Source: http://www.younglazzarini.com/creditors
Timestamp: 2018-05-27 11:21:03
Document Index: 456814388

Matched Legal Cases: ['§ 341', '§ 702', '§ 341', '§ 343', '§ 727', '§ 341', '§ 1328', '§ 341', '§ 521', '§ 727', '§ 523', '§ 523', '§ 523', '§ 523', '§ 341', '§ 523', '§ 1328', '§ 523']

For Creditors — Young & Lazzarini
Creditor's Education Center
I received a Notice of Bankruptcy Filing. What do I do now?
Can I evict my bankrupt tenant? Can I repossess or foreclose on the property?
What information can I get from the Debtor?
How should I interact with the bankruptcy trustee?
My spouse, partner, or ex- filed bankruptcy.
My business partner filed bankruptcy.
I believe the debtor committed fraud.
Q: I received a Notice of Bankruptcy Filing. What do I do now?
A: The most important thing to is take notice of and calendar all relevant dates, including: (1) the date for the debtor's examination by the Trustee (pursuant to 11 USC 341); (2) the date to file adversary proceedings under 11 USC 523 (non-dischargeability) & 11 USC 727 (objection to discharge); and, (3) the claims bar date, or the last date to file a proof of claim. In Chapter 13 cases, you should also note the last date to file objections to plan confirmation. All dates will be clearly stated in the bankruptcy notice. Knowing the deadlines is critical to protecting your rights in the bankruptcy process.
Q: How long do I have to take action?
A: Some deadlines are based on the date the case are filed while others are based on the first date set for the Meeting of Creditors (Note - If the Meeting of Creditors is continued, that does not reset the deadlines). The First Meeting of Creditors will generally be held between 21 and 35 days after the bankruptcy petition is filed, depending on the chapter, but may be as many as 60 days out (FRBP Rule 2003). Any adversary proceeding under 11 USC 523 (non-dischargeability) or 11 USC 727 (objection to discharge) must be filed by a creditor no later than 60 days after the first date set for the Meeting of Creditors under 11 USC 341(a). (FRBP Rules 4004(a) & 4007(c)). Proofs of Claim generally must be filed within 90 days after the first date set for the Meeting of Creditors.
Q: Can I evict my bankrupt tenant? Can I repossess or foreclose on the property?
A: No, not without Court action. The filing of a bankruptcy petition immediately triggers the automatic stay of 11 USC 362, which stays the commencement or continuation of nearly all civil proceedings including unlawful detainer and foreclosure. Any action taken in violation of the stay may subject the creditor to sanctions by the Court or civil damages to the debtor. Before starting or continuing any action to reclaim possession of real property, a creditor must obtain relief from the automatic stay by noticed motion.
However, if the debtor has filed more than one petition in the past calendar year, the automatic stay may not take effect. Under certain circumstances, the automatic stay may expire on the 30th day after the petition is filed if a previous bankruptcy petition was filed and dismissed within 1-year (11 USC 362(c)(3)(A)). If 2 or more petitions were filed and dismissed -- as in the case of serial bankruptcy filers -- no automatic stay will go into effect (11 USC 362(c)(4)(A)(i)).
Many title companies will require a creditor to file a motion for relief from stay pursuant to 11 USC 362(c)(4)(A)(ii) seeking an order confirming that no stay is in effect before authorizing a foreclosure proceeding.
These provisions apply even if the Debtor is past due on their rent or mortgage . You can submit a proof of claim for past due payments in Chapter 13 cases or in asset Chapter 7 cases. Under certain circumstances, you may be able to obtain relief from the stay by noticed motion to commence or continue an eviction proceeding.
A: It depends on the type of bankruptcy petition filed. A no-asset Chapter 7 case generally lasts about 3-4 months, while an asset Chapter 7 may last years. Under normal circumstances, a Chapter 13 repayment plan cannot run less than 3 years or more than 5 years. Chapter 11 varies significantly depending on the nature of the case.
