1. What is bankruptcy under federal law?
Bankruptcy, under federal law, is a way individuals or businesses in financial difficulty ("debtors") repay their debts. Those debts can be repaid over time in accordance with a "repayment" plan under Chapter 11, 12, or 13 of the United States Bankruptcy Code (the "Bankruptcy Code"), or in one payment after a bankruptcy trustee liquidates all the debtor's available assets under chapter 7 of the Bankruptcy Code. While the debtor is working out a repayment plan or the trustee is gathering the available assets for sale, the Bankruptcy Code requires creditors to stop all collection efforts against the debtor.

2. What is the 341 meeting? What can I expect will happen there?
A 341 meeting (“meeting of creditors”) is the hearing all debtors must attend in any bankruptcy case. In chapter 11 cases when the debtor is in possession and no trustee is assigned, a representative of the United States Trustee's office conducts the hearing.

The hearing permits the trustee or representative of the United States Trustee's Office to review the petition and schedules with the debtor face-to-face. The debtor is required to answer questions under penalty of perjury.
The hearing is referred to as the "meeting of creditors" because creditors are notified that they may attend and question the debtor about the location and disposition of assets and any other matter relevant to the administration of the case. Creditors are not required to attend this hearing. The hearing may be continued if the trustee or representative of the United States Trustee's Office is not satisfied with the information provided by the debtor.

3. What is a Bar Date?
The Bar Date is the last day for creditors and other parties to file their Proof of Claim form. The US Bankruptcy Court sets this date, either through an Order or the local rules of the district where the case is pending. A Notice advising creditors of the Bar Date is sent to all known creditors that the debtor has identified as holding potential claims against it. Often the Notice of Bar Date is published in a national paper. If you receive a Notice of the Bar Date and do not understand what your rights and obligations may be, you may want to consult an attorney.

4. What are claims? How are claims filed?
A. Claims
In the broadest sense, a claim is any right to payment held by a person or company against the debtor. A claim does not have to be a past due amount but can include an anticipated sum of money which will come due in the future.

B. Filing of Claims
The written statement filed in a bankruptcy case setting forth a creditor's claim is called a proof of claim. The proof of claim should include or conform to Official Form 10 and contain documentation supporting the claim amount as well as evidence of the security interest if the debt claimed is to be secured. In a chapter 11 case, the court sets the "Bar Date," the last date by which claims must be filed.

Once you have determined that you have a claim against the debtor it is very important that you complete the Proof of claim form as accurately and completely as possible. The name and address section of the proof of claim form will be used for any future mailings to the creditor (absent any change of address being filed). To the extent that you received a pre-printed form with the name and address block completed and you want to change the mailing address, identify the new address on the face of the form. Please make sure you type the signatory’s name as well as signing the form. Telephone and facsimile numbers should be provided in the event that the creditor needs to be contacted. Taxpayer Identification numbers and social security numbers should be identified. The amount section of the claim form should be the amount you believe that debtor owes to you.

5. What does secured, unsecured, priority, and administrative mean?
A. Secured
A claim is "secured" if it is backed by property of the debtor. (That property is then known as a security interest or collateral.) The amount owed can then be repaid in cash or the creditor has a right to take the debtor's pledged property to satisfy that amount. An example of a secured loan is a mortgage. Most homes are purchased by obtaining a loan known as a mortgage from a bank. Monthly mortgage payments are made to the bank. If the payments are not made, the bank has a right to take the home to satisfy the loan given to the debtor.

B. Unsecured
A claim is unsecured if the creditor merely received a promise to be paid a sum of money at a particular time, but no pledge of any property as collateral has been made for the amount owed.

C. Priority
A claim is entitled to priority in payment, ahead of most other debts, in a bankruptcy case if it is listed in section 507 of the Bankruptcy Code. Examples of claims entitled to a priority are certain taxes, employee wage claims earned within 90 days before the bankruptcy filing (up to a certain dollar amount), alimony, maintenance or support of a spouse, former spouse, or child. If you have questions deciding which of your debts are entitled to priority status, you should consult an attorney.

D. Administrative
An administrative claim is a post petition claim; that is, a claim for a debt first incurred by the debtor after the filing of the bankruptcy case. Administrative claims receive a first priority in payment.

6. When will my claims be reconciled?
Once the bar date has passed, the estate will be resolving the claims as quickly as possible. Distributions will be made on allowed claims after the Plan of Reorganization has been filed with and confirmed by the court. Amounts to be paid will be based on allowed amounts multiplied by the applicable payout ratios for the debtor.

7. When will I be paid?
We do not know how long the process will take. In order for any claimant to receive payment, the debtor’s reorganization plan must first be presented to the bankruptcy court, voted on by creditors and then approved by the court.

8. What is a Disclosure Statement?
The Disclosure Statement is a document that provides a profile of the corporation, financial information, and an overview of the proposed Plan of Reorganization. This information is useful to creditors in deciding whether to accept or reject the proposed Plan of Reorganization.

9. What is a Plan of Reorganization?
The Plan of Reorganization is a document that sets out how a debtor in possession will repay creditors. The plan divides creditors into classes. It specifies the treatment of claims for each class of creditors and provides a means for the plan's implementation.