Business Law - Chapter 31

Bankruptcy courts follow the ___rather than the Federal Rules of Civil Procedure.

Federal Rules of Bankruptcy Procedure

Chapter ___ of the Bankruptcy Code provides for "Adjustment of Debts of an Individual with Regular Income".

13

The means test forces more people to file for Chapter ___ bankruptcy rather than have their debts discharged under Chapter 7.

13

In addition to bankruptcy relief through liquidation and reorganization, the Code also provides for individuals' repayment plans (Chapter __) and family-farmer and family-fisherman debt adjustments (Chapter__)

13, 12

A ___ is a government official who performs administrative tasks that a bankruptcy judge would otherwise have to perform.

U.S. trustee

The ___ doctrine, among other things, protects secured creditors from losing their security as a result of the automatic stay.

adequate protection

Underlying the Code's automatic-stay provision for a secured creditor is a concept known as ___.

adequate protection

To be recoverable, a preference must be a transfer for an ___ debt.

antecedent

The moment a petition, either voluntary or involuntary, is filed, an ___, or suspension, of all actions by creditors against the debtor or the debtor's property normally goes into effect.

automatic stay

A ___ is a person appointed by the court to manage the debtor's funds.

bankruptcy trustee

An involuntary bankruptcy case cannot be filed against a ___ or a __.

charitable institution, farmer

In addition to the standard exceptions to discharge of debts, a bankruptcy court may also deny a discharge based on the debtor's __.

conduct

A ___ is a debtor whose debts result primarily from the purchase of goods for personal, family, or household use.

consumer-debtor

Even if only one class of creditors has accepted a reorganization plan, the court may still confirm the plan under the Code's so-called ___ provision.

cram-down

The law now requires that before debtors can file a petition in bankruptcy, they must receive ___ from an approved nonprofit agency within the 180-day period preceding the date of filing.

credit counseling

Not all transfers are preferences. To be a preference, the transfer must be made for something other than ___.

current consideration

DIP stands for __.

debtor in possession

On entry of the order for relief, the debtor generally continues to operate the business as a ___.

debtor in possession

To be enforceable, reaffirmation agreements must be made before the debtor is granted a ___.

discharge

Bankruptcy proceedings are held in federal bankruptcy courts, which are under the authority of the U.S. ___ courts.

district

Collection efforts after petition can continue for ___, which include any debt owed to or recoverable by a spouse, a former spouse, a child of the debtor, that child's parent or guardian, or a governmental unit.

domestic-support obligations

Confirmation of a reorganization plan is conditioned on the debtor's certifying that all postpetition ____have been paid in full.

domestic-support obligations

The inability to pay debts as they become due is known as ___ insolvency.

equitable

On the commencement of a liquidation proceeding under Chapter 7, an ___ (sometimes called an estate in property) is created.

estate in bankruptcy

For purposes of Chapter 12, a ___ is one whose gross income is at least 50% farm dependent an whose debts are at least 50% farm-related.

family farmer

Bankruptcy relief is provided under ___ law.

federal

Most courts generally assume that payment for services rendered within ___ days before the payment is not a preference.

fifteen

An ___ is an individual, partner, partnership, corporation, or officer or director of a corporation who has a close relationship with the debtor.

insider

The Code presumes that the debtor is ___ during the ninety-day period before filing a petition.

insolvent

The Code requires that consumer-debtors file a statement of ___ with respect to the secured collateral.

intention

If creditors file the petition in bankruptcy it is an ___ bankruptcy.

involuntary

Railroads, insurance companies, banks, savings and loan associations, investment companies licensed by the SBA and credit unions cannot be debtors in a ___ bankruptcy.

liquidation

Today, the law provides a ___ to determine a debtor's eligibility for Chapter 7.

means test

If the debtor's income is below the ___, the debtor usually is allowed to file for Chapter 7 bankruptcy, as there is no presumption for bankruptcy abuse.

median income

A debtor, except for a ___, need not be insolvent to file for bankruptcy relief under the Bankruptcy Code.

municipality

To have made a recoverable preferential payment, an insolvent debtor must have transferred property, for a preexisting debt, within ___ days before the filing of the bankruptcy petition.

ninety

In a situation involving an insider, the avoidance power of the trustee extends to transfers made ___ before filing.

one year

An ___ is a court's grant of assistance to a petitioner.

order for relief

If the voluntary petition for bankruptcy is found to be proper, the filing of the petition itself will constitute an __.

order of relief

Attorneys must reasonably attempt to verify the accuracy of consumer-debtors petitions and schedules, as failure to do so is considered __.

perjury

A ___ is the document that is filed with a bankruptcy court to initiate bankruptcy proceedings.

petition in bankruptcy

A straight bankruptcy can be commenced by the filing of either a voluntary or involuntary ___.

petition in bankruptcy

The trustee's ___ allows him/her to set aside a sale or other transfer of the debtor's property and take the property back for the debtor's estate.

powers of avoidance

If a ___ (one who has received a preferential transfer from the debtor) has sold the property to an innocent third party, the trustee cannot recover the property from the innocent party, but they generally can recover the value of the property.

preferential creditor

To be entitled to receive a portion of the debtor's estate, each creditor normally files a ___ with the bankruptcy court clerk within ninety days of the creditor's meeting.

proof of claim

An agreement to pay a debt dischargeable in bankruptcy is called a ___.

reaffirmation agreement

Businesses with debts of less than $2.4 million that do not own or manage ___ can avoid creditors' committees.

real estate

In a ___, the creditors and the debtor formulate a plan under which the debtor pays a portion of the debts and is discharged of the remainder.

reorganization

The type of bankruptcy proceeding most commonly used by corporate debtors is the Chapter 11 ___.

reorganization

If a creditor or other party requests relief from a stay, the stay will automatically terminate ___ days after the request, unless the court grants an extension or the parties agree otherwise.

sixty

Any debtor except a ___ or a ___ who is eligible for Chapter 11 relief is eligible for relief under Chapter 11.

stockbroker, commodities broker

The DIP's role is similar to that of a ___in a liquidation.

trustee

A class has accepted the plan when a majority of the creditors, representing ___ of the amount of the total claim, vote to approve it.

two-thirds

As soon as practicable after the entry of the order for relief, a creditors' committee of____ is appointed.

unsecured creditors

In some instances, to avoid bankruptcy proceedings, creditors may prefer private, negotiated adjustments of creditor-debtor relations, also known as ___.

workouts