Put Experience On Your Side. Call Today.
678-701-9235

Pay Bill

Call Us 678-701-9235

Turning Challenges Into Solutions

Knowledgeable Representation For Creditors During Bankruptcy Proceedings

While filing bankruptcy can certainly be complex – and stressful – for debtors, the bankruptcy process is not without its challenges for creditors either. Depending on the chapter of bankruptcy filed, creditors may lose significant amounts of money depending on where they stand on the priority list for payouts after assets are liquidated. Furthermore, creditors may run into other issues, such as fraudulent transfer, which can require intervention from the courts and lengthy, complex litigation.

While the attorneys at Jones & Walden LLC, are best known for helping individuals and business owners in the greater Atlanta metro through bankruptcy proceedings, our team also has extensive experience representing creditors in bankruptcy cases. We understand that creditors’ rights are a major part of bankruptcy law, which is why our counsel is backed by decades of combined litigation experience and extensive knowledge of bankruptcy rules and procedures. Since 2001, we have helped numerous creditors in Georgia protect their best interests in bankruptcy cases, ensuring that they get a positive outcome when legal issues arise.

Motion For Relief From Stay And Adequate Protection Payments/Protection Of Cash Collateral

The filing of a bankruptcy case triggers an automatic stay, which stops all collection actions outside of bankruptcy court. This includes, but is certainly not limited to:

To move forward with virtually any aspect of collection outside of bankruptcy court, a creditor must request and receive “stay relief,” which means that the bankruptcy court lifts the automatic stay to allow a creditor to pursue or perform a particular action. A stay relief motion requires certain notice to be given to the debtor and a hearing.

In some reorganization cases, the parties may agree (or the court can require) that the debtor will make “adequate protection” payments to the creditor pending possible confirmation of a plan rather than lifting the stay to allow collection, foreclosure or repossession proceedings to resume. This is especially important when a creditor’s claim is secured by the debtor’s accounts receivable, cash and/or rents (known as “cash collateral”). In that circumstance, the parties may agree (or the court can require) that the debtor will make adequate protection payments in lieu of permitting relief from the stay. The purpose and effect of adequate protection agreements is to allow the debtor to continue operating while also protecting the creditor’s security interest.

Filing And Litigating Proofs Of Claim

In order to receive payment on a claim in bankruptcy, a creditor generally must file a “proof of claim.” The proof of claim is a bankruptcy-specific form that requires:

  • The name and address of the creditor
  • Any account numbers for the debtor
  • The amount owed by the debtor
  • The type of debt and basis for the claim
  • Attachment of any supporting documentation

The debtor may object to any proof of claim filed by a creditor. If the debtor objects to the claim, the court will hold a hearing to determine whether the claim should be allowed. If a proof of claim is not filed with the court, the creditor may lose its right to be paid through the bankruptcy case.

Filing And Litigating Discharge And Dischargeability Proceedings

Not every debtor is entitled to a bankruptcy discharge. In certain circumstances, a creditor may be able to object to the discharge of their particular debt through a dischargeability action. Dischargeability actions generally involve allegations of:

  • Fraud
  • Breach of fiduciary duty
  • Embezzlement
  • Conversion in connection with the debt owed to a specific creditor

In other circumstances, a creditor may be able to challenge the debtor’s right to a discharge in general (i.e., an objection to discharge of any and all debts in the case). Objections to discharge usually involve allegations that the debtor:

  • Transferred or concealed assets to defraud its creditors
  • Knowingly gave a false oath in the bankruptcy case
  • Failed to adequately explain a loss of assets

Both dischargeability actions and objections to discharge require the filing of a separate complaint within the bankruptcy case. This institutes an adversary proceeding, which is essentially a new lawsuit within the bankruptcy case. Adversary proceedings must be timely filed and adhere to strict time limits and other procedural requirements. Jones & Walden LLC, has litigated numerous adversary proceedings on behalf of creditors over the years and has secured favorable outcomes for many clients.

Chapter 11, 12 And 13 Plan Review And Litigation

Debtors in Chapters 11, 12 and 13 bankruptcy cases propose plans of reorganization that detail the treatment of creditors’ claims in their cases. A designated trustee will review and give his or her recommendation to the court as to whether the proposed plan should be confirmed or denied. In order to protect its rights, a creditor must also carefully review its treatment in the debtor’s proposed plan and evaluate whether its rights are protected.

If a creditor opposes its proposed treatment under a Chapter 11, Chapter 12 or Chapter 13 plan, it must timely file an objection to the plan and attend a confirmation hearing to present its objection to the court. In some cases, the confirmation hearing may be simple and straightforward; but occasionally, confirmation issues require a full evidentiary hearing.

Creditors’ Chapter 11 Plan And Disclosure Statement Review, Voting And Litigation

As with other bankruptcy reorganization chapters, Chapter 11 debtors may propose a plan of reorganization detailing the treatment of creditor claims in their case. In Chapter 11 cases, however, creditors have the opportunity to vote on their proposed treatment. They also have an opportunity to review and object to a debtor’s disclosure statement that contains certain information regarding the debtor and its plan.

If a creditor opposes its proposed treatment or requires more information from the debtor, it usually must:

  • Vote to reject the plan
  • File an objection to the plan and/or a disclosure statement
  • Attend a confirmation hearing to present its objection to the court

Again, the confirmation hearing may be simple in some cases, but certain confirmation issues require a full evidentiary hearing.

A Seat At The Table: Representing Official Creditors’ Committees

In large Chapter 11 cases, the U.S. Trustee may appoint an official committee of unsecured creditors. This committee typically consists of the debtor’s largest unsecured creditors and serves as a collective voice for all unsecured creditors in the case. Committee members carry significant powers – including the right to investigate the debtor’s financial affairs, negotiate plan terms and retain their own legal and financial professionals, with fees paid by the bankruptcy estate.

Serving on a creditors’ committee offers real advantages. You can count on committee membership to provide:

  • Access to financial information the debtor would not otherwise disclose
  • Direct influence over plan negotiations and the treatment of unsecured claims
  • Shared legal costs spread across all committee members

As committee counsel, our attorneys carry a fiduciary duty to all unsecured creditors – not just those sitting on the committee. That duty shapes every decision we make at the negotiating table and in court.

The Creditors We Stand Behind In Georgia Bankruptcy Cases

At Jones & Walden LLC, our creditor representation practice serves a wide range of lenders, landlords and other parties with financial interests in bankruptcy cases. From national banks to individual judgment creditors, we tailor our approach to the specific rights and priorities of each client. Our attorneys represent:

  • Commercial banks and lenders
  • SBA lenders
  • Asset-based lenders
  • Equipment lessors and financiers
  • Commercial landlords
  • Real estate lenders
  • Trade creditors
  • Judgment creditors

Each type of creditor faces a unique set of challenges in bankruptcy – from protecting collateral to pursuing payment on unsecured claims. Whether you hold a secured lien or an unsecured claim, our team understands how to protect your position at every stage of the process. If your financial interests are at stake, we are ready to step in.

Putting Skill, Experience And Know-How In Your Corner

The complexity of bankruptcy cases is not lost on the highly experienced legal team at Jones & Walden LLC. Our lawyers have extensive knowledge of the Bankruptcy Code and diverse legal backgrounds that help our clients address incredibly complex issues related to a bankruptcy petition, including commercial debt collection issues, real estate matters and more. With Jones & Walden LLC, we provide the same extensive services you’d expect from a large firm with the personalized attention you want from a small firm.

If you would like us to represent your best interests in a bankruptcy case, we encourage you to contact our Atlanta office to schedule a consultation. Call 678-701-9235 or contact us online to get started.