REG mod30b Flashcards
An individual filing for bankruptcy under Chapter 7 is required to pass a test. What test must be passed?
The means test
Does the death or bankruptcy of a partner, in a general partnership, automatically cause dissolution?
No, the events cause dissociation.
What is the order of priority for bankruptcy payments?
S: Secured Creditors (up to the value of the collateral)
A: Administrative costs, Alimony & Child Support
G: Gap creditors (creditors of debt obtained by the debtor between filing and date of bankruptcy hearing)
W: Wages owed to employees
E: Empl benefits earned within 180 days prior to filing
G: Grain producers / Fishermen
C: Consumer deposits for goods and services
A: and
T: Taxes owed to governments
U: Unsecured Creditors
May an individual be brought into involuntary bankruptcy under Chapter 13?
No. Chapter 13 does not permit involuntary bankruptcy.
Filing for bankruptcy grants the debtor an ‘automatic stay’. What is an automatic stay?
This stops collection calls and law suits by creditors.
A bankruptcy trustee is prohibited from receiving payment for managing the estate of the person in bankruptcy. True / False
False. The trustee may receive reasonable compensation.
Why would a creditor want to secure their interest in collateral?
Because a secured creditor generally will succeed over an unsecured creditor in a bankruptcy filing.
May a farmer be brought into involuntary Chapter 7 bankruptcy?
No, farmers are exempt from involuntary Chapter 7 bankruptcy. Note: Charities are also exempt.
Is it legal for a debtor to promise to pay a debt that will be discharged in bankruptcy?
Yes, the law allows for a ‘good guy’ debtor, although it must be approved by the bankruptcy court
