Div 1 Proposal

March 3rd, 2008 by Questions

Lets say I have 10 Creditors – each one I owe 10K – that totals 100K owing. I offer .20 cents on dollar – Question – If only one creditor votes and the proposal is accepted – do the other creditors who did not vote – are they entitled to there share? What happens if they fail to put in a claim – do they receive anything from the proposal? And if not – would that mean that I would only have to pay the 20 cents on the dollar to the creditors who actually voted and put in a claim? Thanks.

Questions

One Response to “Div 1 Proposal”



March 04, 2008 at 6:10 am, A licensed trustee said:

While it is possible to offer a Div I proposal that literally offers to pay $0.20 on the dollar, in most cases, the offer would be made to repay an amount estimated to be equal to that amount. For example, using the numbers you have suggested, $100K in debt, you would offer to repay $20,000.

In a Div I your creditors have 21 days to vote – if they haven’t voted by the time of your creditors’ meeting they effectively lose teh right to vote.

To recieve any money from your trustee, a creditor must submit a proof of claim. If they do not the debt will still be discharged (eliminated) by the proposal.

You cannot repay more than 100% of what you owe – if only one creditor were to submit a claim, they would be paid and then a final notice sent to the others wanring that in 30 days the proposal will be completed. If after 30 days no further claims come in, the excess funds will be returned to you.

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