ch30

West's Business Law with Online Research Guide, 9th Edition

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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. 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 $290,525 or fixed secured debts of less than $871,550 may voluntarily petition the bankruptcy court for relief under Chapter 13 of the Bankruptcy Code. Ch. 30: Bankruptcy Law - No. 1 West’s Business Law (9th ed.)
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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.), and (4) a list of current income and expenses . Ch. 30: Bankruptcy Law - No. 2 West’s Business Law (9th ed.)
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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 $10,775. If the debtor has fewer than twelve creditors , the petition must be filed by one or more creditors having unsecured claims totaling at least $10,775. 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. Ch. 30: Bankruptcy Law - No. 3 West’s Business Law (9th ed.)
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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 knowingly violates the automatic stay, any party injured thereby is entitled to recover actual damages, costs, and attorneys’ fees from the violator. Adequate Protection: Ensures that a secured creditor’s security interest is not lost as a result of a debtor’s automatic stay. Ch. 30: Bankruptcy Law - No. 4
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ch30 - BANKRUPTCY OPTIONS Liquidation: The sale of all...

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