Chapter 11 bankruptcy can provide a debtor with much-needed protection from creditors. Sometimes, though, creditors don’t abide by the rules and instead step over the line. When that happens, you need to know what to do ensure that your business is afforded the protection that the bankruptcy law says it should have. As part of this process, you’ll want to be sure that you have a South Florida attorney experienced in Chapter 11 bankruptcy issues representing your business.
Once you have filed for Chapter 11 bankruptcy and gone through all of the required steps of that process, the court will enter an order releasing your business from the obligation of paying most of its pre-bankruptcy debts. This, of course, is called the discharge order. Once it’s entered, the creditors whose amounts were included in the discharge are forever foreclosed from collecting those debts.
A recent U.S. Supreme Court decision looks at the very important question of what happens when a creditor attempts to collect a debt that has already been discharged in bankruptcy. The case involved B.T., a part-owner of business in Oregon who filed Chapter 7 bankruptcy. At the time that B.T. filed, the business and some other owners were litigating a civil lawsuit filed against B.T.