Your Rights and Duties as a Creditor
Weâve given you an overview of the peoples and processes involved in a bankruptcy case. Letâs look more specifically at the rights and obligations your company will have as a creditor in a consumer bankruptcy case.
The Automatic Stay
The Bankruptcy Code states that once a bankruptcy case is filed, certain rights and restrictions immediately kick in. The most important restriction for both the debtor and the creditor is the automatic stay. The instant a bankruptcy case is filed, a bankruptcy estate is created and the debtor falls under the protection of the Bankruptcy Code. Protection means that all actions to collect the debt must stop immediately. Creditors cannot send letters to a debtor, ...
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