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  1. Chapter 7 bankruptcy
    Debtor liquidates assets, except exempt assets, to pay creditors
  2. Chapter 11 Bankruptcy
    debtor reorganizes debts to pay creditors; primarily used by businesses.
  3. Chapter 13 Bankruptcy
    Debtor reorganizes debts to pay creditors; primarily used by individuals.
  4. Creditor's Committee
    A group of unsecured creditors who essentially function as the bankruptcy trustee in Chapter 11 cases.
  5. Discharge
    After debtor completes bankruptcy, debtor is relieved of all previous debt except debts that are nondischargeable. This allows debtor to get a financial fresh start.
  6. Estate
    The debtor's assets that are used to pay the creditors.
  7. Insider
    A party who has a close relationship with the debtor. Relevant in the area of preferential transfers: Transactions with insiders are examined by the trustee for 1 year prior to filing of the bankruptcy petition.
  8. Involuntary petition
    Debtor is sued by creditors and forced into bankruptcy
  9. Liquidation
    The process of turning assets into cash to pay creditors
  10. Order for relief
    Granted, in most cases, to the debtor upon the filing of the bankruptcy petition. Allows debtor to stop paying creditors until the bankruptcy can be finalized.
  11. Preferential transfer
    When the debtor provides payment or security to a creditor, which would allow creditor to collect more than the creditor would have under Chapter 7 bankruptcy. If such a transfer took place 90 days prior tothe filing of the bankruptcy petition, the trustee may set the transaction aside. This is done to assure all creditors are treated fairly.
  12. Reaffirmation
    When a debtor voluntarily chooses to repay a debt that otherwise would be fully discharged under the bankruptcy code.
  13. Reorganization (rehabilitation)
    A debtor retains assets, as opposed to liquidating the assets, and agrees to pay creditors out of future earnings under Chapter 11 or 13 of the Bankruptcy Code.
  14. Stay
    A court order that prevents further collection actions by creditors. The stay is issued upon the filing of the bankruptcy petition, but does not apply to family law issues.
  15. Trustee
    Teh bankruptcy trustee presides over the bankruptcy estate and organizes the estate for the court. The truste determines what the assets and liabilities of the estate are.
  16. Voluntary petition
    A debtor chooses to file bankruptcy, as opposed to being forced into bankruptcy by creditors.
Card Set:
2012-03-02 04:40:01
Business Law

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