What are my rights as a creditor against a debtor who is filing for Chapter 7?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
What are my rights as a creditor against a debtor who is filing for Chapter 7?
I had a tenant who was evicted a judgement was awarded in my favor for about $3000. I waited about 2 years to take him to court to begin getting my money from him. The judge made a ruling that he was to pay me $80 a month until the full amount was paid. He made these payments in 2009. In 2010 he made only a few payments, then stopped. I found out that the business closed down. Approximately, 2 weeks ago he filed for Chapter 7 bankruptcy. What rights do I have as a creditor?
Asked on January 10, 2011 under Bankruptcy Law, Illinois
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
If the business is the debtor and it was an LLC or a corporation, then while you have the right to file you claim with bankruptcy court so you will get the appropriate distribution (if any) from the assets of the bankrutcy estate, it may be that *all* you can do is put in a claim and hope to get whatever--often dimes or even pennies on the dollar--comes to you. If the business is a debtor but is a sole proprietorship, or even if it's a LLC or corporation, but your debt was personally secured by an owner or other person, you may be able to proceed against the owner directly, even if there is a business filing; it depends on the circumstances. If any property or assets secured the debt, you would have recourse to that property or asset--you can at least get it, even if you can't get anything else.
Depending on how much is still owed, it may not be worthwhile expending much effort or money on this.
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.