Bankruptcy- Section 20

Question 1

Bankruptcy

Answer 1

Legal process whereby the debtor is relieved of his debts and adapters creditors are given satisfaction in the fairest way possible

Question 2

Chapter 7

Answer 2

Liquidation

Assets are turned over to a trustee who sells them and tries to satisfy creditor claims with remaining claims discharged

Question 3

Chapter 11

Answer 3

Business reorganization

That there continues to operate the business while the creditors need to restructure the debts. No trustee is usually involved

Question 4

Chapter 13

Answer 4

Debt adjustment plan

Debtor and a trustee work out a plan to restructure the tats without the involvement of the creditors, only available two individual debtors and small businesses

Question 5

Voluntary

Answer 5

All chapters

Chapter files the petition for relief in the court enters immediate order for relief to stop individual collection efforts by creditors

Doesn’t need to be in solvent in the “equity sense” and spouses may file jointly to avoid duplicative fees

Any person partnership or corporation can file. But not insurance companies, savings and loans, banks, credit unions and railroads

Question 6

Involuntary

Answer 6

Chapters 7 and 11

Creditors are being paid so they forced to tactor into involuntary bankruptcy. The hearing is scheduled to determine if the conditions are satisfied. Courts assign temporary trustee. Within 20-40 Days a credit or meeting is held. Section 341 meeting. Creditors have six months to prove their claims by filing a proof of claim form

Farmers and non profits can’t be pushed to involuntary

12 or more creditors, 3 sigs and 15775 in claims or more

Fewer than 12, 1 sig sand unsecured claims of 15774 or more in the aggregate .

Question 7

Automatic stay

Answer 7

Becomes effective against most creditors of the debtor

To freeze the doctors assets so the courts can take an account team. Certain actions are exempt like criminal proceedings, if fiction proceedings, alimony and child support. Secured creditors interest must be protected or the courts will grant a relief from the automatic stay

Question 8

Filing for involuntary without requirements

Answer 8

Creditors will be liable for court costs, compensatory damages, punitive damages

Question 9

Involuntary gap

Answer 9

Time period between the filing of the petition and the order of relief

Question 10

Filed a petition requirements

Answer 10

That there must’ve made a list of creditors, a schedule of assets and liabilities, income and expenditures, copies of tax returns, payroll stubs, a list of amounts in a Q-tip and educational Ira, and a certificate from the credit counseling agency

Question 11

Trustee

Answer 11

Once approved by the court a trustee has appointed to take control of the doctors property. Trustee will obtain all the non-exempt interest of the debtor as of the filing date of the bankruptcy petition

Given power to maximize the property included and debtor estate.

Question 12

Exemption rules

Answer 12

Limited equity in my home 23,675 - homestead exemption

Limited equity in a motor vehicle 3775

Right to reasonable alimony and child support payments

Household goods furnishings clothing appliances books not to exceed $600 per item

Jewelry upto $1600

Books and tools of trade 2375

Social Security, veterans, and disability
benefits and employment compensation

Payments from pension, profit-sharing and I knew it he plans, up to 1,283,025 in tax exempt retirement account Iras

Educational Irs 529 plans exempt, unless deposited between 120 and 365 days prior to filing, then exempt up to $6425

Question 13

Property to tactor after claim

Answer 13

Trusty can claim property after filing bankruptcy petition if Dr. received it within a 180 days and it comes from inheritances, life insurance proceeds, divorce property settlement

Question 14

Dealing with outstanding contracts

Answer 14

Assume the contract and perform the duties on behalf of the bankruptcy estate

Assume contract an assigned the benefits to a third-party in exchange for a payment to the estate

Reject - breach- the contract

If trustee doesn’t assumed the contract within 60 days of the order of relief it will automatically be rejected

Question 15

FLAP

Answer 15

Fraudulent transfers by the doctor within two years of the filing of the petition

Liens by statute – not liens that were affected before the bankruptcy petition was filed

After filing the petition a transfer was made by the debtor

Preferential transfer of property space I WAIT

Question 16

IWAIT

Answer 16

That there was insolvent when the transfer was made
Preferential transfer

Within 90 days of the filing of the petition

For an antecedent debt– pre-existing debt, no value is OK

Improves the creditors position – creditor that’s more money than I would have gotten into bankruptcy

Time is increased from 90 days to one year for an insider – officer or close relative of the debtor

Question 17

C CONAC

Answer 17

Charity, consumer debt less than $675 , ordinary course of business – current utility bill/lease payment, new value, alimony and child support, continuation of installment payments

Question 18

Fraudulent transfers

Answer 18

For two transfers made within two years before the filing of the petition that were made with intent to hinder, delay, or defraud predators, or a transfer made to prevent creditors from gaining access to property that would have been included in the bankruptcy estate, when the transfer with secret, or the doctor retain possession or beneficial right in the property after it’s conveyance to a third-party

Question 19

Preferential transfers

Answer 19

Most common that may be avoided by the trustee, referred to excessive payments made to one credit or at the expense of the others

Question 20

Insider

Answer 20

First your credit or with a special relationship to that debtor that would enable them to know about the debtor insolvency before others found out about it

Question 21

Antecedent Debt

Answer 21

Refers to a debt created previously And excludes from preferential transfers payment in exchange for a value Received at the same time and charitable contributions

Question 22

Insolvent

Answer 22

One who is liabilities exceed their assets. I Soum to be in solvent and then 90 days prior to the date of the position

Question 23

Order of distribution of assets I’m on creditors

Answer 23

Secured creditors: Fully secured or partially secured

Priority claims – STOP IT space drunk driver

General/unsecured creditors: All remaining on priority timely filed claims or claims exceeding amounts above in STOP IT

Question 24

STOP IT - drunk driver ** on exam

Answer 24

Priority claims paid in this order

Support and alimony payments

Trustee expenses

Old after filing date; creditors with claims arising after the petition date but prior to the order of relief are given special priority.In voluntary petition

Payroll costs up to 12,850: claims by employees for payroll and related benefit costs within a 180 days have priority up to the dollar limit. Remaining are non-priority. Green farmers and fishermen up to 6325 against storage facility

Individual consumer deposits up to 2850

Tax claims within three years

Drunk driver injury claims

Question 25

Exceptions

Answer 25

Doesn’t know anyone except these people. Assuming a general discharge is granted that there may still not be discharge from certain specific types of debts including:

Alimony or child support

Credit card purchases for luxury goods a 675 or more within 90 days of filing in cash advances of my $150 or more with and 70 days of filing. Auto Loans is with in three years of filing

Student loans: during the period that payments are not yet owed

Loans obtained by fraud or false representations

Unscheduled/unlisted debt

Tax claims within three years of the filing of the petition: same debts qualifying as priority claims and distribution of assets

Other items STD
Any debt from a securities law violation under the Sarbanes Oxley act

Debts incurred to pay taxes

Drunk driver injuries or death judgments

Question 26

Denial

Answer 26

Owes everyone

Question 27

Net disposable monthly income

Answer 27

Monthly income - living expenses

Adjusted income under this formula is multiPLIED by 60 . Called disposable income DI

IF SI IS LESS THAN 7770 ch 7 allowed

If less than 12850 need to determine if sufficient to pay at least 25% of debtors insecured debt . If not , ch 7 allowed

Question 28

Chapter 9

Answer 28

Municipalities

Question 29

Chapter 12

Answer 29

Farmers

Simplified reorg

Question 30

Chapter 15

Answer 30

Cross border insolvency cases

Question 31

Means test

Answer 31

If income minus allowablevinf expenses exceeds certain levels a ch 7 filing will be dismissed , with the debtors permission , converted to ch 13