Bankruptcy Flashcards

Questions and Answers

What is bankruptcy?

Federal jurisdiction, constitution, Article 1, bankruptcy code. Always filed in bankruptcy court, adjunct to district court.

If you don't fill out the bankruptcy petition fully, your case can be thrown out of court.

True

What does the term 'the bankrupt' or 'the debtor' refer to?

The person or business seeking protection under the Bankruptcy Code.

What is a bankruptcy petition?

Documents filed with the Bankruptcy Court to start the process. Signup and view all the answers

Who is considered a creditor?

The person or business organization that is owed money by the bankrupt. Signup and view all the answers

What are assets in the context of bankruptcy?

Anything of value that belongs to the bankrupt. Signup and view all the answers

What is an automatic stay?

A law that prohibits creditors from collecting debts after a bankruptcy petition is filed. Signup and view all the answers

What is the purpose of an automatic stay?

To give the debtor time to make a rational plan for paying debts. Signup and view all the answers

Who is a bankruptcy trustee?

A person with special training appointed to oversee the bankruptcy case. Signup and view all the answers

What is a bankruptcy estate?

Everything you own or owe that makes up your bankruptcy estate. Signup and view all the answers

What is liquidation in bankruptcy?

The process of selling the bankrupt's assets to pay creditors. Signup and view all the answers

What is exempt property in bankruptcy?

Property that individual debtors can keep for themselves. Signup and view all the answers

Under the BAPCPA, debtors can take advantage of state exemptions regardless of how long they have lived in that state.

False Signup and view all the answers

What are voidable preferences?

A transfer of money or property just before filing bankruptcy. Signup and view all the answers

Under what conditions can a trustee void a transfer?

If the transfer was to a creditor, to pay an existing debt, and met specific criteria. Signup and view all the answers

What are fraudulent transfers?

Transfers made to hinder, delay, or defraud creditors within a year before filing. Signup and view all the answers

What leads to an increase in bankruptcy filings?

Increase in credit card use and huge costs of medical care. Signup and view all the answers

What do Chapters 1, 3, and 5 of the Bankruptcy Code cover?

Administrative rules that apply to all types of bankruptcy proceedings. Signup and view all the answers

What do Chapters 7, 9, 11, 12, and 13 of the Bankruptcy Code address?

Substantive rules that apply to specific types of bankruptcies. Signup and view all the answers

What is the objective of Chapters 11 and 13 of the Bankruptcy Code?

The rehabilitation of the debtor. Signup and view all the answers

What happens when debtors cannot develop a feasible plan for rehabilitation?

Chapter 7 allows for liquidation. Signup and view all the answers

What do Chapters 9 and 12 of the Bankruptcy Code cover?

Specialized types of debtors not covered in this textbook. Signup and view all the answers

Study Notes

Bankruptcy Overview

Bankruptcy is under federal jurisdiction, as per Article 1 of the Constitution, administered via bankruptcy courts adjacent to district courts.
Bankruptcy judges serve limited terms of eight years.

Bankruptcy Process

Full completion of the bankruptcy petition is crucial; incomplete petitions can lead to case dismissal.
The term "debtor" refers to the individual or entity seeking bankruptcy protection, sometimes labeled as "the consumer."

Essential Documents

A "petition" initiates the bankruptcy proceedings, comprising necessary legal documents submitted to the court.

Parties Involved

Creditor: Entities owed money by the bankrupt individual or organization.
Trustee: An appointed overseer, often an attorney or CPA, responsible for managing the bankruptcy case.

Bankruptcy Estate

Defines the bankrupt's "estate" which includes all assets and liabilities owned.

Assets and Liquidation

"Assets" encompass all valuable items owned by the bankrupt, including money, real estate, and debts owed.
"Liquidation" refers to converting the bankrupt's assets into cash to pay off creditors.

Protections and Exemptions

An "automatic stay" comes into effect upon filing, preventing creditors from collecting pre-petition debts and protects the debtor from making such payments without court permission.
Exempt Property: The bankruptcy code allows debtors to keep certain assets, defined state-by-state, providing some protective rights during bankruptcy.
Under the BAPCPA, debtors must have resided in a state for two years to claim its exemptions and limits property exemptions for homes acquired recently.

Transfer Regulations

Voidable Preferences: Transfers made shortly before filing can be voided if they meet specific criteria related to creditor payments.
Fraudulent Transfers: Transfers made within a year of filing designed to hinder creditors can be invalidated, except for ordinary business payments.

Bankruptcy Trends

Rising bankruptcy cases correlate with increased credit card usage and escalating medical costs.

Legal Framework

Chapters 1, 3, and 5 of the Bankruptcy Code encompass administrative rules for all bankruptcy types.
Chapters 7, 9, 11, 12, and 13 outline substantive rules focusing on either rehabilitation or liquidation goals for specific bankruptcy cases.
Chapter 7 permits liquidation when debtors cannot formulate a viable rehabilitation plan.

Specialized Bankruptcy Types

Chapters 9 and 12 cater to unique debtor types which are not included in standard texts concerning bankruptcy.

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Description

Test your knowledge on bankruptcy with these flashcards covering key concepts and legal details. Learn about the federal jurisdiction related to bankruptcy, the importance of filling out the bankruptcy petition completely, and other essential terms. Perfect for students and professionals looking to strengthen their understanding of bankruptcy law.

Bankruptcy Flashcards - Section 7