My name is Neal Bookspan I’m a partner at
Jaburg and Wilk I help my clients manage there legal risks in the area of litigation transnational
work and creditors rights. Q: What do creditors need to know about litigation
in state court? A: When proceeding in state court, or where
a company hasn’t filed for bankruptcy protection, there can be many issues. It depends if is is unsecured debt, meaning
there is no collateral, or if there is collateral. In what the creditors client needs to know
is that they need to have good documentation, good records of their attempts to try and
collect their debt, whether its through telephone call logs, writing down contemporaneous notes
to when they are talking to the debtor,anything they bring to the table will help people like
me collect their money for them. Q: What do creditors need to know about proceeding
in bankruptcy court? A: When a creditor is owed money by a company
or individual who has filed bankruptcy, it is a whole different brave new world. The rules that are out in the state court
don’t apply. There is a thing called the “automatic stay”
that arises when bankruptcy is filed it stops all collection actions, including lawsuits,
and it makes you a creditor in the bankruptcy proceeding. Depending on whether you are a secured creditor,
meaning you have collateral, or you’re an unsecured creditor, you may have different
rights, positions, obligations to be under taken under the Bankruptcy Code. And so as in all situations , the best thing
you can do is have very good documentation records of your interactions with the debtor
and be able to provide those to your attorney, so that hopefully you can get the best possible
advice to put yourself in the best position to hopefully recover either money and/or your
collateral.