This paper discusses post-petition rights of creditors.
In general, pre-petition creditors are bound by the terms of the plan with respect to the debtor’s property and property of the estate. Alternatively, post-petition creditors are stayed with respect to property of the estate, but not property of the debtor. Issues regarding post-petition creditor rights arise under sections 362, 1306 and 1327(b) of the Bankruptcy Code. In the 7th Circuit, a bankruptcy court cannot provide a broad limitation to the vesting of a property in a confirmation order. Also, a post-petition creditor is not stayed, post-confirmation, from recovery of the debtor’s property and earnings. Counsel for a debtor has several specific requirements, and a post-petition creditor has no easy way to determine whether property targeted by it for recovery is necessary to fulfillment of the Plan.
Download the PDF