What steps to take if you are a creditor but your debtor is filing Chapter 7?

UPDATED: Apr 4, 2012

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What steps to take if you are a creditor but your debtor is filing Chapter 7?

I just received a letter stating my debtor is filing bankruptcy. Where do I go from here? The court ordered payment for debt through small claims court last year and we still have not received full amount. Will this help me to get my money back? The letter states not to file a proof of claim unless I receive a notice to do so. Right above this, it says the deadline to file a complaint objecting to discharge is a date about 4 months from now. Does this mean I need to file a claim that he owes us money or that our collection is being discharged?

Asked on April 4, 2012 under Bankruptcy Law, Indiana


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You have entered the no payment zone unfortunately. What your debtor did is to abolish the many debts he owes, including yours. So you do have to file a proof of claim and unless your debt falls into the category of being exempt from bankruptcy or falls into a priority claim, you will need to wait while the claim is processed and the trustee goes through the accounting process of debts and assets. You cannot attempt to collect this debt while he is in bankruptcy because it would be a violation of the Fair Debt Collection Practices Act. You can certainly file a motion to be exempt from the motion to stay or to lift the stay while you attempt to collect payment but nothing can be done without court approval.

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