What is a “debtor’s exam” in a Chapter 11 bankruptcy?

A debtor’s exam is a type of hearing that takes place during Chapter 11 bankruptcy proceedings. The purpose of this hearing is for a bankruptcy judge or trustee to gain a better understanding of a debtor’s “financial condition.” During a debtor’s exam, the debtor must answer questions about their assets, liabilities, income and expenses under oath. Most often, the questions are related to debt repayment and reorganization. The debtor must also bring documents to the hearing such as tax returns, bank statements and loan documents. The debtor’s exam is a critical part of the bankruptcy process because it helps the judge or trustee determine how much the debtor can afford to pay creditors. In California, a debtor’s exam can also be used to determine if the debtor has any assets that can be used to repay creditors. The exam can be used to examine any and all financial records (including tax returns) related to the debtor’s business or personal finances. If the debtor does not provide documents or answers truthfully, they may be subject to perjury charges. A successful debtor’s exam is an important step in the Chapter 11 bankruptcy process. It provides the court with the information necessary to make an informed decision on how to proceed in the case. A successful debtors’ exam is vital in helping creditors receive full repayment and the debtor to receive the debt relief they need.

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What is a “debtor’s exam” in a Chapter 11 bankruptcy?

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