Introduction to Bankruptcy Law

by Frey,Martin A.

• ISBN13: 9781418040963
• ISBN10: 1418040967
• Edition: 5th
• Format: Paperback
• Copyright: 2006-04-12
• Publisher: Cengage Learning

Summary

Introduction to Bankruptcy Law, fifth edition, is a perfect reference for practicing paralegals and attorneys as well as for paralegal courses in bankruptcy law. This new edition corresponds to the changes in bankruptcy law after enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Material in this edition includes changes in the bankruptcy code and practice, new and revised official and procedural bankruptcy forms, revised bankruptcy rules, and bankruptcy cases that detail the case from initiation of the attorney/client relationship through the closing of the case. The book also includes new flow charts for each type of bankruptcy filing that emphasize the two tracks of bankruptcy; the administration of the bankruptcy estate and the debtor s desire to receive a discharge from as many debts as possible. Other key features are a brief history of bankruptcy law, research aids, alternatives to bankruptcy, a discussion of the role of the various parties involved in the bankruptcy process, and an overview concerning eligibility and the selection of the appropriate bankruptcy chapter under which the case should be filed. The book retains its step-by-step approach to each type of bankruptcy filing so the bankruptcy process is clear and understandable to the reader. Greater emphasis is placed on the paralegal s role in the fact gathering process and the interface with clients, and the concept-example-problem format of provides the opportunity for lively discussion.

Table of Contents

Table of Exhibits	xviii
Table of Cases	xx
Table of Statutes and Rules	xxi
Preface	xxix
The Evolution of Bankruptcy Law	1	(11)
Section 1 Brief History of Modern Bankruptcy Law	1	(7)
The Appearance of Bankruptcy in Early English Law	1	(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	4	(1)
The Bankruptcy Reform Act of 1978	4	(2)
Amendments to the Bankruptcy Reform Act of 1978	6	(2)
Section 2 The Dual Nature of Bankruptcy as a Remedy for Both Creditors and Debtors	8	(4)
Bankruptcy Law and Where to Find It	12	(25)
Section 1 The Bankruptcy Code	15	(10)
The Universal Chapters	17	(1)
Chapter 1---General Provisions	17	(3)
Chapter 3---Case Administration	20	(1)
Chapter 5---Creditors, Debtor, and the Estate	21	(1)
The Operative Chapters	21	(1)
Chapter 7---Liquidation	22	(1)
Chapter 9---Adjustment of Debts of a Municipality	22	(1)
Chapter 11---Reorganization	22	(1)
Chapter 12---Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income	23	(1)
Chapter 13---Adjustment of Debts of an Individual with Regular Income	24	(1)
Section 2 The Federal Rules of Bankruptcy Procedure and Official Forms	25	(2)
The Federal Rules of Bankruptcy Procedure and Official Forms	25	(2)
The Local Rules	27	(1)
District Court Rules	27	(1)
Bankruptcy Court Rules	27	(1)
Section 3 Bankruptcy Law Cases	27	(5)
Section 4 Secondary Authority	32	(5)
Legislative History	32	(1)
Digests	32	(1)
Loose-Leaf Services	32	(1)
Treatises	33	(1)
Legal Periodicals	33	(1)
American Law Reports	34	(1)
Legal Encyclopedias	35	(1)
Internet Resources	35	(2)
The Cast of Characters and Their Roles in the Bankruptcy Process	37	(28)
Section 1 The Debtor, the Debtor's Attorney, the Paralegal, and the Debt Relief Agency	38	(6)
The Debtor	38	(1)
The Debtor's Attorney	39	(1)
