Term
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Definition
| Person who distributes the debtors assets. |
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Term
| General Powers of the trustee |
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Definition
| 1) Investigates what is going on 2) notices are sent out to listed creditors informing them of the filing for bankruptcy 3) Can amass property and turn over assets 4) Power of avoidance: can keep or terminate contracts of employment and lease agreements 5) Can employ professionals 6) Can manage estate 7) Can move to dismiss case |
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Term
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Definition
| Upon filing, all assets are considered part of the estate of the debtor (which are in hands of trustee) Any property acquired after filing could be brought back into the estate. Up to 180 days AFTER filing, property received from inheritance, life insurance, or divorce settlement could be included in estate. |
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Term
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Definition
| States can use either federal exempt property rules or their own state Law |
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Term
| Federal Exemption examples |
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Definition
| Can keep personal clothing, jewelry, prescription health aids, alimony or child support, social security or unemployment, pensions, profit sharing, and annuity payments, books "tools of trade" -must file exempt items on bankruptcy filing- |
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Term
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Definition
| A payment to one creditor that's preferred over others who are similarly situated. Can be voided by trustee. Creditors can take preference payments from debtor but may have to give back. |
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Term
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Definition
| Debtor is presumed insolvent 90 days before filing. Any payments made to creditors within 90 days is considered to be a preference payment. |
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Term
| Trustee can get payment back if they can prove... |
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Definition
| 1) Transfer was made for the benefit of the creditor 2) Payment was made for a prior debt (not rent or utility payment) 3) Debtor was insolvent at time of transfer 4) Credit got more due to the preference payment than if the payment had not been made and they received assets from a straight distribution |
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Term
| Fraudulent Conveyances Act |
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Definition
| The trustee can overturn any transaction designed to hinder, delay, or defraud creditors. Ex: Joe sells boat to Adam for cheap that he still owes payments on. |
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Term
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Definition
| 1) Secured creditors get taken care of first 2) Left over money goes to Priority Creditors until $ runs out in the following order: Administrative expenses (trustee and professionals employed), Gap Creditor- creditors that you got debt between the 20 day period of involuntary bankruptcy, employee wages owed within 90 days of filing, consumer deposits, alimony and child support that is owed. |
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Term
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Definition
| Some taxes, alimony/child support, debts for obtaining $ under false pretenses, liability based on willful injury to a person or property, debt not scheduled at filing, debts created by fraud, student loans, DUI charges, fines and penalties |
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Term
| Cases Where Creditor and trustee thinks the whole case should be dismissed |
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Definition
| 1) Debtor destroyed or falsified records 2) debtor lies under oath 3) debtor transferred property to defraud customers 4) debtor refuses court order 5) debtor can't explain losses 6) Prior discharge (cant fine more than once in 8 yrs) |
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