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Consumers Rights in Business Bankruptcy
United States Bankruptcy laws are designed to provide relief to individuals and businesses that are experiencing extreme financial difficulties.
 
If you are a creditor, or have some other claim against a business which files under the United States Bankruptcy Code, you must stop all phone calls, letters or legal actions you might have begun against the business. You should file a claim with the Bankruptcy Court within 90 days after the business filed bankruptcy, unless the period for filing claims set by the court is longer or shorter than 90 days. If information you receive from the Court does not specify how long you have, or if you are not sure, contact the Bankruptcy Court in writing.
 
There will be a meeting of all of the creditors as early as possible. If you have filed a claim or are listed as a creditor, you will be notified of this meeting date and location. This is your best opportunity to have your questions answered by the business. At this meeting you can ask about the business' intentions to pay your claim.
 
There will be a U.S. Trustee appointed official or "trustee," supervising the case, except in some filings under Chapter 11 of the Bankruptcy Code. The trustee should respond to your reasonable written questions, but keep in mind that the trustee may get paid for each response, which may reduce the amount of money available to pay you and other creditors. Creditors should try to get have their questions answered by the attorney representing the bankrupt business before asking the trustee.
 
After you have contacted the Bankruptcy Court either by dialing VCIS at 765-5211 with a touch tone phone or in writing, you will be told under what chapter of the Bankruptcy Code the business has filed. In bankruptcy filings under Chapters 11, 12 and 13 of the Bankruptcy Code, the business can conduct business as usual. In filings under Chapters 11, 12 and 13 the business will file a plan of repayment or reorganization that will describe how, when and how much you will be paid. You can file a written objection to that plan.
 
Chapter 12 and 13 cases can take three to five years to complete. Chapter 11 cases can go on even longer; most are completed within three years.
When completing your claim, be sure to specify if your claim is secured or unsecured. If you have paid the business for goods or services of an individual nature which you have not received, you can claim up to $900 as a priority, or secured claim. Any amount of the claim over $900 would be unsecured. If you have a lien on, or title to property in the possession of the business, you can claim a fully secured claim. Most other claims are unsecured. If you are not sure, you should contact a bankruptcy lawyer for assistance.

This information was prepared to give you some general information on the law. It is not intended as legal advice about any particular problem. If you have questions about the law you should consult a lawyer. If you do not know a lawyer, you can call the South Carolina Bar Lawyer Referral Service weekdays between 9 a.m. and 5 p.m. The number is 799-7100 in Richland or Lexington Counties, and 1-800-868-2284 from other parts of the state.