Creditor Representation in Bankruptcy

 

Most times, when a debtor files for bankruptcy, this is very bad news for the probability of collection.  Nonetheless, there are times when it is worthwhile to pursue legal representation as a creditor in a bankruptcy.

 

-  First and foremost, when the client has a secured lien.  Basically, this occurs when the creditor provided some or all of the money to purchase an asset involved in the bankruptcy.  Hopefully, this was done with documentation allowing the creditor to foreclose or repossess the asset associated with the debt in the event of default.  (Properly filed documentation is called 'perfecting the lien'.  An 'unperfected' lien can sometimes still be enforced, but only under limited circumstances.)

 

- Second, when the judgment lien has been perfected by abstracting the judgment.  While the bankruptcy is still very damaging to the value and collectibility of the judgment, if there are non-exempt assets from which the trustee might distribute dividends, having abstracted the judgment places the claim toward the front of the line.

 

- Third, when the nature of the claim for the underlying judgment makes the claim non-dischargeable in bankruptcy.  For instance, if the claim is based on fraud, the Texas DTPA, a divorce decree, or child support - those claims are generally protected from discharge in a bankruptcy.

 

Actions which JH&A might representing a creditor in bankruptcy include -

 

- Filing a motion to lift stay to allow a creditor to move forward with a foreclosure proceeding;

- Filing a proof of claim to get in line for any dividend distributions; or

- Filing a lawsuit called an adversary action to contest the dischargeability of a debt;

 

These actions are usually handled on an hourly fee basis.

 

The attorneys at JH&A have extensive practice within the bankruptcy courts and are ready to assist protecting your claim.  If your debtor files bankruptcy, call JH&A today.

281-408-3683

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