Chapter 31: Bankruptcy Law

t/f. in certain circumstances, the bankruptcy court may NOT provide adequate protection by requiring the debtor or trustee to pay the creditor or provide additional guaranties to protect the creditor against the losses suffered by the creditor as a result of the stay.

false, YES it may provide this

t/f. To be enforceable, reaffirmation agreements must be made after the debtor is granted a discharge.

false, must be done before

t/f. the automatic stay can still go into effect even if the court determines that the petition was filed in ba faith/

false, no it may not

t/f. If a preferred creditor has sold the property to an innocent third party, the trustee cannot recover the property from the innocent party.

true

t/f. If one or more creditors file a petition to force the debtor into bankruptcy, the bankruptcy is involuntary.

true

t/f. If the court grants an order for relief, the debtor will be required to supply the same information in the bankruptcy schedules as in a voluntary bankruptcy.

true

t/f. The same principles that govern the filing of a liquidation (Chapter 7) petition apply to reorganization (Chapter 11) proceedings.

true

t/f. The trustee is held accountable for administering the debtor's estate

true

t/f. The trustee is required to promptly review all materials filed by the debtor to determine if there is substantial abuse.

true

t/f. To conceal assets or knowingly supply false information on chapter 7 schedules, is a crime under the bankruptcy laws.

true

what is a petition in bankruptcy?

The document that is filed with a bankruptcy court to initiate bankruptcy proceedings.

what is a cram-down provision?

A provision of the Bankruptcy Code that allows a court to confirm a debtor's Chapter 11 reorganization plan even though only one class of creditors has accepted it.

The request for a debtor to file a tax return at the end of each tax year, may be done at the request of either what 3 entities?

• The court • The U.S. trustee • Any party in interest

The proof of claim lists what 2 aspects?

• The creditor's name and address •The amount that the creditor asserts is owed to the creditor by the debtor

Workouts have several advantages which include what?

• They are much more flexible. • They are more conducive to a speedy settlement. • They avoid the various administrative costs of bankruptcy proceedings.

A debtor may not be permitted to claim the homestead exemption if she or he has engage in what 3 acts?

• Violated securities law • Been convicted of a felony • Engaged in certain other intentional misconduct

The Bankruptcy Code requires that the clerk of the court provide consumer-debtors with 2 things?

• Written notice of the general purpose, benefits, and costs of each chapter under which they might proceed • Information on the types of services available from credit counseling agencies

Article I, Section 8, of the U.S. Constitution gave Congress the power to establish what?

"uniform laws on the subject of bankruptcies throughout the United States."

in chapter 13, The limit for fixed secured debts is about how much?

$1.3 million.

in chapter 13, The limit for fixed unsecured debts is about how much?

$420,000.

a liquidation proceeding works in what 3 steps?

1. A debtor turns all assets over to a bankruptcy trustee. 2. The trustee sells the nonexempt assets and distributes the proceeds to creditors. 3. With certain exceptions, the debtor is granted a discharge of the remaining debts.

in chapter 7 schedules, the The voluntary petition must contain what 8 things?

1. A list of both secured and unsecured creditors, their addresses, and the amount of debt owed to each 2. A statement of the financial affairs of the debtor 3. A list of all property owned by the debtor, including property that the debtor claims is exempt 4. A list of current income and expenses 5. A certificate of credit counseling 6. Proof of payments received from employers within sixty days prior to the filing of the petition 7. A statement of the amount of monthly income, itemized to show how the amount is calculated 8. A copy of the debtor's federal income tax return for the most recent year ending immediately before the filing of the petition

The Bankruptcy Code exempts what 9 properties, up to a specified dollar amount that changes every three years?

