However, this can be a lengthy and costly procedure.

Our Worcester creditors' rights lawyer can explain your choices for post-bankruptcy debt recovery. We can assist you in negotiating an informal payment agreement, filing a lawsuit, and more.

How to Collect a Debt Before Bankruptcy

In some cases, you may be able to take action to collect a debt before an individual or business files for bankruptcy. This is why it is important to check for bankruptcy filings regularly.

Some of the steps you can take to collect a debt before bankruptcy include:

  • Obtaining a judgment: If the debtor has not yet done so, you may start a lawsuit against them to acquire a judgment. A judgment is a court ruling requiring the debtor to pay the debt.
  • Seizing assets: If the debtor fails to return the amount as required by the judgment, you may initiate legal action to seize and sell their assets to reimburse the debt.
  • Garnishing pay: If the debtor is currently employed, you can file a lawsuit to seize their wages. A wage garnishment is an order from the court that mandates the employer of the debtor to deduct a certain amount from their pay and send it to you.
  • Levying bank accounts: You may file a lawsuit to seize funds from a bank account held by the debtor. A court order known as a "bank account levy" permits you to take money straight out of the debtor's bank account.

How Our Worcester Creditors' Rights Lawyer Can Help

At Morrison & Associates, PC, we understand how stressful it can be for a creditor when a debtor files for bankruptcy. Our creditors' rights attorney can help you understand your rights as a creditor and take the appropriate action to protect them.

If you are a creditor who is owed money by an individual or business that has filed for bankruptcy, contact us for a consultation with our team. Dial (508) 928-3038 or reach out online.

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Client Testimonials

  • "If you are facing a bad financial situation don't hesitate to give Troy a call"
    Wally B
  • "Attorney Morrison is knowledgeable about bankruptcy rules and was very generous with his time."
    Former Client
  • "Troy then helped us complete the process with compassion and kindness. We would recommend Troy to anyone struggling to get through a difficult financial situation."
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