Frequently Asked Questions

The following information includes frequently asked creditor bankruptcy questions. The answers stated are general in nature and are not intended to apply to every situation. Each case is different and carries its own set of circumstances which must be taken into consideration by competent legal counsel. If you or someone you know in Dallas would like further information regarding creditor bankruptcy rights and creditor collections, call Attorney Joseph Coleman of Kane, Russell, Coleman & Logan at 866-435-3766, or use the contact form provided on this site to schedule a consultation.

What is the automatic stay?
This is an injunction that goes into effect automatically upon the filing of a bankruptcy. It strictly prohibits the commencement or continuation of any acts to collect on a debt that arose prior to filing the bankruptcy. This includes enforcement of judgments, creating or perfecting liens, and many other actions. (It does not apply to collecting alimony maintenance and support).

Can I still try to collect on a judgment after the debtor files bankruptcy?
No. However, you may have rights to pursue in the bankruptcy depending on what chapter was filed and whether you are secured by any of the debtor's property.

I hold a trust deed on the debtor's house and I am in the process of foreclosing when a bankruptcy is filed. What should I do?
First of all, you cannot proceed with the foreclosure. What you do next depends on what chapter the bankruptcy case was filed under and what the debtor's intentions are with respect to the property. If the property is the debtor's principal residence and he filed a Chapter 13, he will be required to stay current with your payments from that point forward and propose a plan to repay the past due amounts. You should either obtain a copy of the debtor's statement of intentions or contact the debtor's attorney to find out what his plans are with respect to your collateral. If the debtor filed Chapter 7, you can obtain permission from the court (via a Motion for Relief from the Automatic Stay) to allow you to proceed with your foreclosure.

Can the debtor lien strip (reduce the value of) or remove my lien against his/her real property?
If the real property is the debtor's principal residence, only under the following circumstances:
• You have a judgment lien (rather than a consensual trust deed based on a loan) against the debtor that has attached to her property prior to the filing of the bankruptcy case.
• The debtor may be able to avoid your lien even in a chapter 7 if it impairs the debtor's homestead exemption as that term is defined in the bankruptcy code, based on the value of the property and amount of senior liens and encumbrances on the date the bankruptcy case is filed.

I'm an unsecured creditor. How do I make sure the debtor is paying everything he should or that he has included all his assets?
This depends on what chapter is filed and how much you want to spend investigating everything. The bankruptcy papers that are filed may be obtained from the clerk of the court. You can review these papers to see if anything seems inaccurate to you. You may also obtain court approval to take the debtor's deposition if you wish to inquire in more detail as to the debtor's assets and debts.

I am in the middle of a lawsuit when the defendant files bankruptcy. What happens now?
The lawsuit must not proceed unless and until you obtain permission from the bankruptcy court. There may or may not be reasons for doing this (such as to determine, i.e. liquidate, the amount that is owed to you).

How do I get the debtor to reaffirm my debt?
Debtors may choose to reaffirm certain pre-bankruptcy obligations. This reaffirmation turns the debt into a post-bankruptcy obligation. This is desirable for creditors, but almost never for debtors. Extreme care must be exercised in seeking a debtor's reaffirmation as there are increasing court and other legal requirements for doing so.

How do I determine the deadline for filing a proof of claim?
Shortly after the bankruptcy filing, the court sends out a notice of bankruptcy that includes information regarding the date, time and place of the first meeting of creditors, the deadline for filing proofs of claim, and deadline for filing objections to discharge.

May a debtor add additional creditors after the case has been filed?
Yes. This may be done at any time. A debtor may also amend to correct or add any other information contained in the papers.

If I was not listed in the bankruptcy and didn't receive notice, can my debt still be discharged?
Generally, a debt that is not listed or scheduled on a bankruptcy petition will not be discharged unless the creditor has notice or actual knowledge of the case in order to timely file a proof of claim. However, if it is a no asset bankruptcy (meaning, no distribution would be made), most courts hold that the debt will be discharged even if it was not listed since there would be no distribution in any event. If you have grounds for objecting to the debtor's discharge, that time period may be extended if you received no notice of the bankruptcy.

How much does KRCL charge for creditor bankruptcy?
KRCL has very competitive prices, which fall within the range of the industry standard.  The Firm tailors fee arrangements for each client's needs. Due to the nature of law, each case is unique and KRCL has many fee structures to accommodate each client and each client's case based upon:

• Contingency 
• Retainer 
• Deposits
• Set Fees 
• Billable unit rates or any combination of the above

KRCL gives every case individual attention and will work with you to find the best rate plan. There will be no hidden costs. You will be informed of the fees for your case during your first meeting with Attorney Joseph Coleman.