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Ch 7 voluntary bankruptcy (who files/order of relief date/how can you file)
- - debtor files for a liquidation, and trustee is appointed
- - husband and wife file jointly
- - order of relief is same date as filing date
- - can file even if solvent, all you need are debts of any amount
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Ch 7 involuntary bankruptcy (who files/order of relief date)
- - creditors file to force a liquidation and a trustee is appointed
- - 12 or more creditors, need 3 or more to file owed $14,425 in unsecured claims
- - with less than 12, need 1 or more file owed $14,424 in unsecured claims
- - if uncontested by debtor, order of relief is same date as filing date
- - if contested, the order of relief comes after hearing has determined insolvency
- - railroads, banks, insurance companies, farmers and charities are exempt
- - if creditors properly file, debtor may sure for compensatory damages, court, attorney fees, and punitive damages
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Equitable Insolvency:
- not paying debts when due
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Ch 11 reorganization (what is it/who files/who approves plan/what happens)
- - debtor submits a plan to restructure debts to allow business to continue
- - plan submitted to an unsecured creditor's committee (exclusive rights for 120 days)
- - plan must be approved by at least 1 impaired class of creditors
- - a trustee is usually not needed (debtor does this)
- - reorganization can be voluntary/involuntary
- - plan won't be confirmed by court until full payment of all admin costs
- - upon court's final decree, debtor pays off debts according to plan, and is discharged from other debts not covered by plan
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Exempt property includes:
- - social security and disability benefits
- - things necessary to live (car, house, furniture)
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Debtor keeps most property gained after filing, with 3 exceptions:
- property gained within 180 days after filing by divorce, inheritance, or insurance
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Preferential transfers can be avoided. To disaffirm the prior payment, TANIM must be met:
- - must have Transfer of property to benefit a creditor
- - must have been for an Anteceedent debt - an existing overdue debt
- - transfer must have been made within Ninety days within filing date (1 yr for insiders)
- - transfer must have been made while Insolvent (within 90 days of filing)
- - creditor received More than he wooed have received in bankruptcy
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A fraudulent conveyance is:
- - a phony transfer by debtor to hide property from creditors
- - trustee can disaffirm within 1 year
- - if done secretly, debtor retains equitable title and usually remains in possession
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10 categories of debts in order they get paid SAG-WEG-CT:
- - Secured creditors paid up to value of their collator
- - Administrative costs (and domestic support)
- - Gap creditors - debts between filing but before order
- - Wages unpaid up to 180 days prior to filing
- - Employee benefits unpaid up to 180 days prior to filing, up to $11,725 per
- - Grain Producers & Fishermen unpaid up to $5,775
- - Consumer deposits for goods or services, up to $2,600
- - Taxes unpaid to state & local
- - all remaining to other filing unsecured creditors
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When a corporation completes bankruptcy, it is:
- Dissolved
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Certain actions by debtors will preclude any discharge:
- - receiving discharge witting 8 years of filing
- - unjustifiably failed to keep adequate books & records
- - attempted to hide assets within 1 year of filing
- - refusal to explain loss of assets or refusal to obey a court order
- - making false oath or account
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Certain debts are nondischargeable (WAFTED):
- - willful & malicious injury to others
- - alimony and child support
- - debts from fraud
- - taxes within 3 years of filing
- - educational loans
- - Debts unscheduled by debtor
- - theft and embezzlement
- - any debt from Sarbanes Oxley
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