1. A portion of equity in the debtor's home (the homestead exemption) 2. Motor vehicles, up to a certain value (usually just one vehicle) 3. Reasonably necessary clothing, household goods and furnishings, and household appliances (the aggregate value not to exceed a certain amount) 4. Jewelry, up to a certain value 5. Tools of the debtor's trade or profession, up to a certain value 6. A portion of unpaid but earned wages 7. Pensions 8. Public benefits, including public assistance (welfare), Social Security, and unemployment compensation, accumulated in a bank account 9. Damages awarded for personal injury up to a certain amount

Property that is not exempt under federal law includes what 6 things?

1. Bank accounts 2. Cash 3. Family heirlooms 4. Collections of stamps and coins 5. Second cars 6. Vacation homes

Four chapters set forth the most important types of relief that debtors can seek, these chapters are what?

1. Chapter 7 provides for liquidation proceedings. 2. Chapter 11 governs reorganizations 3. Chapters 12 (for family farmers and family fisherman) and 13 (for individuals) provide for the adjustment of debts by persons with regular incomes.

Claims that are not dischargeable in bankruptcy include what 15 circumstances?

1. Claims for back taxes accruing within two years prior to bankruptcy 2. Claims for amounts borrowed by the debtor to pay federal taxes or any non dischargeable taxes 3. Claims against property or funds obtained by the debtor under false pretenses or by false representations4. Claims by creditors who were not notified of the bankruptcy 5. Claims based on fraud or misuse of funds by the debtor while acting in a fiduciary capacity or claims involving the debtor's embezzlement or larceny 6. Domestic-support obligations and property settlements as provided for in a separation agreement or divorce decree 7. Claims for amounts due on a retirement account loan 8. Claims based on willful or malicious conduct by the debtor toward another or the property of another 9. Certain government fines and penalties 10. Student loans, unless payment of the loans imposes an undue hardship on the debtor and the debtor's dependents 11. Consumer debts of more than a specified amount ($725 in 2021) for luxury goods or services owed to a single creditor incurred within ninety days of the order for relief 12. Cash advances totaling more than a threshold amount ($1,000 in 2021) that are extensions of open-end consumer credit obtained by the debtor within seventy days of the order for relief 13. Judgments against a debtor as a result of the debtor's operation of a motor vehicle while intoxicated 14. Fees or assessments arising from property in a homeowners' association, as long as the debtor retained an interest in the property 15. Taxes with respect to which the debtor failed to provide required or requested tax documents

The estate in bankruptcy includes what 3 terms?

1. Community property (property jointly owned by married persons in certain states) 2. Property transferred in a transaction voidable by the trustee 3. Proceeds and profits from the property of the estate

The Code provides several exceptions to the automatic stay, which include what 4 things?

1. Domestic-support obligations, including any debt owed to or recoverable by: • A spouse • A former spouse • A child of the debtor • That child's parent or guardian • A governmental unit 2. Proceedings against the debtor related to: • Divorce • Child custody or visitation • Domestic violence • Support enforcement 3. Investigations by a securities regulatory agency 4. Certain statutory liens for property taxes

In addition to dismissing a debtor's voluntary petition for Chapter 7 relief for substantial abuse or for failure to provide the necessary documents within the specified time, a court might dismiss a Chapter 7 if the debtor does what 2 things?

1. Has been convicted of a violent crime or a drug-trafficking offense 2. Fails to pay post petition domestic-support obligations (which include child and spousal support)

For an involuntary action to be filed, what 2 requirements must be met?

1. If the debtor has twelve or more creditors, three or more of these creditors having unsecured claims totaling at least $16,750 must join in the petition. 2. If a debtor has fewer than twelve creditors, one or more creditors having a claim totaling $16,750 or more may file.

If the debtor challenges the involuntary petition, a hearing will be held, and the bankruptcy court will enter an order for relief if it finds what 2 circumstances to be true?

1. The debtor is not paying debts as they come due. 2. A general receiver, assignee, or custodian took possession of, or was appointed to take charge of, substantially all of the debtor's property within 120 days before the filing of the petition.

Grounds for denial of discharge by a bankruptcy court based on the debtor's conduct include what 5 conditions?

