R7 - Bankruptcy

Question 1

Which types of bankruptcies require a trustee be appointed?

Answer 1

Chapter 7 and 13

Question 2

What types of entities do not qualify for Chapter 7 bankruptcy?

Answer 2

RIBS
Railroads
Insurance companies
Banks/brokers
Small businesses

Question 3

In an involuntary bankruptcy proceeding, what amount must the debtor owe? How many creditors must join the petition?

Answer 3

$15,325 individually or in the aggregate; 1 creditor if fewer than 12 total and 3 creditors if more than 12 total

Question 4

What is a preferential payment?

Answer 4

A payment for an antecedent debt within 90 days prior to filing that results in a creditor receiving more than they would have under the Bankruptcy Code

Question 5

Which debts survive bankruptcy proceedings?

Answer 5

WAFTED
Willful injury/DWI
Alimony
Fines/fraud
Taxes
Education/embezzlement
Debts undisclosed

Question 6

What is the order of priorities for distributions of a debtor’s estate?

Answer 6

Secured
Priority
General

Question 7

What is the order of priority under the priority distributions?

Answer 7

SAG WEG CTI
Support (alimony)
Administrative expenses
Gap claims
Wages (up to $12,475)
EBP (up to $12,475 less wages)
Grain farmers/fishermen (up to $6,150)
Consumer deposits (up to $2,775)
Taxes
Injury from DUI