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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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I filed bankruptcy and have been discharged. There is funds

Customer Question

I filed bankruptcy and have been discharged. There is funds at the court being held. The trustee did not distribute these funds to creditors and now the bank that put a lien prior to these funds is trying to get that money. But they did not file a proof of claim for that money, is the bank still entitled to receive that money when I have been discharged and they did not file a proof of claim???
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.

cfortunato :

Hi JACustomer,

cfortunato :

No creditor who does not file a Proof of Claim is entitled to receive any money from the Bankruptcy court.

cfortunato :

However, a creditor who does not file a Proof of Claim can be entitled to property - including money - if a lien was placed on that property before the Bankruptcy was filed.

cfortunato :

Was a lien placed on those funds before your Bankruptcy was filed?

Customer:

Yes

cfortunato :

Then there was no need for the bank to file a Proof of Claim to be entitled to those funds.

Customer:

Why did the trustee who did my bankruptcy not distribute those funds then accordingly.

cfortunato and other Bankruptcy Law Specialists are ready to help you
Expert:  cfortunato replied 5 years ago.
Are you asking why the trustee did not distribute the funds to the bank with the lien, or why the trustee did not distribute those funds to the other creditors?