The Paralegal	40	(2)
The Debt Relief Agency	42	(2)
Section 2 The Bankruptcy Petition Preparer	44	(1)
Section 3 The Creditors and Other Parties in Interest	45	(8)
Creditors	45	(1)
Creditors Holding Secured Claims	45	(3)
Creditors Holding Unsecured Priority Claims	48	(2)
Creditors Holding Unsecured Nonpriority Claims	50	(1)
Other Parties in Interest	50	(1)
Equity Security Holders	50	(1)
Indenture Trustees	51	(1)
Statutory Lienholders	51	(1)
Lessors	51	(1)
Governmental Regulatory Authorities	52	(1)
Section 4 The Administrative Office of the United States Courts	53	(1)
Section 5 The Bankruptcy Judge and Staff	53	(2)
The Bankruptcy Judge	53	(1)
The Judge's Law Clerk, Judicial Assistant, and Courtroom Deputy	54	(1)
The Court Reporter	55	(1)
Section 6 The Office of the Clerk of the Bankruptcy Court	55	(2)
The Bankruptcy Court Clerk	55	(1)
The Deputy Clerks	56	(1)
Section 7 The United States Trustees, Private Trustees, and Examiners	57	(8)
The United States Trustees	57	(1)
Private Trustees	58	(1)
The Trustee Panel	59	(2)
Standing Trustees	61	(2)
Other Trustees	63	(1)
Paralegals	63	(1)
Examiners	64	(1)
Information Gathering, Analysis, Counseling, and Drafting	65	(42)
Section 1 The Debtor-Client	65	(30)
Information Gathering	68	(14)
Analysis: Nonbankruptcy or Bankruptcy	82	(1)
Alternatives to a Bankruptcy Filing	83	(4)
Bankruptcy Choices	87	(7)
Counseling	94	(1)
Drafting of Bankruptcy Forms	94	(1)
Section 2 The Creditor-Client	95	(10)
The Causes of the Creditor's Distress	95	(1)
Information Gathering	95	(1)
Analysis: If the Debtor Has Filed Bankruptcy	96	(1)
If the Debtor Has Filed a Chapter 7 Case	96	(1)
If the Debtor Has Filed a Chapter 11 Case	97	(1)
If the Debtor Has Filed a Chapter 12 Case	98	(1)
If the Debtor Has Filed a Chapter 13 Case	98	(1)
Analysis: Alternatives If the Debtor Has Not Filed Bankruptcy	99	(1)
Private Alternative	99	(1)
State Court Alternatives	99	(4)
Involuntary Bankruptcy Choices	103	(1)
Counseling	104	(1)
Counseling the Creditor-Client	104	(1)
Drafting Bankruptcy Forms	104	(1)
Section 3 The Debtor-Client in an Involuntary Bankruptcy	105	(2)
Information Gathering	105	(1)
Analysis	105	(1)
Counseling	106	(1)
The Voluntary Chapter 7 Bankruptcy (Liquidation)	107	(240)
Section 1 The Initiation of a Chapter 7 Case	115	(6)
Section 2 The Filing of the Petition	121	(108)
The Debtor's Petition (Official Form No. B1)	125	(9)
The Filing Fee	134	(8)
The Clerk's Notice	142	(1)
Corporate Resolution Authorizing Filing of Chapter 7	142	(1)
Disclosure of Attorney's Compensation Statement	142	(7)
The List of Creditors	149	(1)
Schedules (Official Form No. B6)	149	(2)
Schedule A: Real Property	151	(3)
Schedule B: Personal Property	154	(9)
Schedule C: Property Claimed as Exempt	163	(2)
Schedule D: Creditors Holding Secured Claims	165	(6)
Schedule E: Creditors Holding Unsecured Priority Claims	171	(6)
Schedule F: Creditors Holding Unsecured Nonpriority Claims	177	(4)
Schedule G: Executory Contracts and Unexpired Leases	181	(2)
Schedule H: Codebtors	183	(2)
Schedule I: Current Income of Individual Debtor(s)	185	(3)
Schedule J: Current Expenditures of Individual Debtor(s)	188	(4)
The Schedule of Current Income and Current Expenditures of a Partnership or Corporation	192	(3)
Declaration Concerning Debtor's Schedules	195	(2)
Statement of Current Monthly Income and Means Test Calculation	197	(1)
Statement of Financial Affairs	197	(28)
Statement of Intention If the Debtor Is an Individual with Consumer Debts	225	(2)