Q: Will I get the money owed to me?
A: It depends. If you are a creditor in a no-asset Chapter 7, you will not receive any distribution from the bankruptcy estate. The only chance of recovery is if you can prevail in an action for non-dischargeability under 11 USC 523 or denial of discharge under 11 USC 727. In an asset Chapter 7 or in Chapters 11 & 13, you may file a proof of claim and recover some distributions from the bankruptcy estate depending on your creditor status. (California Sample Form Here). Secured debts in bankruptcy are preferred over unsecured debts, as are priority debts such as child support and certain administrative debts.
Q: What information can I get from the Debtor?
A: Most of the information you need will be in the Debtor's bankruptcy petition, schedules, and statement of financial affairs including list and value of assets, employment and income information, and records of property transfers. You can obtain a copy of the entire bankruptcy petition at the local courthouse or online through the bankruptcy court's online document system (PACER). You will need to make an account for online access, but the records are open to the public.
Creditors may also obtain a copy of the Debtor's most recent tax return. However, the request must be made more than 7 days prior to the first date set for the Debtor's meeting of creditors (11 USC 521(e)(2)(C)). After the request is made by the creditor, the Debtor must provide the tax return at the same time he or she provides such return to the Trustee. Failure to provide the tax return may result in dismissal of the Debtor's bankruptcy case unless the Debtor can show cause for not providing the return.
If further information from the Debtor is required, the most powerful tool available to a creditor is an examination under Fed. Rules Bankr. Proc. Rule 2004. Any creditor can motion the Court for an order compelling the Debtor to attend an examination under oath regarding the "liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor’s estate, or to the debtor’s right to a discharge." (FRBP Rule 2004(b)). A creditor may also compel production of documents in a FRBP Rule 2004 examination. (FRBP Rule 2004(c)).
A: Each bankruptcy court district adopts its own form for filing bankruptcy claims. The form will include general information such as the case number, debtor name, creditor address, and payment address. It will also require specific information regarding the secured status of the claim, amount of arrearage, and whether the claim is entitled to priority. Once completed, the form should be filed with the Court and served on the debtor (generally via the attorney) as well as the bankruptcy trustee. Proofs of Claim also require supporting documentation such as the contract or note underlying the claim and calculation of interest as of the petition date.
Q: How should I interact with the bankruptcy trustee?
A: This is a tricky question that depends on the result you hope to achieve. The job of the appointed Trustee is to maximize the return to creditors. However, the manner in which Trustees go about that result depends on a number of circumstances. If you have information that the debtor has lied in his bankruptcy petition, you may bring that to the attention of the Trustee immediately. However, if the case is then dismissed, other creditors may attempt to collect on their debts against the debtor as well.
If the Trustee files an objection to discharge under 11 USC 727, you may also need to proceed with your own 727 action in order to protect your rights. The circumstances of each case will dictate the appropriate way to proceed.
Q: My spouse, partner, or ex- filed bankruptcy.
A: If they owed you money, you are now part of the bankruptcy case. The petition filing will stay any legal proceedings, including divorce or any other family law proceedings. The first thing to do is look at the debtor's schedules and see if all assets and debts have been disclosed. You may also need to file a proof of claim.
Domestic support obligations and most debts related to divorce proceedings are non-dischargeable in bankruptcy (11 USC 523(a)(5) & 11 USC 523(a)(15)). However, certain dissolution settlements that constitute property division and not spousal support may be dischargeable. If your dissolution decree includes equalization payments or property division, you may need to file an adversary proceeding or risk your debt being discharged.
Q: My business partner filed bankruptcy.
A: Your rights are largely dependent on the type of business entity you have. When a person files bankruptcy, all of their assets become property of the bankruptcy estate. That includes a person's interest in a business entity, whether that be shares of a corporation, member interest in an LLC, or partnership interest in a partnership. In Chapter 7 cases, the Trustee has the right to administer and sell that interest to anyone unless the documents governing the business entity restrict transfer. If the bankrupt person's business interest has value, it is often advisable for the other business members to purchase that interest from the bankruptcy estate to avoid an unknown, third-party from buying into the business.
