Term
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Definition
| matters related to the administration of the bankruptcy estate; liquidation of assets, creditors rights, objections to proofs of claim etc. |
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| involves claims raising out of state law, federal claims, or any claim affecting interstate commerce. These would be heard by a U.S. district courts. |
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| Where are appeals made to? |
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Definition
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Term
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Definition
| chapters of general provisions and case administration |
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Definition
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Term
| What is Voluntary Petition? |
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Definition
The Voluntary action ( by the debtor) of filing for bankruptcy. can be filed by "all debtors" which include:
individual
a partnership
a corporation
banks, credit unions, savings and loan assocations, licensed small business investment companies, and railroads are excluded |
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Term
| What is Involuntary Petition ( Ch 11 and 7) |
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Definition
if debtor has 12 or more creditors, three creditors are needed to put debtor into voluntary bankruptcy
if less than 12 creditors, a single creditos can put debtor into involuntary bankruptcy
in all cases, creditors must have 13,475 worth of unsecured claims
** may not be filed against a farmer or against a banking, insurance or non-profit organization |
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Term
| What constitutes as abuse? ( there are 2 ways) |
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Definition
1.bad faith determined under the totality of the circumstances; or
2. Through finding abuse on the means test. |
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Term
| What qualifies someones for Chapter 7 Test? |
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Definition
1. measure current montly income against the median income for a family of your size in the state.
(a) if less than or equal to the median debtor may file for ch 7
(b) If over median, debtor must pass the "means test" |
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Term
| What are the 2 things you can subtract in a means test? |
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Definition
1. certain allowed expenses, in amounts set by the IRS
2.Monthly payments you will make on secured and priority debts. |
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Term
| What are the calculations the debtor must perform in order to see if they have passed the means test? |
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Definition
Must take monthly income and subtract both of the following.
(a) certain allowed expenses, in amounts set by the IRS.
(b) Monthly payments you will have to make a secured and priority debts. |
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Term
| Approved Credit Counseling? |
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Definition
| when debtor qualifies to file for chapter 7, Debtor must also have approved credit counseling within 6 months prior to filing. And must pay for it. |
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Term
| What does the Petition trigger at the end? |
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Definition
| Petition is deemed to be an Order of Relief, and it triggers the "Automatic Stay" |
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Term
| What is the Credit Counseling Requirement? |
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Definition
| the debtor must file a certificate from the credit counseling agency that describes the services provided to debtor and any debt repayment plan developed by agency. |
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Term
| What is the initial action in a bankruptcy proceeding? |
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Definition
| debtor must file Petition and provide a sea of into to schedules. |
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Term
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Definition
| Freezes all creditor action against debtors. |
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Term
| In a chapter 11, what can a secured creditor request of he/she feels that the stay does not provide "adequate protection" and "jeopardizes his interest" in the collateral? |
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Definition
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Term
| What is the time frame for the debtor in ch 7 to reaffirm or redeem a loan secured by personal property ? What happens if they do not meet the time frame? |
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Definition
| must be filed within 45 days filing, or surrender the property. |
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Term
| Exempt from Automatic Stays |
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Definition
1. alimony
2. child support
3. where there are co-workers and gurantors, it does not affect ability to proceed against them. |
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Term
| What is Attorney Verification? |
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Definition
attorneys must make "reasonable inquiry" to verify that the information contained in petitions and schedules are well grounded in fact.
i.e. tax returns, look over bank statements, credit card statement revisals. |
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Term
| When does the first meeting occur? |
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Definition
| within 10-30 days after the first filing of the petition creditors are sent notice of the filing and a meeting date |
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Term
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Definition
legal representative of the debtor and gets legal title to the property.
can be a lawyer, accountant, business person. If a large case, he may have an entire staff. |
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Term
| What are the basic duties of a Trustee? |
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Definition
1. take possession of debtors property
2. separate the unsecured from the secured
3. set aside the property that is exempt under state law or federal law.
4. in charge of investigating financial affairs
5. might get individual professionals to assist in the administration of the estate.
can be a lawyer, accountant, business person. If a large case, he may have an entire staff.
6.oversees lawsuits already brought on behalf of the esate
7. will sell and dispose of property of the estate
8. Examines proof of claims
9. Must make periodic reports to court and debtor on how much he is receiving from sale of property.
10. At the final meeting, the trustee presents a final statement of the administration of the bankruptcy estate |
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Term
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Definition
1. takes possession of all debtor's property = estat
2. reviews the schedules of debt. Seperates the secured from the unsecured property
3. sets aside the property that is exempt under state law or federal law
4.is charged with investigating the debtors financial affair
5. where appropriate, will get individual professionals to assist in the administration of the estate.
6. examines the proof of claims filed by the creditors
7. bring and oversees lawsuits brought on behalf of the state
8. to the extent the estate is in cash, deposit or invest in cash.
9. will sell and dipose of property in the estate.
10.must make reports to court and debtor on how much he is receiving from the sale of the property.
11. at final meeting: presents a detailed statement of the administration of the bankruptcy estate. May even recommend that teh debtor not be discharged.
