When a debtor files for Chapter 7 or 11 bankruptcy (rather debtor filed “voluntary” or creditors filed “involuntary”) — all entities are automatically and immediately “stayed” from taking or continuing further legal action against the debtor.
This means, as a creditor, you must stop all efforts directed toward the debtor. This includes attempts to collect debt, enforcement of liens against the debtor’s property, or repossession of property. If a creditor had repossessed property prior to the filing, and sold the asset — the creditor could be required to make restitution of that asset to the bankruptcy estate.
Information from U.S. Bankruptcy Court
Have you ever needed information on a bankrupt business account but didn’t know where to turn? Don’t feel bad, most business professionals don’t either. The answer, however, is as close as your phone and often a lot quicker than searching the Internet, pulling up and searching bankruptcy websites you know of, waiting for the site to load, etc.
Each of the 91 bankruptcy court districts has what they refer to as an automated Voice Case Information System phone number or VCIS. Most are toll free. Simply call that number, press 2 and enter the case number (or enter the complete and accurate business name of your commercial account ) and presto, a recording will provide you with the business debt,attorney’s name and phone number, petition filing dates, upcoming hearing dates and much more. Try it and see how easy it is.
