New York City and Long Island Creditors' Rights in Bankruptcy

Silverberg P.A. routinely handles cases in bankruptcy court. Attorney Karl Silverberg has years of experience representing creditors in these cases who seek to collect money from debtors who have declared bankruptcy.

Law Firm Representing Creditors When Debtors Declare Bankruptcy

Bankruptcy law crosses paths with construction law in two ways. New York's trust fund statute gives construction industry creditors certain protections.

  • First, a debtor's accounts receivable on a project may represent trust funds that belong to those creditors who performed work the project. Any trust funds recovered would be distributed solely to those who worked on the project, and not among all the creditors.
  • Second, a corporate officer that knowingly diverts trust funds may be liable for breach of fiduciary duty making such debt nondischargeable, meaning it will survive the bankruptcy.

Another tool for creditors, under the right circumstances, is the option of forcing a debtor into bankruptcy through an involuntary bankruptcy action. Such an action prevents the debtor from favoring one creditor over other creditors and allows all creditors to share the debtor's assets pro-rata. It also helps preserve assets such as accounts receivables that require a collection action. Such receivables may be in danger of being squandered if the debtor thinks it is not worth the effort to go after such receivables if such proceeds will only go to the debtor's creditors.

Contact An Experienced Long Island Creditor's Right Lawyer Today

Mr. Silverberg is available to discuss your collection and bankruptcy needs at any time. Call 631-904-0307 or use the email contact form.