1. The debtor's concealment of destruction of property with the intent to hinder, delay, or defraud a creditor 2. The debtor's fraudulent concealment or destruction of financial records 3. The grant of a discharge to the debtor within eight years before the petition was filed 4. The debtor's failure to complete the required consumer education course 5. The debtor's involvements in proceedings in which the debtor could be found guilty of a felony

A plan of rehabilitation by repayment must provide for the following what 3 circumstances?

1. The turning over to the trustee of such future earnings or income of the debtor as is necessary for execution of the plan 2. Full payment through deferred cash payments of all claims entitled to priority, such as taxes 3. Identical treatment of all claims within a particular class

Bankruptcy law in the United States has two main goals which are what?

1. To protect a debtor by giving him or her a fresh start without creditors' claims 2. To ensure equitable treatment of creditors who are competing for a debtor's assets

A trustee may avoid fraudulent transfers or obligations if they were made under what 2 circumstances?

1. Within two years prior to the filing of the petition 2. With actual intent to hinder, delay, or defraud a creditor

If a small-business debtor chooses to avoid a creditors' committee, the time for the debtor's filing is how many days?

180 days.

what is an order for relief

A court's grant of assistance to a complainant.

what is a preferred creditor?

A creditor who has received a preferential transfer from a debtor.

what is the main function of a discharge?

A discharge voids, or sets aside, any judgment on a discharged debt and prevents any action to collect it.

what is the adequate protection doctrine?

A doctrine that protects secured creditors from losing their security as a result of an automatic stay.

what conditions constitute a family farmer?

A family farmer is one whose: • Gross income is at least 50 percent farm dependent. • Debts are at least 50 percent farm related. • Total debt for a family farmer must not exceed a specified amount (around $4.2 million in 2019)

what constitutes a family fisherman?

A family fisherman is one whose: • Gross income is at least 50 percent dependent on commercial fishing operations. • Debts are at least 80 percent related to commercial fishing. • Total debt for a family fisherman must not exceed a certain amount (around $2 million in 2021)

what is a workout agreement?

A formal contract between a debtor and his or her creditors in which the parties agree to negotiate a payment plan for the amount due on the loan instead of proceeding to foreclosure.

what is a U.S trustee?

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

what is meant by a party in interest?

A party in interest is a party who has a valid interest in the outcome of the proceedings

what is a bankruptcy trustee?

A person appointed by the court to manage the debtor's funds in a bankruptcy proceeding.

what is preference?

A property transfer or payment made by a debtor that favors one creditor over others.

what is reaffirmation assignment?

An agreement between a debtor and a creditor in which the debtor voluntarily agrees to pay a debt dischargeable in bankruptcy.

what is an insider?

An individual, partner, partnership, corporation, or officer or director of a corporation (or a relative of one of these) who has a close relationship with the debtor.

An individual with regular income who owes debts not exceeding specified amounts may file for what type of repayment plan?

Chapter 13 repayment plan

If the debtor's income is below the median income, the debtor usually is allowed to file for what?

Chapter 7 bankruptcy.

what is a debtor in possession?

In Chapter 11 bankruptcy proceedings, a debtor who is allowed to continue in possession of the estate in property (the business) and to continue business operations.

what is meant by automatic stay?

In bankruptcy proceedings, the suspension of almost all litigation and other action by creditors against the debtor or the debtor's property.

what is a consumer-debtor?

One whose debts result primarily from the purchase of goods for personal, family, or household use.

what is discharge?

The termination of a bankruptcy debtor's obligation to pay debts.

Bankruptcy proceedings are held in federal bankruptcy courts, which are under the authority of who?

U.S. district courts.

A bankruptcy court can dismiss a Chapter 7 petition if the use of Chapter 7 constitutes what?

a "substantial abuse" of bankruptcy law

Debtors filing a Chapter 7 petition must include what?

a certificate proving that they have received individual or group counseling from an approved agency within the last 180 days.

