There are a lot of things you and your bankruptcy attorney can do to help the process move as smoothly as possible. Unfortunately, however, not everything is within your control. Depending on the type of bankruptcy relief you seek, your creditors can play a significant role and can even take actions to hold up the process if they so desire. Therefore, in difficult bankruptcy cases, the ability to deal with creditors is essential to success.
The degree of involvement that creditors can choose to have depends in large part upon the type of bankruptcy in question:
Chapter 11 — Chapter 11 provides for the highest degree of creditor involvement. A committee of creditors may closely supervise the process. Creditors may also submit their own reorganization plans if the debtor fails to have one approved in a timely manner. Certain creditors must also vote to approve any reorganization plan that the debtor puts forth.
Chapter 13 — Chapter 13 centers on a repayment plan through which the debtor proposes to pay back a significant portion of debt before receiving a discharge of the remainder. While creditors do not directly approve or reject a Chapter 13 plan, they do have the right to object to a plan and have the court consider those objections.
Chapter 7 — Chapter 7 involves the least amount of creditor involvement. However, creditors still have the right to question the debtor under oath at a meeting of creditors that the U.S. Trustee conducts between 21 and 40 days after the initial filing.
While creditors can play a role in the bankruptcy process, they must do so under court supervision and through your bankruptcy attorney. However, this should not dissuade you from using the process. It is usually much easier to deal with creditors through the bankruptcy process than it is to deal with them under normal conditions.