- A Notice of Chapter 13 Bankruptcy is the notification a creditor receives stating that a person who owes them money has filed for bankruptcy protection. This notification of the creditors is important because it alerts a creditor that the debtor is now covered by a court order called a stay of collections. As long as the bankruptcy action is in effect, a creditor can not take any collection action against the debtor without facing sanctions from the bankruptcy court.
- Generally within 30 days of a debtor's bankruptcy filing, the court will convene a meeting of the creditors. The Notice of Chapter 13 Bankruptcy serves as an official notification of the location, date and time of that meeting. The notice also outlines a creditor's right to attend the meeting and to ask the debtor questions about his assets and his ability to pay his bills.
- The Notice of Chapter 13 Bankruptcy also names the trustees in the bankruptcy case. The bankruptcy trustee is an impartial person who will oversee the debtor's bankruptcy estate. With a Chapter 13, he will determine total debts and the income available to fund a repayment plan. A bankruptcy also has a United States Trustee, who is interested in making sure that the creditors get paid back at the highest possible rate. Both trustees' contact information is provided in the notice.
- The Notice of Chapter 13 Bankruptcy also outlines what the creditors can do moving forward. It will instruct them as to any filings or notices of claim that they need to make with the bankruptcy court. Often, with an unsecured creditor, they may simply need to wait until the repayment plan is put into place, and see if they receive any money from the plan. If a creditor suspects fraud, or that purchases were made on credit while the debtors intend to file for bankruptcy, they may choose to file a motion contesting the discharge of the debt in bankruptcy.
Notification
Invitation to the Meeting of Creditors
Names the Trustee
The Creditors Next Actions
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