July 9, 2015 by Lisa Brammer
In the United States, bankruptcy is supposed to benefit both the debtor and the creditor, but when people talk about bankruptcies the focus is typically on the debtor. But what about the creditor?
There are a list of dos and don’ts for creditors when a bankruptcy is filed. If you are a creditor and someone who owes you money files bankruptcy, all debt collection activities must cease immediately. It’s also important to determine whether the debt owed to you is secured or unsecured. The easiest way to understand the difference between the two is secured debt has a tangible item that is attached to it, like a home mortgage or car payment—-something that can be taken back if the debt goes unpaid. Examples of unsecured debt would include credit card, medical debt, and payday loans.
Depending on the type of bankruptcy the debtor has filed, creditors who hope to get…
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