As an unsecured creditor in a chapter 11 case, who should I pursue to recover my debt now ? 8 Answers as of July 28, 2011The developer of the condo that I purchased filed for chapter 11 bankcruptcy. The developer owed me back taxes. The judge dismissed the reorganization plan proposed by the debtor (developer) and the unsold units are turned over to the bank who is the secured creditor. Does the bank now assume all of the developer's debts ? I have already filed a B-10 form with the bankruptcy court, will be I be contacted by the bank to settle my portion of the claim or I have to initiate the contact with them? Can I take the bank to court if they ignore my claim ?
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Are you owed back taxes because you paid them for the developer? If that is the case you are out of luck. The foreclosing bank has no obligation to pay you, (unless your are a taxing authority, in which case your claim would have been a priority claim). If there are surplus funds after the foreclosure sale the money will be turned over to the developer. The idea that you can sue the developer is a good one, except he or she may file Chapter 7.
Answer Applies to: California
Ashman Law Office | Glen Edward Ashman
Unsecured creditors usually go unpaid in bankruptcy and you cannot sidestep the court. That will violate federal law and result in you owing money to the debtor and its lawyers. A lawyer would need to review the filing to know if you have any chance of being paid.
Answer Applies to: Georgia
Colorado Legal Solutions | Stephen Harkess
If the bank had a loan secured by the unsold condos then they are entitled to take over the condos to pay that debt. This does not mean that they are responsible for the developers debts or that the bank has any interest in condos that were sold. Your claims are still against the developer and will have to be pursued in the bankruptcy court. It is very likely that you will not be able to recover all of the money you are owed.
Answer Applies to: Colorado