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Yaeger REG > Mod 30 Bankruptcy > Flashcards

Mod 30 Bankruptcy Flashcards

1
Q

Chapter 7 voluntary

A

Debtor files for a liquidation and trustee is appointed

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2
Q

Under Chapter 7 voluntary, husband and wife…

A

Husband and wife may file jointly

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3
Q

Under Chapter 7 voluntary, order of relief is…

A

Order of relief is same date as filing date

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4
Q

Under Chapter 7 voluntary, you can file even if…2

A

1 Can file even if solvent

2 all you need are debts of any amount

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5
Q

Chapter 7 Involuntary

A

Creditors file to force a liquidation and a trustee is appointed

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6
Q

Chapter 7 Involuntary, 12 or more creditors

A

Need 3 or more to file owed $15,325 in unsecured claims

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7
Q

Chapter 7 Involuntary, with less than 12 creditors

A

Need 1 or more to file owed $15,325 in unsecured claims

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8
Q

Chapter 7 Involuntary, if uncontested by debtor…

A

The order of relief is same date as filing date

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9
Q

Chapter 7 Involuntary, if contested by debtor

A

The order of relief comes after hearing has determined insolvency

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10
Q

Chapter 7 Involuntary, contested:

Test for insolvency is

A

Equitable insolvency

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11
Q

equitable insolvency

A

Not paying debts when due

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12
Q

Chapter 7 Involuntary, do not use insolvency in…

A

Bankruptcy Sense (assets - liabilities)

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13
Q

Chapter 7 Involuntary, 2 exempt parties

A

Farmers and charities

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14
Q

Chapter 7 Involuntary, if creditors improperly file, the debtor may collect…4

A

1 compensatory damages
2 court costs
3 attorney’s fees and
4 punitive damages

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15
Q

Chapter 11 Reorganization

A

Debtor submits a plan to restructure debtor’s debts for the purpose
Of allowing the debtor’s business to continue

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16
Q

Under Chapter 11 Reorganization, no…

A

Liquidation of business occurs

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17
Q

In a Chapter 11 Reorganization, a plan is submitted to…

A

an unsecured creditor’s committee (exclusive rights For 120 days)

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18
Q

In a Chapter 11 Reorganization, plan must be approved by…

A

At least 1 impaired class of creditors

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19
Q

In a Chapter 11 Reorganization, a trustee is…

A

Not usually needed (debtor acts as trustee)

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20
Q

In a Chapter 11 Reorganization, a reorganization can be…

A

Voluntary or involuntary

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21
Q

In a Chapter 11 Reorganization, plan won’t be confirmed until…

A

Full payment of administrative costs

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22
Q

In a Chapter 11 Reorganization, upon court’s final decree…

A

Debtor pays off debts according to plan

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23
Q

In a Chapter 11 Reorganization:

Upon court’s final decree, debtor pays off debts according to plan

A

Debtor is discharged from any other debts not covered by the plan

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24
Q

Neumonic for who can’t file under chapter 7

A

RIBS

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25
Q

4 parties that can’t file under chapter 7

A

1 railroads
2 insurance companies
3 banks
4 savings and loans

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26
Q

Filing under Chapter 7 or 11 acts as…2

A

1 an automatic stay and

2 stops all collection efforts

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27
Q

Filing under chapter 7 or 11 acts as an automatic stay and stops all collection efforts. What’s the exception?

A

An automatic stay doesn’t stop alimony and child support payments

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28
Q

Property as of filing date goes to…

A

Goes to trustee for creditors (includes are proceeds gained after
Filing)

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29
Q

Property as of filing date goes to trustee for creditors. 2 exemptions

A

1 social security and disability benefits are exempt

2 things necessary to live are exempt (house, car, furniture)

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30
Q

Debtor keeps most property gained after filing. 3 exceptions

A

1 property gained within 180 days after filing by divorce

2 inheritance or

3 by insurance goes to trustee

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31
Q

Property included in debtor’s estate:

With leases, the trustee can…2

A

1 Accept or reject

2 if no action in 60 days they are rejected

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32
Q

Trustee can avoid or disaffirm…

A

payments on property transfers done by debtor prior to filing

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33
Q

Preferential transfers define

A

Preferring 1 creditor over others

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34
Q

Preferential transfers can…

A

Be avoided

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35
Q

Preferential transfers can be avoided, to disaffirm prior payment…

A

5 tests must be met (TANIM)

