http://www.goodbye2debt.com/

Law Offices of Nicholas Gebelt
15150 Hornell St
Whittier, CA 90604
(562) 7779159

When we file a chapter 11, that of course triggers the automatic stay that I’ve already discussed. And then we have a whole lot of stuff we have to do right away. One of the things we have to get done, we try to get good portion of it prepared before filing the petition although sometimes it’s simply not possible because we have to file quickly. We have to prepare something called the 7day package. Now, I don’t know if this is coast to coast but it’s certainly here in the Central District of California. It’s a voluminous thing that we submit to the office of United States Trustee. And it has all kinds of documentation of the debtor’s assets, liabilities, income, expenses and so we have to submit that within 7 days of the petition date, that’s what’s called the 7day package. On top of that, there are at least three hearings that we’re going to have. One is called the IDI (Initial Debtor Interview). In there, we meet with the debtor of course has to be there, if it’s a business, the person most knowledgeable. We meet with the representative of the office of the United States Trustee and there, we are going to lay out what we think is the future of the case, what is our exit strategy.
Creditors are permitted to attend, usually maybe one or two will show up, usually the big ticket creditors because they want to know where are we heading. Then sometime after that, there is the meeting of creditors under section 341A of the bankruptcy code. And that also is with a representative of the United States Trustee and the creditors are permitted to attend and they frequently do especially the creditors that are owed large sums of money. They want to know what’s going on and sometimes those hearings can be really quite heated because in the meeting of creditors, the creditors are permitted to ask the debtor questions. And those questions are sometimes very probing, the goal being to find out is there bad faith here, is there a way to challenge the discharge, where are the assets, I lent you all this money, where did it go that kind of a thing and sometimes they can be just really nasty experiences.
Then there is going to be a status conference before the judge. Now, prior to the status conference, we have to submit an initial status report. There is a certain redundance into these things but in essence, we’re going to be laying out to the judge what the history of the debtor is, how it got to the point of needing to file the chapter 11 and what our goals are in the chapter 11 and what the roadmap is. So the judge will consider that and set a timetable. Now, typically at that status conference, the judge will set a Claims Bar Date. What that means is creditors, if they want to file proofs of claim in the chapter 11, have to file their claims no later than that particular bar date. A little sidebar here: Creditors in chapter 11 do not have to file proofs of claim if they don’t want to. The only time a creditor is going to file a proof of claim is if the creditor disagrees with the way its debt was scheduled in the bankruptcy papers. But if in the schedules the debt to that particular creditor, let’s call it generically A, B, C, matches with what creditor A, B, C thinks is the right amount and the nature of the debtor, creditor doesn’t have to take any action at all.

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