Bankruptcy Flashcards
1
Q
*Chapter 7 (liquidation)
A
- Only once every 8 years
- voluntary/involuntary permitted
- individuals & businesses
- “means” test
- must receive credit couseling w/in 180 days prior to filing
- Trustee appointed
- NOT eligible = railroad, domestic insurance co, savings bank, savings and loan, cooperative bank, certain SBA entities
2
Q
Chapter 9 (reorg. of municipality)
A
- voluntary permitted
- rarely addressed on exam
3
Q
*Chapter 11 (reorganization)
A
- voluntary/involuntary permitted
- allows companies to restructure and be discharged of certain debts
- must be approved by 1/2 creditors with 2/3 of total claims
- Court must approve
4
Q
Chapter 12 (reorg. for family farmer/fisherman)
A
- only voluntary
- rarely tested on exam
5
Q
*Chapter 13 (reorg. for individuals)
A
- only voluntary
- < 383,175 unsecured
- < 1,149,525 secured debt
- ALWAYS has a trustee
- only applies to individuals
- court confirmation
- 3-5 years for plan - discharged is payment is made
6
Q
?What does a creditor need to file to commence proceedings?
A
- Petition
7
Q
What constitutes the debtor’s estate?
A
- ALL tangible/intangible property of debtor held at time proceedings began
- Following after-aquired property; inheritance/gift, by divorce, separation, prop settlement, beneficiary proceeds from life insurance
- property appreciation, income, etc, from existing property
- property reaquired by trustee’s avoidable powers such as preferences, fraudulant transfers, transfer by mistake, under duress
8
Q
Order of priorities among creditors (distribution of estate)
A
- Perfected secured creditors (collateral only, rest can file as general creditor); unperfected=general cred.
- Domestic support obligations
- Administrative costs
- Claims arising in the ordinary course of business
- Emploee Wages
- Contributions to employee benefit plans
- Claims of farm producers/fisherman
- Consumer creditors
- Claims of gov’t units for various taxes
- Claims for death/personal injury
- ALL general unsecured creditors
- Remaining goes to debtor
9
Q
What debtor debts CANNOT be discharged
A
- partnerships/s corps cannot get ch. 7 discharge
- domestic support obligations
- student loans
- fines/penalties
- unscheduled debts (not listed/known)
- judgements for willful/malicious injuries
- from DUI
- debts incurred through fraud, larceny, embezzlement
- unpaid taxes (2 years)
- SOX bonuses/incentives
- COnsumer debts (w/in 90 days of filing) (> 600 luxury item still owe)
10
Q
Requirements of Reaffirmations
A
- Agreements btwn debtor/creditor tht a debt will not be discharged
- must be entered into prior to granting of discharge decree
- signed/filed with the court
- if no attorrney rep, hearing/approval required
- must include debtors right to rescind anytime before discharge decree or w/in 60 days of filing agreement, whichever is later
11
Q
When debtor fails to pay - Obtain a judgement
A
- attachment - court-ordered seizure of non-exempt property prior to judgement
- writ of execution - after unsatisfied judgment, can seek this from court, a writ to levy (possess and sell) on non-exempt property of the debtor
- garnishment - e.g. bank accounts, wages
12
Q
Upon filing of a petition
A
Court will grant an ORDER FOR RELIEF or a stay; meaning creditors MUST stop collection and all pending credit proceedings are stopped; the debts/payments will be handled through the bankruptcy court
13
Q
Debtors Obligation to Provide info - after petition has been filed, order for relief granted
A
- creditors, addressed, amount
- schedule of A & L
- Schedule income/expenses
- stmnt of financial affairs
- stmnt of intentin to retain or surrender any property, specify exempt property
- credit couseling agent certificate
- stmnt of monthly income itemized to show how calculated
- copy of tax return
- proof of payments during last 6 months
- ful cooperation, truth, appearance, surrender all property, books, and records subject to trustee
14
Q
BASIC trustee duties
A
- collect property
- account for all property
- final report on administration of estate
- furnishing info/reports concerning estate
- providing notice info to domestic support creditors
15
Q
EXEMPT property from estate
A
- ONLY INDIVIDUALS can claim these
- Homestead
- Motor vehicle
- Household furnishings
- “wild card”
- tools, prefessional books used in trade
- prescribed health aids
- unmatured life insurance policies
- various gov’t benefits (uneployment, soc. sec., veterans benefits)
- various provate benefits (alimony, child support, pension, disability)
- damages for bodily injury
- Interest in jewelry