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36
Q

5 tests to disaffirm prior payment:

TANIM

A 
Transfer
Antecedent debt
Ninety days
Insolvent
More
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37
Q

5 tests of TANIM to disaffirm prior payment:

T

A

Must have a transfer of property that benefits a creditor

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38
Q

5 tests of TANIM to disaffirm prior payment:

A

A

Transfer must have been for an antecedent debt

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39
Q

Antecedent debt, define

A

Existing overdue debt

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40
Q

Transfer must have been for an antedecedent debt:

New debts are…2

A

1 New debts are not antecedent debts

2 they are a contemporaneous exchange for new value

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41
Q

Transfer must have been for an antedecedent debt:

Secured debts are…

A

Not antecedent debts, can’t prepay

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42
Q

Transfer must have been for an antedecedent debt:

Paying current bills in ordinary corse of business are…

A

Not antecedent debts, can’t prepay

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43
Q

Transfer must have been for an antedecedent debt:

Consumer debts of…

A

$650 or less aren’t antecedent debts

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44
Q

4 debts that are not antecedent debts

A

1 new debts
2 secured debts
3 paying current bills in ordinary course of business
4 consumer debts of $650 or less

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45
Q

5 tests of TANIM to disaffirm prior payment:

N

A

Transfer must have been made within Ninety days of filing date

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46
Q

5 tests of TANIM to disaffirm prior payment:

Transfer may be made within 1 year of filing date if…

A

Creditor was an insider

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47
Q

5 tests of TANIM to disaffirm prior payment:

I

A

Transfer must have been made while debtor was insolvent

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48
Q

5 tests of TANIM to disaffirm prior payment:

Insolvency is normally presumed if…

A

The transfer was made within 90 days

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49
Q

5 tests of TANIM to disaffirm prior payment:

M

A

Creditor received more than he would have received in bankruptcy

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50
Q

3 types of Bankruptcy

A

1 Chapter 7 voluntary

2 chapter 7 involuntary

3 chapter 11 reorganization

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51
Q

Fraudulent conveyances

A

Phony transfer by debtor to hide property from creditors

52
Q

With fraudulent conveyances, a trustee can…

A

Can disaffirm if within 1 year within filing

53
Q

Fraudulent conveyances are done secretly where the…

A

Debtor retains equitable title and usually retains possession

54
Q

Debts are paid in the order of their priority neumonic

A

SAG-WEG-CTO-AM

55
Q

If insufficient money to pay all debts within a given category…

A

Each debt within category receives a pro rata share of available
Funds

56
Q

Categories of debts:

What does SAG-WEG-CTO-AM stand for?

A 
1 secured creditors
2 administrative costs
3 Gap creditors
4 wages unpaid
5 employee benefits unpaid
6 grain producers and fisherman unpaid
7 consumer deposits
8 taxes
9 obligations
10 accidents
11 miscellaneous
57
Q

Categories of debts SAG-WEG-CTO-AM:

S

A

1 secured creditors are paid up to the value of collateral

58
Q

Secured creditors are paid up to the value of the collateral which is…

A

Category 10 for any deficiency

59
Q

Categories of debts SAG-WEG-CTO-AM:

A, 2

A

2 Administrative Costs of bankruptcy and

Domestic support obligations

60
Q

Domestic support obligations 2

A

Child support and alimony

61
Q

Categories of debts SAG-WEG-CTO-AM:

G, 2

A

3 Gap creditors,

debts occurring after filing but before the order of relief

62
Q

Categories of debts SAG-WEG-CTO-AM:

W, 2

A

4 Wages unpaid

Must be earned within 90 days prior to filing and maximum priority
Is $12,475 per employee

63
Q

Categories of debts SAG-WEG-CTO-AM:

E, 2

A

5 employee benefits unpaid

Must be earned within 180 days prior to filing and maximum priority
Is $12,475 per employee

64
Q

Categories of debts SAG-WEG-CTO-AM:

G, 2 (2nd G)

