That depends. You must participate in the bankruptcy proceedings and you may desire legal representation depending on the complexity of the case, the legal priority of your debt and the amount of money that is owed to you. The bankruptcy trustee who is assigned to the debtor’s case will determine the priority of the debts. In a Chapter 7 bankruptcy, the trustee will distribute the eligible assets of the debtor to the creditors depending on who has a secured versus unsecured interest in the debtor’s assets and who has a priority to payment. In a Chapter 13 bankruptcy proceeding, the trustee will help the parties develop a repayment plan. Any claims that are not part of the trustee’s plan pursuant to Chapter 7 or Chapter 13 are likely to be dismissed and in most case the debtor will no longer have any legal obligation to repay the debts.
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