The Automatic Stay upon the Filing of Bankruptcy

After months of litigating, a suggestion of bankruptcy appears on the eve of trial! What happens now? Upon the filing of a bankruptcy case, the automatic stay, a legal injunction, takes effect, preventing collection efforts, communications, and lawsuits from moving forward against the debtor and the debtor’s property for debts owed as of the date of the bankruptcy filing.

It is important to avoid ignoring the automatic stay. Violating the automatic stay after becoming aware of the bankruptcy can result in a bankruptcy judge awarding the debtor actual damages, punitive damages, attorney’s fees, and costs, in addition to reversing or voiding your actions.  

Bankruptcy is a legal tool that allows a person to change and recalibrate their life. The automatic stay that results is intended to give the Debtor (the person filing for bankruptcy) breathing room to get their affairs in order. A bankruptcy filing often significantly impacts a creditor’s plan for resolution and collection. It is essential to consult an experienced bankruptcy attorney for guidance throughout the bankruptcy process and to increase the likelihood of collecting the debt owed.

Primer on Chapter 7 Bankruptcy

When an individual or business files for Chapter 7 bankruptcy, the filing serves as a comprehensive financial disclosure presented to the court and all creditors. The debtor seeks a bankruptcy discharge, which, if granted, eliminates certain debts and permanently bars collection efforts—provided that creditors received proper notice and the debtor meets all legal requirements as determined by the Chapter 7 Trustee and the Bankruptcy Court.

From a creditor’s standpoint, it’s important to understand that a Chapter 7 case is not simply an “easy” way for a debtor to walk away from their debts. While Chapter 7 can be a relatively quick process for qualifying debtors, it also opens the debtor’s financial affairs to scrutiny by the trustee and all creditors. Debtors must disclose all assets, income, and recent financial transactions—information that can help creditors assess whether assets may be available for liquidation and partial repayment.

Creditors should also be aware that certain debts are not dischargeable, such as debts obtained through fraud, willful misconduct, or other improper conduct. In these instances, timely and informed creditor participation can make a significant difference.

An experienced bankruptcy attorney for creditors can help evaluate the bankruptcy filing, review schedules and statements, and determine whether to file a proof of claim or pursue an objection to discharge or nondischargeability complaint when appropriate.

If you receive notice of a bankruptcy filing from a borrower, customer, or former tenant, do not ignore it. Promptly reviewing the case and understanding your rights under Chapter 7 can help protect your financial interests and preserve potential recovery.

Roberts Law assists creditors in navigating the bankruptcy process, asserting their rights, and taking appropriate action when necessary to protect their claims.

Primer on Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a reorganization process available to individual debtors who have regular income and wish to repay some or all of their debts over time. Unlike Chapter 7, which involves liquidation of non-exempt assets, Chapter 13 allows the debtor to keep property and propose a structured repayment plan—typically lasting 36 to 60 months—subject to court approval.

For creditors, Chapter 13 means that repayment may occur through a court-supervised plan rather than through direct collection efforts. Once the case is filed, an automatic stay immediately halts lawsuits, foreclosures, wage garnishments, and most other collection activity. Creditors must then look to the Chapter 13 process to assert and protect their claims.

Common Reasons Debtors File Chapter 13

Debtors often seek Chapter 13 protection to:

• Catch up on mortgage, homeowners’ association, or property-tax arrears;
• Cure child support or alimony delinquencies;
• Address IRS or other priority tax debts;
• Restructure vehicle loans or other secured debts; or
• Retain valuable assets while repaying creditors through a manageable plan.

The Chapter 13 Process and Creditor Involvement

After filing, the debtor must submit a proposed repayment plan detailing how each class of creditor will be treated. A Chapter 13 trustee reviews the plan and conducts the meeting of creditors (the 341 meeting), where creditors may ask questions about the debtor’s financial situation.

Following the meeting, the court holds confirmation hearings, where the trustee and any objecting creditors may challenge or negotiate the terms of the proposed plan. Creditors who wish to receive payment must file a proof of claim before the applicable deadline. Once a plan is confirmed, payments are made through the trustee, who distributes funds to creditors in accordance with the plan’s terms.

Although Chapter 13 offers debtors an opportunity to reorganize, it also provides a formal process for creditors to recover at least a portion of what they are owed, provided they act within the required deadlines.

Roberts Law assists creditors throughout the Chapter 13 process by reviewing plans, filing proofs of claim, asserting objections when warranted, and protecting creditor rights from filing through discharge.

Primer on Chapter 11 Bankruptcy 

When a business or individual files for Chapter 11 bankruptcy in Florida, it signals an intent to reorganize debts while continuing operations under the supervision of the Bankruptcy Court. For creditors—whether landlords, lenders, vendors, or associations—understanding the process is essential to protecting rights and maximizing potential recovery.

The Basics of Chapter 11

In a Chapter 11 case, the debtor remains in control as a “debtor-in-possession” while developing a plan of reorganization. This plan outlines how debts will be repaid over time, potentially affecting secured and unsecured creditors differently. Immediately upon filing, an automatic stay halts lawsuits, foreclosures, and collection activities, providing creditors with a structured forum for asserting claims.

Why Florida Creditors Need an Experienced Chapter 11 Lawyer

Chapter 11 cases are complex and heavily procedural. Delays or inaction can result in reduced recovery or the loss of rights. A skilled Florida Chapter 11 bankruptcy attorney for creditors can:

• Review debtor filings for errors or omissions;
• File and protect proofs of claim;
• Object to improper plan terms or discharge provisions;
• Negotiate repayment terms or adequate protection for secured claims;
• Represent creditors in adversary proceedings and contested hearings.

Protect Your Rights Early

Early involvement is critical for creditors to preserve liens, maximize recovery, and assert their legal rights in Chapter 11 proceedings.

Roberts Law represents landlords, lenders, vendors, and homeowners and condo associations in Chapter 11 cases throughout the state of Florida. We help creditors navigate the process strategically, assert their claims, and protect their financial interests at every stage.

Contact Roberts Law today to discuss your rights and options in a Chapter 11 bankruptcy case.

Bankruptcy Litigation

Bankruptcy is a summary proceeding where multiple disputes can be resolved in one case rather than defending a number of lawsuits in different courts at different times. Bankruptcy provides resolutions that are affordable and allows debtors to move forward into their future without the fear of a dispute popping up at any time.

Bankruptcy litigation occurs when a creditor or trustee initiates discovery, depositions, or complaint inside of the bankruptcy case. There are two types of litigation in bankruptcy, contested matters and adversary proceedings.

Contested matters are disagreements over a matter of fact or law that need to be resolved before the bankruptcy case can move on or be completed. In a chapter 7 filing, common contested matters include negotiations with the chapter 7 trustee over the value of non-exempt assets, or the existence of an asset. In chapter 13 cases, the chapter 13 trustee may find issue with the debtor’s income calculations or whether the expenses provided are reasonable or necessary.

Adversary proceedings are lawsuits inside of a bankruptcy case. These cases are often initiated by (a) upset creditors, usually investors in the debtor’s business that take the position that they were deceived by the debtor; or (b) the chapter 7 trustee who alleges that a creditor was paid more value than it was entitled, before the bankruptcy was filed. Said another way, a creditor may be sued as a part of the bankruptcy.

Roberts Law, PLLC is experienced in representing creditors, debtors, and their family members in all chapters of bankruptcy litigation. Schedule a consultation to discuss your pending matter today.