7.3 BANKRUPTCY: DECLARATION, PROCESSES, DISTRIBUTION, AND DISCHARGE

Question 1

WHAT IS CH 7?

Answer 1

• STRAIGHT OR LIQUIDATION BANKRUPTCY.
• DOES THE DEBTOR HAVE THE ABILITY TO PAY DEBTS AS THEY COME DUE?
• TRUSTEE IS APPOINTED
• NONPROFIT, FARMERS, AND STOCK BROKERAGE FIRMS ARE EXCLUDED NOT ELGIBLE UNDER CH 7
• BOTH VOLUNATRY AND INVOLUNTARY PETITIONS (SEE REQUIREMENTS FOR INVOLUNTARY)
  -DEBTOR WHO PREVIOUSLY RECEIVED A DISCHARGE IN BANKRUPTCY WN 8 YEARS WILL DENIED A GENERAL DISCHARGE.

Question 2

WHAT IS CH 9?

Answer 2

ADJUSTMENT OF DEBTS BY INSOLVENT MUNICIPALITIES, ONLY VOLUNTARY PETITIONS

Question 3

WHAT IS CH 11?

Answer 3

REORGANIZATION - SEE SCREENSHOT

*IN ADDITION A CREDITORS COMMITTEE IS FORMED, AND THE COMMITTEE CONSIST EXCLUSIVELY OF UNSECURED CREDITORS

Question 4

WHAT IS CH 12?

Answer 4

ADJUSTMENT OF DEBTS OF A FAMILY FARMER AND FAMILY FISHERMAN, ONLY VOLUNTARY PETITIONS.

Question 5

WHAT IS CH 13?

Answer 5

WAGE EARNERS PLAN - SEE SCREENSHOT

Question 6

WHAT IS THE BANKRUPTCY PROCESS?

Answer 6

SEE SCREENSHOT

Question 7

WHAT PROPERTY IS EXEMPT FROM BANKRUPTCY’S ESTATE?

Answer 7

THE DEBTORS BANKRUPTCY ESTATE INCLUDES PROPERTY OWNED BY THE DEBTOR WHEN THE BANKRUPTCY PETITION IS FILED, IT ALSO INCLUDES PROPERTY OWED TO THE DEBTOR AS OF THE FILING, IN ADDITION PROPERTY RECEIVED BY THE DEBTOR WITHIN 180 DAYS AFTER THE PETITION IS FILED IS PART OF THE ESTATE IF IT RECEIVED BY INHERITANCE, BEQUEST, LIFE INSURANCE, DIVORCE,
- - 189,050 HOMESTEAD EQUITY IF AQUIRED WITHIN 3 1/2 YEARS PRECEDING THE DATE OF FILING, AND DEBTOR MUST HAVE BEEN DOMICILED IN THE STATE FOR TWO YEARS.
-GOVERNMENT BENEFITS
-IRA - UP TO 1,512,350
-ALIMONY, CHILD SUPPORT, PENSION, DISABILITY

Question 8

WHAT IS A VOIDABLE PREFERENCE?

Answer 8

DEBTORS ATTEMPT TO CONCEAL PROPERTY THROUGH TRANSFERS. THESE TRANSFERS MUST BE RETURNED TO THE TRUSTEE.

THERE ARE TWO TYPES OF VOIDABLE PREFERENCE
1) TRANSFERS FROM THE DEBTOR TO THE CREDITOR
2) TRANSFERS BY THE DEBTOR TO INSIDERS OF A BUSINESS

Question 9

WHAT ARE THE EXCEPMTIONS TO VOIDABLE PREFERENCES?

Answer 9

1) CHARITY
2) EMPLOYEE RETENTION BONUSES
3) CONSUMER DEBTOR’S PAYMENT OF UP TO $7,575 IN CONSUMER DEBT
4) PATERNITY, ALIMONY, MAINTENANCE, AND CHILD SUPPORT

Question 10

WHAT IS THE ORDER OF PRIORITIES FOR DISTRIBUTION OF THE DEBTOR’S ESTATE DUE TO BANKRUPTCY? SEVENTH DAY ADVENTIST CAN EXCEL FOR CHRIST TODAY PERIOD.

Answer 10

1) SECURED PARTIES - PERFECTED SECURED PARTIES, THEN SECURED PARTIES
2) DOMESTIC SUPPORT - E.G., ALIMONY, CHILD SUPPORT
3) ADMINISTRATIVE COST - EXPENSES OF THE BANKRUPTCY
4) CLAIMS ARISING IN THE ORDINARY COURSE OF BUSINESS
5) EMPLOYEE WAGES - LIMITED TO THOSE EARNED WITHIN 180 DAYS OF FILLING FOR BANKRUPTCY UP TO $15,150.
6) EMPLOYEE BENEFIT PLAN - SAME APPLICATION AS EMPLOYEE WAGES HOWEVER, EMPLOYEE WAGES IS SUBTRACTED FROM WHAT IS OWED FROM THE EMPLOYEE BENEFIT PLAN. (WAGES - BENEFIT PLAN)
7) FARM PRODUCERS AND FISHERMAN (UP TO 7,475)
8) CONSUMER CREDITORS - UP TO 3,350 (GOODS OR SERVICES FOR PERSONAL USE)
9) GOVERNMENT TAX - FEDERAL TAXES LESS THAN 3 YEARS - FYI SOCIAL SECURITY TAX IS NEVER DISCHARGED
10) CLAIMS FOR DEATH OR PERSONAL INJURY
11) ALL GENERAL UNSECURED CREDITORS WHO TIMELY FILLED (PRORATION MAY BE NEEDED)

Question 11

WHAT WILL RESULT IN THE COURT NOT ORDERING DISCHARGE?

Answer 11

• NO DEBTOR WHO HAS HAD A DISCHARGE IN BANKRUPTCY WITHIN EIGHT YEARS OF THE FILING OF THE PETITION FOR THE CURRENT BANKRUPTCY CAN BE GIVEN A DISCHARGE.
• CONDUCT OF THE DEBTOR (E.G., CONCELAMENT, REFUSAL TO FURNISH DOCUMENTS.

Question 12

WHAT SPECIFIC TYPES OF DEBTS WILL NOT BE DISCHARGED?

Answer 12

SEE SCREEN SHOT

FYI: DEBTS DUE TO ORDINARY NEGLIGIENCE (BREACH) ARE DISCHARGEABLE.