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I received a possible dividend notice, what should I do now?

2019-04-13 Finance No comment

The vast majority of Chapter 7 bankruptcy cases are not asset cases. This means that people applying for bankruptcy protection do not have assets that cannot be protected and kept. California has two sets of exempted assets or is exempt from bankruptcy when it comes to bankruptcy. But what if someone owns $75,000 in stocks or bonds and has $150,000 in debt? There is no exemption in the normal stock trading account to protect $75,000. If the person applies for Chapter 7 of bankruptcy, he may protect part of the stock on a case-by-case basis, and the rest will become part of the bankruptcy, and the debtor is entitled to payment.

This process begins with Chapter 7, Trustee, who is assigned to manage the insolvency estate and submits a “Possible Dividend Notice” [NPD] to all creditors in the bankruptcy petition, which are in arrears. The NPD is submitted to inform everyone that they can get some funds from the bankrupt applicant. The amount or amount received is called a dividend. NPD requires creditors to submit proof of claim or to prove the amount they believe the bankrupt applicant owes to them.

This may seem like a simple process, but there are some lawsuits that prove that creditors have filed fraudulent claims for more than actual arrears. The claim process includes procedures for opposing claims for payment. It is alleged that the claim certificate includes documents proving the amount owed when the bankruptcy case was filed. Unfortunately, many of the claims submitted will be a simple accounting summary with no evidence. Anyone can write a number on a piece of paper and attach it to the claim. It has no evidence and should be expected. If you believe that the creditor in the bankruptcy filed a fraudulent claim, you need to tell the bankruptcy lawyer to object.

Sometimes the trustee will submit the NPD because you think the creditor can get the assets. Once they submit the NPD, they will further investigate the value of the bankrupt applicant's assets and determine if the creditor can or should receive the dispute. As long as the trust actually does something after submitting the NPD, this is fine. What if the trustee submits the NPD and nothing? This is a very troublesome thing and should never happen. When this happens, the creditor wastes precious time and money and gets nothing. A bankruptcy court cannot sign a dismissal order or close a bankruptcy case. If you have experienced this in a bankruptcy case, you will need to consult a bankruptcy lawyer to find out what can be done.

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