Paid in Full in Bankruptcy and the Unwary Creditor
Does It Look Too Good To Be True? What You Should Know About Bankruptcy, The Creditor, and Bankruptcy Law Law
Debt and bankruptcy filings come ni different forms. What does it mean when you come across a deal that is “prepackaged” though? We will find the answers to that question and more below.
The Prepackaged Deal
One person(the debtor) owes money to someone else(the creditor or creditors). They reach an agreement that is supposed to be mutually beneficial for all involved.
The difference between this and a traditional filing, according to an expert bankruptcy lawyer, is that the terms are agreed on before filing a petition. With a traditional filing, you enter into something without any agreement in place.
One main benefit of the prepackaged deal is the terms are carved in stone. It is a legally binding contract to which no one can get out of unless there is just cause to stop the filing.
A traditional filing gives the creditors an excuse to increase the rates you pay.
This type of filling is also known as a “paid-in-full” deal.
Can The Prepackaged Deal Become Impaired For One Party?
It depends on how the petition is created. The debtor could have a more favorable position over the creditor. Sometimes the debtor is left to fend for themselves. The only guarantee about the prepackaged deal is that the debt will be paid. The when and how is sometimes left up to negotiation.
What Other Concerns Are There For A Prepackaged Bankruptcy Filing?
It depends on how the filing is created as to what concerns are raised by which parties.
1) The creditors might have access to past, present, and future money disputes, but they might not be able to go after every filing. The petition filing might exclude certain past unresolved money issues.
2) The debtor might have more power over the creditor depending on how the petition is filed. The debitor might be in more of a position to negotiate the debts, including what counts as paid and what does not.
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They can assist you with anything you need from finding a good bankruptcy attorney to simple questions regarding bankruptcy law and how to handle a bankruptcy filing dispute.