May a qualified lender consider a borrower’s bankruptcy plan of reorganization when offering distressed loan restructuring?
Yes. Borrower rights are generally compatible with filing for reorganization in bankruptcy, as both sets of laws are designed to resolve a borrower’s financial difficulties by offering various remedies to borrowers. Therefore, FCA allows qualified lenders to treat a borrower’s plan of reorganization (submitted in a bankruptcy proceeding) to serve as the application for restructuring if the bankruptcy paperwork contains all the information under section 4.14A(a)(1) of the Act.
Related Questions
- Does a borrower have to submit an application for restructuring before meeting with the qualified lender to discuss either the distressed loan notice or the inputs into a restructure plan?
- May a qualified lender modify a distressed loan notice when it is being sent to a borrower(s) who has filed bankruptcy?
- May a qualified lender foreclose on a distressed loan without a least-cost analysis?
