In this blog post, I want to concentrate on those who have lent money only to find that their borrower has declared bankruptcy. What can you do if the person who owes you money just filed for bankruptcy?
- The first thing to do is evaluate what type of a claim you have. Certain claims are non-dischargeable. For instance, if someone was drunk and crashed into you on the road, they will owe you money. Even if they filed bankruptcy, they would not be able to get rid of the debt they owe you
- Next, consider whether there will be any money to distribute. With the help of a bankruptcy attorney, you should review the schedules filed by the debtor to determine if there is anything of value that can be sold or if there may be any property that the debtor forgot to disclose.
- The last thing to examine is whether your claim is entitled to a priority position in the bankruptcy. For instance, if you have a claim against your employer who filed bankruptcy, you would be entitled to receive a greater distribution of the payout than if the debtor was a credit card company.
Bottom line: creditors have rights in bankruptcy. If someone who owes you money declares bankruptcy, don’t just throw your hands up in the air.
Come meet with an experienced Arizona bankruptcy attorney to discuss filing a claim against a borrower in debt, or call (480) 648-8975 today for your bankruptcy consultation.