Category Archives: NJ Chapter 11 Debtors
It was the day before Thanksgiving. A friend of mine called me in a panic. She received a notification that her bank account was frozen by a creditor; she was to get a direct deposit of her salary in the next 2 days, which was two weeks before Christmas. She needed to file bankruptcy fast in order to trigger the automatic stay (legal principle that means no creditor can take action to harm you).
I stayed up until midnight that day in order to get the case filed for her. Her business had gone bad and this was the fallout from it.
Often, bankruptcy cases are filed on an emergency basis. In many instances, time may be of the essence and you need to file the case immediately (e.g. a creditor has a judgment against you and has sent the Sheriff to your home or business; you have received a notice of garnishment of your wages or bank account by a taxing body). If this firedrill can be avoided, it should be.
Rushing into a case is pretty much never a good idea. Filing the petition on an emergency basis only increases the costs of your case and there may not be enough time to research potential issues that may arise during the course of your case. You may omit important creditors. You may omit assets. If the schedules are not accurate, you will need to amend them and that costs more money to do. Substantial, repeated amendments do not leave favorable impressions upon the U.S. Trustee or the Ch. 7 Trustee.
A debtor is permitted to file a barebones “emergency “bankruptcy petition together with a list of 20 largest creditors. The full set of schedules must be submitted within 14 days, unless extended.
Regardless of whether the case is an emergency filing or not, if you are an individual, you MUST complete pre-bankruptcy filing credit counseling course at least 24 hours before any case is filed.
- Talk to an attorney. He or she can give you the questionnaire you need to fill out well ahead of time. He or she will also give you a list of documents you will need You can start gathering that info. If the case is billed hourly, you will save yourself money by gathering up this information rather than having a paralegal do it.
- Pre-bankruptcy planning is always advisable for any individual or business. You don’t want to throw good money after bad (meaning you don’t want to pay down debt that ultimately may be discharged). You don’t want to make preferential or fraudulent transfers. Often, there are non-bankruptcy options, particularly for businesses (but that can be a topic for another blog post).
DISCLAIMER: This does not constitute legal advice. This post does not create an attorney client relationship. Consultant an attorney for more information re: this topic.
Hovbilt, Inc. filed a voluntary petition for bankruptcy relief under Chapter 11 of the bankruptcy code on September 17th, 2013. The case was filed in the Bankruptcy Court of New Jersey and the case was assigned to the Honorable Judge Michael B. Kaplan under case number 3:13-bk-30341. For a summary of the docket please click here.
Debtor claims assets between $0 and $50,000 with liabilities of $1 to $10 million. In its petition, it lists 10 creditors including Home Depot and Sovereign Bank. (Please see the docket summary for a complete list of creditors.) Sovereign Bank filed for a Notice of Appearance and Request for Service of Notice by its duly appointed counsel in response to Debtor’s voluntary petition for Chapter 11 relief. The petition, as filed, was incomplete and the Attorney Disclosure Statement, Statement of Financial Affairs, Summary of Schedules, and Incomplete Filings are due by October 1st, 2013.
This Chapter 11 Debtor’s exclusive right to file a plan of reorganization expires on January 15, 2014.
CHAPTER 11 DEBTOR TIP: Every Chapter 11 Debtor should know that upon the commencement of a chapter 11 case, Bankruptcy Code section 1121 gives a debtor-in-possession (“DIP”) the exclusive right to file a plan of reorganization for 120 days (4 months). The DIP also has the exclusive right to solicit acceptances (votes) for a plan filed within that 120-day period until 180 days (6 months) after filing for chapter 11. (A debtor may file a plan but creditors may not actually vote on the plan until an accompanying approved Disclosure Statement and set of ballots are served). No competing plans may be filed during this period of exclusivity. A creditor, a creditors’ committee, or another special interest committee may be one of the parties filing a competing plan. Sometimes various parties join together to file a “jointly proposed” competing plan. See helpful article regarding exclusivity written by Salene’ brother-in-law’s fine law firm Jones Day.
This Debtor is a property developer specializing in residential housing developments located at 1 Dag Hammarskjold Blvd. Freehold, NJ 07728. Hovilt, Inc. was established in 1969 as a private company categorized as a speculative building of single-family houses and primarily operated in Monmouth and Ocean Counties in New Jersey. (source)