Generally, the filing of a bankruptcy petition fixes what?

a dividing line.

Promptly after the order for relief in the liquidation proceeding has been entered, who is appointed?

a trustee is appointed.

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

adequate protection

On the commencement of a liquidation proceeding under Chapter 7, what is created?

an estate in bankruptcy (sometimes called an estate in property) is created

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

an order for relief

If a creditor knowingly violates the automatic stay (a willful violation), what is true for the injured party's remedies?

any injured party, including the debtor, is entitled to recover actual damages, costs, and attorneys' fees. Punitive damages may be awarded as well.

If the debtor had two or more bankruptcy petitions dismissed during the prior year, the Code presumes what?

bad faith

how is disposable income calculated?

by subtracting living expenses and secured debt payments, such as mortgage payments, from monthly income

to enable the trustee to accomplish this duty (administering the debtor's estate), the Code gives the trustee what?

certain powers, stated in both general and specific terms. these powers must be exercised within two years of the order for relief.

The automatic stay normally continues until the bankruptcy proceeding is what?

closed or dismissed.

The basic duty of the trustee is to do what?

collect the debtor's available estate and reduce it to cash for distribution, preserving the interests of both the debtor and the unsecured creditors.

The law now requires that before debtors can file a petition, they must receive what?.

credit counseling from an approved nonprofit agency within the 180-day period preceding the date of filing

When a fraudulent transfer is made outside the Code's two-year limit, what are creditor's entitled to

creditors may seek alternative relief under state laws

The trustee has the power to require persons holding the debtor's property at the time the petition is filed to do what?

deliver the property to the trustee.

The Bankruptcy Code is contained in Title 11 of the United States Code and has how many chapters?

eight chapters.

t/f. The automatic stay prohibits creditors from taking any act to collect, assess, or recover a claim against the debtor that arose after the filing of the petition.

false, that rose BEFORE

t/f. When the debtor has no assets—called a "no-asset case"—creditors are notified of the debtor's petition for bankruptcy but are still instructed to file a claim.

false, they are instructed to not file a claim

t/f. Each class, or group, does not have to be fully paid before the next class is entitled to any of the remaining proceeds

false, they must be fully paid!

t/f. The Code does NOT provide penalties for the filing of frivolous petitions against debtors.

false, yes it does

t/f. The trustee is NOT allowed to recover payments made both voluntarily and involuntarily to one creditor in preference over another.

false, yes it is allowed to do this

t/f. if the petition was filed in bad faith, Punitive damages may NOT be awarded.

false, yes that may

t/f. railroads are not eligible for chapter 11 relief/

false, yes they are

An individual is NOT entitled to exempt (exclude) certain property from a Chapter 7 bankruptcy.

false, yes they are allowed to do this!

t/f. The preferred creditor, however, generally cannot be held liable for the value of the property.

false, yes they can be

t/f. A husband and wife may NOT file jointly for bankruptcy under a single petition.

false, yes they may

who does chapter 12 cover?

family farmers and family fisherman

Bankruptcy relief is provided under what law?

federal law

Most courts generally assume that payment for services rendered within how many days before the payment, is not a preference?

fifteen days

The automatic stay on secured property terminates when?

forty-five days after the creditors' meeting unless the debtor redeems or reaffirms certain debts.

Bankruptcy court judges are appointed for terms of how long?

fourteen years.

Bankruptcy law establishes an order of priority for debts owed to unsecured creditors, and they are paid in what order?

in the order of their priority.

who does chapter 13 cover?

individuals

If the petition was filed in bad faith, damages can be awarded for what?

injury to the debtor's reputation.

what does chapter 7 provide?

liquidation proceedings.

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

ninety days

t/f. Federal bankruptcy legislation was first enacted in 1898 and since then has undergone several modifications, most recently in the 2005 Bankruptcy Reform Act.

true

To be entitled to receive a portion of the debtor's estate, each creditor normally files a proof of claim with the bankruptcy court within how many days?

ninety days of the creditors' meeting.

