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Flashcards in Mod 30 Bankruptcy Deck (126):
1

Chapter 7 voluntary

Debtor files for a liquidation and trustee is appointed

2

Under Chapter 7 voluntary, husband and wife...

Husband and wife may file jointly

3

Under Chapter 7 voluntary, order of relief is...

Order of relief is same date as filing date

4

Under Chapter 7 voluntary, you can file even if...2

1 Can file even if solvent

2 all you need are debts of any amount

5

Chapter 7 Involuntary

Creditors file to force a liquidation and a trustee is appointed

6

Chapter 7 Involuntary, 12 or more creditors

Need 3 or more to file owed $15,325 in unsecured claims

7

Chapter 7 Involuntary, with less than 12 creditors

Need 1 or more to file owed $15,325 in unsecured claims

8

Chapter 7 Involuntary, if uncontested by debtor...

The order of relief is same date as filing date

9

Chapter 7 Involuntary, if contested by debtor

The order of relief comes after hearing has determined insolvency

10

Chapter 7 Involuntary, contested:
Test for insolvency is

Equitable insolvency

11

equitable insolvency

Not paying debts when due

12

Chapter 7 Involuntary, do not use insolvency in...

Bankruptcy Sense (assets - liabilities)

13

Chapter 7 Involuntary, 2 exempt parties

Farmers and charities

14

Chapter 7 Involuntary, if creditors improperly file, the debtor may collect...4

1 compensatory damages
2 court costs
3 attorney's fees and
4 punitive damages

15

Chapter 11 Reorganization

Debtor submits a plan to restructure debtor's debts for the purpose
Of allowing the debtor's business to continue

16

Under Chapter 11 Reorganization, no...

Liquidation of business occurs

17

In a Chapter 11 Reorganization, a plan is submitted to...

an unsecured creditor's committee (exclusive rights For 120 days)

18

In a Chapter 11 Reorganization, plan must be approved by...

At least 1 impaired class of creditors

19

In a Chapter 11 Reorganization, a trustee is...

Not usually needed (debtor acts as trustee)

20

In a Chapter 11 Reorganization, a reorganization can be...

Voluntary or involuntary

21

In a Chapter 11 Reorganization, plan won't be confirmed until...

Full payment of administrative costs

22

In a Chapter 11 Reorganization, upon court's final decree...

Debtor pays off debts according to plan

23

In a Chapter 11 Reorganization:

Upon court's final decree, debtor pays off debts according to plan

Debtor is discharged from any other debts not covered by the plan

24

Neumonic for who can't file under chapter 7

RIBS

25

4 parties that can't file under chapter 7

1 railroads
2 insurance companies
3 banks
4 savings and loans

26

Filing under Chapter 7 or 11 acts as...2

1 an automatic stay and

2 stops all collection efforts

27

Filing under chapter 7 or 11 acts as an automatic stay and stops all collection efforts. What's the exception?

An automatic stay doesn't stop alimony and child support payments

28

Property as of filing date goes to...

Goes to trustee for creditors (includes are proceeds gained after
Filing)

29

Property as of filing date goes to trustee for creditors. 2 exemptions

1 social security and disability benefits are exempt

2 things necessary to live are exempt (house, car, furniture)

30

Debtor keeps most property gained after filing. 3 exceptions

1 property gained within 180 days after filing by divorce

2 inheritance or

3 by insurance goes to trustee

31

Property included in debtor's estate:

With leases, the trustee can...2

1 Accept or reject

2 if no action in 60 days they are rejected

32

Trustee can avoid or disaffirm...

payments on property transfers done by debtor prior to filing

33

Preferential transfers define

Preferring 1 creditor over others

34

Preferential transfers can...

Be avoided

35

Preferential transfers can be avoided, to disaffirm prior payment...

5 tests must be met (TANIM)

36

5 tests to disaffirm prior payment:

TANIM

Transfer
Antecedent debt
Ninety days
Insolvent
More

37

5 tests of TANIM to disaffirm prior payment:

T

Must have a transfer of property that benefits a creditor

38

5 tests of TANIM to disaffirm prior payment:

A

Transfer must have been for an antecedent debt

39

Antecedent debt, define

Existing overdue debt

40

Transfer must have been for an antedecedent debt:

New debts are...2

1 New debts are not antecedent debts

2 they are a contemporaneous exchange for new value

41

Transfer must have been for an antedecedent debt:

Secured debts are...

Not antecedent debts, can't prepay

42

Transfer must have been for an antedecedent debt:

Paying current bills in ordinary corse of business are...

Not antecedent debts, can't prepay

43

Transfer must have been for an antedecedent debt:

Consumer debts of...

$650 or less aren't antecedent debts

44

4 debts that are not antecedent debts

1 new debts
2 secured debts
3 paying current bills in ordinary course of business
4 consumer debts of $650 or less

45

5 tests of TANIM to disaffirm prior payment:

N

Transfer must have been made within Ninety days of filing date

46

5 tests of TANIM to disaffirm prior payment:

Transfer may be made within 1 year of filing date if...

