Chapter 14- Creditors' Rights and Bankruptcy Flashcards
Affidavit
Statement of facts confirmed by the oath made before a person having the authority to administer the oath or affirmation
Artisan’s Lien
Lien on personal property of another person to ensure payment to a person who has made improvements on that property.
Attachment
Process of seizing another’s property to secure satisfaction of a judgment yet to be rendered
Automatic Stay
Suspension of all judicial proceedings on the occurrence of an independent event.
Co-Surety
One who assumes liability jointly with another surety for the payment of an obligation
Consumer-Debtor
One whose debts result primarily from the purchases of goods for personal, family, or household use.
Cram-Down Provision
Bankruptcy Code that allows a court to confirm a debtor’s Chapter 11 reorganization plan even though only one class of creditors has accepted it
Creditors’ Composition Agreement
Agreement between a debtor and creditors where creditors agree to accept a lesser sum than that owed by the debtor
Debtor in Possession (DIP)
In Chapter 11 bankruptcy, debtor is allowed to continue possession of the business and to continue business operations.
Discharge
The termination of a debtor’s obligation
Estate in Property
All of the property owned by a person, including real estate and personal property
Garnishment
Creditor appropriates a debtor’s property or wages that are in the hands of a third party
Guarantor
Person who agrees to satisfy the debt when the debtor fails to pay the debt
Homestead Exemption
Allows an owner to designate their house (and adjoining land) as a homestead and is exempt from liability for their debt
Lien
Claim against specific property to satisfy a debt
Liquidation
Sale of assets for cash and the distribution of the cash received to creditors, with the balance going to the owner(s).
Mechanic’s Lien
Created to ensure priority of payment for work performed
Order for Relief
Relieves the debtor of the immediate obligation to pay the debts listed in the bankruptcy petition
Petition in Bankruptcy
Document filed with a bankruptcy court to initiate bankruptcy proceedings
Preference
property transfer or payment made by the debtor that favors one creditor over others
Preferred Creditor
A creditor who has received a preferential transfer from a debtor
Reaffirmation Agreement
Between a debtor and a creditor where debtor voluntarily agrees to pay a debt dischargeable in bankruptcy
Reorganization
Readjustment of a corporation and its debts, the submission of the plan to a bankruptcy court, and the court’s approval or rejection of the plan
Right of Contribution
Co-surety pays more than their share on a debtor’s default to recover the excess paid from other co-sureties
Right of Reimbursement
Person will be repaid or indemnified for costs, expenses, or losses incurred or expended on behalf of another
Right of Subrogation
The right of a person to stand in the place of (be substituted for) another, giving the substituted party the same legal rights against the debtor that the creditor had.
Secured Creditor
A lender or seller who has a security interest in collateral that secures a debt
Surety
Third party who agrees to be responsible for the debt of another
Suretyship
Express contract where the surety promises to be responsible for a debtor’s obligation to a creditor
U.S. Trustee
Government official who performs certain administrative tasks that a bankruptcy judge would otherwise have to perform
Unsecured Creditor
Creditor whose debt is not backed by any collateral
Workout
Out-of-court agreement between a debtor and creditors that establishes a payment plan for discharging the debtor’s debts
Writ of Attachment
Used to enforce obedience to an order or judgment of the court
Writ of Execution
Puts in force a court’s decree or judgment
A lien may be defined as
a claim against a debtor’s property to satisfy a debt or protect a claim for the payment of a debt
Kelly promises Mountain State Bank that she will be responsible for a loan taken out by her niece Dallas such that at the moment the debt is due, Mountain State may demand repayment from Kelly. This is known as
a suretyship
In each state of the United States, debtors are permitted to either retain their family home or keep up to a specified dollar amount of the value of the home. This is known as
the homestead exemption
If, in a court’s opinion, granting relief under Chapter 7 would constitute a “substantial abuse” of the law, what may the court do?
Dismiss the petition for bankruptcy relief
If Deroy’s creditors force him into bankruptcy proceedings, what is this called?
an involuntary bankruptcy
In bankruptcy proceedings, an automatic stay on (suspension of) all litigation and other actions by creditors against the debtor or the debtor’s property arises
once the petition in bankruptcy is filed
Normally, in order to receive a portion of a debtor’s estate, what must each creditor file
a proof of claim
The type of bankruptcy proceeding used most commonly by corporations is a reorganization
Chapter 11
One of the advantages of Chapter 13 repayment plans is that:
they are less expensive and less complicated than reorganization proceedings or liquidation proceedings.
Chapter 12 of the Bankruptcy Code is aimed at helping which group?
Family Farmers
