Who is Involved in Bankruptcy Proceedings?
An important step to understanding the bankruptcy process is identifying the various parties involved.
Bankruptcy is a legal process involving an individual or other entities who cannot repay their outstanding debts to creditors. Understanding the bankruptcy process is key to approaching this financial and legal issue efficiently and more productively. A crucial step in this process is identifying the various parties involved.
A creditor is a person or entity to which a debt or obligation is owed. Creditors can be of two types: a secured creditor or an unsecured creditor.
A secured creditor is one whose credit products are backed by collateral, while an unsecured creditor extends an obligation to a debtor with no collateral requirement. The creditor usually extends some service or property to the debtor with the promise that the debtor will pay them later. In bankruptcy proceedings, the creditor is usually a financial institution, credit card provider, or simply an individual who advanced goods or services to the debtor.
The debtor is the person or entity that files for bankruptcy. The debtor files for bankruptcy to get protection as they work out a fresh start. When filing for bankruptcy, the debtor is required to disclose all the financial information and account for all transactions in the past few years.
In some cases, the debtor’s property is exempted from listing in the bankruptcy case. It would be prudent for a debtor to work with a reputable Smithfield Bankruptcy Attorney to determine what property to surrender or retain.
The Debtor’s Attorney
The debtor works with a bankruptcy attorney who offers advice and guidance and is the voice during the mediation process. The attorney ensures that the debtor’s rights are protected, and the procedure is well organized and timely. In addition to going over all the paperwork, the attorneys also work with the debtor to iron out any potential issues that may derail the case to ensure a seamless process.
A trustee is a trusted third party tasked with compiling all details regarding the properties included in the bankruptcy process. They also manage all funds from the sale of these properties, pay related administrative expenses, and distribute the remaining amount among qualified creditors.
The judge is a court representative who hears and determines the bankruptcy case. They issue any order related to the matter and decide on any contested issues like:
- Objections to the exemption by creditors or trustee
- Objections to creditors and trustee confirmation
- Ruling on the dischargeability of some debts
Are You Looking for a Smithfield Bankruptcy Attorney? Contact us Now
At Narron Wenzel, P.A, we pride ourselves on offering customer-focused legal services to help you navigate the bankruptcy process. Our experienced bankruptcy attorneys will go out of their way to ensure your legal rights are fully protected. Please contact us online or call us now at 919-934-0049.