Bankruptcy Protection

[cappucm]

Rule 9019

A creditor on my friend's bankruptcy has asked the Trustee
for protection under rule # 9019.

Please explain what this rule is and why would anyone ask for this protection. Is it good for other creditors listed on the bankruptcy.

This is in in Arizona.

The creditor asking using rule 9019 is offering to put $5,000 into the debtors estate. Why would a creditor do this, how does it help the debtor and/or other creditors.

[Edited by cappucm on 11-22-2000 at 01:02 PM]

 

[I AM ALWAYS LIABLE]

A creditor on my friends bankruptcy has asked the Trustee
for protection under rule # 9019.

Please explain what this rule is and why would anyone ask for this protection. Is it good for other creditors listed on the bankruptcy.

This is in in Arizona.

[Edited by cappucm on 11-21-2000 at 05:07 PM]

My response:

It would appear that one or more of the creditors is attempting to settle their portion of the claims with the debtor. One or more of the other creditors is apparently objecting to such settlements under 9019, or is, in the alternative, asking the Trustee that if such settlements are approved, that the objecting creditors' rights to the full amount of their debts not be diminished as a result of such settlments, because the debtor will, theoretically, have less money left over to be divided by the non-settling creditors.

In other words, the non-settling creditors believe it's unfair for the debtor to settle with other creditors.

IAAL

 

[cappucm]

Rule 9019

Why would the creditor asking for Rule 9019 offer to put $5,000 in the debtors estate. What purpose does this serve that creditor and does it help the other creditors. The creditor refers to the $5,000 as a windfall for the estate.

 

[HomeGuru]

First you must understand the pecking order and whether the creditor is secured or unsecured. Apparently this creditor is secured ie. real estate and has something to gain or i a family member that wants to help out.

[Edited by HomeGuru on 11-22-2000 at 09:53 PM]

 

[cappucm]

Rule 9019

The party that is asking for protection under Rule 9019 is listed as an unsecured party on the bankruptcy, but they hold a disputed deed of trust on the debtors property. In Arizona the property is protected under the "Homstead Act". Again, why would they ask for protection under 9019?

Thank you for your help