Bankruptcy Flashcards
Order to pay debts
SAG-WEG-CTO-AM
- Secured Creditor: up to value of collateral
- Administrative Costs, child support, alimony
- Gap Creditors: new creditor (.)bankruptcy period
- Wages unpaid: earned in90days max $12475/emp
- Employee Benefit Unpaid
- Gain Producers &fisherman unpaid:$6150/person
- Consumer Deposits: max 2775/consumer
- Taxes
- Obligations to insured bank
- Accidents under affect of drug or alcohol
- Misc Unsecured Debts
Chapter 7- Liquidation
Trustee is appointed
Individual, Partnership or Corp can file Chapter 7
- VOLUNTARY (debtor file) affect RIGHT AWAy
+H+W can file jointly
+Order relief ~at filing date
+Need to have debts to file
2.INVOLUNTARY(creditor file) NOT affect Right away
+If>12creditors:>3 to file owe$15325inUnsecured
+ If1 to file owe—————–
Not apply to Criminal prosecution, paternity suits, child support suit case
Chapter 13- Not Liquidation
Trustee MUST be appointed
ONLY Individual can file chapter 13
Debtor repay all or portion of his debt over 3yr to max 5yr
Chapter 11- Reorganization: restructure debtor’s debt ( Not liquidation)
Trustee NOT required
Individual, Partnership or Corporation can file Chapter 11
Debtor remains in possession of his assets and adopt plan of reorganization
Paid creditors to extent possible and business continue
Provision for full pmt of administration expenses
Allowable to deduct from monthly income
Living expense set by IRS: food, cloth
Health &Disability ins & HSA
Care of elderly, disables
Who cant file chapter 7 Involuntary bankruptcy?
RIBS
Railroad
Insurance CO
Banks
Saving Institutions
5 tests to meet Preferential Transfer
TANIM
TRANSFER property that benefit creditor
For an ANTECEDENT DEBT- an existing debt ( not new debt, secured debts, ordinary course debts and consumer debtasset)
Creditor receive MORE than he would receive in bankruptcy
Properties are excluded from Bankruptcy Estate
Earning after filing petition
Spendthrift trust, Educational IRAs
General thing necessary to live
Government benefits such as Unemployment, disability pmt
Prevent a debtor from getting discharged in Bankruptcy chapter 7
- Debtor is not individual
- Fraudulent transfer
- Unjustifiable failed to keep books and record
- Only discharge within 8yr period
- Commission of a Bankruptcy crime
- Failure to explain loss of assets over the past 2yrs
- Refusal to obey lawful orders
- Improper conduct in an insider’s case
- Failure to complete Personal financial mgt course
Debts never get away in discharge chapter 7
WAFFTEED
Willful injury Alimony &child support & maintenance Debt incurred by fraud Fines & penalties Tax due in 3yrs filing Education loan Embezzlement & fiduciary fraud Debt undisclosed in Bankruptcy petition
Involuntary bankruptcy proceeding under the liquidation of Bankruptcy
Debtor may regain possession of property in the possession of an interim trustee if the debtor files a bond
Voluntary filed and receive a discharge in bankruptcy under the liquidation provision
Must surrender for distribution to the creditors amounts received as an inheritance if the receipt occurs within 180days after filling of the petition
Claim discharge in bankruptcy proceeding if
Is Brought by a secured creditor & remain unsatisfied after receipt the proceed
Is for unintentional tort cuz injury
Breach of a contract by debtors
EXCEPT: Extension of credit based upon false representation
Discharge from bankruptcy
When a debtor is granted a discharge in bankruptcy process, most of debtor’s debts are discharged EXCEPT the debt cuz of debtor’s false representation
Involuntary petition in bankruptcy
If NOT contested, will automatically result in the entry of an order for relief by the bankruptcy court
If CONTESTED, creditor required to prove either
+Debtor is not paying his debts as it is due or
+During 120days preceding filing the petition, custodian was appointed or took possession of substantially all of the property of the debtor
Assets included in debtor’s bankruptcy estate in a liquidation proceeding
Assets other than those received by inheritance, bequest, devise, or from life insurance, a divorce decree or property settlement with one spouse are not part of estate if received after the filing
Estate of debtor consists of
Property presently owned by debtor as of filing date
Property owed to debtor by 3rd parties that recovered by trustee
Income from property owned by estate after petition is filed
Property received by debtor within 180days after filing of petition by: inheritance, life ins, divorce decree, property settlement
