Business Law: Bankruptcy Flashcards
What is the requirement for creditors to file an involuntary bankruptcy petition under Chapter 7 of the federal Bankruptcy Code?
An involuntary petition or bankruptcy can be filed if a debtor owes more than $16,750 in unsecured debt and is not paying its debts as they become due. If there are more than 12 creditors, at least three must join together in filing the petition.
Under the liquidation provisions of Chapter 7 of the U.S. Bankruptcy Code, certain property acquired by the debtor after the filing of the petition becomes part of the bankruptcy estate. What property is included?
The estate includes income generated from estate property and property the debtor receives from a bequest, devise, inheritances, property settlement, divorce, or beneficial interest in life insurance within 180 days after filing of the petition.
In addition, the estate includes any income generated by estate property (rents, interest and dividends) after the petition is filed.
A debtor who filed voluntarily and received a discharge in bankruptcy under the provisions of Chapter 7 of the federal Bankruptcy Code can obtain another voluntary discharge in bankruptcy after how many years have passed?
A debtor can obtain another voluntary discharge in bankruptcy after either years have passed
When does a stay against creditor collection proceedings go into effect?
In a liquidation proceeding, after the petition is filed, a trustee will be appointed, and unless within twenty days after the filing of the creditor’s petition the debtor objects to the petition, an automatic stay against creditor collection proceedings goes into effect. On tho there hand, if the debtor files the petition, the automatic stay takes effect on the date of the filing.
Which debtor is specifically excluded for relief under Chapter 11?
Stockbrokers
What is the difference between Chapter 7, 9, 11 and 13?
- Chapter 7 provides for liquidation of a debtor’s estate.
- Chapter 9 is for municipal debt adjustment.
- Chapter 11 is for debt reorganization.
- Chapter 13 is for adjustment of debts of individuals with regular income.
Is the secured or unsecured portion of collateralized debt dischargeable?
The unsecured portion of collateralized debt is dischargeable
Who gets leftover money after the general unsecured creditors whose claims were timely filed and paid?
- Claims that were not filed timely
- A secured creditor’s priority extends only to the extent of the proceeds of the sale and the amount owed. If the debt owed to the secured creditor exceeds the value of the collateral, the secured creditor is treated as a general creditor with regard to the deficiency and is unlikely to recover much with respect to the deficiency.
How are repayments of directors’ loans treated during insolvency?
Payments to insiders while the debtor is insolvent within one year of the bankruptcy can be set aside as preferential. The payments to directors are repayments of loans and were made: (i) within one year of the bankruptcy and (ii) while the debut was insolvent.
What types of debts are non dischargeable?
Nondischargeable debts include certain taxes, debts incurred by fraud, unscheduled debts, debts arising from crimes, fines and penalties, alimony/child support debts, and student loans.
