Creditor Objections In A Chapter 13 Bankruptcy Case

This video talks about creditors and their acceptance or rejection of a proposed plan.

David Siegel: Let me ask you this, Jesse. Do creditors object to your plan for your organization or do they just accept it?

Jesse Barrientes: It depends on the creditor. Sometimes they object. Essentially, and we talked about this which is similar in a Chapter 7. It’s a 341 Meeting. It’s essentially the same, Meeting of Creditors. But this is a meeting with the trustee to approve the plan. And I’ve seen some trustees for example; they want to maximize what it is. So let’s say for example that part of the money that’s coming out, okay, is voluntary contributions to your pension. Well, unless it’s what they call 100% plan which is where your creditors get paid back 100%, your unsecured creditors, during that duration because there’s enough money for that, unless it’s a situation like that, I’ve seen where the trustee is going to tell you to stop that until the bankruptcy, the Chapter 13 plan duration is done. So they are going to tweak it, they are going to look at little things like that.

Now of course, everybody wants what, Dave? They want to get paid. They always want to be first in line. But there are certain priority claims that you have. So sometimes creditors do object to that specific plan.

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