Bankruptcy Law for Paralegals, Chapter 2
2. Bankruptcy alternatives- assignments for the benefits of creditors, bulk sales, and composition agreements.
3. Bankruptcy Code- the name of the bankruptcy laws in effect in the United States since October 1, 1979.
4. Composition Agreement- an agreement between a debtor and multiple creditors for the repayment of debt. The various reorganization proceedings of the Bankruptcy Code (Ch. 9, 11, 12 and 13) are judicially approved composition agreements.
5. Creditors- an entity with a claim arising before the filing of a bankruptcy petition. Section 101(9) of the Bankruptcy Code defines creditor.
6. Debtor- an entity that owes a debt. The entity filing a voluntary bankruptcy proceeding or against whom an order for relief is entered in an involuntary bankruptcy is known as the debtor.
7. Liquidation- the sale of an estate’s assets to repay creditor. A Chapter 7 bankruptcy is a liquidation proceeding.
8. Reorganization- a bankruptcy proceeding where a debtor seeks confirmation of a plan that will repay creditors while permitting the debtor to retain assets or continue in business. The proceedings permitted by Chapters 9, 11, 12 and 13 of the Bankruptcy Code are reorganization proceedings.
9. Trustee- a fiduciary appointed by the United States Trustee to administer a bankruptcy estate.
Questions: pg. 30, #1-5
1. What is a liquidation proceeding?
- It is the sale of an estate’s assets to repay creditors.
2. What is a reorganization proceeding?
- It is a bankruptcy proceeding where a debtor seeks confirmation of a plan that will repay creditors while permitting the debtor to retain assets or continue in business.
(a) Those chapters of the Bankruptcy Code applicable to all bankruptcy proceedings.
- They are Chapters 1, 3 and 5
(b) Those chapters