Bankruptcy

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Author:
johncburt
ID:
198714
Filename:
Bankruptcy
Updated:
2013-02-13 19:53:46
Tags:
Bankruptcy Law
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Description:
Bar review
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  1. Chapter 13 - Creditors Best Interests Test
    To approve a Ch. 13, creditors must get paid more through the plan then they would the present value of D's property in a Ch. 7 liquidation
  2. Chapter 13 - Limitations on who can file
    • 1. Only people, not corporations
    • 2. Unsecured Debt: Less than $361,000
    • 3. Secured Debt: Less than $1.1MM
  3. In a Ch 7, 13, 11, who controls the assets
    • In Ch. 7 and 13 the trustee controls the assets.
    • In a Ch 11, the Debtor is usually in control of the assets and can continue to conduct business, though can appoint a trustee to run the business
  4. Chapter 11 Plan - What is it
    Same as a Ch 13, but requires creditor approval
  5. Chapter 7 - Who cannot file - General rule + 5 exceptions
    Any person or entity can file a Ch 7, you do not need to be insolvent.

    ** Railroads, banks, credit unions, insurance companies, municipalities cannot file Ch 7.
  6. Involuntarty Bankruptcy - Who can be forced into bankruptcy and what chapters
    Anyone who qualifies for a 7 or 11 (but not 13) can be forced into bk.
  7. Involuntarty Bankruptcy - Why would a creditor force a bankruptcy
    To stop the race to the courthouse.  If D has limited funds and many creditors
  8. Involuntarty Bankruptcy - What Creditors can force a bankruptcy - How many Creditors, how much money
    D must have 12 or more creditors, then 3 or more creditors with the combined debt of $15k may force the BK.

    ** Can only count the unsecured portion of Secured Creditors
  9. Involuntarty Bankruptcy - Adequate grounds to force a bk
    • 1. D must regularly miss a significant amount of payments
    • 2. Debts need to be bone fide, not in dispute
    • 3. If a custodian (receiver, trustee or assignee) is to take possession w/in 120 days, it is adequate grounds
  10. Automatic Stay - Grounds for relief from stay (4)
    • 1. Lack of Adequate protection: for the asset - Protect asset from declining in value - can get insurance or a bond
    • 2. Lack of equity: Like a mortgage can foreclose if no equity
    • 3. Scheme to Defraud: Remove real property if multiple filings, or partial transfers
    • 4. Serial Filings: Stay removed after 30-days if another BK was dismissed in the prior year
  11. Automatic Stay - Relief From Stay- Statement of Intentions, when must you file, effect if you dont, when must you reaffirm
    Stay expires for collateral secured by a loan if you do not file a statement of intention w/in 30-days or fail to make payments after another 30-days

    ** Must file re-affirmation w/in 45-days of creditor meeting
  12. Bankruptcy Estate: What does/doesnt include (2)
    • Includes:
    • 1. All pre-petition property (even exempt)
    • 2. Does not include post-petition property, except: inherited, life insurance, prop received in divorce w/in 180 days of petition
  13. Exemptions: What exemptions can you use, can state limit, how long live in a state
    Choose from Federal System or State System.  States can prevent use of fed system.

    ** Must be a resident of a state for two years to use their exemptions. No forum shoppoing
  14. Exemptions: Homestead - When can you be limitated in using Homestead, what is limited amount
    • Limitations:
    • 1. Bad Acts: If convicted of a felony and filing BK looks like bad faith, homestead limited to $146,000
    • 2. If acquired HS w/in 3.3yrs you are limited to $146k exemption
    • 3.
  15. Trustee - Can trustee be a BFP of Real Property
    Trustee can take advantage of recording statutes as if he was a BFP.
  16. Trustee  - Avoidance Power - Fraudulent Transfers, when can he avoid , SOL of transfer
    • Trustee can avoid (undue) fraudulent transfers D used to defraud creditors. 
    • Can use state law statute of limitations for fraudulent transfer if longer than fed 2 year SOL
  17. Trustee  - Avoidance Power - Preferential Powers ( All 5 Conditions Present)
    • All 5 must be present:
    • 1. Transfer to benefit of a creditor
    • 2. Debtor was insolvent - Presummed if w/in 90-days of bk 
    • 3. For a past debt - Debt must have existed prior to the transfer (it is not an antecedent debt if you paid money when you gained title)
    • 4. W/in 90-days of filing BK
    • 5. Creditor receives more than he would in a Ch 7 liquidation
  18. Trustee  - Avoidance Power - Preferential Powers - Exceptions (4)
    • 1. Domestic Support
    • 2. Statutory Liens
    • 3. Consumer debts of less than $600 each w/ an aggrigate less than $6k
    • 4. Payments made to approved credit counseling agency
  19. Trustee Power - Executory Contracts, what can he do with them
    • 1. May reject the lease - but pay damages and treat as unsecured debt
    • 2. Assign the lease.  No assignement clause is void.
  20. Order of Claim Payments - Secured Claims, when are they paid, how much
    1. Secured Claims are paid first (up to the value of the secured portion). A deposit at a bank you owe money is considered a security interest in the deposit.
  21. Order of Claim Payments - Unsecured priority Claims - Order that claims are paid (8)
    • 1. Support
    • 2. BK Admin
    • 3. Gap claims (debts after involuntary BK)
    • 4. Wage Claims
    • 5. Employee Benefits
    • 6. Deposits made for consumer goods -$2k
    • 7. Tax Claims
    • 8. Personal Injury Claims from DUI
  22. Discharge - Who/why can object to discharge (9)
    • 1. Fraud transfer w/i 1-year
    • 2. Failure to keep books
    • 3. Commission of bk crime
    • 4. Failure to explain loss of assets
    • 5. Refusal to obey orders
    • 6. Prior Ch 7 discharge w/in 8-years
    • 7. Prior Ch 13 discharge in 6-years unless proposes to pay 70% of prior debts
    • 8. Fin Man Course
    • 9. Bad Acts
  23. Discharge - Things not dischargable (13)
    • 1. Tax claims
    • 2. Debts incurred by fraud
    • 3. Luxury goods over $600 w/in 90-days of filing
    • 4. Cash advances on CC w/in 70 days for more than $875
    • 5. Unscheduled debts
    • 6. Debts for embezzelment, larceny, fraud
    • 7. Liability for wilful and malicious injury to person or property
    • 8. Gov fines
    • 9. Student loans
    • 10. Condo Association Fees
    • 11. Restitution for Fed Crimes
    • 12. Debts from violating securities laws
    • 13. Debts owed to a pension
  24. Discharge - Re-affirmation Agreements - Requirements
    • 1. Made b4 discharge
    • 2. Creditor must give D disclosures w/in 60 days of discharge - right to cancel
    • 3. Agreement filed w/ court
    • 4. If no attorney, then need a re-affirmation hearing - court determines no undue hardship
    • 5. Attorney files affidavit that D can afford payments

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