Chapter 32 -Bankruptcy and Reorganization

Question 1

Insolvent debtor

Answer 1

1) debtors who cannot pay their debts in a timely fashion

2) bankruptcy law allows them to respond to their debts

Question 2

Bankruptcy Abuse Prevention and Consumer Protection Act (BACA) of 2005

Answer 2

1) reasons – increased bankruptcy filings, losses with filings, loopholes, ability for significant repayment

Question 3

Title 11 of US Code

Answer 3

1) bankruptcy Code
2) Chp 1 3 5 = general def and provisions for debtors/creitors
3) chp 7 9 11 12 13 15 = specific types of bankruptcy relied

Question 4

Jurisdiction over Bankruptcy law

Answer 4

1) Bankruptcy is federal law

2) may be affected by state laws regarding property and debts may affect proceedings

Question 5

Bankruptcy Proceedings

Answer 5

1) begin with filing/petition for bankruptcy
2) petition filed = creditor’s legal actions against debtor must cease AUTOMATIC STAY
3) court determines whether order of relief should be granted
4) creditors meet with debtor
5) Payment plan is created and approved, by creditors and court
6) payment plan is carried put through actions of trustee and debtor,
7) remaining debts after plan carried out = discharged

Question 6

Chp 7 / liquidation / straight bankruptcy

Answer 6

1) Eligible: Individuals, partnerships, and corporations
2) Procedure: debtor turns over all assets to a trustee who then sells the non-exempt assets and distributes the proceeds of the sale to the creditors

Question 7

Chp 9/ Municipal Bankruptcy

Answer 7

1) local governments
2) reorganize / alter terms of debt
3) can eliminate debts
4) contracts with PD / FD

Question 8

Chapter 11 Bankrupty

Answer 8

1) Bankruptcy Court monitored reorganization
2) big businesses, can be individuals
3) reorganization of debt – eliminate and modify
4) Must be monitored by court and approved by creditors (based on money received)
5) often used to terminate pension plans

Question 9

Chapter 12 Bankruptcy

Answer 9

1) Farmers and fisherman

2) allows for keeping farm

Question 10

Chapter 13 Bankruptcy

Answer 10

1) Wage earner reorganization

2) individuals pay their debts to creditors in installment plans under the supervision of the court

Question 11

Chapter 14 Bankruptcy

Answer 11

1) recognizes foreign bankruptcy and applies it to obligations in US

Question 12

Automatic Stay

Answer 12

1) Cessation for almost all creditor litigation of debtor
2) goes into effect when bankruptcy petiotion, volutarily or not is filed
3) prior judgements against debtor may not be enforced

Question 13

ORder of Relief

Answer 13

goes into effect if filing is voluntatry and proper

2) If Involuntary:
- debtor no challege= order of relief in effect
- debtor challenge either a) debtor not paying debts as they are due or b) custodian took possession of debtor’s property within 120 days before filing the pertition = rder in effet

Question 14

Discharge

Answer 14

1) if debtor dealt honestly with creditors during bankruptcy proceedings, eligible for discharge
2) debtor immune from creditor actions to collect debt
3) debtor essentially no longer responsible for debt

Question 15

Nondischargeable Debts Under Bankruptcy Code

Answer 15

1) Claims for back taxes or govt fines witihn 3 yrs of filing
2) liabilities brought about by fraud
3) claims by creditors not listed on the schedule or notified of bankruptcy proceedings
4) alimony, child support
5) willdil or malicious conduct that caused injury
6) specific student loans
7) DUIs
8) debts not discharged in prior bankruptcies
9) taxx to US
10) cash advances on credit cards