From the debtor's point of view, the primary purpose of liquidation is to accomplish what?

obtain a fresh start through a discharge of debts.

To bring a voluntary petition in bankruptcy, the debtor files what?

official forms designated for that purpose in the bankruptcy court.

A debtor is not permitted to transfer property or to make a payment that favors—or gives a preference to who?

one creditor over others.

what does chapter 11 govern?

reorganizations

The debtor has up to how many days before the date of the first creditors' meeting to provide a copy of the most recent tax returns to the trustee.

seven days

If a creditor or other party requests relief from the stay, the stay will automatically terminate when?

sixty days after the request, unless the court grants an extension or the parties agree otherwise.

Congress has established a "fast-track" Chapter 11 procedure for who?

small-business debtors whose liabilities do not exceed a specified amount (about $2.7 million) and who do not own or manage real estate.

t/f. If a debtor files the petition, the bankruptcy is voluntary

true

Within how many days after the first meeting of the creditors, must the trustee file a statement indicating whether the case is presumed to be an abuse under the means test.

ten days

Federal bankruptcy laws are called what?

the Bankruptcy Code or, more simply, the Code.

The type of bankruptcy proceeding most commonly used by corporate debtors is what?

the Chapter 11 reorganization.

what is strong-arm power?

the Code provides that the trustee has rights equivalent to those of certain other parties, such as a creditor who has a judicial lien

Bankruptcy courts follow the Federal Rules of Bankruptcy Procedure rather than what?

the Federal Rules of Civil Procedure.

The law attempts to balance the rights of who?

the debtor and of the creditors

The automatic stay is effective the moment that what?

the debtor files a petition in bankruptcy

An involuntary bankruptcy occurs when ?

the debtor's creditors force the debtor into bankruptcy proceedings.

Rulings from bankruptcy courts can be appealed to who?

the district courts.

A straight bankruptcy can be commenced by what?

the filing of either a voluntary or an involuntary petition in bankruptcy.

Only the debtor may file a plan within how many days after the date of the order for relief

the first 120 days. This period may be extended, but not beyond eighteen months from the date of the order for relief.

The Bankruptcy Code limits the amount of equity that can be claimed under what exemption?

the homestead exemption.

In bankruptcy proceedings, the order relieves the debtor of what?

the immediate obligation to pay the debts listed in the bankruptcy petition.

With the means test, the debtor's average income in recent months is compared with what?

the median income in the geographic area in which the person lives.

If there are insufficient proceeds to fully pay all the creditors in a class, how are the proceeds distributed?

the proceeds are distributed proportionately to the creditors in that class

what s liquidation?

the sale of the nonexempt assets of a debtor and the distribution of the funds received to creditors.

what is the purpose of the Means Test?

to keep upper-income people from abusing the bankruptcy process by filing for Chapter 7.

T/f. the debtor must begin making payments under the proposed plan within thirty days after the plan has been filed and must continue to make "timely" payments.

true

T/f. to enable the trustee to implement this power, the Code provides that the trustee has rights equivalent to those of certain other parties, such as a creditor who has a judicial lien

true

t//f. If the debtor owes a domestic-support obligation, the trustee must provide written notice of the bankruptcy to the claim holder.

true

t/f Any debtor (except a stockbroker or a commodities broker) who is eligible for Chapter 7 relief is eligible for relief under Chapter 11.

true

t/f In almost all Chapter 7 bankruptcies, the funds will be insufficient to pay all creditors.

true

t/f. A bankruptcy court can conduct a jury trial if the appropriate district court has authorized it and the parties to the bankruptcy consent.

true

t/f. A debtor (except for a municipality) need not be insolvent to file for bankruptcy relief under the Bankruptcy Code.

true

t/f. A debtor cannot retain secured property while continuing to pay without entering into a reaffirmation agreement.

