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Court Rules that Debtors Infringed on Creditors' Rights in San Jose Bankruptcy Case

busness-creditor.jpgRecently, the Northern California Record reported that five different debtors made unlawful modifications to their Chapter 13 bankruptcy debt restructuring plans. More specifically, the debtors failed to give proper notice to the bankruptcy trustee and creditors. Due to this, the creditors lost out on their right to object to the plan. The right to object is a valuable tool for creditors and it must be protected. If you are a California creditor and you have questions about your right to object, please contact an experienced San Jose creditors rights attorney today to discuss your legal options.

The Importance of the Right to Object

When a debtor is going through Chapter 7, Chapter 11 or Chapter 13 bankruptcy, all impacted creditors have important legal rights. First and foremost, this includes the right to notification about the bankruptcy filing and any material changes in the bankruptcy proceedings. The bottom line is that the debtors do not have the right to make unilateral decisions. This is true even if they are completely confident that the decision will be approved by the creditors. Ultimately, creditors retain objection rights. Of course, their object may not be sustained, but, creditors deserve their chance to be heard. In a Chapter 13 bankruptcy case, creditors may decide to raise an objection for a wide variety of reasons. A non-exhaustive list of some of the most frequently used grounds for creditor objection include:

  • Inaccurate listing of the debts;
  • Dispute over the classification of the debts;
  • Unfair treatment to a certain class of creditor; or
  • A proposed cramdown of the bankruptcy plan.

What Can a Creditors' Rights Attorney Do to Help?

It is important to remember that a bankruptcy filing usually means that all creditors will not be re-paid in full. While this is not always true, it should be a starting assumption. A bankruptcy filing means that the debtor is insolvent. As such, there is often just not enough left in assets to go around. This means that it is extremely important for creditors to effectively use their legal rights. The failure to do so could result in a creditor being paid less than they legally deserve. Your creditors' rights attorney will help protect you. Some of the things your attorney can do for you includes:

  • Preserving your objection rights;
  • Challenging an automatic stay;
  • Challenging the discharge of a debt;
  • Litigating debt collection preference; and
  • Filing a lawsuit over a fraudulent conveyance.

Do You Need Legal Advice?

At Diemer, Whitman & Cardosi, LLP, our team has extensive experience handling creditors' rights in bankruptcy cases. To learn more about what our team can do you protect your legal rights and financial interests, please contact our passionate San Jose creditors' rights attorneys today. We will review your case for free, with no additional obligations on your part. We represent creditors throughout the Silicon Valley, including in Mountain View, Sunnyvale, Cupertino and Palo Alto.

Source:

http://norcalrecord.com/stories/511018646-california-bankruptcy-court-rules-that-five-debtors-infringed-upon-creditors-rights-to-object

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