R7 Bankruptcy
RIBS BIBS What do these mean?
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What does the "means test? say?
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What is an automatic stay? When does it not apply?
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What is the order of the distribution of a debtor's estate?
1. Secured claimants 2. Priority claimants (SAG WEG CTI) 3. General creditors
What is Chapter 13 (for individuals only)? Is a trustee required? Are debts wiped out?
Adjustment of debts of individuals with Regular Income Yes No, payment time is extended
Is property the debtor receives from divorce, inheritance,or insurance within 180 days after filing the petition included in the estate? Does the bankruptcy estate also include any income generated by the estate property (rents dividends and interest) after the petition is filed? Does it include earned income?
DII yes no
What is WAFTED?
Debts that follow you forever. Willful and mailicious injury Alimony Fraud, Fines to government Taxes Educational loans Debts undisclosed in bankruptcy proceeding
What are the requirments to be able to file Ch 7? What is the "means test"?
If net current monthly income is less than $7,025 - Ch. 7 is permitted If net current monthly income more than $11,725 - Ch. 7 not permitted If inbetween $7,025 and $11,725 - Ch 7 is ok if net income is less than 25% of unsecured claims
Voluntary vs. unvoluntary Cases... In a voluntary Ch 7 or 11, must a debtor be insolvent?
No. He may also be in a situation where he's unable to pay his debts as they become due. Liabilities do not need to be greater than assets.
What is Chapter 11? Is a trustee required?
Reorganization no, but court will appoint one if needed
What is SAG WEG CTI?
Spouse and children Administrative expenses Gap claims involuntary case Wage claims up to $11,725 - if earned within 180 days prior to filing Employee benefit plans up to 11,725 - if earned within 180 days prior to filing, reduced by wage claims Grain farmers and fishermen up to $5775 Consumer deposits up to $2,600 Tax claims Injury claims - personal - arising from intoxicated driving
What is a preferential payment?
When a petition is filed, trustee can go back up to 90 days or up to1 year (if creditor is insider) to find transfers of money for a greater share than what they should've gotten.
What is an "automatic order for relief"?
When a voluntary petition is filed, it constitutes "an order for relief", where all creditors must stop contacting you and a case can proceed
What is an involuntary case gap?
When an involuntary petition is filed, an order of relief is not granted right away. There is a gap between the filing and the order of relief called the "involuntary case gap". the court will enter an order for relief if the debtor does not object to the petition within 20 days.
In an involuntary case, who must join the petition?
With fewer than 12 creditors, 1 or more creditors owed $14,425 in unsecured debt may file. With more than 12 creditors, at least 3 creditors who are owed $14,425 in aggregate in unsecured, undisputed debt must file.
What is an automatic stay?
it stops almost all collections efforts in either a voluntary petition or involuntary petition
What is Chapter 7? For... I, P, C Is a trustee required? Are debts wiped out?
liquidation Yes Yes
In a Chapter 11 reorganization, is there a trustee? Can it be voluntary or involuntary?
no yes
A trustee is a hypothetical lien creditor as of filing date. The trustee is treated as having a lien on all of the debtor's property the instant the bankruptcy petition is filed. this means that the trustee has priority over all creditors except creditors with prior perfected security interests or prior statutory or judicial liens.
true
When there is an involuntary case gap, are persons who become creditors of the debtor during the involuntary case gap period given high priority in recovering against the debtor's estate?
yes