Creditors’ Rights in Chapter 13 Bankruptcy

In Chapter 13 bankruptcy, much of the legal proceedings focus on protecting the rights of the debtor. What can be overlooked is that the process also provides protections for creditors. The Maryland creditor’s rights attorneys of Rosenberg Martin Greenberg are experts in taking the fullest advantage of protections available for an individual or corporate creditor.

Creditor protections in Chapter 13

Since Chapter 13 reorganization is only an option for individual debtors or sole proprietors whose income is too high to qualify for a Chapter 7 liquidation, there is reasonably good potential for creditors to recover on their liens. 

Some of the areas where a creditor’s rights attorney can help improve a creditor’s outcome include:

• Sale of property of a bankruptcy estate – Knowledgeable bankruptcy counsel can ensure that priority attaches to the sale proceeds in the same order it was attached to the property. An attorney will also ensure that the property is properly valued and that its sale will satisfy the liens. In addition, a representative will ensure that all required notices are provided.
• Automatic stay – The stay becomes effective immediately upon a debtor’s filing, but it may be lifted when qualifying conditions exist. Knowing when and how the stay can be lifted prevents penalties for actions taken in violation of the stay, which are void, absent a court order.

Benefits of a creditor’s rights lawyer in Chapter 13

In many cases, having a bankruptcy attorney is required by law. A corporation, like most other business entities, is a fictitious person created under law. Maryland, like most states, has passed laws prohibiting the unauthorized practice of law by non-lawyers. This means a corporation needs to be represented in court by an attorney licensed in the appropriate jurisdiction. Anything more complicated than attending a meeting of the creditors or filing a proof of claim will often cross into the realm of practicing law.

For businesses with in-house counsel, the company’s lawyer may be eligible to defend the rights of the company, provided the legal department has the bandwidth to accommodate such additional and complex legal matters. Another option is to engage the services of dedicated bankruptcy counsel to protect the rights of the creditor entity.  RMG is equipped for the types of issues that can arise when a routine bankruptcy proceeding turns complicated.

Rosenberg Martin Greenberg has successfully protected creditors’ rights in bankruptcy for 30 years. We  are ready to take over when bankruptcy proceeding turns complicated. We treat even large-scale cases with the personal touch of a small firm. Call today for a free evaluation of your rights after a bankruptcy filing from your debtor.