A

6 grain producers & fisherman unpaid

Maximum priority is $6,150 per individual

65
Q

Categories of debts SAG-WEG-CTO-AM:

C 2

A

7 consumer deposits for goods and services not received

And maximum priority is $2775 per person

66
Q

Categories of debts SAG-WEG-CTO-AM:

T

A

8 taxes

67
Q

Categories of debts SAG-WEG-CTO-AM:

O

A

9 obligations to insured bank

68
Q

Categories of debts SAG-WEG-CTO-AM:

A

A

10 accidents while under influence of drugs or alcohol

69
Q

Categories of debts SAG-WEG-CTO-AM:

M

A

11 miscellaneous unsecured debts

70
Q

Upon bankruptcy completion…

A

Most of debtor’s debts are discharged

71
Q

Discharge of debtors:

Only individuals are discharged…

A

Corporations and partnerships are dissolved

72
Q

Certain actions by debtor will preclude any discharge, this is known as…

A

Denial of discharge

73
Q

Certain actions by debtor will preclude any discharge:

Received previous discharge…

A

Received previous discharge within 8 years of filing

74
Q

Certain actions by debtor will preclude any discharge:

Unjustifiably failed to…

A

Failed to Keep adequate books and records

75
Q

Certain actions by debtor will preclude any discharge:

Attempted to…

A

Attempted to hide assets within 1 year of filing

76
Q

Certain actions by debtor will preclude any discharge:

Refusal to…2

A

1 refusal to explain a loss of assets or

2 refusal to obey a court order

77
Q

Certain actions by debtor will preclude any discharge:

Making…

A

Making false oath or account

78
Q

Even if a discharge is granted, certain…

A

Certain debts are not dischargeable

79
Q

Even if discharge is granted, certain debts are non dischargeable, what is the neumonic

A

WAFTED

80
Q

Even if discharge is granted, certain debts are non dischargeable, what does WAFTED stand for?

A 
Willful
Alimony
Fraud
Taxes
Educational loans
Debts
81
Q

Even if discharge is granted, certain debts are non dischargeable, WAFTED:

W

A

Debts from causing Willful and malicious injury to others

82
Q

Even if discharge is granted, certain debts are non dischargeable, WAFTED:

A

A

Debts concerning Alimony and child support

83
Q

Even if discharge is granted, certain debts are non dischargeable, WAFTED:

F

A

Debts resulting from fraud

84
Q

Even if discharge is granted, certain debts are non dischargeable, WAFTED:

T

A

Taxes owed within 3 years of filing

85
Q

Even if discharge is granted, certain debts are non dischargeable, WAFTED:

E

A

Educational loans

86
Q

Even if discharge is granted, certain debts are non dischargeable, WAFTED:

D

A

Debts unscheduled by the debtor and creditor had no notice of bankruptcy

87
Q

Even if discharge is granted, certain debts are non dischargeable.

3 other debts (aside from WAFTED)

A

1 theft

2 embezzlement

3 debt from SOX

88
Q

Preferential transfers made to insider within 12 months may be…

2) They are not…

A

Set aside

2) not preferential payments

89
Q

Insiders are…5

A 
1 close blood relatives
2 officers
3 directors
4 controlling stockholders of corporations 
5 general partners of partnerships
90
Q

Taxes after 3 years of filing are…

A

Discharged by bankruptcy

91
Q

Additional debts mentioned in text book that are not discharged by bankruptcy:

Loans for…

A

Loans for payment of federal taxes

92
Q

Congress amended the bankruptcy code making it noted difficult for…

A

Student loans to be discharged in bankruptcy

93
Q

Additional debts mentioned in text book that are not discharged by bankruptcy:

Government fines…

A

Government fines and penalties imposed within prior 3 years

94
Q

Additional debts mentioned in text book that are not discharged by bankruptcy:

Any debt violation under…

A

Any debt violation under securities laws

95
Q

Additional debts mentioned in text book that are not discharged by bankruptcy:

Debts owed to…3

A

1 pension plans

2 profit sharing plans or

3 similar employee plans

96
Q

Additional debts mentioned in text book that are not discharged by bankruptcy:

Homeowner…3

A

1 Homeowner association

2 condo or

3 cooperative fees

97
Q

Debts adjustment plans Chapter 13 deals with…

A

Individuals

98
Q

Debts Adjustment Plans- Chapter 13:

