One of the wonderful things about bankruptcy is the Automatic Stay, the protection from creditor collections that stops wage garnishments, foreclosures, car repossessions, lawsuits, and more when a bankruptcy case is filed. The stay applies to (almost) everyone, and it doesn’t let creditors decide if they want to ignore or abide by the stay.
That means, however, that all creditors are entitled to notice. That includes creditors on debts that our clients want to keep. We can help discuss reaffirmations of loans in Chapter 7 bankruptcy cases or means to keep the property in reorganizations cases; that is, in Chapter 13 bankruptcy cases. But we need to know about all debts to make sure we can help achieve these goals.
Debts that we need to know include:
- Debts are owed to family members, even if you have every intention of repaying the loan.
- Recent medical debt, even if it hasn’t gone through insurance yet.
- Co-signed car loans and other loans, even if you are not the one making the payments.
- Anticipated income taxes or other taxes due, even if the returns haven’t been filed.
- Personal guarantees on business debts like leases.
Beyond the fact that debtors are obligated under the bankruptcy rules to list all of their creditors, it’s just good practice to let all creditors know what is going on. That way they know to either expect payment or some other treatment of the debt.
Besides, creditors who aren’t notified and don’t receive the Notice of Chapter 7 (or Chapter 11, 12, or 13) Bankruptcy Case can’t be sanctioned for intentionally violating the automatic stay if they aren’t notified. Even creditors you are worried about learning of the case would be covered and you’ll see a lot fewer calls and e-mails to collect.
We have a lot of experience in consumer bankruptcy cases, Chapter 7, and Chapter 13 cases. We also have experience in non-consumer cases like small business and farm cases. That is Chapter 11 and Chapter 12 cases. Because of this experience, we can discuss how to treat creditors. But we need to first know all of the creditors before providing that advice. Some creditors don’t even show up on credit reports.
Know About All Creditors
Tell us about all of your debts and we can assure you that you’ll receive the best advice on how to handle the debts, in bankruptcy or outside of a filing. For more information visit us at: www.kansascitybankruptcy.com.
At WM Law, we are….HERE TO HELP.