Q: I believe the Debtor committed fraud.
A: If the Debtor committed fraud against you, you can commence a non-dischargeability adversary proceeding under 11 USC 523(a)(2). There are different rules depending on whether the fraudulent representation was made orally or in writing.
If the Debtor is committing fraud against the bankruptcy system, such as by concealing assets or making fraudulent representations in his or her bankruptcy papers, you may object to the Debtor's discharge by filing an adversary complaint under 11 USC 727.
There are strict deadlines for commencing an adversary proceeding. You must file a complaint within 60 days of the first date set for the meeting of creditors.
(B) within 30 days after the first date set for the meeting of creditors under section 341(a), or within such additional time as the court, for cause, within such 30-day period fixes, perform his intention with respect to such property, as specified by subparagraph (A) of this paragraph; except that nothing in subparagraphs (A) and (B) of this paragraph shall alter the debtor's or the trustee's rights with regard to such property under this title, except as provided in section 362(h);
(A) The debtor shall provide-
(1) A statement referred to in subsection (f)(4) shall disclose-
(i) for purposes of subparagraph (A)- (I) consumer debts owed to a single creditor and aggregating more than $500 for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and (II) cash advances aggregating more than $750 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and
(ii) for purposes of this subparagraph- (I) the terms "consumer", "credit", and "open end credit plan" have the same meanings as in section 103 of the Truth in Lending Act; and (II) the term "luxury goods or services" does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor;
(B) a loan from a thrift savings plan permitted under subchapter III of chapter 84 of title 5, that satisfies the requirements of section 8433(g) of such title; but nothing in this paragraph may be construed to provide that any loan made under a governmental plan under section 414(d), or a contract or account under section 403(b), of the Internal Revenue Code of 1986 constitutes a claim or a debt under this title; or
(a) DATE AND PLACE. Except as otherwise provided in § 341(e) of the Code, in a chapter 7 liquidation or a chapter 11 reorganization case, the United States trustee shall call a meeting of creditors to be held no fewer than 21 and no more than 40 days after the order for relief. In a chapter 12 family farmer debt adjustment case, the United States trustee shall call a meeting of creditors to be held no fewer than 21 and no more than 35 days after the order for relief. In a chapter 13 individual’s debt adjustment case, the United States trustee shall call a meeting of creditors to be held no fewer than 21 and no more than 50 days after the order for relief. If there is an appeal from or a motion to vacate the order for relief, or if there is a motion to dismiss the case, the United States trustee may set a later date for the meeting. The meeting may be held at a regular place for holding court or at any other place designated by the United States trustee within the district convenient for the parties in interest. If the United States trustee designates a place for the meeting which is not regularly staffed by the United States trustee or an assistant who may preside at the meeting, the meeting may be held not more than 60 days after the order for relief.
(3) Right To Vote. In a chapter 7 liquidation case, a creditor is entitled to vote at a meeting if, at or before the meeting, the creditor has filed a proof of claim or a writing setting forth facts evidencing a right to vote pursuant to § 702(a) of the Code unless objection is made to the claim or the proof of claim is insufficient on its face. A creditor of a partnership may file a proof of claim or writing evidencing a right to vote for the trustee for the estate of the general partner notwithstanding that a trustee for the estate of the partnership has previously qualified. In the event of an objection to the amount or allowability of a claim for the purpose of voting, unless the court orders otherwise, the United States trustee shall tabulate the votes for each alternative presented by the dispute and, if resolution of such dispute is necessary to determine the result of the election, the tabulations for each alternative shall be reported to the court.
(c) RECORD OF MEETING. Any examination under oath at the meeting of creditors held pursuant to § 341(a) of the Code shall be recorded verbatim by the United States trustee using electronic sound recording equipment or other means of recording, and such record shall be preserved by the United States trustee and available for public access until two years after the conclusion of the meeting of creditors. Upon request of any entity, the United States trustee shall certify and provide a copy or transcript of such recording at the entity’s expense.