Initiated when…

A

Debtor files voluntary petition in bankruptcy court

99
Q

Creditors may not file involuntary petition under…

A

Ch. 13

100
Q

Debts Adjustment Plans- Chapter 13:

Filing a petition…2

A

1 stays all collection and

2 straight bankruptcy proceedings against debtor

101
Q

Debts Adjustment Plans- Chapter 13:

Debtor has…

A

Exclusive right to propose plan

102
Q

Debts Adjustment Plans- Chapter 13:

Debtor has exclusive right to propose plan. If debtor does not file plan…

A

Creditors may force debtor into involuntary proceedings under
Ch. 7

103
Q

Debts Adjustment Plans- Chapter 13:

Plan will be approved…

A

Approved or denied by court without approval of unsecured

creditors

104
Q

Debts Adjustment Plans- Chapter 13:

Plan will be confirmed or denied by court without approval of unsecured creditors. However unsecured creditors must…

A

Receive as much as they would get under chapter 7

105
Q

Debts Adjustment Plans- Chapter 13:

Unsecured creditors must receive as much as they would get under Ch. 7 and…2

A

1 either be paid in full, or

2 have all debtor’s disposable income committed to plan

106
Q

Debts Adjustment Plans- Chapter 13:

Plan may put claims in different classifications but may not…

A

Not Discriminate unfairly against any of designated classes

107
Q

Debts Adjustment Plans- Chapter 13:

Each claimant within same classification must…

A

Receive same treatment

108
Q

Debts Adjustment Plans- Chapter 13:

If debts to unsecured creditors are not paid in full, plan must…

A

Plan must commit to payments for 3 years

109
Q

Debts Adjustment Plans- Chapter 13:

If debtor’s monthly income exceeds the state’s average median income, plan must…

A

Plan must make payment for 5 years

110
Q

Court must appoint trustee in…

A

Ch. 13 cases

111
Q

Debts Adjustment Plans- Chapter 13:

Debtor engaged in business may…

A

Continue to operate that business subject to limitations imposed
by court

112
Q

Debts Adjustment Plans- Chapter 13:

Completion of plan…

A

Discharges debtor from debts dischargeable by law

113
Q

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

Amends various parts of US Bankruptcy Code including…2

A

1 consumer bankruptcies and

2 business bankruptcies

114
Q

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

Provisions under the new Act allow trade creditors to treat large portions, sometimes most or even all of…

A

Vendors’ claims as being administrative expenses

115
Q

Treating vendor’s claims as administrative expenses…

A

Significantly increases their priority status

116
Q

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

Creates a new bankruptcy code section at imposes limits on…2

A

1 limits on payment of severance pay or

2 limits on retention bonuses to key employees in a Ch. 11 case

117
Q

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

Retention bonuses are only permitted if…

A

Key employees have good faith offers from other businesses at
Same or greater conpensation

118
Q

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

For consumer cases, the time between discharges has been…

A

Increased

119
Q

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

For consumer cases, the time between discharges has been increased so that the Bankruptcy Code will…2

A

1 Deny discharge to Ch 7 debtor

2 if that debtor received Ch 7 or Ch 11 in discharge in case filed
Within 8 years of pending case

120
Q

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

For consumer cases, the time between discharges has been increased. Prior law said 6 years between…

A

Such discharges under Ch 7 and Ch. 11

121
Q

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

Under the new act, Chapter 13 debtor’s have a few different time limitations…

A

When combined with various chapters

122
Q

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

Creates a new Chapter 15 of US Bankruptcy Code dealing with…

A

Cross border insolvency cases

123
Q

Ch. 15 is meant to…

A

Make bankruptcy proceedings across international borders more functional

124
Q

Ch. 15 favors and promotes…

A

cooperation and communication with both foreign courts and

Foreign representatives

125
Q

In recent years, bankruptcy specialists have made much larger fees. Rising fees have elicited major objections coming from…3

A

1 federal watchdogs

2 organized labor

3 major creditors of bankrupt companies

126
Q

A major complaint is that lawyers and other advisors have been…

A

Taking too many fees and leaving less money for others in the bankruptcy

Yaeger REG (77 decks)

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