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When you file bankruptcy Ch. 7, do creditors ever get paid? How?
17 ANSWERS
William M Stoddard
No if the creditors are unsecured.
Answered on Oct 14th, 2013 at 2:17 AM
Bankruptcy Attorney serving Seattle, WA
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The Law Office of Marc S. Stern
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Sometimes. The trustee liquidates the debtor's nonexempt property. After payment of the administrative expenses that property is the source of the funds.
Answered on Sep 26th, 2013 at 4:55 AM
Creditor in Chapter 7 only get paid if the Trustee finds assets that are not protected by state exemption laws. Frankly, that happens very rarely.
Answered on Sep 26th, 2013 at 2:43 AM
General Law Attorney serving Cherry Hill, NJ
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Mark S. Cherry, Attorney at Law, PC
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Unsecured Creditors only get paid if the chapter 7 has assets to distribute.
Answered on Sep 25th, 2013 at 7:51 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Generally not, or pennies on the dollar.
Answered on Sep 25th, 2013 at 5:37 AM
A Chapter 7 is a liquidation bankruptcy. That means that if you have any property that has value, and that value cannot be protected in the bankruptcy, then the trustee could sell that property and pay your creditors (and themselves). That being said, you really should see a bankruptcy attorney to see if you have any property that a trustee may think is worth something and would not be protected in a bankruptcy. There are so many things that you might not even think about that could be liquidated in a bankruptcy, even property that you don't own anymore, that it is worth the time and money to see a bankruptcy attorney.
Answered on Sep 25th, 2013 at 4:44 AM
Deborah F. Bowinski
It depends upon what assets you own and whether they are all protected (exempt) or whether they are assets that the trustee can take from you.
Answered on Sep 25th, 2013 at 4:37 AM
2 Awards
Creditors get paid if you have assets that are not otherwise exempt that can be liquidated and distributed to the creditors.
Answered on Sep 25th, 2013 at 4:36 AM
Creditors get paid in Chapter 7 only if you have "non-exempt" assets that the Trustee chooses to liquidate. If you have assets that are worth a lot of money, in some circumstances the Trustee in Chapter 7 will be able to sell those assets and distribute part of the sale proceeds to your creditors.
Answered on Sep 25th, 2013 at 4:34 AM
Debt Settlement Attorney serving Chicago, IL
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Law Offices of Daniel J. Winter
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Generally, in Chapter 7 cases, creditors only get paid if there are assets that the trustee sells, and then that money is used to pay creditors. In most cases, people can protect a certain amount of their assets, and no assets are sold. It is important to contact an experienced bankruptcy attorney to help determine your best options if you are the one trying to file bankruptcy. If you are a creditor, you should also contact an attorney to find out how to protect your right to get paid, if there are any assets.
Answered on Sep 25th, 2013 at 4:33 AM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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Not if you have exempted all your assets.
Answered on Sep 25th, 2013 at 4:29 AM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
2 Awards
Sometimes, if the trustee is able to take possession of an asset and then liquidate it.
Answered on Sep 25th, 2013 at 3:57 AM
Litigation Attorney serving San Antonio, TX
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Graves Law Firm
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Unsecured creditors get paid only if you have non-exempt assets the bankruptcy trustee can seize and distribute to them. Usually they get nothing, and rarely do they ever get more than a small percentage of what they're owed.
Answered on Sep 25th, 2013 at 3:45 AM
Car Accidents Attorney serving Mandeville, LA
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Olivier Law Firm, LLC
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Yes. If there are assets worth selling, the money is put in the kitty (estate) and all creditors get a small bit.
Answered on Sep 25th, 2013 at 2:46 AM
Personal Injury Attorney serving Glendale, CA
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JT Legal Group
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In a 7, creditors get paid if their debt is either non-dischargeable or if there are assets to be administered.
Answered on Sep 24th, 2013 at 6:41 PM
Debt Settlement Attorney serving San Diego, CA
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Law Offices of Kathryn Tokarska
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Yes. If there are non-exempt assets in the bankruptcy estate the creditors gets paid out of those assets.
Answered on Sep 24th, 2013 at 5:12 PM
General Practice Attorney serving Coeur d'Alene, ID
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Michael B. McFarland, PA
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It depends on several factors. In many "no asset" Chapter 7 cases, (where there are no non-exempt assets and no secured debts being reaffirmed) there may be nothing paid to creditors. If there are non-exempt assets worth more than a few hundred dollars, those may be taken by the trustee and sold, with the proceeds paid pro-rata to creditors (which assets are exempt varies from state to state). In Idaho, most of the trustees will not bother with collecting and selling assets totaling less than $1,000. This late in the year, though, they may wait to see if there are tax refunds available for 2013 before deciding. If a debtor reaffirms an obligation, such as a car loan, that particular creditor will continue to be paid directly by the debtor. If a secured item is surrendered, the creditor gets the property back and can sell it, but receives no other payment. It would be best to consult with an experienced bankruptcy attorney in your area to determine what property is exempt, and to get a more detailed answer to your question.
Answered on Sep 24th, 2013 at 5:06 PM