** Gets paid from the estate- money form the estate goes first to the trustee and then to the bankruptcy attorneys. |
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Term
| What is a Proof of Claim? |
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Definition
| Will entitle a creditor to receive a distribution ( usually 3 months from the date of filing - as dictated by local bankruptcy rules). |
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Term
| What is the Bankruptcy Estate? |
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Definition
| composed of debtor's legal and equitable property at the time of the filing. |
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Term
| What estate property can trustee recover as? |
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Definition
1. lien creditor ( gains rights and powers of any creditor with a judicial lien)
2. in avoiding voidable preferences
3. to avoiding fraudulent preferences
4. to avoid statutory liens |
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Term
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Definition
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Term
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Definition
| arises without court action. |
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Term
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Definition
| created voluntarily by the debtor, as in a security interest that is pledged to creditors |
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Term
| What do exemptions cover? |
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Definition
| they protect "current" property. |
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Term
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Definition
debtor must have lived in the state for at least 2 years in order to file under state exemption.
* 3.3 ( 1215 days) to get homestead exemption. |
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Term
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Definition
| debtor can shield all the equity in his/her home as long as he/she has lived there more than 3.3 yrs ( 1215 DAYS). |
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Term
| Under Federal Bk Exemptions, up to how much in equity can you keep for a residence |
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Definition
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Term
| What is Preferential Transfer/ Voidable Preference? |
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Definition
| meant to prevent the bankrupt debtor favoring certain creditors over others. |
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Term
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Definition
| relative or general partner of debtor, or a partnership in which debtor is a general partner, or a corporation in which debtor is a director, officer, or person in control. |
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Term
| What are exceptions as to what are preferential transfers/voidable preferences? |
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Definition
1. Exchange for new value
2. Payments in the ordinary course
3. Alimony and Support |
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Term
| What is a Fraudulent Transfers |
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Definition
(a) any transfer of the debtors property made on r within 2 years of filing petition that i made with the intent to hinder, delay, or defraud creditors.
(b) Transferring property for less than reasonable value |
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Term
| What is ch 11 primary objective? |
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Definition
1. rehabilitate the troubled debtor
2. maximize the return to creditors
3. maintain jobs and preserve economic benefits to communities. |
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Term
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Definition
| with 7, the trustee controls the debtor entity, but with 1, it is teh debtor = debtor in posession (DIP). |
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Term
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Definition
| key to ch 11 is plan to reorganization = a blueprint of how the DIP plans to reorganize |
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Term
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Definition
| Plan and disclosure statement are filed with the court, Once court reviews, will enter into a COnfirmation Process |
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Term
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Definition
| all parties in interest vote. need a majority of each class to approvem, then plan can be confirmed. |
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Term
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Definition
| named after the idea that bk court can cram the plan down the throat of creditors because they will fare better under this plan than under a chapter 7 liquidation. As long as creditor due process rights are not impinged, court will approve Cramdown plan. |
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Term
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Definition
| unsecured debt less than 336,900 and secured debts of 1,1010,650 ( think home equity) |
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Term
| eligibility for chapter 13? |
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Definition
| unsecured debts less than 336,900 and secured debts of 1010650 ( think home equity). |
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Term
| Ch 13 petition can be for? |
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Definition
1. extension
2. composition
3.a combo of extension and composition |
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Term
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Definition
| only a person that resides or/has domicile, a place of business or property in the U.S. or a municipality, maybe a debtor under this title. (1) Must be a person (2) connections to the U.S. |
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Term
| What happens if your means test ends up falling between 100.00 - 166.67? |
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Definition
| If the remaining monthly disposable income is between 100 - 166, debtor must figure out whether what remains is enough to pay more than 25% of his/her unsecured, nonpriority debts ( such as credit card bills, student loans, medical bills) over a 5 year period. It is more than 25%, debtor flunks the means test. |
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Term
| What happens if the debtors monthly disposable income is $ 100.00 - $ 166.66 ? |
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Definition
| If she/he can pay25% of his/her unsecured nonpriority debts over a 5 yr period. |
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Term
| What were the three prominent debtor's prisons in London? |
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Definition
1. The Fleet
2. The Kings Bench
3. Marshalsea Prison |
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Term
| In 1500 England established the first BK law. What did it not allow? |
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Definition
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Term
| What was the 1720's Statute of Anne? |
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Definition
| allowed dischargability, but if one refused to file, the offense was capital punishment. |
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Term
| What does the U.S. Constitution: Article 1 Section8 outline? |
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Definition
| provides congress with the power to establish uniform laws on the subject of Bankruptcies throughout the U.S. |
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Term
| What did the 1938 Chandler Act provide for? |
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Definition
| reorganisation alternative to liquid |
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Term
| Who/What can an involuntary petition not be filed against? |
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Definition
farmer
against a bank
insurance
non-profit organization |
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Term
| Does the court require a secured creditor to file proof of claim? |
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Definition
| no. but should do so in an abundance of caution. |
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Term
| How many days after filing is the property the debtor "acquires" fall under the BK estate? |
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Definition
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Term
| Are wages included in the BK estate? Where are they excluded? |
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Definition
| yes in ch 7. However in ch 13 and 11 they are not. |
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Term
| What states are eligiable for Homestead Exemption? |
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Definition
Florida, Iowa, Kansas, South Dakota, Texas, D.C.