(b) SCOPE OF EXAMINATION. The examination of an entity under this rule or of the debtor under § 343 of the Code may relate only to the acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor’s estate, or to the debtor’s right to a discharge. In a family farmer’s debt adjustment case under chapter 12, an individual’s debt adjustment case under chapter 13, or a reorganization case under chapter 11 of the Code, other than for the reorganization of a railroad, the examination may also relate to the operation of any business and the desirability of its continuance, the source of any money or property acquired or to be acquired by the debtor for purposes of consummating a plan and the consideration given or offered therefor, and any other matter relevant to the case or to the formulation of a plan.
(e) MILEAGE. An entity other than a debtor shall not be required to attend as a witness unless lawful mileage and witness fee for one day’s attendance shall be first tendered. If the debtor resides more than 100 miles from the place of examination when required to appear for an examination under this rule, the mileage allowed by law to a witness shall be tendered for any distance more than 100 miles from the debtor’s residence at the date of the filing of the first petition commencing a case under the Code or the residence at the time the debtor is required to appear for the examination, whichever is the lesser.
(a) TIME FOR OBJECTING TO DISCHARGE; NOTICE OF TIME FIXED. In a chapter 7 case, a complaint, or a motion under § 727(a)(8) or (a)(9) of the Code, objecting to the debtor’s discharge shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a). In a chapter 11 case, the complaint shall be filed no later than the first date set for the hearing on confirmation. In a chapter 13 case, a motion objecting to the debtor’s discharge under § 1328(f) shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a). At least 28 days’ notice of the time so fixed shall be given to the United States trustee and all creditors as provided in Rule 2002(f) and (k) and to the trustee and the trustee’s attorney.
(L) a motion is pending to delay discharge because the debtor has not filed with the court all tax documents required to be filed under § 521(f).
(d) APPLICABILITY OF RULES IN PART VII AND RULE 9014. An objection to discharge is governed by Part VII of these rules, except that an objection to discharge under §§ 727(a)(8),1 (a)(9), or 1328(f) is commenced by motion and governed by Rule 9014.
(b) TIME FOR COMMENCING PROCEEDING OTHER THAN UNDER § 523(c) OF THE CODE. A complaint other than under § 523(c) may be filed at any time. A case may be reopened without payment of an additional filing fee for the purpose of filing a complaint to obtain a determination under this rule.
(c) TIME FOR FILING COMPLAINT UNDER § 523(c) IN A CHAPTER 7 LIQUIDATION, CHAPTER 11 REORGANIZATION, CHAPTER 12 FAMILY FARMER’S DEBT ADJUSTMENT CASE, OR CHAPTER 13 INDIVIDUAL’S DEBT ADJUSTMENT CASE; NOTICE OF TIME FIXED. Except as otherwise provided in subdivision (d), a complaint to determine the dischargeability of a debt under § 523(c) shall be filed no later than 60 days after the first date set for the meeting of creditors under § 341(a). The court shall give all creditors no less than 30 days’ notice of the time so fixed in the manner provided in Rule 2002. On motion of a party in interest, after hearing on notice, the court may for cause extend the time fixed under this subdivision. The motion shall be filed before the time has expired.
(d) TIME FOR FILING COMPLAINT UNDER § 523(a)(6) IN A CHAPTER 13 INDIVIDUAL’S DEBT ADJUSTMENT CASE; NOTICE OF TIME FIXED. On motion by a debtor for a discharge under § 1328(b), the court shall enter an order fixing the time to file a complaint to determine the dischargeability of any debt under § 523(a)(6) and shall give no less than 30 days’ notice of the time fixed to all creditors in the manner provided in Rule 2002. On motion of any party in interest, after hearing on notice, the court may for cause extend the time fixed under this subdivision. The motion shall be filed before the time has expired.