Bankruptcy Concepts and Insights

Questions and Answers

A Chapter 13 bankruptcy plan must provide for:

The surrender of all collateral to the creditors. (correct)

The payment of 100 percent of all obligations in full.

The turnover of the debtor's future income to the trustee.

The completion of all payments to all creditors within six years.

In bankruptcy under Chapter 11, Natural Resources, Inc. (NRI) assumes the role of a debtor in possession. This role is similar to a:

Trustee in a liquidation proceeding under Chapter 7. (correct)

Family farmer after a discharge under Chapter 12.

Creditor at a Chapter 7 creditors' meeting.

Secured creditor in possession of collateral under Chapter 13.

As to Andrea Law Firm's Chapter 11 plan to reorganize its debts:

A court may refuse to confirm it only if it is not in the best interests of the creditors.

A court may confirm it even if the debtor does not certify that all post petition domestic-support obligations have not been paid in full.

A court may confirm it even if only one class of creditors have accepted it if the plan is fair and equitable. (correct)

A court may confirm it if less than a majority of all classes of creditors vote to approve it.

Unlike a mechanic's lien, an artisan's lien is:

Possessory. Signup and view all the answers

In Chapter 11 bankruptcy proceedings, a debtor allowed to continue in possession of the business is a:

Debtor in possession. Signup and view all the answers

The amount included in the property of Goulding's estate was most likely:

$272,000, the total amount he would receive from the trusts within 180 days (six months) after filing. Signup and view all the answers

In Chapter 11 bankruptcy, a reorganization plan is established to conserve and administer assets in the hope that the business can eventually:

Return to successful operation and solvency. Signup and view all the answers

As a debtor in possession, ALF can choose whether to cancel or assume unexpired leases.

True Signup and view all the answers

Study Notes

Chapter 13 Bankruptcy Key Concepts

A Chapter 13 bankruptcy plan requires the surrender of all collateral to creditors.
Debtor in possession under Chapter 11 functions similarly to a trustee in a Chapter 7 liquidation proceeding.

Chapter 11 Bankruptcy Insights

Courts can confirm a Chapter 11 reorganization plan even if it's accepted by only one class of creditors, provided the plan is fair and equitable.
In Chapter 11, a debtor who maintains possession of their business is termed as a debtor in possession.

Artisan's lien vs. Mechanic's lien

An artisan's lien is classified as possessory, contrasting with the nature of a mechanic's lien.

Bankruptcy Asset Assessment

In a Chapter 7 filing, assets from irrevocable spendthrift trusts are included in the bankruptcy estate, amounting to $272,000 if income and future payments are considered.

Objectives of Chapter 11

Chapter 11 reorganization aims for the business to return to successful operation and solvency, rather than just selling assets or merging.

Lease Management in Bankruptcy

A debtor in possession (like the Andrea Law Firm) has the authority to cancel or assume unexpired leases without needing creditor committee approval.

Description

Explore the key concepts of Chapter 13 and Chapter 11 bankruptcy, including asset assessments and lien types. This quiz covers crucial aspects of bankruptcy law and its implications for debtors and creditors. Test your understanding of these vital topics in bankruptcy procedures.