_ Bankruptcy laws are designed to give debtors a “fresh start” while at the same time providing a more even playing field for the debtors’ creditors.  Although an even playing field among creditors may be helpful, bankruptcy can nevertheless be harsh on creditors who are forced to absorb the debts that will not be repaid, or that will be paid at a reduced amount.  Sometimes, creditors are even asked to repay funds they were rightfully paid to them because of something under the bankruptcy code called a “preference”.  However, just because you’ve received a notice of bankruptcy from someone who owes you money, doesn’t mean you have no rights.

What is a “preference”?
To further the goal of providing a more even playing field among creditors, the bankruptcy code can require creditors who have been paid a past-due debt by the debtor to repay those funds if that payment was made within 90 days prior to the filing of the bankruptcy petition.  That lookback period can be extended to one year under certain circumstances.  There are defenses to preference claims, however.  If you’ve been sued by a bankruptcy trustee or Chapter 11 debtor to recover a preference, we may be able to help you avoid having to repay the amount you received – or at least pay less than the full amount.

What is the “automatic stay”?
The automatic stay is an injunction automatically imposed by the filing of a bankruptcy petition (except under certain very limited circumstances) that immediately prohibits creditors from taking any action to collect  debts owing by the debtor.  The automatic stay can be lifted, but you must seek that relief from the bankruptcy court.  Once the automatic stay takes effect, most state court actions against the debtor must cease unless and until you get an order for “relief from the stay”.  Becker Law Offices, LLC assists creditors in reviewing debtors’ bankruptcy schedules to see where opportunities exist for the creditors to advance their claims.  We are aggressive in meeting court deadlines, which can come quickly, and in defense of our clients’ rights. We take the stress off our clients’ shoulders.

Secured versus unsecured debt
A loan that is secured by collateral gives the creditor a lien against that asset. This is a huge advantage in bankruptcy court, where secured creditors go to the head of the line. Additionally, in most cases, the lien survives the debtor's bankruptcy discharge.  Often the issue is cut and dried, but where there is ambiguity about whether a debt is secured, a skilled attorney can make the difference to a creditor’s chances of recovery.

The honesty requirement
The U.S. Supreme Court has stated that the Bankruptcy Code “gives to the honest but unfortunate debtor...a new opportunity in life….” If the debtor was not truthful in obtaining the debt, or otherwise acted in bad faith, he may not be able to  discharge that debt. If you believe there is misrepresentation or fraud in the debtor’s bankruptcy petition or in the debtor's dealings with you, and would like to object to the debtor's discharges or to the discharge of the debt owed to you, you must bring those objections to the court within a certain limited time frame. Becker Law Offices, LLC can help.