When a customer files Chapter 7 bankruptcy, sometimes an unsecured creditor will simply write off the loan and chalk the matter up to experience. However, if you receive a Notice to File a Claim, you will want to re-evaluate things.

When a debtor files for a Chapter 7 bankruptcy, more often than not, there will be no distributions in the case and any unsecured creditors will be wiped out, without any payment. However, there can be circumstances when a trustee locates some non-exempt assets and will sell them to distribute to unsecured creditors. It is in this instance that you will receive a Notice to File Claim.

If you receive such a notice, you should calendar the deadline on the notice and be sure to file your claim within the period granted. If you fail to file a claim, you have no ability to receive any of the proceeds from the trustee. If you do successfully file your claim, the trustee will pay you a pro rata share of the proceeds of the money he collects.

Thus, if you receive a Notice to File Claim in a customer’s bankruptcy, it would be wise to discuss the details of your claim with an attorney, so as to not miss an opportunity to receive some payment on your debt