Bankruptcy

Question 1

Bankruptcy in General

Answer 1

Controlled by the federal Bankruptcy Code

Goal = bring debtors and creditors together in a collective proceeding to deal with debtor’s financial troubles

Creditors paid in same priority as under state law

Question 2

Chapter 7 Bankruptcy

Answer 2

Liquidation of debtor’s non-exempt property to pay creditors

Available to individuals and artificial entities

Question 3

Chapter 11 Bankruptcy

Answer 3

Reorganization of debtor’s business or financial affairs

Available to individuals and artificial entities

Question 4

Chapter 13 Bankruptcy

Answer 4

Repayment of portion of individual’s debts from future income

Available to individuals only

Question 5

Bankruptcy Exemptions

Answer 5

Indiana: Individuals may only claim exemptions specified by IN law

Question 6

Bankruptcy Estate

Answer 6

All of debtor’s:

(1) Property, regardless where it is exempt; and
(2) Legal and equitable interests

Question 7

Automatic Stay

Answer 7

Happens IMMEDIATELY upon filing bankruptcy case

Stops all creditor action against debtor and debtor’s property

Question 8

How Long Does Automatic Stay Remain in Place?

Answer 8

Duration of the bankruptcy case

Question 9

Termination of Stay By Court

Answer 9

Secured creditors may move to terminate stay if:

(1) Creditor not adequately protected; or
(2) Debtor has no equity in property and property not needed to effectuate the debtor’s reorganization