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Gleim > SU 20 Debtor-Creditor > Flashcards

SU 20 Debtor-Creditor Flashcards

1
Q

Statutory lien

A

Party add value to property by agreement

Types-artisan, mechanic, bailee, tax

artisan & mechanics liens have priority over all security interests in property unless statute disagrees
-properly recorded real estate mtg priority mech lien attached after mtg recorded

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2
Q

Artisan lien

Bailee lien

A

artisan- repair/improve personal property; retains possession
-must have express/implied agreement
bailee- common carrier; secures pmt of shipment or storage charges (doc of title)

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3
Q

Mechanics lien

A

mechanics-svc or improve real property; not possesory

  • file w/in 60-120 days after complete
  • lien attaches when work began
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4
Q

Tax lien

A

tax-taxes owed to govt

  • only fed statutes exempt debtor assets from federal tax liens
  • state homestead exemption shield debtor’s equity in home from some liens
  • -doesn’t exempt mtg or tax liens
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5
Q

Judicial lien

A

judgment, seizure, judicial process
writ of execution- sheriff can seize & sell non exempt propety of debtor if debtor fails to pay
attachment-prejudgment remedy, seize nonexempt property and gives court custody (secures satisfaction of pending judgment)
–replevin- secure property subject to lien/repo
garnishment

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6
Q

Termination of liens

A

property doesn’t exist
pmt/tender
if lien depends on possession, terminates when lienholder surrenders possession/control of property
waiver

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7
Q

equitable right of redemption

A

regain rights by paying mtg & interest
can’t relinquish thru agreement
redemption possible thru refinance
rights exists from default until sold

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8
Q

Statutory right of redemption

A

repurchase property after foreclosure sale for max of 1 year by paying auction sale price

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9
Q

Composition

A

contract when debtor agrees to pay creditors less than full amnt
consent of creditors needed
extension- debtor pays full amnt over longer pd

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10
Q

Assignment

A

voluntary transfer of debtor of title to assets to 3rd party (assignee/trustee)
-trustee gets property, converts to cash, distributes cash to creditors (creditors release debtor)
-consent of creditors not req
-assignee has legal title
Fraudulent transfers are voidable

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11
Q

Types of bankruptcy

A 
7-liquidation
9-adjust debts of municipality
11-reorg
12-adjust debts of family farmer or fisherman with regular annual income
13-adjust debts of indiv w/ reg income
15-ancillary, cross-border
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12
Q

Ch 7 eligible vs ineligible

A

Ch 7-liquidation (voluntary/involuntary)

  • eligible: indiv (pass means test), pship, corp
  • ineligible-municipalities (Ch 9), RBIs, Credit Union
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13
Q

Ch 11 eligible vs ineligible

A

reorganization (voluntary/involuntary)

eligible: railroad, pship, corp, debtors qualiefied for relief under Ch 7
ineligible: sh, commodities/stockbrokers, insurers, banks, credit unions, S&L

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14
Q

Ch 13 eligible vs ineligible

A

eligible- indiv

ineligible- nonindiv, indiv w/o reg income

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15
Q

voluntary vs involuntary

A

voluntary- auto order for relief

involuntary can’t be used for- farmers, banks, insurers, NFP, railroad, ppl owed

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16
Q

Opposition to involuntary

A

case dismissed, creditors pay debtor’s costs, atty fees, damages from trustee’s possession of debtor’s property
petitioner acted in bade faith pay damages bc harmed debtor’s reputation

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17
Q

Presumption of abuse

A

CMI after deductions 207.92 regardless amnt of general unsecured debt
CMI is at least 124.58 if pays at least 25% of general unsecured debt over 5 years

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18
Q

Debtor’s Estate includes

A

nonexempt property currently held
interests debtors becomes entitled to w/in 180 day after filing (life ins, divorce settlement, amnts rec’d upon death)
trustee can choose to assume unexpired lease (60 days after order for relief to assume lease)

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19
Q

Voidable preferential transfer

A

transfer may be voluntary property, voluntary creation of lien, or involuntary creation of lien
voidable
-to/benefit of creditor, for pre-existing debt, during debtor’s insolvency, w/in 90 days before petition filed, for purpose to entitle creditor to get larger amnt of claim than would get under bankruptcy distribution

20
Q

Can void

A

preferential liens (judgment)
pmts to insiders w/in 1 yr
fraudulent transfers

21
Q

Secured creditors

A

trustee can’t defeat rights

  • pd in full if collateral is sufficient
  • if can’t pay full amnt, become general creditor
  • perfected property tax lien satisfied before support obligations
  • secured creditors w/ interest in same collateral, 1st perfected interest has priority
22
Q

