Creditors frequently are at a loss in recovering amounts owed to them by debtor individuals or companies. Fox, O’Neill & Shannon has substantial experience both in protecting creditors’ rights and in enforcing those rights on behalf of its individual and business clients.
The first line of creditor’s rights activity typically involves informal attempts to obtain recovery, including appropriate secured workout agreements. Such agreements help prevent a debtor’s bankruptcy filing, or preserve a creditor’s interest if such a filing occurs, and so preserve a creditor’s ability to obtain full payment.
When informal efforts fail, FOS’s creditor’s rights attorneys, working with its business and litigation attorneys, prosecute to judgment collection lawsuits to judgment. These include civil suits, mortgage and commercial code.
The firm’s goal, as always, is to obtain the amounts owed to its clients in the most reasonable and cost effective manner possible.
Collateral / Guaranties
FOS has extensive experience in negotiating, drafting, filing and enforcing collateral agreements to secure the amounts owed to creditors. These agreements allow a creditor to enforce its payment rights by foreclosing on and selling the collateral.
FOS is also expert at negotiating, drafting and obtaining enforceable guaranties of debtors’ payment obligations, by third parties, including a debtor business’ principals.
A creditor’s judgment is of no value unless it can be collected. FOS’s creditors rights attorneys know how to effectively navigate the often confusing and time-consuming task of judgment collection. From registering a judgment, through execution, supplementary examination, garnishment, lien enforcement and mortgage foreclosure sales, FOS will do all it can to ensure that its creditor clients obtain full recovery from their debtors.
FOS’s creditor’s rights attorneys are adept at investigating a debtor’s asset activities, to prevent or obtain repayment of fraudulent asset transfers. When appropriate, they will arrange for a receivership of the debtor’s assets.
Bankruptcy: Debts to clients
Creditors are often frustrated when their debtors file for bankruptcy, especially when the bankruptcy estate demands repayment from the creditors while prohibiting the creditors’ collection activities. FOS’s creditor’s rights attorneys have extensively represented creditor clients in bankruptcies throughout the country.
When appropriate, FOS’s attorneys will move the bankruptcy court to lift the automatic stay against creditor collection activities, which automatically occurs when a bankruptcy petition is filed. The attorneys will similarly move to protect a secured creditor client’s right to collateral. A lessee’s rights to leased premises subject to the bankruptcy will also be protected.
FOS’s creditors rights attorneys will also work with the client to complete and file appropriate proofs of claim on behalf of the creditor client, review and make recommendations regarding proposed asset plans, and otherwise guide the client through the bankruptcy proceedings.
Not all debts are discharged in bankruptcy. For example, child support obligations and certain fraudulent obligations are not dischargeable. When a debt to a creditor client is nondischargeable, FOS will take the affirmative action required to obtain a judicial declaration of nondischargeability, which allows creditors to continue collection activities notwithstanding the bankruptcy.
FOS’s creditor’s rights attorneys are also experienced in defending against preference claims brought on behalf of bankrupt debtors. In a preference claim, a debtor seeks to recover payments made to a creditor before the bankruptcy, without any offset for the debt owed to the creditor. FOS successfully defends against preference claims by applying a detailed financial analysis to the applicable legal defenses.