Got a Notice of Bankruptcy?

Posted By : admin
Category : Other
25 - Aug - 2014

Halcomb Singler, LLP, represents both debtors and creditors in bankruptcy proceedings in the Southern District of Indiana, Indianapolis division.  When an individual(s) or entity files for bankruptcy protection one of the first things that happens is that the creditors of that individual or entity’s creditors receive a notice from the court.  It is aptly called a Notice of Bankruptcy.  The notice of bankruptcy contains information such as the name of the debtor, the address of the debtor and the type of bankruptcy that has been filed.

Once a bankruptcy creditor receives this notice he or she is normally at a loss for what to do.  The bankruptcy notice contains notice of a hearing, and creditors sometimes contact our office asking whether or not they need to attend the hearing.

Just as with most legal answers… depends.  The type of bankruptcy, the amount of money owed, and whether the debtor is an individual or business is some of the information we use to determine whether it would be prudent to send an attorney to the hearing.  Often it is not worth attending the hearing since the bankruptcy trustee (person assigned to oversee the hearing) will send out a claim form if any assets are discovered to pay creditors.

The notice of bankruptcy also includes a notice of the “last date to determine dischargeablity.”  This is an extremely important date for creditors.  This is the last time that a creditor can file a lawsuit in the bankruptcy to object to the dischargeability of that creditor’s debt.   Again, whether it is worthwhile to file this case is very fact-specific.  Just because a person owes a creditor money does not mean that the creditor has any hope of having the debt found non-dischargeable.  Section 523 of the bankruptcy code lays out very specific reasons that the court may find a debt non-dischargeable.  Examples include when the debt was a result of fraud or willful and malicious injury.  The vast majority of creditors do not bring adversary proceedings.  However, if it makes sense to file an adversary proceeding the lawsuit must be filed prior to the date to determine discharge ability.

The bottom line is if you receive a notice of bankruptcy it may be a good idea to contact a bankruptcy attorney (not the bankruptcy attorney representing the debtor in the bankruptcy).  The simple fact is that only attorneys licensed to give legal advice and bankruptcy attorneys will be able to properly advise you whether you need to take action to preserve any of your rights in the underlying bankruptcy case.  If you are a creditor who has gotten a notice of bankruptcy and would like to set up an appointment to review your options do not hesitate to contact Halcomb Singler, LLP, at 317-575-8222.