What to Do if Someone Who Owes You Money Files for Bankruptcy
If someone you’ve done business with owes you money and files for bankruptcy before paying you, what do you do? Bankruptcy law is complicated and differs a great deal from other areas of law. Although it may seem like there’s nothing you can do, the experienced attorneys at Spivey, Pope, Green & Greer can help you fight for your payment.
Cease All Collection Efforts
When a debtor files for bankruptcy, you must stop all collection efforts immediately. If you continue to try and receive payment, you could be sued or fined.
In order to get your money back, you’ll have to go through the courts. It’s important to realize that receiving your money will be difficult, and you will likely receive only part of your money.
File a Proof of Claim
The proof of claim outlines what the debtor owes you and why. The court will set a deadline for when your proof of claim should be filed, so make sure you and your lawyer complete this form on time. If you don’t, you won’t receive payment.
Review the Repayment Plan
The debtor must create a repayment plan that their court-appointed trustee approves. This plan outlines when and how each debt will be paid off. You and your lawyer can review this plan and either consent or not.
Play the Waiting Game
If the person who owes you money filed Chapter 11 or Chapter 13 bankruptcy, he or she will have to abide by the payment plan. Debts such as secured claims will be paid first. Unsecured claims rank low in the hierarchy, so if your debt is unsecured, you might be waiting for a while.
The best way to deal with a debtor who has filed for bankruptcy is to hire a skilled attorney who will increase your chances of getting payment. SPGG attorneys John Burton Wilkerson, Jr. and Thomas M. Green have expertise in creditors’ rights and bankruptcy filings. Contact our attorneys today for a consultation.