What rights do creditors have when someone files bankrupcy?

Question

I may file for bankrupcy but wasn't sure if i could be sued after the fact by the creditors

Answer 1

Purpose

The primary purpose of bankruptcy is: (1) to give an honest debtor a "fresh start" in life by relieving the debtor of most debts, and (2) to repay creditors in an orderly manner to the extent that the debtor has the means available for payment.

Bankruptcy allows debtors to be discharged from the legal obligation to pay most debts by submitting their non-exempt assets, if any, to the jurisidiction of the bankruptcy court for eventual distribution among their creditors. During the pendency of a bankruptcy proceeding the debtor is protected from most non-bankruptcy legal action by creditors through a legally imposed stay. Creditors cannot pursue lawsuits, garnish wages, or attempt to compel payment.

Bankruptcy fraud

Bankruptcy fraud is a crime. While difficult to generalize across jurisdictions, common criminal acts under bankruptcy statutes typically involve concealment of assets, concealment or destruction of documents, conflicts of interest, fraudulent claims, false statements or declarations, and fee fixing or redistribution arrangements. Falsifications on bankruptcy forms often constitutes perjury. Multiple filings are not in and of themselves criminal, but they may violate provisions of bankruptcy law. In the U.S., bankruptcy fraud statutes are particularly focused on the mental state of particular actions.[1]

Bankruptcy in the United States

Main article: Bankruptcy in the United States

Bankruptcy in the United States is a matter placed under Federal jurisdiction by the United States Constitution (in Article 1, Section 8), which allows Congress to enact "uniform laws on the subject of Bankruptcy throughout the United States." Its implementation, however, is found in statute law. The relevant statutes are incorporated within the Bankruptcy Code, located at Title 11 of the United States Code, and amplified by state law in the many places where Federal law either fails to speak or expressly defers to state law.

While bankruptcy cases are always filed in United States Bankruptcy Court (an adjunct to the U.S. District Courts), bankruptcy cases, particularly with respect to the validity of claims and exemptions, are often highly dependent upon State law. State law therefore plays a major role in many bankruptcy cases, and it is often quite unwise to generalize bankruptcy issues across state lines.

[edit] Bankruptcy chapters

There are six types of bankruptcy under the Bankruptcy Code, located at Title 11 of the United States Code:

* Chapter 7 - basic liquidation for individuals and businesses
* Chapter 9 - municipal bankruptcy
* Chapter 11 - rehabilitation or reorganization, used primarily by business debtors, but sometimes by individuals with substantial debts and assets
* Chapter 12 - rehabilitation for family farmers and fishermen
* Chapter 13 - rehabilitation with a payment plan for individuals with a regular source of income
* Chapter 15 - ancillary and other international cases

Answer 2

When you file for Bankruptcy all of your listed creditors get notified. Between the date you file and the date it is discharged they can take no action against you and any pending suits have an automatic stay(hold). They then have the right to attend the Meeting of Creditors(341a) hearing, or file an objection. Unless you have tried to do something illegal the creditors will rarely attend the meeting or object.

If there are any objections to the bankruptcy the trustee can based on the information disallow that creditor and you would still be liable for any debts from them. At which time they could continue to attempt to collect the debt.

However, once your debt is discharged by the courts the creditors can not come back and sue or try to collect in any way for a debt that was included in the bankruptcy.

Answer 3

The only way you can be sued after a bankruptcy discharges is if any of your creditors protested being included in the bankruptcy.

Like say you took out a large cash advance right before you filed, they could claim fraud and then sue you after the BK discharges.

Answer 4

Spiff and OC are correct.

Do not take out any large loans within 60 days of filing your BK.
Do not sell or transfer property within 30 days.

Either of these will trigger a creditor to fight your bankruptcy.

Answer 5

How about owning up to want you spent and paying it off. Bankruptcy is a cop out.