Bankruptcy

Question 1

Bankruptcy does not stop collections on

Answer 1

student loans
income taxes ( previous 3 yrs)
Alimony. child support
debts/judgments resulting from drunk driving
Pension obligations
Debt related to SOX
Debts from illegal activities
Debts not listed in the BK filing

Question 2

Corporations are

Answer 2

Dissolved

Question 3

Individuals are

Answer 3

Discharged

Question 4

Chapter 7

Answer 4

Liquidation - discharges all non-exempt debt
can be filed every 8 yrs
voluntary file
non voluntary file

Question 5

Disallowed from filing Ch 7

Answer 5

Railroads
Banks
Insurance comps
Savings & Loans

Question 6

To Voluntary file ch 7

Answer 6

must pass means test:

income must be below the median (middle) income for state

Question 7

Involuntary file ch 7

Answer 7

creditors must be able to prove that they are not being paid on time
at least 3/12 unsecured creditors must file
if less than 12 unsecured only 1 must file

Question 8

Ch 11 -

Answer 8

Business repayment
- allows business a reprieve from creditors
creates a payment plan for debt
business remains in operation
at leat 2/3 of each debt class must consent to reorg
CH11 involuntary allowed

Question 9

Ch 13

Answer 9

Personal Repayment
gives individuals a reprieve from creditors
creates payment plan
involuntary is NOT allowed

Question 10

preferential creditor payments

Answer 10

trustee can void pmts on antecedent (past) debts that occur w/in 90 days of filing
voidable preference must be on an old debt where debtor is picking and choosing creditors to pay

Question 11

Mechanics Lien

Answer 11

lien on real property to secure payment for a repair/ improvement

Question 12

artisan’s lien

Answer 12

applies to personal property like car

Question 13

Surety

Answer 13

(Co-Signer)
3rd party agrees to be liable
surety is Primarily liable
surety can be released from liability if debtor changes loan agreement materially

Question 14

Guarantor

Answer 14

is secondarily liable