Debtor's Duty to Supplement the Schedules	227	(1)
Debtor's Right to Amend the Petition, Lists, Schedules, and Statements	228	(1)
Section 3 The Significance of Filing a Petition	229	(23)
The Order for Relief	229	(1)
The Estate Is Created	229	(1)
Property of the Estate	229	(6)
Location of Property	235	(1)
Property Acquired after Filing the Petition	236	(1)
Contractual Provisions Limiting Transferability of Property	237	(1)
Possession and Control of Property of the Estate	238	(1)
Exemptions	238	(1)
Exemptions under the Bankruptcy Code: State vs. Federal Exemptions	238	(6)
Converting Nonexempt Property to Exempt Property	244	(1)
Waiver of Exemptions and Waiver of Avoidance Powers	244	(1)
The Automatic Stay	245	(7)
Section 4 The Appointment and Powers of an Interim Trustee	252	(17)
Abandon Property of the Estate	253	(1)
Abandonment by the Trustee	253	(1)
A Party in Interest Can Force the Trustee to Abandon	254	(1)
Abandoned by Being Scheduled but Not Administered	254	(1)
Assume or Reject Executory Contracts	254	(1)
Avoiding Transfers	255	(1)
Avoiding Unperfected Security Interests	255	(4)
Avoiding Claims That an Actual Creditor Can Avoid under State Law	259	(2)
Avoiding Statutory Liens That Arise on the Debtor's Bankruptcy or Insolvency	261	(1)
Avoiding Prepetition Transfers of Property of the Estate to Creditors That Are Voidable Preferences	261	(4)
Avoiding Prepetition Transfers of Property of the Estate That Are Fraudulent under the Bankruptcy Code	265	(3)
Avoiding Postpetition Transfers of Property of the Estate Unless They Are Authorized by the Bankruptcy Code or by the Bankruptcy Court	268	(1)
Section 5 Proofs of Claim and Proofs of Interest	269	(1)
Creditors' and Indenture Trustees' Proofs of Claim	269	(1)
Equity Security Holders' Proofs of Interest	270	(1)
Section 6 Motions and Complaints after the Order for Relief	270	(31)
Motions	273	(1)
Motions by the Debtor	274	(4)
Motions by a Party in Interest	278	(10)
Motion by the United States Trustee to Dismiss the Case	288	(3)
Motion by the Court to Dismiss the Case	291	(1)
Complaints	292	(1)
Complaints by a Creditor	292	(7)
Complaint by the Trustee or the United States Trustee Objecting to Debtor's Discharge	299	(1)
Complaint by the Trustee to Avoid Prepetition and Postpetition Transfers	299	(1)
Complaint by the Debtor to Determine the Dischargeability of a Debt	299	(2)
Section 7 Order and Notice of Chapter 7 Bankruptcy Filing, Meeting of Creditors, and Fixing of Dates	301	(1)
Section 8 Objections by a Party in Interest to Debtor's Claim of Exemptions	301	(7)
Section 9 Meeting of Creditors (The Section 341 Meeting) and Meeting of Equity Security Holders	308	(1)
The Meeting of Creditors	308	(1)
Examination of the Debtor	308	(1)
Election of a Trustee	309	(1)
The Meeting of Equity Security Holders	309	(1)
Section 10 Redemption, Discharge and Reaffirmation	309	(16)
Redemption	309	(1)
Discharge and Reaffirmation	310	(15)
Revocation of Discharge	325	(1)
Section 11 Distribution of the Property of the Estate	325	(4)
Priority Claims	325	(1)
Domestic Support Obligations	326	(1)
Administrative Expenses	326	(1)
Extension of Credit in an Involuntary Case	326	(1)
Wages, Salaries, or Commissions	326	(1)
Contributions to Employee Benefit Plans	327	(1)
Farmer and Fishermen Claims	327	(1)
Consumer Deposits	327	(1)
Certain Governmental Tax Claims	327	(1)
Insured Depository Institution Claims	328	(1)
Drunk Driving Claims	328	(1)
Nonpriority Claims	328	(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	328	(1)
Other Tradily Filed Unsecured Claims	328	(1)
Penalty-Type Claims	328	(1)
Interest on Priority and Nonpriority Prepetition Claims	328	(1)
Debtor	329	(1)
Section 12 Closing the Case	329	(14)
Trustee's Final Report and Proposed Distribution	329	(1)
Trustee's Final Account after Distribution and Request for Discharge	329	(14)
Closing the Case	343	(1)
Section 13 After the Case Is Closed	343	(4)
Amending the Case without Reopening the Case	343	(1)
Reopening a Closed Case	344	(3)
The Chapter 13 Bankruptcy (Adjustment of Debts of an Individual with Regular Income)	347	(59)
Section 1 The Initiation of a Chapter 13 Case	354	(8)
Section 2 The Chapter 13 Plan	362	(18)
Contents of a Chapter 13 Plan	362	(1)
Mandatory Provisions	363	(1)
Permissive Provisions	363	(1)
A Sample Chapter 13 Plan	363	(16)
The Debtor's Payments under the Plan	379	(1)
Modification of the Plan before Confirmation	380	(1)
Section 3 The Filing of the Petition	380	(1)
Section 4 The Significance of Filing a Petition	381	(2)
Possession and Control of Property of the Estate	382	(1)
Operation of the Debtor's Business	383	(1)
Exemptions	383	(1)
Section 5 Appointment and Duties of a Chapter 13 Trustee	383	(1)
Section 6 Motions and Complaints after the Order for Relief	384	(4)
Motions	385	(1)
Complaints	386	(2)
Section 7 The Clerk's Notice	388	(1)
Section 8 Meeting of Creditors (The Section 341 Meeting)	388	(3)
Section 9 Hearing on Confirmation of the Plan	391	(6)
Section 10 Trustee's Distribution of Payments under the Plan	397	(1)
Section 11 Modification of the Plan after Confirmation	397	(6)
Section 12 Revocation of Order of Confirmation	403	(1)
Section 13 Discharge	403	(2)
Section 14 Revocation of the Discharge	405	(1)
Section 15 Closing the Case and Proceedings after the Case Is Closed	405	(1)
The Chapter 12 Bankruptcy (Adjustment of Debts of a Family Farmer or Family Fisherman with Regular Annual Income)	406	(45)
Section 1 The Initiation of a Chapter 12 Case	411	(8)
Section 2 The Chapter 12 Plan	419	(8)
Contents of a Chapter 12 Plan	419	(1)
Mandatory Provisions	420	(1)
Permissive Provisions	420	(1)
A Sample Chapter 12 Plan	421	(5)
The Debtor's Payments under the Plan	426	(1)
Modification of the Plan before Confirmation	426	(1)
Section 3 The Filing of the Petition	427	(1)
Section 4 The Significance of Filing a Petition	428	(4)
Possession and Control of Property of the Estate: The Debtor in Possession	430	(1)
Operation of the Debtor's Business	431	(1)
Exemptions	431	(1)
Section 5 Appointment and Duties of a Chapter 12 Trustee	432	(1)
Section 6 Motions and Complaints after the Order for Relief	433	(3)
Motions	433	(3)
Complaints	436	(1)
Section 7 The Clerk's Notice	436	(1)
Section 8 Meeting of Creditors (The Section 341 Meeting)	436	(5)
Section 9 Hearing on Confirmation of the Plan	441	(4)
Section 10 Trustee's Distribution of Payments under the Plan	445	(1)
Section 11 Modification of the Plan after Confirmation	446	(2)
Section 12 Revocation of Order of Confirmation Conversion, or Dismissal	448	(1)
Section 13 Discharge	448	(1)
Section 14 Revocation of the Discharge	449	(1)
Section 15 Closing the Case and Proceedings after the Case Is Closed	449	(2)
The Voluntary Chapter 11 Bankruptcy (Reorganization)	451	(77)
Section 1 The Initiation of a Chapter 11 Case	453	(6)
Section 2 The Chapter 11 Petition and the Significance of Filing a Chapter 11 Petition	459	(13)
The Filing of the Chapter 11 Petition	459	(6)
The Significance of Filing a Petition	465	(1)
Possession and Control of Property of the Estate	465	(2)
Operation of the Debtor's Business	467	(1)
Use of Cash Collateral	468	(1)
Adequate Protection	468	(1)
Employment of Professionals	468	(1)
Obtaining Credit	469	(1)
Utility Services	469	(1)
Shedding Burdensome Collective Bargaining Contracts	470	(1)
Dealing with Pending and Future Litigation	470	(1)
Special Provisions for a Small Business Debtor	471	(1)
Evidence of Debtor in Possession (DIP) Status	472	(1)
Exemptions	472	(1)
Section 3 The Chapter 11 Plan	472	(16)
Strategies Utilized in Reorganization Plans	474	(5)
Contents of a Chapter 11 Plan	479	(1)
Mandatory Provisions	479	(2)
Permissive Provisions	481	(1)
A Sample Chapter 11 Plan	482	(1)
Modification of a Chapter 11 Plan	482	(6)
Chapter 11 Plan Filed by Parties Other Than the Debtor	488	(1)
Section 4 A Disclosure Statement or Evidence Showing Compliance with 11 U.S.C.A. § 1126(b)	488	(13)
Section 5 Order and Notice of Chapter 11 Bankruptcy Filing, Meeting of Creditors, and Fixing of Dates	501	(1)
Section 6 Motions and Complaints	501	(5)
Motions	501	(5)
Complaints	506	(1)
Section 7 Appointment of a Committee of Unsecured Creditors and a Committee of Equity Security Holders	506	(1)
Section 8 Meeting of Creditors (The Section 341 Meeting) and Meeting of Equity Security Holders	507	(1)
Section 9 Hearing on the Disclosure Statement	507	(3)
Section 10 Hearing on Confirmation of the Plan	510	(13)
Section 11 Effect of Confirmation of the Plan	523	(1)
Section 12 Distribution under the Plan and Reporting by Debtor in Possession or Chapter 11 Trustee	523	(2)
Section 13 Revocation of an Order of Confirmation	525	(1)
Section 14 Final Report and Final Decree	525	(3)
Selecting the Appropriate Type of Bankruptcy Filing	528	(16)
Section 1 Eligibility	528	(6)
Section 2 Selecting the Chapter If the Debtor Is Eligible under Multiple Chapters	534	(10)
The Business Debtor	534	(1)
Choosing to Liquidate under Chapter 7 or Reorganize under Chapter 11	534	(1)
Choosing to Liquidate under Chapter 7 or Liquidate under Chapter 11	535	(1)
Choosing to Reorganize under Chapter 11 or Adjust Debt under Chapter 12 or 13	536	(1)
The Nonbusiness Debtor	537	(1)
Choosing to Liquidate under Chapter 7 or Adjust Debt under Chapter 13	537	(5)
Choosing to Liquidate under Chapter 7 or Reorganize under Chapter 11	542	(1)
Choosing to Reorganize under Chapter 11 or Adjust Debt under Chapter 13	542	(2)
The Involuntary Bankruptcy: Chapter 7 or Chapter 11	544	(19)
Section 1 Limitations on Filing an Involuntary Petition	545	(3)
Debtors Who May Be Subject to an Involuntary Petition	545	(1)
Requirements of a Petitioning Creditor	545	(3)
Section 2 Flow Chart for the Involuntary Petitions	548	(1)
Section 3 The Filing of the Creditors' Petition	548	(1)
Section 4 The Significance of Filing a Petition	548	(8)
The Order for Relief, the Bankruptcy Estate, and the Automatic Stay	548	(3)
Appointment of a Trustee	551	(5)
Gap Period Creditors	556	(1)
Section 5 The Debtor's Answer	556	(1)
Section 6 Hearing and Disposition of an Involuntary Petition	557	(6)
The Order for Relief	557	(2)
Dismissal of an Involuntary Petition	559	(4)
Appendix A Interview Questionnaire for the Debtor-Client	563	(43)
Appendix B Interview Questionnaire for the Creditor-Client	606	(2)
Appendix C Chapter 9---Debts of Municipalities	608	(1)
Glossary	609	(8)
Index	617