Creditors in Bankruptcy

Many prospective clients ask us if they should notify their creditors that they are intending to file bankruptcy. Additionally, at what point in the process should they notify their creditors that they are intending to file bankruptcy. Depending upon the jurisdiction in which the case is filed, a person must first file: an Intent to file voluntary petition; an Application for a Voluntary Petition, or a Petition with the court.

In the United States, the burden first falls on the debtor to act. Under United States law, the debtor must take the first step, which is a mandatory action. The initial action entails informing the court by filing with the court a petition, providing the first notice to the creditors of the debtor’s intent to file bankruptcy. Consequently, filing for chapter 7 bankruptcy is not the same in every jurisdiction. In some states a debtor can file Chapter 7 bankruptcy once they file a petition with the court and simply provide notice of the petition to the creditors.However, the debtor is not required by law to notify any creditors that they intend to file bankruptcy. The debtor need not ask permission from their creditors.

However, if the debtor chooses to notify their creditors that they are intending to file bankruptcy, there are various ways in which to do this. These ways range from: calling the creditors, via telephone; sending a letter (via certified mail); or filing a public petition.

In bankruptcy, you will not be subject to any communications with your creditors through the automatic stay. This order prevents creditors from contacting you while your debts are discharged by the court. For more information about bankruptcy protection from creditors, or to discuss all your possible debt relief options, contact a Dallas bankruptcy lawyer today.