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May a Chapter 13 Debtor who has a PC be required to produce the financial documents of the PC that is not in bankruptcy?
Houston, TX
Viewed 46 times.
Posted 5 months ago in Bankruptcy / Debt
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A Doctor has a PC that is completely legitimate and functioning and is not in bankruptcy. The Doctor took personal Chapter 13 Bankruptcy and has provide all the financial information about his personal bankruptcy that the Chapter 13 Trustee has requested. The doctor does not want to provide any financial information about his non-bankrupt PC of which he is the only owner and from which he derives a salary. Under those circumstances, can the Chapter 13 trustee force the debtor to provide financial information about the professional pc even if the pc is not in banktuptcy? What protection from inquiry can the doctor assert regarding the financial matters of the professional corporation not in bankruptcy?
Answers (2)Lesley Abigail Hoenig
This attorney is licensed in Illinois and 2 other states.
Posted 5 months ago.
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I think the only reason the Chapter 13 trustee would want financial info about a PC, is because the ownership interest the Doctor has is an asset of the bankruptcy estate. The trustee needs to know the value of the entity to know whether the plan payments made into the chapter 13 are sufficient to cover equity available in all non exempt assets. I have seen trustees ask for the taxes for businesses owned by debtors, mostly for valuation purposes. If you don't voluntarily turn the information over, and the trustee believes it is necessary to determine whether the plan payment is sufficient, then the trustee can move to compel you to turn over the information. This is a lot less likely to matter if Doctor is paying off 100% of unsecured debt since that is the most anyone would have to pay in a chapter 13 case.
Jeffrey Daniel Larkin
This attorney is licensed in California.
Posted 5 months ago.
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To the extent this information helps the trustee determine whether the debtor is acting in accordance with bankruptcy law it is certainly relevant. If the doctor fails to provide this information the trustee will probably file an objection to confirmation and move to dismiss it on that basis.
LEGAL DISCLAIMER Mr. Larkin is licensed to practice law in CA and is located in San Diego. His response here does not constitute legal advice and does not create an attorney/ client relationship. The response is in the form of legal education and is intended to provide general information about the matter in question. Many times the questioner may leave out details which would make the reply unsuitable. Mr. Larkin strongly advises the questioner to confer with an attorney in their own state to acquire more information about the specifics of their case. |