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CHAPTER 30 - Commercial Law Chapter 30 CHAPTER 30...

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Commercial Law- Chapter 30 CHAPTER 30 BANKRUPTCY LAW I. Bankruptcy Proceedings A. Introduction 1. Bankruptcy laws were introduced in the US has two goals: a. To protect debtor by giving him/her a fresh start, free from creditor’s claims b. To ensure equitable treatment to creditors who are competing for the debtor’s assets; equitable distribution of assets 2. Bankruptcy proceedings are held in “federal bankruptcy” courts B. The Role of the Bankruptcy Courts 1. The bankruptcy court fulfills the roles of an administrative court for the federal district court concerning matters in bankruptcy 2. Bankruptcy court: a. Holds proceedings dealing with procedures required to admin the debtor’s estate in bankruptcy b. Conduct a jury trial (if authorized) c. Court judges are federally appointed for fourteen year term C. Types of Bankruptcy Relief (Summary of entire chapter here!) 1. Title 11 of the US Code encompasses the Bankruptcy Code which has eight chapters 2. Chapters 1, 3, and 5 contains general information 3. Chapter 7 - provides for liquidation proceedings, the selling of all nonexempt assets and the distribution of the proceeds to the debtor’s creditors. 4. Chapter 9- governs the adjustment of a municipality’s debts 5. Chapter 11 - governs reorganizations 6. Chapter 12- provide the adjustment of debts by parties with regular income (family farmers and fishermen) 7. Chapter 13 - same as 12, but for individuals 8. Anyone obliged to a creditor can declare bankruptcy D. Special Treatment of Consumer-Debtors 1. Consumer-Debtor - a debtor whose debts result primarily from the purchase of goods for personal, family, or household use 2. To fully inform consumer-debtor: a. the clerk must fully give written notice of the general purpose, use, and cost of each Chapters of Bankruptcy b. provide informational materials on the types of services available form credit counseling agencies E. Bankruptcy Reform Act 1. Amended the law to make it difficult to receive a discharge in bankruptcy 2. Improved “means test” on debtor filing for bankruptcy 3. Trustee/Creditor can have case dismissed if substantial abuse is presumed (refer again later in chapter) J. Duong 1
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Commercial Law- Chapter 30 II. Chapter 7: Liquidation Proceedings A. Introduction 1. Often referred to as an ordinary or straight bankruptcy 2. The simple process: a.
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