Often when people enter a law firm, it doesn’t matter if they are from Nashua, Amherst, Merrimack, etc., they are focused on getting a judgment against the person or entity that owes them money (the debtor). The client could initially walk in the door for a variety of reasons, such as because of a car accident, a contract dispute, a workplace accident, or an unpaid loan agreement. However, once judgment enters, if the debtor doesn’t have deep pockets, the case now becomes a matter of collection regardless of how it started.

Collecting a judgment can be difficult if the debtor doesn’t have the resources to pay the judgment. Even worse, what if the debtor decides to file bankruptcy? Does the judgment become worthless? All is not necessarily lost.

Regardless of which court the claim began, a New Hampshire bankruptcy proceeding will take place in Concord and the client is now a creditor. The underlying judgment proceedings will be stayed during the bankruptcy.

First, it is important to review the bankruptcy filings to determine if there are assets and the type of bankruptcy filing, such as a Chapter 7, 13 or 11.  Second, a creditor may have rights that have to be acted on such as filing a Proof of Claim or attending a Meeting of Creditors. Third, the underlying claim or any liens granted in the underlying action, could give creditors priority status or make them secured creditors in the bankruptcy. For these reasons, it may be possible for a creditor to get paid through the bankruptcy plan. Additionally, there are circumstances that allow creditors to file with the Bankruptcy Court in order to proceed with collection actions despite the bankruptcy filing. It is also important to monitor the bankruptcy and to be aware of a dismissal or discharge of the bankruptcy.

With all these considerations, it can be a good idea for creditors to retain an attorney to guide them through the bankruptcy. If you are a creditor, we have attorneys at Welts, White & Fontaine, P.C. that can help protect your rights during the bankruptcy process. We are Nashua’s largest law firm, and our attorneys have decades of experience in collections law. Contact us through our website, or call us at (603) 883-0797.