Chapter 28 Flashcards
The goal of federal bankruptcy law to grant a debtor relief from some burdensome debts while protecting creditors by requiring the debtor to pay more of the debts than would otherwise have been required prior to the 2005 act.
fresh start
A federal act that substantially changed federal bankruptcy law. The act made it easier for debtors to file for bankruptcy and have their unpaid debts discharged. This act was considered debtor friendly.
Bankruptcy Reform Act of 1978
A federal act that substantially amended federal bankruptcy law. This act makes it more difficult for debtors to file for bankruptcy and have their unpaid debts discharged.
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
The name given to federal bankruptcy law, as amended
Bankruptcy Code
Special federal courts that hear and decide bankruptcy cases
U.S. bankruptcy courts
A federal government official who is responsible for handling and supervising many of the administrative tasks of a bankruptcy case
U.S. Trustee
Individuals filing for bankruptcy must receive _______________ within 180 days prior to filing a petition for bankruptcy.
prepetition counseling
Personal financial counseling that a debtor must receive before he or she receives a discharge in a Chapter 7 or Chapter 13 bankruptcy
postpetition counseling
A document filed with a bankruptcy court that starts a bankruptcy proceeding
petition for bankruptcy
A petition filed by a debtor that states that the debtor has debts.
voluntary petition
A petition filed by creditors of a debtor that alleges that the debtor is not paying his or her debts as they become due
involuntary petition
Documents filed by a debtor upon filing a voluntary petition for bankruptcy that name secured and unsecured creditors and that describe property owned by the debtor, the debtor’s income, and other financial information.
schedules
A certification that an attorney who represents a client in bankruptcy must file certifying the accuracy of the information contained in the bankruptcy petition and the debtor’s schedules, under penalty of perjury.
attorney certification
An order that occurs on the filing of either a voluntary petition or an unchallenged involuntary petition or an order that is granted after a trial of a challenged involuntary petition.
order for relief
A meeting of the creditors in a bankruptcy case must occur within a reasonable time after an order for relief. The debtor must appear at this meeting.
meeting of the creditors (first meeting of the creditors)
A document required to be filed by a creditor that states the amount of the claim against the debtor.
proof of claim
A document required to be filed by an equity security holder that states the amount of interest against the debtor.
proof of interest
A legal representative of the debtor’s estate
bankruptcy trustee
The suspension of certain legal actions by creditors against a debtor or the debtor’s property.
automatic stay
A court order that relieves a debtor of the legal liability to pay debts that were not paid in the bankruptcy proceeding
discharge in bankruptcy
An agreement entered into by a debtor with a creditor prior to discharge whereby the debtor agrees to pay the creditor a debt that would otherwise be discharged in bankruptcy. Certain requirements must be met for a reaffirmation agreement to be enforced.
reaffirmation agreement
The debtor’s property and earnings that comprise the estate of a bankruptcy proceeding.
bankruptcy estate
A transfer of a debtor’s property or an obligation incurred by a debtor within two years of the filing of a petition, where (1) the debtor had actual intent to hinder, delay, or defraud a creditor or (2) the debtor received less than a reasonable equivalent in value.
fraudulent transfer
Property that may be retained by the debtor pursuant to federal or state law that does not become part of the bankruptcy estate.
exempt property
Equity in a debtor’s home that the debtor is permitted to retain.
homestead exemption
A bankruptcy rule that stipulates that a debtor may not exempt more than a specified dollar amount as a homestead exemption
abusive homestead exemption
A form of bankruptcy in which the debtor’s nonexempt property is sold for cash, the cash is distributed to the creditors, and any unpaid debts are discharged.
Liquidation (straight bankruptcy)
A bankruptcy rule that states that if a debtor’s median family income is at or below the state’s median family income for a family the same size as the debtor’s family, the debtor can receive Chapter 7 relief.
median income test
For a family of any size, income for which half of the state’s families of this size have incomes more than this figure and half of the state’s families of this size have incomes less than this figure.
state median income
A bankruptcy rule that applies to a debtor who has a median family income that exceeds the state’s median family income for families the same size as the debtor’s family. A debtor in this category qualifies for Chapter 7 bankruptcy if the debtor has disposable income below an amount determined by bankruptcy law but does not qualify for Chapter 7 bankruptcy if he or she has disposable income above an amount determined by bankruptcy law.
means test
For bankruptcy purposes, income that is determined by taking the debtor’s actual income and subtracting expenses for a typical family the same size as the debtor’s family, as determined by government tables.
disposable income
Property of a debtor that is not exempt from the bankruptcy estate that is distributed to the debtor’s secured and unsecured creditors pursuant to statutory priority established by the Bankruptcy Code.
nonexempt property
A secured creditor in a bankruptcy proceeding where the value of the collateral securing the secured loan exceeds the creditor’s secured interest.
oversecured creditor
A secured creditor in a bankruptcy proceeding where the value of the collateral securing the secured loan is less than the creditor’s secured interest.
undersecured creditor
A rule of bankruptcy law that stipulates the priority of unsecured claims that are to be satisfied out of the bankruptcy estate.
statutory priority of unsecured claims
The termination of the legal duty of an individual debtor to pay unsecured debts that remain unpaid on the completion of a Chapter 7 proceeding
Chapter 7 discharge
A rehabilitation form of bankruptcy that permits bankruptcy courts to supervise the debtor’s plan for the payment of unpaid debts in installments over the plan period.
Chapter 13—Adjustment of Debts of an Individual with Regular Income
An individual whose income is sufficiently stable and regular to enable the individual to make payments under a Chapter 13 plan.
individual with regular income
Provides a longer period of time for the debtor to pay his or her debts.
extension
provides for the reduction of a debtor’s debts
composition
A plan that lays out a debtor’s plan for paying his or her disposable income to prepetition creditors during a Chapter 13 plan period.
Chapter 13 plan of payment
A discharge in a Chapter 13 case that is granted to the debtor after the debtor’s plan of payment is completed (which could be up to three or up to five years).
Chapter 13 discharge
A bankruptcy method that allows the reorganization of the debtor’s financial affairs under the supervision of the bankruptcy court
Chapter 11-Reorganization
A form of bankruptcy in which a debtor reorganizes its capital structure, receives a partial discharge of unpaid debts, and takes other actions to emerge from bankruptcy as a viable concern
reorganization bankruptcy
A debtor who is left in place to operate the business during the reorganization proceeding
debtor-in-possession
A committee of unsecured creditors that is appointed by the court to represent the class of unsecured claims. The court can also appoint committees for secured creditors and for equity holders.
creditors’ committee
A contract or lease that has not been fully performed
executory contract or unexpired lease
A plan that sets forth a proposed new capital structure for a debtor to assume when it emerges from Chapter 11 reorganization bankruptcy
Chapter 11 plan of reorganization
The bankruptcy court’s approval of a plan of reorganization.
confirmation of a Chapter 11 plan of reorganization
A method whereby the court confirms a plan of reorganization if the creditors accept the plan and if other requirements are met.
acceptance method
A provision whereby the court confirms a plan of reorganization over an objecting class of creditors if certain requirements are met.
cram-down provision