true

t/f. A debtor may be required to file a tax return at the end of each tax year while the case is pending and to provide a copy to the court.

true

t/f. A debtor wishing to file for bankruptcy must complete the means test to determine whether she or he qualifies for Chapter 7.

true

t/f. A discharge may be revoked within one year if it is discovered that the debtor acted fraudulently or dishonestly during the bankruptcy proceeding.

true

t/f. A partnership or close corporation that is at least 50 percent owned by the farmer or fisherman's family can qualify as a family farmer or family fisherman.

true

t/f. A reaffirmation agreement that is not accompanied by the original signed disclosures will not be effective.

true

t/f. A secured creditor or other party in interest can petition the bankruptcy court for relief from the automatic stay.

true

t/f. Although state laws may play a role in bankruptcy proceedings, particularly state property laws, the governing law is based on federal legislation.

true

t/f. Any "person"—defined as including individuals, partnerships, and corporations—may be a debtor in a liquidation proceeding

true

t/f. Any reason that a debtor can use to obtain the return of her or his property can be used by the trustee as well.

true

t/f. Anyone obligated to a creditor can declare bankruptcy.

true

t/f. Businesses with debts of less than a specified amount that do not own or manage real estate can avoid creditors' committees.

true

t/f. Certain debts, however, are not dischargeable in bankruptcy.

true

t/f. Chapters 1, 3, and 5 of the bankruptcy code contain general definitional provisions, as well as provisions governing case administration, creditors, the debtor, and the estate.

true

t/f. Claims for domestic-support obligations, such as child support and alimony, have the highest priority among unsecured creditors, so these claims must be paid first.

true

t/f. If the debtor acquired the homestead within three and a half years preceding the date of filing, the maximum equity exempted is $170,350, even if state law would permit a higher amount.

true

t/f. In no-asset cases, the unsecured creditors will receive no payment, and most, if not all, of these debts will be discharged.

true

t/f. In putting together a repayment plan, a debtor must apply the means test to identify the amount of disposable income that will be available to repay creditors.

true

t/f. Individual states have the power to pass legislation precluding debtors from using the federal exemptions within the state.

true

t/f. Not all transfers are preferences.

true

t/f. Once a Chapter 11 petition has been filed, a bankruptcy court can dismiss or suspend proceedings at any time if dismissal or suspension would better serve the interests of the creditors.

true

t/f. Partnerships and corporations are excluded from filing a Chapter 13 plan.

true

t/f. Property acquired after the filing of the petition remains the debtor's.

true

t/f. Property acquired prior to the filing of the petition becomes property of the estate.

true

t/f. Repayment plans are less expensive and less complicated than reorganization or liquidation proceedings.

true

t/f. Sometimes, the creditor receiving the preference is an insider.

true

t/f. The D I P's role is similar to that of a trustee in a liquidation bankruptcy.

true

t/f. The automatic stay on secured debts will terminate thirty days after the petition is filed if the debtor filed a bankruptcy petition that was dismissed within the prior year.

true

t/f. The debtor cannot keep the secured property, even if she or he continues to make payments on it, without reinstating the rights of the secured party to collect on the debt.

true

t/f. The law provides that confirmation of a plan does not discharge an individual debtor.

true

t/f. To discourage creditors from engaging in abusive reaffirmation practices, the law provides specific language for disclosures that must be given to debtors entering into reaffirmation agreements.

true

t/f. With the exception of tax returns, failure to file the required schedules within forty-five days after the filing of the petition will result in an automatic dismissal of the petition.

true

t/f. Within forty days after the order for relief has been granted, the trustee must call a meeting of the creditors listed in the schedules filed by the debtor.

true

t/f. if the court dismisses an involuntary petition, the petitioning creditors may be required to pay the costs and attorneys' fees incurred by the debtor in defending against the petition

true

t/f. the Code also allows a court, after notice and a hearing, to dismiss a case under reorganization "for cause" when there is no reasonable likelihood of rehabilitation

true

t/f. the test forces more people to file for Chapter 13 bankruptcy rather than have their debts discharged under Chapter 7.

true

t/f. the trustee has specific powers of avoidance that enable the trustee to set aside (avoid) a sale or other transfer of the debtor's property and take the property back for the debtor's estate.

true

Once a consumer-debtor's voluntary petition has been filed, the trustee and creditors must be given notice of the order for relief by mail not more than how days after entry of the order.

twenty days

The state homestead exemption is available only if the debtor has lived in a state for how long?

two years before filing the bankruptcy petition.

