Bankruptcy Flashcards
Under Chapter 7 of the federal Bankruptcy Code, what effect does a bankruptcy discharge have on a judgment creditor when there is no bankruptcy estate?
The debtor is relieved of any personal liability to the judgment creditor.
Under Chapter 7, a discharge discharges most debts of a debtor, whether or not there is a bankruptcy estate from which to pay the debts.
What is Chapter 9
is for municipal debt adjustment
What is Chapter 7
provides for liquidation of a debtor’s estate
What is Chapter 11
is for debt reorganization and is available to family farmers with regular income
What is Chapter 13
is for adjustment of debts of individuals with regular income and is available to a family farmer with regular income
Which of the following creditors must join in the filing of the involuntary petition?
I. JOG Office Supplies $2,000
II. Nanstar Electric Co. $1,200
III. Decoy Publications. $18,000
If a person has fewer than 12 creditors, any one or more of them with unsecured and undisputed claims that aggregate at least $15,325 more than the value of any collateral securing the claim may file the petition.
Decoy Publications has a claim for $18,000 beyond its security.
JOG Office Suppliers’ claim is for $2,000, not enough by itself to justify filing and unnecessary if Decoy files. Similarly, Nanstar is owed only $1,200, not enough by itself to justify filing and unnecessary if Decoy files.
In a liquidation proceeding?
In a liquidation proceeding, after the petition is filed, a trustee will be appointed, and unless within twenty days after the filing of the creditor’s petition the debtor objects to the petition, an automatic stay against creditor collection proceedings goes into effect. On the other hand, if the debtor files the petition, the automatic stay takes effect on the date of the filing.
Which of the following parties ordinarily must confirm the plan?
Technically, only the court can confirm a plan; creditors and security interest holders vote whether to accept the plan. Moreover, unimpaired parties, such as secured creditors are presumed to have affirmed, so their vote is not necessary. A plan need not be affirmed by 2/3 of interested shareholders (called “equity security holders” under the Bankruptcy Code), but rather by 2/3 of the interests (e.g., 2/3 of the outstanding shares, which may be held by fewer than 2/3 of the shareholders). Finally, through the “cram down” provision of the Bankruptcy Code a plan may be confirmed by a court even if only one impaired class votes to affirm the plan.
