Bankruptcy can be filed with Chapter 11 or Chapter 13 or Chapter 7. If a business the options further narrow down to Chapter 11 or Chapter 7. In other words, Chapter 13 is something exclusive for the individuals. Chapter 7 deals with liberating debts in exchange for assets and Chapter 13/11 deals with a future payment plan that aims at fulfilling the majority of the debts in the period of 3-5 years. Most of all the assets of the business or an individual can be safeguarded under Chapter 11 or 13. To know more about each chapter log on to https://www.recoverylawgroup.com/bankruptcy/.
What is a nonconsensual lender?
In Chapter 11 or chapter 13 the payment plan proposal is an important aspect. While filing bankruptcy itself, the filer should indicate a potential payment plan and how he/she is going to abide by the same for the next 3-5 years. This payment plan must be thought-out well to ensure it is not unreasonable or is in bad faith to ensure maximum discharge of debt after the payment plan is complete. When a lender disagrees with the proposed payment plan, he becomes a nonconsensual lender.
What should a nonconsensual lender do?
In many situations, the filer might underestimate the income and overbudget the expenses to minimize the payouts to the debts in the restructured payment plan. While it is a subjective matter, a nonconsensual lender can propose a better alternative restructured plan that gets the support of other lenders and the bankruptcy trustee. In case the payment plan presented by the borrower is practical, reasonable, and approved by the bankruptcy trustee, there is not much a nonconsensual lender does to prevent the execution of the payment plan.
There is a big debate on the rights of the bankruptcy court to allow for a payment plan despite the objections of a lender. There is a constitutional rights debate with the bankruptcy court that many experts argue in favor and against the rights of the bankruptcy court. To summarize the bankruptcy court has greater discretion in setting up a restructured payment plan even when the lenders do not agree. The judgment and report provided by the bankruptcy trustee can play a crucial role in the bankruptcy court judgment.
To ensure you are not blown away by the objections and the questions of the lenders and the bankruptcy trustee, hiring a good attorney from Los Angeles & Dallas, TX can be a great idea. Dial 888-297-6203 to connect with one instantly.