[...]... for getting customers to pay up well before they go bankrupt 1/6 GETTING PAID: HOW TO COLLECT FROM BANKRUPT DEBTORS Chapter 18: Forcing Debtors Into Bankruptcy Would you have a greater chance of getting paid if the person who owes you money just went ahead and filed for bankruptcy? There are rare situations in which this is true This chapter explains when you might want to file an involuntary bankruptcy... Keep While, in concept, most of what the debtor owns gets heaped into the bankruptcy estate, the law actually allows debtors to keep some of their possessions To hang onto any particular item of property, the debtor must show that it 2/8 GETTING PAID: HOW TO COLLECT FROM BANKRUPT DEBTORS falls into one of the various exemption categories Of course, the debtor can only claim an exemption in as much of... telling debtors how to protect property by claiming it as exempt, we’ll show you how to check the legitimacy of the exemptions claimed by the debtor And, instead of describing how to create a reorganization plan, we’ll tell you how to make sure you get the most out of the reorganization plan proposed by the debtor If you’re looking for a guide to filing for bankruptcy, see, for example: • How to File... “un-file.” However, bankruptcy courts will usually deny debtors request for dismissal if unsecured creditors stand to receive something on their claims if the case is kept open HOW BANKRUPTCY WORKS Trustees and creditors may also ask the bankruptcy court to dismiss debtors cases Usually, a motion to dismiss is filed by the trustee, based on the debtor’s failure to obey the rules of the bankruptcy... 2/12 GETTING PAID: HOW TO COLLECT FROM BANKRUPT DEBTORS A few weeks after the debtor files for bankruptcy, the trustee will hold a “meeting of creditors.” The purpose is to examine the debtor and review the bankruptcy schedules and statements Any creditor may appear (with or without an attorney) and question the debtor at this meeting (See Chapter 6 for more on preparing for the creditors’ meeting.) Most... Introduction to Bankruptcy Procedures and Players Bankruptcy exists to help debtors (the people who owe money) while simultaneously protecting their creditors (the people to whom the money is owed) Bankruptcy helps debtors by allowing them to avoid paying some or all of their bills or debts In technical terms, the law allows them to “discharge” their legal obligation to pay Bankruptcy protects creditors by... main chapters of bankruptcy, let’s look at what features they have in common This section will cover: • the petition that starts off the case (Section 1) • the automatic stay (Section 2) • how creditors normally learn about the bankruptcy (Section 3) • what property will be subject to the bankruptcy (Section 4) 2/6 GETTING PAID: HOW TO COLLECT FROM BANKRUPT DEBTORS • what property the debtor can keep (Section... notices Chapter 4: The Automatic Stay This chapter is a must-read for everyone The very moment a debtor files for bankruptcy, something called the automatic stay goes into effect Anything you do to collect your claim after that violates federal law Read this chapter so you don’t waste time and money by improperly pursuing the debtor 1/4 GETTING PAID: HOW TO COLLECT FROM BANKRUPT DEBTORS Chapter 5: Examining... con- 2/10 GETTING PAID: HOW TO COLLECT FROM BANKRUPT DEBTORS version is that the newly chosen chapter must be one under which the debtor could have filed originally After the debtors use up their one free pass, they are not allowed to convert again without court approval Conversion isn’t always voluntary Creditors and trustees may ask the bankruptcy court to convert a reorganization case to a Chapter... TO USE THIS BOOK without an attorney’s help, others aren’t so straightforward For example, asking the court to refuse to allow a debtor to wipe out his debt to you, or to force a debtor into involuntary bankruptcy are best done with an attorney’s help Throughout this book, we’ve done our best to point out the situations in which you’d benefit from hiring an attorney How to find a good one is discussed . up well before they go bankrupt. 1/6 GETTING PAID: HOW TO COLLECT FROM BANKRUPT DEBTORS Chapter 18: Forcing Debtors Into Bankruptcy. Would you have a greater chance of getting paid if the person. 19/11 Appendix Index CHAPTER 1 How to Use This Book A. Who Should Use This Book 1/2 B. Choosing Which Chapters to Read 1/3 1/2 GETTING PAID: HOW TO COLLECT FROM BANKRUPT DEBTORS P eople who go bankrupt and can’t pay. debtor. 1/4 GETTING PAID: HOW TO COLLECT FROM BANKRUPT DEBTORS Chapter 5: Examining the Bank- ruptcy Papers. After filing for bank- ruptcy, debtors must make lengthy and detailed disclosures to the bankruptcy court.