Bankruptcy

Question 1

Individual - Chapter 7 Ok if

Answer 1

Avg. MI past 6 months < state median
Or “Net” MI x 60 < $7,025
Or “net” MI x 60 < 25% of unsecured claims

Question 2

Who can not file for Chapter 7? No RIBS

Answer 2

R - Railroads
I - Insurance companies
B- Bank and small business investment
S - Saving institutions

Question 3

Who can not file for Chapter 11? No BIBS

Answer 3

B - Brokers
I - Insurance companies
B- Bank and small business investment
S - Saving institutions

Railroad is ok

Question 4

Chapter 7 and 11 - voluntary

Answer 4

Debts of any amounts .

No need to be solvent. Just incapable to pay debts when due

Immediate “order for relief”

Question 5

Chapter 7 and 11 - involuntary.

Answer 5

Must owed at least $14,425 in unsecured, undisputed debt

If fewer than 12 creditors - 1 or more must owe at least $14,425
If more than 12 creditors - 3 or more must owe at least 14,425 in aggregate

No immediate order of relief - gap. New creditors during this gap period has the high priority to recover debt

Question 6

What debts will not be discharge by bankruptcy ? WAFTED

Answer 6

Willful and malicious injury (drunk driving)
Alimony and child support
Fraud
Taxes
Education loans
Debts undisclosed in the bankrupt petition

Question 7

Distribution of debtor’s estate- priority?

Answer 7

1. Secured claimants
2. Priority claimants : (9 subcategory) SAG WEG CTI
   S - Support obligation - Alimony and child support
   A- Administrative fees
   G- Involuntary case Gap claimants
   W - Wage up to $11,725 for each employee if earned within 180 days prior to filling.
   E - Employee benefit plan contributions up to $11,725 for each employee, reduced by wage claims.
   G - Grain famers’ and fishermen’s claim up to $5775
   C- Consumer deposit for goods paid for but not delivered up to $2600
   T - Taxes
   I - Injury claims caused by drunk driving.
3. Non Priority claim

Question 8

Chapter 15 - Ancillary and Cross-Border Cases

Answer 8

• Promotes uniform and coordinated legal regime for cross-border insolvency cases.
• Foreign representative may file for recognition of foreign proceeding or participate in a U.S. case.

(similar to bankruptcy rule, but apply for foreign representative. Prohibit against discrimination against foreign creditors)