Bankruptcy Flashcards
(43 cards)
What can a creditor do is the debtor transfers property for the purpose of delaying or defeating the collection effort?
What is this called?
They can usually reverse the conveyance and levy against the property.
This is called fraudulent conveyance
What are the four protections offered to debtor’s?
1- Homestead election: most states allow homeowners to protect up to a certain amount of equity in their homes from unsecured creditors. (doesn’t work with mortgages)
2- State exempt property statutes (story about P. Lewis trying to take a watch and wallet from debtor which cant strip someone to have nothing - jewelry, $500, etc)
3- Consumer protection statutes
4- Federal Bankruptcy law
What does the homestead election do? Does it work with mortgages?
most states allow homeowners to protect up to a certain amount of equity in their homes from unsecured creditors.
No it doesn’t work with mortgages
What are the three main goals of bankruptcy?
1- protect and rehabilitate debtor.
2- Treat all creditors “fairly” though not necessarily equally
3- Require consumer-debtors to pay as much of their debts as they can
What is the focus of chapter 7 bankruptcy?
What is the focus of chapter 13 bankruptcy?
- Chapter 7: Liquidation
- Chapter 13: payments over an extended period of time
What chapters of bankruptcy are voluntary? Which involuntary?
Voluntary: all
Involuntary: 7& 11 both can be (debtor forced against their will if needed)
What are the first seven sworn debtor schedules, and when must they be filed by?
1- List of secured & unsecured creditors, amounts due them, and their addresses
2- A statement of the financial affairs of the debtor
3- A list of all property both exempt and non-exempt
4- A listing of current income and expenses
5- A certificate of credit counseling
6- Proof of wages/ salaries received within the 60 days prior to filing
7- A statement of monthly income
These must be filed within 45 days after the petition for bankruptcy is filed unless the court extends the deadline (up to 45 days)
What is the 8th sworn debtor schedule, and when must it be filed?
8- The debtor’s most recent federal tax return
This must be filed at least 7 days prior to the 1st meeting of creditors (3 - 23 days after bankruptcy filing)
What happens if you don’t get the 8 sworn debtor schedule items in on time?
The case will be dismissed.
What will a failure to pay post petition domestic support obligation do?
dismiss the case
Does the debtor need to be insolvent to file for bankruptcy?
no
What must be provided for several years by the debtor upon the creditors request. What chapters of bankruptcy does this fall under?
federal tax returns
Chapters 11, 12, 13
What has been done to stop impetuous (acting or done quickly and without thought or care) filings?
Within 180 days before filing the debtor must have worked with a credit counselor and come up with a plan to take care of his debts.
What is the purpose of credit counseling?
1- to avoid having to take out bankruptcy at all
2- to minimize the chances for future bankruptcy filings
What does it mean when an attorney signs a chapter 7 petition?
He is certifying that the debtor is not abusing that chapter and the petition and schedules have been reasonably verified.
What happens if a petition is dismissed because of abuse and the attorney has signed it?
The debtor and/or the attorney can be forced to pay the costs and fees associated with that dismissal
What are the rebuttable presumptions (abuse) that can be found under “means testing”?
This is if the debtors income is greater than his states median income
What are the three ways a debtors income can be found to be more than his states median income, and would show abuse.
a- Monthly income minus living expenses >$100 but 25% of his non priority unsecured debt then a chapter 7 filing is abusive
b- If monthly income minus living expenses and other expenses is >$166.66 then chapter 7 is abusive
How are normal monthly living expenses determined for the “means testing”? What is included under “other expenses”?
- IRS pronouncements based on location
- health and disability insurance premiums, health savings account expenses, support payments for elderly, chronically ill/ disabled family members, up to $1,500 per dependent child per year for education, monthly secured debt payments,arrearages needed to be paid in order to maintain the debtor’s primary residence, motor vehicle, and other property necessary to the support of the debtor; and the bankruptcy trustee fees if the debtor qualifies for Chapter 13
What is an automatic stay in bankruptcy? When does it happen?
It stops most collections from creditors and forces them to go through bankruptcy court.
It comes automatically when the bankruptcy petition is signed.
Are there exceptions to the “automatic stay” when a bankruptcy petition is filed?
yes: support obligations, medical obligations, tax refund interceptions by government authorities, loan repayment to pension plans, and landlord actions including evictions.
Can anything be done about a “automatic stay”? How?
Yes, the secured creditors can petition for a release of the stay.
When is the first meeting of creditors? Do creditors have to come to receive proceeds?
10-30 days
no they don’t have to show up to get their money
Generally what property is included by the debtor at the time of filing? What are the exceptions?
- property owned by the debtor at the time of the filing
- exceptions: gifts, inheritances, property settlements in a divorce, and life insurance death proceeds received within 180 days after the fling, and preferential transfers before the filing date become part of the estate.
