What should we di if we are acreditor and our debtor is filing for bankruptcy?

Get Legal Help Today

 Secured with SHA-256 Encryption

What should we di if we are acreditor and our debtor is filing for bankruptcy?

We have a small (2 person) business. A local company owes us $1924 and is filing Chapter 11 bankruptcy. We received a letter asking if we want to file a motion to object to the Unsecured Creditors Committee. The letter also stated that they want to request that a retainer fee of $10,000 be held in trust for the secured counsel. Should we object? If so, why?

Asked on December 16, 2010 under Bankruptcy Law, Indiana

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

First, who sent you a letter requesting a retainer fee--a law firm? If so, don't pay it, unless you feel that paying $10 to *maybe* recover $1,924 is a good bargin. You can and should put your claim in and you can object to the bankruptcy if there are good grounds to object on your own--you don't need an attorney, and an attorney would not be worth it for this amount.

If you are an unsecured creditor, if you're lucky, you'll get a few dimes on the dollar. If you're a secured creditor, you may be able to get the property or asset serving as securityy. Probably for this amount of money, it is not, unfortunately, worth much effort on your part. At least it should be a tax loss if you're not paid.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption