Introduction to Bankruptcy Law

by Frey, Martin A.; Frey, Phyllis H.; Swinson, Sidney K.

• ISBN13: 9780766820364
• ISBN10: 076682036X
• Edition: 4th
• Format: Paperback
• Copyright: 2004-07-23
• Publisher: CENGAGE Delmar Learning

Summary

The authors of this publication have taken a practical approach to teaching the intricacies of bankruptcy. To promote reader comprehension, they employ step-by-step explanations and flow charts of each type of filing, supporting case examples, challenging problems to address, and the definition of new terms as they are introduced. To further enhance learning, the roles of the various parties involved in the process are described in detail, particularly the role of the paralegal. From fact gathering and interfacing with clients, to the preparation of various official forms, paralegals will come to understand their role and those of others in handling bankruptcy cases. The most up-to-date official bankruptcy forms with detailed explanations for completing them are contained within the publication, as are debtor and creditor client questionnaires. Book jacket.

Author Biography

Martin A. Frey Professor Emeritus The University of Tulsa College of Law Phyllis Hurley Frey Attorney at Law Tulsa, Oklahoma Sidney K. Swinson Attorney at Law Tulsa, Oklahoma

Table of Contents

Table of Exhibits	xx
Table of Cases	xxii
Table of Statutes and Rules	xxiii
Preface	xxxi
The Evolution of Bankruptcy Law	1	(8)
Brief History of Modern Bankruptcy Law
The Appearance of Bankruptcy in Early English Law	2	(1)
Treatment of Bankruptcy in the United States Constitution	2	(1)
Early American Bankruptcy Statutes	2	(1)
The Bankruptcy Act of 1800	2	(1)
The Bankruptcy Act of 1841	3	(1)
The Bankruptcy Act of 1867	3	(1)
The Bankruptcy Act of 1898	3	(1)
The Bankruptcy Reform Act of 1978	4	(1)
Amendments to the Bankruptcy Reform Act of 1978	5	(2)
Future Bankruptcy Reform	7	(2)
The Dual Nature of Bankruptcy as a Remedy for Both Creditors and Debtors
Bankruptcy Law and Where to Find It	9	(20)
The Bankruptcy Code
The Universal Chapters	13	(1)
General Provisions	14	(2)
Case Administration	16	(1)
Creditors, Debtor, and the Estate	17	(1)
The Operative Chapters	17	(1)
Liquidation	18	(1)
Adjustment of Debts of a Municipality	18	(1)
Reorganization	18	(1)
Adjustment of Debts of a Family Farmer with Regular Annual Income	19	(1)
Adjustment of Debts of an Individual with Regular Income	19	(1)
The Federal Rules of Bankruptcy Procedure and Official Forms
The Federal Rules of Bankruptcy Procedure and Official Forms	20	(1)
The Local Rules	21	(1)
District Court Rules	21	(1)
Bankruptcy Court Rules	22	(2)
Bankruptcy Law Cases
Secondary Authority
Legislative History	24	(1)
Digests	25	(1)
Loose-leaf Services	25	(1)
Treatises	25	(1)
Legal Periodicals	26	(1)
American Law Reports	27	(1)
Legal Encyclopedias	27	(1)
Internet Resources	27	(2)
The Cast of Characters and Their Roles in the Bankruptcy Process	29	(21)
The Debtor, the Debtor's Attorney, and the Paralegal
The Debtor	30	(1)
The Debtor's Attorney	31	(1)
The Paralegal	32	(2)
The Bankruptcy Petition Preparer
The Creditors and Other Parties in Interest
Creditors	34	(1)
Creditors Holding Secured Claims	34	(3)
Creditors Holding Unsecured Priority Claims	37	(1)
Creditors Holding Unsecured Nonpriority Claims	38	(1)
Other Parties in Interest	39	(1)
Equity Security Holders	39	(1)
Indenture Trustees	39	(1)
Statutory Lienholders	39	(1)
Lessors	40	(1)
Governmental Regulatory Authorities	41	(1)
The Administrative Office of the United States Courts
The Bankruptcy Judge and Staff
The Bankruptcy Judge	42	(1)
The Judge's Law Clerk, Judicial Assistant, and Courtroom Deputy	43	(1)
The Court Reporter	43	(1)
The Office of the Clerk of the Bankruptcy Court
The Bankruptcy Court Clerk	43	(1)
The Deputy Clerks	44	(1)
The United States Trustees, Private Trustees, and Examiners
The United States Trustees	45	(1)
Private Trustees	46	(1)
The Trustee Panel	46	(1)
Eligibility to Serve as a Trustee	46	(1)
Selection and Qualification	47	(1)
Standing Trustees	48	(1)
Other Trustees	48	(1)
Paralegals	48	(1)
Examiners	49	(1)
Information Gathering, Analysis, Counseling, and Drafting	50	(38)
The Debtor-Client
Information Gathering	52	(13)
Analysis: Nonbankruptcy or Bankruptcy	65	(1)
Alternatives to a Bankruptcy Filing	66	(1)
Negotiation	66	(3)
Consolidation Loan	69	(1)
Credit Counseling	69	(1)
Assignments for the Benefit of Creditors	70	(1)
Bankruptcy Choices	70	(1)
Liquidation	71	(2)
Municipalities	73	(1)
Reorganization	73	(1)
Adjustment of Debts of a Family Farmer with Regular Annual Income	74	(1)
Adjustment of Debts of an Individual with Regular Income	75	(1)
Counseling	76	(1)
Drafting of Bankruptcy Forms	76	(1)
The Creditor-Client
The Causes of the Creditor's Distress	77	(1)
Information Gathering	77	(1)
Analysis: If the Debtor Has Filed Bankruptcy	77	(1)
If the Debtor Has Filed a Chapter 7 Case	78	(1)
If the Debtor Has Filed a Chapter 11 Case	78	(1)
If the Debtor Has Filed a Chapter 12 Case	79	(1)
If the Debtor Has Filed a Chapter 13 Case	79	(1)
Analysis: Alternatives If the Debtor Has Not Filed Bankruptcy	80	(1)
Private Alternative	80	(1)
State Court Alternatives	80	(1)
Prejudgment Garnishment	81	(1)
Attachment	81	(1)
Receivership	81	(1)
UCC § 2--702	81	(1)
Replevin	82	(1)
Self-Help Repossession	82	(1)
Disposition of Collateral	82	(1)
Retention of Collateral	82	(1)
Cognovit Judgment	82	(1)
Judgment Lien	82	(1)
Execution Lien	83	(1)
Execution Sale	83	(1)
Creditor's Bill	83	(1)
Supplementary Proceedings	83	(1)
Postjudgment Garnishment	83	(1)
Fraudulent Conveyance	83	(1)
Consensual Lien	83	(1)
Equitable Lien	83	(1)
Involuntary Bankruptcy Choices	84	(1)
Involuntary Chapter 7---Liquidation	84	(1)
Involuntary Chapter 11---Reorganization	84	(1)
Counseling	85	(1)
Counseling the Creditor-Client	85	(1)
Drafting Bankruptcy Forms	85	(1)
The Debtor-Client in an Involuntary Bankruptcy
Information Gathering	85	(1)
Analysis	86	(1)
Counseling	86	(2)
The Voluntary Chapter 7 Bankruptcy (Liquidation)	88	(210)
The Initiation of a Chapter 7 Case
The Filing of the Petition
The Debtor's Petition (Official Form No. 1)	103	(9)
The Filing Fee	112	(3)
The Clerk's Notice	115	(2)
Corporate Resolution Authorizing Filing of Chapter 7	117	(1)
Disclosure of Attorney's Compensation Statement	118	(3)
The List of Creditors	121	(1)
Schedules (Official Form No. 6)	122	(1)
Schedule A: Real Property	122	(3)
Schedule B: Personal Property	125	(10)
Schedule C: Property Claimed as Exempt	135	(2)
Schedule D: Creditors Holding Secured Claims	137	(5)
Schedule E: Creditors Holding Unsecured Priority Claims	142	(6)
Schedule F: Creditors Holding Unsecured Nonpriority Claims	148	(4)
Schedule G: Executory Contracts and Unexpired Leases	152	(2)
Schedule H: Codebtors	154	(2)
Schedule I: Current Income of Individual Debtor(s)	156	(3)
Schedule J: Current Expenditures of Individual Debtor(s)	159	(4)
The Schedule of Current Income and Current Expenditures of a Partnership or Corporation	163	(3)
Declaration Concerning Debtor's Schedules	166	(2)
Statement of Financial Affairs	168	(22)
Statement of Intention If the Debtor Is an Individual with Consumer Debts	190	(2)
Debtor's Duty to Supplement the Schedules	192	(1)
Debtor's Right to Amend the Petition, Lists, Schedules, and Statements	193	(1)
The Significance of Filing a Petition
The Order for Relief	194	(1)
The Estate Is Created	194	(1)
Property of the Estate	194	(4)
Location of Property	198	(1)
Property Acquired after Filing the Petition	198	(2)
Contractual Provisions Limiting Transferability of Property	200	(1)
Possession and Control of Property of the Estate	200	(1)
Exemptions	201	(1)
Exemptions under the Bankruptcy Code: State vs. Federal Exemptions	201	(5)
Converting Nonexempt Property to Exempt Property	206	(1)
Waiver of Exemptions and Waiver of Avoidance Powers	206	(1)
The Automatic Stay	207	(6)
The Appointment and Powers of an Interim Trustee
Abandon Property of the Estate	213	(1)
Abandonment by the Trustee	213	(1)
A Party in Interest Can Force the Trustee to Abandon	214	(1)
Abandoned by Being Scheduled but Not Administered	214	(1)
Assume or Reject Executory Contracts	214	(1)
Avoiding Transfers	215	(1)
Avoiding Unperfected Security Interests	215	(5)
Avoiding Claims That an Actual Creditor Can Avoid under State Law	220	(2)
Avoiding Statutory Liens That Arise on the Debtor's Bankruptcy or Insolvency	222	(1)
Avoiding Prepetition Transfers of Property of the Estate to Creditors That Are Voidable Preferences	222	(4)
Avoiding Prepetition Transfers of Property of the Estate That Are Fraudulent under the Bankruptcy Code	226	(2)
Avoiding Postpetition Transfers of Property of the Estate Unless They Are Authorized by the Bankruptcy Code or by the Bankruptcy Court	228	(2)
Proofs of Claim and Proofs of Interest
Creditors' and Indenture Trustees' Proofs of Claim	230	(1)
Equity Security Holders' Proofs of Interest	230	(4)
Motions and Complaints after the Order for Relief
Motions	234	(1)
Motions by the Debtor	234	(1)
Motion to Convert to a Chapter 11, 12, or 13	234	(1)
Motion to Dismiss the Case	234	(1)
Motion for a Change of Venue	234	(3)
Motion to Enforce the Automatic Stay	237	(1)
Motion to Avoid a Judicial Lien	238	(4)
Motions by a Party in Interest	242	(1)
Motion for Relief from the Automatic Stay	242	(3)
Motion to Dismiss the Case	245	(1)
Motion for Abstention by the Court	245	(1)
Motion for a Change of Venue	245	(1)
Motion for Disallowance of a Claim	245	(1)
Motion for Examination of Any Entity	245	(2)
Motion by the United States Trustee to Dismiss the Case	247	(4)
Motion by the Court to Dismiss the Case	251	(1)
Complaints	252	(1)
Complaints by a Creditor	252	(1)
Complaint Objecting to Debtor's Discharge	252	(3)
Complaint Objecting to the Dischargeability of a Debt	255	(7)
Complaint by the Trustee or the United States Trustee Objecting to Debtor's Discharge	262	(1)
Complaint by the Trustee to Avoid Prepetition and Postpetition Transfers	262	(1)
Complaint by the Debtor Objecting to the Dischargeability of a Debt	262	(8)
Order and Notice of Chapter 7 Bankruptcy Filing, Meeting of Creditors, and Fixing of Dates
Objections by a Party in Interest to Debtor's Claim of Exemptions
Meeting of Creditors (The Section 341 Meeting) and Meeting of Equity Security Holders
The Meeting of Creditors	270	(1)
Examination of the Debtor	270	(1)
Election of a Trustee	270	(1)
The Meeting of Equity Security Holders	271	(1)
Redemption, Discharge and Reaffirmation
Redemption	271	(1)
Discharge and Reaffirmation	271	(1)
Revocation of Discharge	272	(6)
Distribution of the Property of the Estate
Priority Claims	278	(1)
Administrative Expenses	278	(1)
Extension of Credit in an Involuntary Case	278	(1)
Wages, Salaries, or Commissions	278	(1)
Contributions to Employee Benefit Plans	279	(1)
Farmer and Fishermen Claims	279	(1)
Consumer Deposits	279	(1)
Alimony, Maintenance, and Support Claims	279	(1)
Certain Governmental Tax Claims	279	(1)
Insured Depository Institution Claims	280	(1)
Nonpriority Claims	280	(1)
Timely Filed Unsubordinated General Unsecured Claims and Tardily Filed Unsecured Claims Where Creditor Did Not Have Notice but Proof of Claim Filed in Time to Make Payment	280	(1)
Other Tardily Filed Unsecured Claims	280	(1)
Penalty-Type Claims	280	(1)
Interest on Priority and Nonpriority Prepetition Claims	280	(1)
Debtor	280	(1)
Closing the Case
Trustee's Final Report and Proposed Distribution	281	(1)
Trustee's Final Account after Distribution and Request for Discharge	281	(1)
Closing the Case	281	(13)
After the Case Is Closed
Amending the Case without Reopening the Case	294	(1)
Reopening a Closed Case	294	(4)
The Chapter 13 Bankruptcy (Adjustment of Debts of an Individual with Regular Income)	298	(46)
The Initiation of a Chapter 13 Case
The Chapter 13 Plan
Contents of a Chapter 13 Plan	308	(1)
Mandatory Provisions	308	(1)
Permissive Provisions	309	(1)
A Sample Chapter 13 Plan	309	(9)
The Debtor's Payments under the Plan	318	(1)
Modification of the Plan before Confirmation	318	(3)
The Filing of the Petition
The Significance of Filing a Petition
Possession and Control of Property of the Estate	321	(1)
Operation of the Debtor's Business	321	(1)
Exemptions	321	(2)
Appointment and Duties of a Chapter 13 Trustee
Motions and Complaints after the Order for Relief
Motions	323	(2)
Complaints	325	(19)
The Clerk's Notice
Meeting of Creditors (The Section 341 Meeting)
Hearing on Confirmation of the Plan
Trustee's Distribution of Payments under the Plan
Modification of the Plan after Confirmation
Revocation of Order of Confirmation
Discharge
Revocation of the Discharge
Closing the Case and Proceedings after the Case Is Closed
The Chapter 12 Bankruptcy (Adjustment of Debts of a Family Farmer with Regular Annual Income)	344	(44)
The Initiation of a Chapter 12 Case
The Chapter 12 Plan
Contents of a Chapter 12 Plan	357	(1)
Mandatory Provisions	357	(1)
Permissive Provisions	358	(1)
A Sample Chapter 12 Plan	358	(1)
The Debtor's Payments under the Plan	358	(5)
Modification of the Plan before Confirmation	363	(5)
The Filing of the Petition
The Significance of Filing a Petition
Possession and Control of Property of the Estate: The Debtor in Possession	368	(1)
Operation of the Debtor's Business	368	(1)
Exemptions	369	(2)
Appointment and Duties of a Chapter 12 Trustee
Motions and Complaints after the Order for Relief
Motions	371	(3)
Complaints	374	(14)
The Clerk's Notice
Meeting of Creditors (The Section 341 Meeting)
Hearing on Confirmation of the Plan
Trustee's Distribution of Payments under the Plan
