Creditors Rights: Can They Affect Your Case?

One of the biggest surprises individuals find who file for bankruptcy without legal counsel is that their petition can be refused by the court in certain situations. The most common reason for this denial is a creditor who is contesting the claims made in the petition. When a bankruptcy trustee receives a petition they will contact all listed creditors and notify them of the filing along with case particulars. Some bankruptcies generate a creditor meeting, while other simple filings often do not. The possibility of a discharge denial is actually one of the primary reasons petitioners need representation from bankruptcy professionals like Canfield Wells bankruptcy attorney in Hopewell VA who understand what to expect in response.

Notification of Petition

All creditors will be notified of any bankruptcy petition in which they are included regarding the application. Creditors can inspect the filing and assess the accuracy of the amount that is owed to them in association with all other creditors. Chapter 13 bankruptcies will typically also include a repayment plan for each creditor on the schedule and a list of those being discharged as unsecured. Chapter 7 filings will list assets used as collateral and can be seized for sale along with the amount of discharged unsecured debt. The creditors then have the right to contest the plan.

Court Response

When the court is evaluating a bankruptcy petition they generally consider the conduct of the filing party in creating the debt, the potential recovery of their finances, and the rights of the creditor to oppose the approval. Bankruptcies involving large amounts of debt that result in an unfavorable creditor meeting can be reconsidered by the court, which can then return an order to continue with the debt discharge, suspend the bankruptcy petition until an agreement can be reached, or even deny the bankruptcy request when the creditor proves their assertions in the contest. And, there are actually several types of unsecured debt that cannot be discharged, which a bankruptcy attorney will know in advance when the petition is being compiled.

Virginia residents should never attempt handling their own bankruptcy filing because debt discharge is not automatic. There are specific rules and exemptions that apply. Virginia residents considering bankruptcy should always call Canfield Wells bankruptcy attorney in Hopewell VA for comprehensive representation.