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What is a 2004 Examination in Bankruptcy?

 

 

In a bankruptcy case, you are required by the court to reveal all information that is deemed necessary. This includes all your debts, assets, income, expenses, etc. In addition, you will be required to attend a 341 meeting, where your creditors will ask you further questions (HYPERLINK: 341 Meeting article).

Usually, the interested parties, such as your creditors or the court trustee, may be satisfied with the information you provide. However, in case they wish to investigate matters further regarding your bankruptcy case, they will schedule a special session called a 2004 examination.

What is a 2004 Examination in Bankruptcy?

A 2004 exam is a formal session that allows the interested party to acquire any information that they may want regarding your bankruptcy case. A 2004 examination meeting can cover a broad range of issues, which can include but are not limited to:

In a 2004 examination, the interested parties could also bring in anyone that has knowledge relating to your bankruptcy. Any witness subject to the session will not always be entitled to an attorney, and their right to object to any questions asked may be restricted.

The 2004 Examination Process

Because of the potential for abuse, an interested party is not automatically given the right to conduct a 2004 exam. Rather, they have to request it from the bankruptcy court by filing a motion. The party requesting a 2004 exam must convince the court that they have a ‘just cause’ for holding the session. If the motion is approved, the court will then issue an order, informing you or another witness of the date and time of when the session will take place.

Additional information

A 2004 exam can also be requested by you, and it can be advantageous to do so in certain cases, such as challenging the basis of a creditor’s potential adversary claim. It is also important to know that once an adversary claim has been filed, then a 2004 Exam can no longer be used to get information from the parties involved in that proceeding. Instead, the process will be conducted in a separate adversary lawsuit with its own set of rules.

Hire a Bankruptcy Attorney

You don’t have to confront your creditors alone in a bankruptcy case. An experienced legal professional can guide you through the long-drawn and complicated bankruptcy process and ensure a favorable outcome. To hire an attorney from our office or for any inquiries, call 512.640.3340.

For more information, speak with an experienced bankruptcy attorney – schedule your free 1-hour consultation today: https://seanflynnlaw.com/calendar/

CARES Act and Chapter 13 Bankruptcy

In March of this year, in response to the impending economic downturn, the US government passed the CARES Act. Beyond the massive $2 trillion dollar stimulus package, the Act has allowed for a number of different changes to existing laws to make it easier for both businesses and individuals impacted by the COVID-19 pandemic to whether the crisis.

Among these includes changes made to the Chapter 13 Bankruptcy Law. Where the previous maximum repayment plan duration was set to 5 years, struggling debtors can now have it extended by a further 2 years. In addition, any COVId-19 related federal emergency relief payments will not be taken into account by the bankruptcy court in calculating your current monthly income.

These changes apply to all bankruptcy cases filed after the Act was enacted and is likely to remain applicable for some time.

Have any further questions regarding the CARES Act or bankruptcy? Schedule your free consultation with our legal experts by calling 512-640 3340.

Alternatively, you can book one online by visiting our website:

Link: https://seanflynnlaw.com/calendar/

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The Effect on Chapter 11 Business Bankruptcies in 2020

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Bankruptcy is one of the most challenging options that one can only choose if the situation does not allow any other possible way. While there can be various kinds of bankruptcies, when we talk about this year, the first thing that comes to mind is business bankruptcies in 2020.

The reason why your mind will take you directly towards this is not just because of the obvious calculations of businesses facing a downfall due to COVID-19, but also because we now have statistics that confirm this case. Hence, before moving forward with everything you need to know about recent corporate bankruptcies, let’s take a look at some figures first to legitimize the significance of this topic.

Statistics

The best way of analyzing data in this situation is to compare it with the data for last year. Although we are not yet done with this pandemic and the year itself, one can still compare and contrast the statistics present for half of the year which were recently released.

While the overall bankruptcies for all chapters went down by 23% for the first 6 months from last year, there was an increase of 26% in chapter 11 bankruptcies from 2019 for the first half and a stark increase of 43% was noted for June 2020 in comparison to June 2019!

These figures are good enough to show how businesses have been opting for seeking help by filing bankruptcy amidst the pandemic even after knowing that there can be severe consequences.

Chapter 11 Business Bankruptcy

We are now well aware of how there has been an increase in business bankruptcies in 2020 for the first half only and the number will probably go even more up for the rest of the year. However, it is also essential to understand what exactly chapter 11 means and what effect does it might have had after the recent changes.

Chapter 11 bankruptcy is a reorganization process through which you can change your payment plan by proposing a new one that allows you to keep your business running while also being able to pay back to your creditor. The case is different for every business, but it is surely not like chapter 7 where you directly just give in and all your assets are taken to pay the debt amount.

In February 2020, an amendment came into effect which was basically for small businesses. This change was made in subchapter V of chapter 11 through which the process of bankruptcy was made faster and at a low-cost for small businesses. While this change was not specifically made because of the current pandemic, it did help a lot of people who because of coronavirus are now unable to pay their debt according to the payment plan that they were okay with at the start.

As a piece of advice, we would suggest that if you have a business which had to face a major setback due to the current situation, you should consult an expert before taking any big step and then do what might be the best option for now!

For more information, speak with an experienced bankruptcy attorney – schedule your free 1-hour consultation today: https://seanflynnlaw.com/calendar/

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