An involuntary case cannot be filed against who?

• A charitable institution • A farmer (an individual or business that receives more than 50 percent of gross income from farming operations)

the trustee's avoidable power apply to what?

• Avoidable rights available to the debtor • Preferences • Fraudulent transfers by the debtor

in a chapter 7 schedule The official forms must be what 3 things?

• Completed accurately • Sworn to under oath • Signed by the debtor

A consumer-debtor who is filing for liquidation bankruptcy must do what 2 things?

• Confirm the accuracy of the petition's contents • State in the petition, at the time of filing, that he or she understands the relief available under other chapters of the Code and has chosen to proceed under Chapter 7

If the debtor fails to make timely payments or to commence payments within the thirty-day period, the court can either do what 2 things?

• Convert the case to a Chapter 7 bankruptcy • Dismiss the petition

Before the court can exercise the right of cram-down confirmation, it must be demonstrated that the plan meets what 2 conditions?

• Does not discriminate unfairly against any creditors • Is fair and equitable

what does the "fast-track" amenity allow for?

• Enables a debtor to avoid the appointment of a creditors' committee • Shortens the filing periods • Relaxes certain other requirements • Is less costly

When there is a presumption of abuse, the trustee must either follow what 2 rules?

• File a motion to dismiss the petition (or convert it to a Chapter 13 petition) • File a statement explaining why a motion would not be appropriate

Attorneys representing consumer-debtors must do what 2 things?

• File an affidavit stating that they have informed the debtors of the relief available under each chapter of the Bankruptcy Code • Reasonably attempt to verify the accuracy of the consumer-debtors' petitions and schedules

Voidable rights include grounds in what?

• Fraud • Duress • Incapacity • Mutual mistake

certain after-acquired property to which the debtor becomes entitled within 180 days after filing may become part of the estate, such as what objects?

• Gifts • Inheritances • Property settlements (from divorce) • Life insurance death proceeds

what is the debtor in possession entitled to do?

• Is entitled to avoid preferential payments made to creditors and fraudulent transfers of assets • Can exercise a trustee's strong-arm powers • Has the power to decide whether to cancel or assume prepetition executory contracts (contracts that are not yet performed) or unexpired leases

what is true about Liquidation under Chapter 7 of the Bankruptcy Code?

• Is probably the most familiar type of bankruptcy proceeding • Is often referred to as ordinary, or straight, bankruptcy

who cannot be debtors in a liquidation bankruptcy?

• Railroads • Insurance companies • Banks • Savings and loans associations • Investment companies licensed by the Small Business Administration• Credit unions

Among those eligible for chapter 13 are?

• Salaried employees • Sole proprietors • Individuals who live on: • Welfare • Social Security • Fixed pensions • Investment income

The original disclosure documents must meet what 3 conditions?

• Signed by the debtor • Certified by the debtor's attorney • Filed with the court at the same time as the reaffirmation agreement

The reaffirmation agreement must disclose what 4 things?

• The amount of the debt reaffirmed • The rate of interest • The date payments begin • The right to rescind

in a reorganization plan, it can be modified on the request of who?

• The debtor • The D I P • The trustee • The U.S. trustee • A holder of an unsecured claim

A Chapter 13 repayment plan case can be initiated only by what 2 ways?

• The debtor's filing of a voluntary petition • Court conversion of a Chapter 7 petition