Chapter 30 Bankruptcy law

Chapter 30 Bankruptcy law - BANKRUPTCY OPTIONS Liquidation:...

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BANKRUPTCY OPTIONS Liquidation: The sale of all nonexempt assets of a debtor and distribution of the proceeds to the debtor’s creditors, pursuant to Chapter 7 of the Bankruptcy Code. The availability of liquidation bankruptcy to consumer debtors has been sharply curtailed by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) , which took effect October 17, 2005. Reorganization: A form of bankruptcy, under Chapter 11 of the Bankruptcy Code, whereby a business debtor and its creditors formulate a plan under which the debtor repays a portion of its debts and is discharged from the remainder. Repayment: Individuals with regular income who owe fixed unsecured debts of less than $307,675 or fixed secured debts of less than $922,975 may voluntarily petition the bankruptcy court for relief under Chapter 13 of the Bankruptcy Code.
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VOLUNTARY BANKRUPTCY Voluntary Bankruptcy: A debtor who finds himself unable to pay debts as they become due may voluntarily petition for bankruptcy relief. The petition must contain (1) a list of all secured and unsecured creditors , their addresses, and the amount owed to each, (2) a statement of the debtor’s finances , (3) a list of all property (real and personal) owned by the debtor, including property claimed by the debtor to be exempt ( e.g. , homestead, etc.), (4) a list of current income and expenses , including an itemization of monthly income and proof of payments received from employers within 60 days of filing, (5) proof of pre-petition credit counseling (as required by the BAPCPA), and (6) a copy of the debtor’s federal income tax return for the most recent pre-petition tax year. “Means Testing”: BAPCPA restricts the availability of Chapter 7 liquidation to debtors whose family income exceeds the median family income for their state.
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INVOLUNTARY BANKRUPTCY Involuntary Bankruptcy: A debtor’s creditors may file a bankruptcy petition against the debtor. If the debtor has twelve or more creditors , the petition must be filed by three or more creditors having unsecured claims totaling at least $12,300. If the debtor has fewer than twelve creditors , the petition must be filed by one or more creditors having unsecured claims totaling at least $12,300. If the debtor challenges the bankruptcy, the court will hold a hearing and enter an order against the debtor if (1) the debtor is generally not paying debts as they become due , or (2) a receiver, custodian, or assignee took possession of, or was appointed to take charge of, substantially all of the debtor’s property within 120 days prior to the filing of the bankruptcy petition.
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AUTOMATIC STAY Automatic Stay: Once a bankruptcy petition is filed voluntarily or involuntarily, virtually all other litigation or other action by creditors or potential creditors against the debtor or the debtor’s property are suspended until the bankruptcy is resolved and the stay is lifted. If a creditor
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This note was uploaded on 01/17/2011 for the course POLITICAL 210 taught by Professor Amitage during the Spring '08 term at San Mateo Colleges.

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Chapter 30 Bankruptcy law - BANKRUPTCY OPTIONS Liquidation:...

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