Creditors Rights and Bankruptcy in Arizona
There are many parties involved during a bankruptcy filing, including creditors. Your creditors will file and make petitions during the proceedings to make sure they get their fair share of the wealth. While you’re the most important person involved in the Arizona bankruptcy filing, creditors have rights under Arizona law.
Creditors have lawyers devoted to dealing with bankruptcy situations. Chances are high that your creditor knows exactly what to do and has vast experience in bankruptcy court. There are many options for creditors during bankruptcy discussions, though there are strict rules that the creditors must adhere to and timelines they must pay attention to. Here’s what you need to know about your creditors involved in your bankruptcy filing.
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Creditors rights during bankruptcy under Arizona law
Just like you will be working with your attorney to meet various deadlines and filing dates, so will the creditors. Their options are many when it comes to being involved in your bankruptcy filing. Here’s a look at what those options are and their role during these various phases of your bankruptcy filing.
- 341 Meeting of Creditors: Approximately 30 days after you file for bankruptcy, the courts will call a 341 Meeting of Creditors. These meetings move quickly and last only a few minutes. The main point of the meeting is for the trustee to ask the individual filing for bankruptcy a series of questions. While the focus is on the trustee and the bankruptcy filer, there is an opportunity for the creditors involved in the filing to ask questions as well. The bankruptcy filer is under oath, which makes it an opportune time for creditors to ask questions and get answers. Creditors might take this opportunity to document issues in the case with the trustee present to hear them.
- 2004 Examination: Rule 2004 of the Federal Bankruptcy Rules of Procedure allows creditors to require debtors to provide documentation. While many of these requests are just the creditor fishing for information, it is permissible. And if the creditor makes such a request, the debtor and the debtor’s attorney must provide a deposition-style examination of the material requested.
- Proof of Claim: To ensure the creditor is not left out of the bankruptcy conversations, they must file a proof of claim. This documentation shows what the debtor owes the creditor and breaks down that debt by principal, interest and other fees. Once the proof of claim is filed, it allows the creditor to be a larger part of the bankruptcy conversation and ask questions during the 341 Meeting of Creditors. It also ensures that creditors are included in payment plans once the judge rules.
- Denial of Discharge: A creditor can prove that you committed a fraudulent act or other malicious injuries toward the creditor. If they effectively prove this, the courts could deny the discharge of your debt to that creditor. This denial of discharge would be in addition to your other debts that are not dischargeable, including tax debt, child support, student loans, etc.
- Request to Lift Automatic Stay: Once you file for bankruptcy, creditors cannot take actions against you and their collections process pauses. However, the creditor can make a request to the courts that the automatic stay be lifted so that they can pursue litigation against you or place liens on your property. For a judge to consider something like this, the creditor must show cause.
Working with an Arizona Bankruptcy attorney
You should not feel overwhelmed by the information about the creditor’s role in the bankruptcy filing. Arizona bankruptcy attorneys are well versed in the options available to creditors and how these creditors sometimes use their rights against bankruptcy filers.
Your attorney will walk you through the many phases, meetings and court sessions involved in a bankruptcy filing. As an advocate for your case, your attorney will also do everything in their power to make the bankruptcy terms as favorable to you as possible to block some of the tactics creditors use to favor them. Contact us to learn more about what we offer in your bankruptcy filing.
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