Business Law Chapter 37 Bankruptcy

Front 1

The Federal Bankruptcy Code has how many chapters?

Back 1

8, all of which are odd numbers.

Front 2

Which chapters help rehabilitate the debtor?

Back 2

Chapters 11 and 13

Front 3

Rehabilitation may result in...

Back 3

...not loosing your assets, but promising a share of future earnings.

Front 4

Straight bankruptcy

Back 4

Also known as liquidation, form of bankfruptcy where the bankrupt's assets be distributed to creditors but the debtor has no obligation to share future earnings.

Front 5

Chapter 7 of bankruptcy

Back 5

Liquidation, Assets are sold to pay creditors. Business terminates, creditors have no rights to future earnings

Front 6

Chapter 11 of bankruptcy

Back 6

Reorganization; Continue operations, creditors receive a portion of the debtors current assets and future earnings. Specific for wealthy individuals or business.

Front 7

Chapter 13 of Bankruptcy

Back 7

Consumer reorganization; Creditors usually receive some portion of individuals current assets and future earnings. Specific for individuals

Front 8

Bankruptcy code has three primary goals:

Back 8

1)To preserve as much of the debtors property as possible. 2) To divide the debtor's assets fairly between the debtor and creditors. 3) To divide the debtors assets fairly among creditors.

Front 9

Debtor

Back 9

Someone who cannot pay his debts and files for protection under the bankruptcy code

Front 10

Voluntary petition

Back 10

Filed by a debtor to initiate a bankruptcy case.

Front 11

Involuntary petition

Back 11

Filed by creditor to initiate a bankruptcy case.

Front 12

2 requirements individuals must make before filing a voluntary petition:

Back 12

1) Within 180 days before filing, debtor must undergo credit counseling with an approved agency.

Front 13

The voluntary petition must include the following documents:

Back 13

Petition, list of creditors, schedule of assets and liabilities, claim of exemptions, schedule of income and expenditures, statement of financial affairs.

Front 14

How many requirements are necessary to file an involuntary petition?

Back 14

Three

Front 15

Order for relief...

Back 15

An official acknowledgment that a debtor is under the jurisdiction of the bankruptcy court.

Front 16

The U.S. trustee...

Back 16

Oversees the administration of bankruptcy law in a region.

Front 17

Trustee

Back 17

The trustee is responsible for gathering the bankrupts assets and dividing them amoung creditors.

Front 18

Proof of claim

Back 18

A form stating the name of an unsecured creditor and the amount of the claim against the debtor.

Front 19

Secured creditors do not file proofs of claim unless...

Back 19

the claim exceeds the value of their collateral.

Front 20

Automatic stay

Back 20

Prohibits creditors from collecting debts that the bankrupt incurred before the petition was filed.

Front 21

Bankruptcy estate

Back 21

The new legal entity created when a debtor files a bankruptcy petition. The debtors existing assets pass into the estate.

Front 22

The code permits...

Back 22

INDIVIDUAL debtors (But not organizations) to keep some property for themselves.

Front 23

Preference

Back 23

When a debtor unfairly pays creditors immediatley before filing a bankruptcy petition.

Front 24

Preferences can take two forms:

Back 24

Payments and lien

Front 25

Lien

Back 25

Security interest in the debtors property.

Front 26

Insider

Back 26

Family members of an individual debtor, offers and directors of a corporation, or partners of a partnership.

Front 27

a transfer is fraudulent if...

Back 27

...it is made within the year before a petition is filed and its purpose is to hinder, delay, or defraud creditors.

Front 28

A trustee cannot void...

Back 28

...pre-petition payments made in the ordinary course.

Front 29

What order are claims placed in?

Back 29

1) Secured claims 2)Priority claims 3) Unsecured claims

Front 30

Trustee pays bankruptcy estate to the various classes of claims in order of..

Back 30

...rank.

Front 31

Pro Rata

Back 31

...rank.

Front 32

Gap period

Back 32

The period between in the time that a creditor files an involuntary petition and the court issues the order for relief.

Front 33

Fresh Start

Back 33

After the termination of a bankruptcy case, creditors cannot make a claim against the debtor for money owed before the initial bankruptcy petition was filed.

Front 34

Discharge

Back 34

The debtor no longer has an obligation to pay a debt.

Front 35

Debts of business organizations cannot be...

Back 35

...discharged.

Front 36

A debtor who has received a discharge under chapter 7 or 11 cannot receive another discharge under chapter 7 for at least...

Back 36

... eight years after the prior filing.

Front 37

A debtor who received a prior discharge under chapter 13 cannot in most cases receive one under chapter 7 for at least...

Back 37

...six years.

Front 38

Reaffirm

Back 38

To promise to pay the debt even after it is discharged.

Front 39

To be Valid, a reaffirmation must...

Back 39

..Not violate common law, been filed in court before discharge was granted, include detailed disclosure statement, approved by the court.

Front 40

Debtor in possession

Back 40

The debtor acts as a trustee in chapter 11 bankruptcy.