REG: Business Law3 Flashcards
Who is not allowed to file bankruptcy under chapter 11?
Stock brokers
Under the 2005 Bankruptcy Reform Act, the clerk of the bankruptcy court must provide a consumer-debtor with which of the following materials or services?
Written notice of the costs, purpose, and benefits of each form of bankruptcy.
What action will release a non-compensated surety from liability?
Modification by the principal debtor and creditor of their contract that materially increases the surety’s risk of loss.
Describe some major features of a Chapter 11 bankruptcy
Usually businesses. Allows reorganizations of debtor assets to pay debts, 2/3 of creditors must approve, temporarily stops creditors from collecting debt until reorg plan done, involuntary petitions allowed.
Under the Bankruptcy Reform Act of 2005 who is a priority status creditor?
Employees owed wages, earned within 180 days up to $12,475
Describe some major features of a Chapter 7 bankruptcy
It is a liquidation bankruptcy, discharges all non-exempt debt, voluntary and involuntary filing
A person who receives a chapter 7 discharge must surrender for distribution to the creditors amounts received as an inheritance, gift, insurance payment if the receipt occurs within 180 days after filing the bankruptcy petition. True or false.
True
What are the homestead exemptions outlined in the 2005 Bankruptcy Reform Act?
If the debtor was involved in any securities law violations or certain criminal acts within the past 5 years, there is no exemption, must live in state for 2 years,
This right to receive (reimbursement) payment from co-sureties is known as:
Contribution
What is a composition agreement?
An agreement among several creditors of a debtor, usually a business. Usually, the agreement involves paying a lessened amount over a period of time.
The right of the surety to pursue (from the defaulting debtor) the remedies of the creditor (the amount of $ he paid the creditor) is known as:
Subrogation
A compensated surety is always totally released if the debtor tenders performance. True or false.
True
What is a preference payment?
A “preference” is a payment to a previously existing creditor within 90 days prior to the date of bankruptcy which gives that creditor an unfair advantage over similarly situated creditors. If the creditor is an “insider,” such as a relative or business partner, the period of time is one year.
Describe some major features of a Chapter 13 bankruptcy
Like ch 11 but usually individuals. Payment plan, no involuntary petitions,
One of the requirements of an involuntary petition is that the debtor must not be paying debts in the regular course of business. True or False.
True