Creditor was an insider

47

5 tests of TANIM to disaffirm prior payment:

I

Transfer must have been made while debtor was insolvent

48

5 tests of TANIM to disaffirm prior payment:

Insolvency is normally presumed if...

The transfer was made within 90 days

49

5 tests of TANIM to disaffirm prior payment:

M

Creditor received more than he would have received in bankruptcy

50

3 types of Bankruptcy

1 Chapter 7 voluntary

2 chapter 7 involuntary

3 chapter 11 reorganization

51

Fraudulent conveyances

Phony transfer by debtor to hide property from creditors

52

With fraudulent conveyances, a trustee can...

Can disaffirm if within 1 year within filing

53

Fraudulent conveyances are done secretly where the...

Debtor retains equitable title and usually retains possession

54

Debts are paid in the order of their priority neumonic

SAG-WEG-CTO-AM

55

If insufficient money to pay all debts within a given category...

Each debt within category receives a pro rata share of available
Funds

56

Categories of debts:

What does SAG-WEG-CTO-AM stand for?

1 secured creditors
2 administrative costs
3 Gap creditors
4 wages unpaid
5 employee benefits unpaid
6 grain producers and fisherman unpaid
7 consumer deposits
8 taxes
9 obligations
10 accidents
11 miscellaneous

57

Categories of debts SAG-WEG-CTO-AM:

S

1 secured creditors are paid up to the value of collateral

58

Secured creditors are paid up to the value of the collateral which is...

Category 10 for any deficiency

59

Categories of debts SAG-WEG-CTO-AM:

A, 2

2 Administrative Costs of bankruptcy and

Domestic support obligations

60

Domestic support obligations 2

Child support and alimony

61

Categories of debts SAG-WEG-CTO-AM:

G, 2

3 Gap creditors,

debts occurring after filing but before the order of relief

62

Categories of debts SAG-WEG-CTO-AM:

W, 2

4 Wages unpaid

Must be earned within 90 days prior to filing and maximum priority
Is $12,475 per employee

63

Categories of debts SAG-WEG-CTO-AM:

E, 2

5 employee benefits unpaid

Must be earned within 180 days prior to filing and maximum priority
Is $12,475 per employee

64

Categories of debts SAG-WEG-CTO-AM:

G, 2 (2nd G)

6 grain producers & fisherman unpaid

Maximum priority is $6,150 per individual

65

Categories of debts SAG-WEG-CTO-AM:

C 2

7 consumer deposits for goods and services not received

And maximum priority is $2775 per person

66

Categories of debts SAG-WEG-CTO-AM:

T

8 taxes

67

Categories of debts SAG-WEG-CTO-AM:

O

9 obligations to insured bank

68

Categories of debts SAG-WEG-CTO-AM:

A

10 accidents while under influence of drugs or alcohol

69

Categories of debts SAG-WEG-CTO-AM:

M

11 miscellaneous unsecured debts

70

Upon bankruptcy completion...

Most of debtor's debts are discharged

71

Discharge of debtors:

Only individuals are discharged...

Corporations and partnerships are dissolved

72

Certain actions by debtor will preclude any discharge, this is known as...

Denial of discharge

73

Certain actions by debtor will preclude any discharge:

Received previous discharge...

Received previous discharge within 8 years of filing

74

Certain actions by debtor will preclude any discharge:

Unjustifiably failed to...

Failed to Keep adequate books and records

75

Certain actions by debtor will preclude any discharge:

Attempted to...

Attempted to hide assets within 1 year of filing

76

Certain actions by debtor will preclude any discharge:

Refusal to...2

1 refusal to explain a loss of assets or

2 refusal to obey a court order

77

Certain actions by debtor will preclude any discharge:

Making...

Making false oath or account

78

Even if a discharge is granted, certain...

Certain debts are not dischargeable

79

Even if discharge is granted, certain debts are non dischargeable, what is the neumonic

WAFTED

80

Even if discharge is granted, certain debts are non dischargeable, what does WAFTED stand for?

Willful
Alimony
Fraud
Taxes
Educational loans
Debts

81

Even if discharge is granted, certain debts are non dischargeable, WAFTED:

W

Debts from causing Willful and malicious injury to others

82

Even if discharge is granted, certain debts are non dischargeable, WAFTED:

A

Debts concerning Alimony and child support

83

Even if discharge is granted, certain debts are non dischargeable, WAFTED:

F

Debts resulting from fraud

84

Even if discharge is granted, certain debts are non dischargeable, WAFTED:

T

Taxes owed within 3 years of filing

85

Even if discharge is granted, certain debts are non dischargeable, WAFTED:

E

Educational loans

86

Even if discharge is granted, certain debts are non dischargeable, WAFTED:

D

Debts unscheduled by the debtor and creditor had no notice of bankruptcy

87

Even if discharge is granted, certain debts are non dischargeable.

3 other debts (aside from WAFTED)

1 theft

2 embezzlement

3 debt from SOX

88

Preferential transfers made to insider within 12 months may be...

