Protection of Security Rights in Bankruptcy

Bankrutpcy Attorney in Savannah Georgia

Creditors are significantly worried when a business or individual who owes him money files for bankruptcy. There are two types of creditors, unsecured creditors and secured creditors. Unsecured creditors include credit card companies while secured creditors can be home mortgage lender. Secured creditors have security against which they had provided financial aid. Thus it is natural that secured creditors have security rights when compared to unsecured creditors. Thus debtor bankruptcy should be handled very carefully by secured creditors.

Creditor needs to get in touch with a bankruptcy attorney so that they are able to understand the process involved in protecting their security rights during debtor bankruptcy. Under the guidance of a bankruptcy attorney, the first step is to obtain the proof of claim from bankruptcy court clerk. When debtor files for bankruptcy, court send proof of claim forms to all creditors which should ideally reach them within a couple of weeks of having filed bankruptcy. In the event of the proof of claim form not reaching creditor, he can contact bankruptcy court clerk regarding it and obtain one from him.

The proof of claim form has to be filled in as accurately as possible. It would be advisable to take help from a bankruptcy attorney to do the same. The form would have to be furnished with name, contact information, money due and explanation of nature of debt. Secured creditors should not omit to include the fact that debt owned is a secured debt. The secured debt is given against a particular asset like a mortgage loan is secured against real estate, auto loan against car and so on. The loan, asset secured and outstanding loan amount must be clearly indicated in the proof of claim form. In support of statement, a copy of security agreement has to be attached to proof of claim form.

Once the form is filled, creditor’s interests and security rights are protected by bankruptcy law. Creditors who have security rights are given priority over other creditors with regard to assets of debtor. The creditors meeting should be definitely attended by secured creditors and this is usually scheduled around 30 to 60 days from the filing of bankruptcy. Creditors can question the debtor and reaffirm priority during meeting in presence of bankruptcy clerk.

Creditors have to remain vigilant and careful to ensure that their security rights are upheld during course of bankruptcy proceedings. A bankruptcy attorney would prove invaluable under the circumstances. The attorney would be able to ascertain that creditor’s rights are not violated at any time during bankruptcy process.

Call a Savannah bankruptcy lawyer if you are considering bankruptcy.