Flashcards in Deck 31 Deck (20):
What chapters of bankruptcy may be voluntary or involuntary?
Chapter 7 or 11 (Ch. 13 is voluntary only)
What chapter of bankruptcy is voluntary only?
Under voluntary cases, who files?
The debtor files; automatic order for relief
Under involuntary cases, who files?
Unsecured creditor; does not constitute an order for relief
Who may petition a debtor involuntarily into bankruptcy? (Kind of creditor and amount)
Unsecured, undisputed debt; Creditors must owe at least $15,325
Power of fraudulent transfer
Trustee can set aside set aside fraudulent transfers made within 2 years of the filing date
Preferential payment in Bankruptcy is (purpose to prevent one creditor being preferred over other):
1) Transfer made to or for the benefit of a creditor; 2) on account for an antecedent debt; 3) made within 90 days of filing the petition; 4) creditor receives more than the creditor would have received under the bankruptcy code
Something not considered a preference
Payment to a fully secured creditor
What debts will not be discharged by a bankruptcy? (WAFTED)
Willful and malicious injury, Alimony, Fraud, Taxes, Educational Loans, and Debts undisclosed
Assets of an estate are distributed in the following order:
1) secured creditors; 2) priority creditors; and 3) general creditors who filed on time
Taxes that can be claimed as itemized deductions include:
Real estate tax, income tax, and personal property tax (ad valorem tax on car)
Education loan interest is what kind of adjustment?
Adjustment for AGI limited to $2500
Treatment for Municipal bond income
Not included in gross income
Statute of limitations for fraud or filing false tax returns
Rights that a surety has against the principal debtor
Exoneration, subrogation (step into the shoes of the debtor), and reimbursement
Defenses of a Surety (CPRS)
Creditor acts in bad faith; payment and tender of payment; release of principal debtor; and surety's incapacity or bankruptcy
No defense situations for a surety
Principal's fraud or duress upon surety; incapacity of principal; and bankruptcy of principal
Agreement between the debtor and at least 2 creditors that the debtor pays the creditors less than their full claims in full satisfaction of their claims
Property in the hands of the debtor