It depends.

Debtor filed Chapter 7 bankruptcy

In Chapter 7 bankruptcy, there is either an “asset” case or a “no asset” case. When a debtor files for bankruptcy, she is entitled to keep a certain amount of assets, known as exemptions. If debtor has assets beyond the exemption limit, the trustee will liquidate the assets and distribute it to the creditors. Such case would be considered an asset case. If there is no assets beyond the exemption limit, the creditors will not receive any money.

In an asset case, you will receive a Notice of Possible Dividend. This is the trustee’s way of informing the creditors that there may be money available to pay the creditors. It’s important that you complete the Proof of Claim. The Proof of Claim is like a reimbursement request. If you do not complete it, you will not be paid.

When completing the Proof of Claim, you must attach documents to support your claim. There is very specific rules about information you must include and information and that you must redact.

Debtor filed Chapter 13 bankruptcy

In Chapter 13 bankruptcy, debtors are required to make payments for typically 3 or 5 years. The amount of her payment depends on several factors including her disposable income (amount left over after necessary expenses), liquidation analysis of debtor’s assets and types of debts, such as priority claims, arrearages, and secured claims.

Similar to an asset Chapter 7, you must complete the Proof of Claim in order to get paid. Unlike a Chapter 7, in Chapter 13 the debtor prepares a plan that explains how much will be paid to each type of creditor.

Posted in: Creditor Rights in Bankruptcy