Protecting Your Rights as a Lender
The possibility of bankruptcy exists whenever credit is extended. In the unfortunate case when your client files for bankruptcy, you need to secure the best possible position quickly so that you can avoid losing your claim.
First, you need to know that secured creditors are more likely to recover at least part of a claim than unsecured creditors when bankruptcy occurs. And, of course, a creditor’s rights differ depending on the circumstances of the bankruptcy.
Your approach to maximizing your rights in bankruptcy court as a creditor will be based on the following factors:
- Is your client’s claim secured?
- What is the nature of the security interest?
- Did the debtor file under Chapter 7, 11, or 13?
After a debtor files a bankruptcy petition, the court issues an automatic stay. This prevents creditors from taking any further action to collect debts directly while the bankruptcy is pending. When this happens, the only safe way for a creditor to proceed is via a claim in bankruptcy court. Creditors should never take actions that would violate the stay. Instead, they must file a timely proof of claim so that the court can recognize their claim.
From a creditor’s perspective, bankruptcy litigation can be a realistic way to recover property and enforce claims. But if your claims are secured, you must be vigilant in protecting your claims to property that is in the possession of debtors who have filed for bankruptcy. If you have an interest in cash or proceeds, you must act immediately to ensure that your interest is recognized, and that collateral is not used or dissipated without your consent.
We Can Help
We represent creditors in Maryland bankruptcy courts. When you are a holder of secured debt and you are confronted with the automatic stay of bankruptcy, our skilled legal team will go to work. Our firm’s services include:
- Adversary complaints
- Motions for relief from stay
- Proofs of claim
- Reaffirmation agreements
Our attorneys use aggressive strategies to ensure that you receive the maximum repayment possible from your debtors in bankruptcy.
Protect your Interests When You Hire Our Bankruptcy Lawyers in Towson at Huesman, Jones & Miles
Your financial institution must rely on attorneys who can confidently take on your debtors in default. Our bankruptcy lawyers in Towson at Huesman, Jones & Miles, LLC provide experienced representation. Contact us online or call us at 443-589-0150.