When a Kentucky consumer files for bankruptcy, creditors may have a right to pursue any amounts that they are owed. The first step in the process of obtaining payment is to file a proof of claim. A proof of claim will list the name and address of the debtor, the amount of the debt owed and whether the debt is secured or unsecured.
In most cases, unsecured debtors are paid only after priority and secured claims are settled. It is possible that unsecured creditors will receive nothing in a Chapter 7 proceeding. Priority debts include back taxes, child support payments and certain business debts such as wages, salary or commissions owed. The trustee who is overseeing the case will also take a portion of any assets that are seized as payment for services rendered. In a Chapter 7 case, the trustee will typically set the deadline by which proof of claim forms must be submitted.
In a Chapter 13 proceeding, creditors typically have 90 days from the first creditor meeting to submit this document. Creditor claims will sometimes be purchased by outside entities on a secondary market. If a claim is purchased, additional paperwork will need to be filed with the bankruptcy court.
Those who are going through a Chapter 7 proceeding may be able to have debts discharged in a matter of weeks or months. After a debt is discharged, creditors are generally unable to make phone or take other actions in an effort to obtain additional payments. However, debtors may voluntarily make payments in an attempt to maintain relationships with their creditors. Debtors may also choose to make regular payments on mortgages or other secured loans.