- all 6 states may shield all their equity as long as they meet the guidelines |
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Term
| What happens to a debtor who has lived in Fl for two years but not for three? |
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Definition
| they can exempt more than 125,000 of the value of equity in your homestead. |
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Term
| If you have a house in florida ( winter home), can you take advantage of the Homestead exemption? |
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Definition
| no. unless it is your domicile. |
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Term
| What was the 2005 Revision to the exemption? |
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Definition
| IRA's ( up to 1,095 million adjusted for inflation) are exempt, whether debtor chooses State or Federal exemptions. |
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Term
| Under Federal BK exemption, how much equity can be kept for a motor vehicle? |
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Definition
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Term
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Definition
is any direct or indirect disposal of property or interest including "retention of title" as in security interest.
i.e. trustee may avoid the perfected security interest and secured creditor is reduced to unsecured creditor. |
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Term
| How does Trustee make a recovery of a fraudulent transfer? |
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Definition
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Term
| How does Trustee make a recovery of a fraudulent transfer? |
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Definition
through INTENT
(a) debtor has knowledge she could not pay creditors (b) close relationship between transferor and transferee |
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Term
| What is the avoidance/recovery of "retention bonuses" |
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Definition
| trustee can avoid a transfer to an isider in an employment contract and not in the ordinary course of business. |
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Term
| What is the avoidance to transfers to Certain Asset Protection Trust? |
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Definition
| trustee can avoid the transfer to a self-settled trust made wihtin 10 years of the filing by a debtor where the debtor is the beneficiary and the transfer was made with actual intent to hinder or delay creditors. |
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Term
| Can a trustee avoid liens on property if they are gotten preceding debtor's filing of the petition? If so, how many days after the procedding? |
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Definition
| Yes. and 90 days within the preceding. |
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Term
| In which order is Distribution of Estate followed? |
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Definition
1. Secured Creditor
2. Unsecured Creditors who file claim on time
3.Unsecured creditor who filed late
4.claims for fines or punitive damages
5. Interest at the legal rate from the date of the filing of the petition, to all of the above claimants.
6. Remaining property to debtor |
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Term
| If value of the secured collateral is less than debt owed, what happens to the secured creditor? |
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Definition
| Secured creditor becomes unsecurd for the remaining amount owed. |
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Term
| What is the order of priority? |
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Definition
1. Alimony
2. Expenses of administration of debtor's estate
3."gap creditors"
4. allowed ( meaning trustee has no valid defense to it)
5. Allowed, unsecured claims for contributions to employee benefit plans arising from services rendered within 180 days before the filing of the petition up to $10,950.00.
6. Allowed, unsecured claims up to 5,400 for grain or fish products.
7. Allowed, unsecured claims up to 2,425 for consumer deposits
8. Taxes owed to government units. |
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Term
| What are the time restrictions in getting a discharge? |
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Definition
| can not receive one if a prior discharge was received within 8 years in either a 7 or 11. |
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Term
| In order to graduate, the debtor must complete what to become discharged? |
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Definition
| must complete a financial management course approved by trustee. |
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Term
| What is non-discharge debt? |
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Definition
| taxes and customs due to U.S. or any state or local government |
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Term
| According to the 2005 Revision, under all chapters, what is considered non-dischargable? |
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Definition
| debts owed to s a single creditor totaling more than $550 for luxury goods incurred within 90 days of filing; cash advances of more than $825 within 70 days. |
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Term
| Can creditors object to discharge? |
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Definition
| yes. judge will hold a hearing to listen. |
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Term
| What is a reaffirmation Agreement? |
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Definition
| where debtor agree to be liable and continue paying a particular debt despite discharge. |
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Term
| For the agreement to be effective, it must: |
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Definition
1. specify the amounts being reaffirmed
2."voluntary action"
3.The agreement can be rescinded within 60 days after filing the document in the court. |
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Term
| Why do some creditors prefer chapter 11? |
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Definition
| creditors may benefit more from the continuation of a debtors business than from liquidation of the estate. |
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Term
| Who is chpater 11 available to? |
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Definition
| individuals ( including small business, activities that do not have aggregate debt of 2,190,000.00) |
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Term
| In order to encourage DIP financing in ch 11's what might a lender get? |
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Definition
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Term
| What is Plan of Payment according to ch 13? |
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Definition
| a plan that a debtor must present. It must chart out the monthly payment plans that will go to trustee. And the trustee will pay the creditors. |
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Term
| What is the statutory rule in ch 13? |
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Definition
| trustee is paid 10 precent of amount of funds he handles in the plan |
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Term
| What are the 2 Plan of Payments in chapter 13? |
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Definition
(a) 5 yr plan ( where the debtor's income is greater than the state median income)
(b) 3 year plan ( where debtors income is less than the state median income unless the court finds cause to extend to a 5 year plan) |
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