Division 1 Proposal
April 2nd, 2008 by Questions
I have recently submitted a Division 1 proposal for a debt to 4 creditors:
-creditor A: $5,000
-creditor B: $3,000
-creditor C: $18,000
-creditor D: $206,000
Creditors A,B,C submitted profer Proof of Claims, and B & C both accepted, so TECHNICALLY 2 out of 3 creditors accepted with over 80% of the dollar amount for those 3 creditors….
However, creditor D (who I owe the MOST to) did NOT submit proper documentation, but did say they wanted to vote no. My trustee says that `On Paper` my proposal passes, but now has to be ratified in court…
I really want to avoid bankruptcy, and am rather upset that Creditor D did not show up to negotiate at the Meeting of the Creditors, as I would have been willing to change terms of the proposal in their favor to avoid bankruptcy… What are my options on the day of the court hearing?
One Response to “Division 1 Proposal”
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April 03, 2008 at 6:23 am, A licensed trustee said:
You really ought to be having this conversation with your trustee – not a free website.
That being said, the purpose of the hearing is to allow a disinterested party (the Court) a final look at your situation to see if everything is reasonable. If creditor D (which I am guessing is the government) shows up at the hearing they will have to explain why they didn’t attend at the meeting of creditors. The Court may then decide whether or not to hear their position at the hearing. If they ask for alternate terms and you agree (or counter offer and they agree to your new terms) the Court will likely approve the new terms on the spot.
It’s likely in your best interest to attend the hearing with your trustee, just in case, but I would ask your trustee for their opinion first.