Priority creditors

A

unsecured creditors pd after secured

priority over general creditors

23
Q

List of priorities for unsecured claims

A
  1. Domestic support obligations,
  2. Administrative expenses,
  3. Claims arising in the ordinary course of business after the petition was filed but before the order for relief was granted,
  4. up to $12,475 for wages earned by an individual within 180 days before filing (vacation/sick pay),
  5. employee benefit plans,
    Claims of grain producers and fishermen,
  6. Claims of depositors of money for the purchase of undelivered consumer goods,
  7. Tax claims of governmental units, and
  8. Death and injury claims arising from an intoxicated person’s operation of a motor vehicle.
24
Q

Ch 11

A

trustee not required
committee of unsecured creditors appointed after order of relief granted (7 largest unsecured claims)
must file reorganization plan w/in 120 days after order for relief (creditors don’t approve plan w/in 180 days any party can file)
entity discharged from debts happen prior to confirm if not protected by plan

25
Q

Confirmation by bankruptcy court of plan for Ch 11

A 
acceptance by class req holder of > 50% of claims represent 2/3 of dollar totals to approve plan
plan must be accepted by each class
court can't confirm plan not in creditor's best interest
26
Q

Cramdown

A

confirmation over objection of 1 or more classes
reqs
-acceptance by at least 1 impaired class
-plan is fair
-plan doesn’t discriminate unfairly against any creditor

27
Q

Confirmation of reorg required if

A

proposed in good faith
provides full pmt of admin exp
each class accepted plan or is unimpaird
each member of impaired class accepted plan or receives amnt would’ve under Ch 7

28
Q

Ch 13

A

pmt from future income (confirmation/extension)
debtor able to retain more assets (better than liquidation)
voluntary
trustee appointed
only need bankruptcy judge’s approval
debtor has reg income & owe unsecured of

29
Q

requirement for ch 13 confirmation

A

good faith, complies w/ code
debtor can comply
req amnts pd
value of property distributed on each unsecured claim = at least ch 7 amnt
secured claim-holder accepted plan, holder retains lien, debtor surrenders possession of collateral to holder

30
Q

Person who receives money or credit

A

debtor, principal, principal debtor, obligor

31
Q

creditor/obligee

A

allows debtor to receive goods, svcs, $, or value w/o paying full price

32
Q

surety

A

legal person contractually liable for another’s debt/default

absolute surety- guarantor of pmt & primary liable upon debts maturity

33
Q

guarantor

A

secondary liable
upon default, creditor must proceed against principal debtor & get judgment that isn’t satisfied then proceed against guarantor
conditional guarantor- not liable until creditor sued debtor & can’t collect judgment

34
Q

Surety contract

A

express contract
elements of contract-legal capacity, consideration req
Statute of frauds req contract be written & signed by surety
-writing needed for secondary promise

35
Q

Creditor duty to disclose

A

communicate to surety prior to contract info about significant risk to surety
-duty exists if believe surety doesn’t know facts
surety can’t void based on debtor misconduct (contract bet surety & creditor)

36
Q

Rights of surety

A

reimbursement
exoneration
right of contribution

37
Q

Exoneration

A

req court to get capable/reluctant debtor to pay debt before creditor collects from surety

38
Q

reimbursement

A

sue debtor for amnt pd to creditor

39
Q

right of contribution

A

cosurety pays > share agreed to pay

max liab/sum of max liab * default amnt

40
Q

Discharge of surety

A

performance of obligation
agreement bet creditor & debtor extend pmt time discharges surety to extent of loss to surety
creditor’s release of debtor discharge unless
-reserves rights against surety
-instruments states creditors rights retained
modification of debtor-creditor contract w/o consent of surety
-discharge complete if surety risk of loss increases
creditor’s impairment of collateral
rescission/revocation of principal contract releases surety from further liab but not from liab already incurred
release by creditor of surety releases cosureties to extent can’t obtain contribution from released surety

41
Q

Defenses of surety

A

suretyship contract
debtor’s defense
special

42
Q

Suretyship contract defense

A

valid contract of suretyship never existed
contract is valid, surety exercised right to void it
creditor got surety’s promise thru fraud/duress
surety

43
Q

Debtor defense unavailable to surety

A

incapacity due to infancy/mental incompetence
discharge in bankruptcy
claim for set-off

44
Q

Defense for debtor & surety

A 
forgery of signautre
fraud on contract
lack of valid creditor-debtor contract
illegal/impractical performance
performance by debtor
creditor refused to accept tender/perf
45
Q

Special surety defense

A

creditor’s release of debtor unless creditor reserves rights against surety
modify debtor-creditor contract w/o surety consent
creditor’s impairment of collateral

Gleim (7 decks)

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