2) They are not...

Set aside

2) not preferential payments

89

Insiders are...5

1 close blood relatives
2 officers
3 directors
4 controlling stockholders of corporations
5 general partners of partnerships

90

Taxes after 3 years of filing are...

Discharged by bankruptcy

91

Additional debts mentioned in text book that are not discharged by bankruptcy:

Loans for...

Loans for payment of federal taxes

92

Congress amended the bankruptcy code making it noted difficult for...

Student loans to be discharged in bankruptcy

93

Additional debts mentioned in text book that are not discharged by bankruptcy:

Government fines...

Government fines and penalties imposed within prior 3 years

94

Additional debts mentioned in text book that are not discharged by bankruptcy:

Any debt violation under...

Any debt violation under securities laws

95

Additional debts mentioned in text book that are not discharged by bankruptcy:

Debts owed to...3

1 pension plans

2 profit sharing plans or

3 similar employee plans

96

Additional debts mentioned in text book that are not discharged by bankruptcy:

Homeowner...3

1 Homeowner association

2 condo or

3 cooperative fees

97

Debts adjustment plans Chapter 13 deals with...

Individuals

98

Debts Adjustment Plans- Chapter 13:

Initiated when...

Debtor files voluntary petition in bankruptcy court

99

Creditors may not file involuntary petition under...

Ch. 13

100

Debts Adjustment Plans- Chapter 13:

Filing a petition...2

1 stays all collection and

2 straight bankruptcy proceedings against debtor

101

Debts Adjustment Plans- Chapter 13:

Debtor has...

Exclusive right to propose plan

102

Debts Adjustment Plans- Chapter 13:

Debtor has exclusive right to propose plan. If debtor does not file plan...

Creditors may force debtor into involuntary proceedings under
Ch. 7

103

Debts Adjustment Plans- Chapter 13:

Plan will be approved...

Approved or denied by court without approval of unsecured
creditors

104

Debts Adjustment Plans- Chapter 13:

Plan will be confirmed or denied by court without approval of unsecured creditors. However unsecured creditors must...

Receive as much as they would get under chapter 7

105

Debts Adjustment Plans- Chapter 13:

Unsecured creditors must receive as much as they would get under Ch. 7 and...2

1 either be paid in full, or

2 have all debtor's disposable income committed to plan

106

Debts Adjustment Plans- Chapter 13:

Plan may put claims in different classifications but may not...

Not Discriminate unfairly against any of designated classes

107

Debts Adjustment Plans- Chapter 13:

Each claimant within same classification must...

Receive same treatment

108

Debts Adjustment Plans- Chapter 13:

If debts to unsecured creditors are not paid in full, plan must...

Plan must commit to payments for 3 years

109

Debts Adjustment Plans- Chapter 13:

If debtor's monthly income exceeds the state's average median income, plan must...

Plan must make payment for 5 years

110

Court must appoint trustee in...

Ch. 13 cases

111

Debts Adjustment Plans- Chapter 13:

Debtor engaged in business may...

Continue to operate that business subject to limitations imposed
by court

112

Debts Adjustment Plans- Chapter 13:

Completion of plan...

Discharges debtor from debts dischargeable by law

113

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

Amends various parts of US Bankruptcy Code including...2

1 consumer bankruptcies and

2 business bankruptcies

114

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

Provisions under the new Act allow trade creditors to treat large portions, sometimes most or even all of...

Vendors' claims as being administrative expenses

115

Treating vendor's claims as administrative expenses...

Significantly increases their priority status

116

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

Creates a new bankruptcy code section at imposes limits on...2

1 limits on payment of severance pay or

2 limits on retention bonuses to key employees in a Ch. 11 case

117

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

Retention bonuses are only permitted if...

Key employees have good faith offers from other businesses at
Same or greater conpensation

118

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

For consumer cases, the time between discharges has been...

Increased

119

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

For consumer cases, the time between discharges has been increased so that the Bankruptcy Code will...2

1 Deny discharge to Ch 7 debtor

2 if that debtor received Ch 7 or Ch 11 in discharge in case filed
Within 8 years of pending case

120

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

For consumer cases, the time between discharges has been increased. Prior law said 6 years between...

Such discharges under Ch 7 and Ch. 11

121

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

Under the new act, Chapter 13 debtor's have a few different time limitations...

When combined with various chapters

122

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

Creates a new Chapter 15 of US Bankruptcy Code dealing with...

Cross border insolvency cases

123

Ch. 15 is meant to...

Make bankruptcy proceedings across international borders more functional

124

Ch. 15 favors and promotes...

cooperation and communication with both foreign courts and
Foreign representatives

125

In recent years, bankruptcy specialists have made much larger fees. Rising fees have elicited major objections coming from...3

1 federal watchdogs

2 organized labor

3 major creditors of bankrupt companies

126

A major complaint is that lawyers and other advisors have been...

Taking too many fees and leaving less money for others in the bankruptcy

Decks in Yaeger REG Class (77):