Modification of the Plan after Confirmation
Revocation of Order of Confirmation, Conversion, or Dismissal
Discharge
Revocation of the Discharge
Closing the Case and Proceedings after the Case Is Closed
The Voluntary Chapter 11 Bankruptcy (Reorganization)	388	(70)
The Initiation of a Chapter 11 Case
The Chapter 11 Petition and the Significance of Filing a Chapter 11 Petition
The Filing of the Chapter 11 Petition	395	(6)
The Significance of Filing a Petition	401	(1)
Possession and Control of Property of the Estate	401	(1)
Operation of the Debtor's Business	402	(1)
Use of Cash Collateral	402	(1)
Adequate Protection	402	(1)
Employment of Professionals	403	(1)
Obtaining Credit	403	(1)
Utility Services	404	(1)
Shedding Burdensome Collective Bargaining Contracts	404	(1)
Dealing with Pending and Future Litigation	404	(1)
Evidence of Debtor in Possession (DIP) Status	405	(1)
Exemptions	405	(2)
The Chapter 11 Plan
Strategies Utilized in Reorganization Plans	407	(6)
Contents of a Chapter 11 Plan	413	(1)
Mandatory Provisions	413	(1)
Permissive Provisions	414	(1)
A Sample Chapter 11 Plan	415	(1)
Modification of a Chapter 11 Plan	415	(7)
Chapter 11 Plan Filed by Parties Other Than the Debtor	422	(13)
A Disclosure Statement or Evidence Showing Compliance with 11 U.S.C.A. § 1126(b)
Order and Notice of Chapter 11 Bankruptcy Filing, Meeting of Creditors, and Fixing of Dates
Motions and Complaints
Motions	435	(1)
Complaints	435	(23)
Appointment of a Committee of Unsecured Creditors and a Committee of Equity Security Holders
Meeting of Creditors (The Section 341 Meeting) and Meeting of Equity Security Holders
Hearing on the Disclosure Statement
Hearing on Confirmation of the Plan
Effect of Confirmation of the Plan
Distribution under the Plan and Reporting by Debtor in Possession or Chapter 11 Trustee
Revocation of an Order of Confirmation
Final Report and Final Decree
Selecting the Appropriate Type of Bankruptcy Filing	458	(15)
Eligibility
Selecting the Chapter If the Debtor Is Eligible under Multiple Chapters
The Business Debtor	464	(1)
Choosing to Liquidate under Chapter 7 or Reorganize under Chapter 11	464	(1)
Choosing to Liquidate under Chapter 7 or Liquidate under Chapter 11	465	(1)
Choosing to Reorganize under Chapter 11 or Adjust Debt under Chapter 12 or 13	465	(2)
The Nonbusiness Debtor	467	(1)
Choosing to Liquidate under Chapter 7 or Adjust Debt under Chapter 13	467	(5)
Choosing to Liquidate under Chapter 7 or Reorganize under Chapter 11	472	(1)
Choosing to Reorganize under Chapter 11 or Adjust Debt under Chapter 13	472	(1)
The Involuntary Bankruptcy: Chapter 7 or Chapter 11	473	(20)
Limitations on Filing an Involuntary Petition
Debtors Who May Be Subject to an Involuntary Petition	474	(1)
Requirements of a Petitioning Creditor	474	(11)
Flow Chart for the Involuntary Petitions
The Filing of the Creditors' Petition
The Significance of Filing a Petition
The Order for Relief, the Bankruptcy Estate, and the Automatic Stay	485	(1)
Appointment of a Trustee	485	(1)
Gap Period Creditors	485	(1)
The Debtor's Answer
Hearing and Disposition of an Involuntary Petition
The Order for Relief	486	(4)
Dismissal of an Involuntary Petition	490	(3)
Appendix A Interview Questionnaire for the Debtor-Client	493	(45)
Appendix B Interview Questionnaire for the Creditor-Client	538	(2)
Appendix C Chapter 9--Debts of Municipalities	540	(2)
Glossary	542	(8)
Index	550