The introduction to the U.S. Bankruptcy proceedings Bankruptcy is a particular type of civil case involving persons or companies who can not pay their debts. The Congress created a special court, known as the bankruptcy court to adjudicate bankruptcy. Protects both the failure of debtors and creditors hierarchy of courts or U. S. Supreme Court & O, # xA0; Circuit Court of Appeals or courts of appeal or in bankruptcy court (BAP), or to bankruptcy court LAWS & O # xA0, Title 11 of the Rules, federal rules of procedure bankruptcy or Title 18 Crimes (SEC. 151-158 devoted to bankruptcy fraud and other crimes, bankruptcy). E. G. Ø Involvement of Title 26 IRC or tax evasion; Title 28 Judiciary and judicial process Ø Federal Rules of Procedure Call & O # xA0; federal rules of evidence. BANKRUPTCY positions of judges The judges in bankruptcy courts are appointed by judges of the circuit courts of the United States for such circuits for over 14 years. Currently there are 324 posts of judges in the United States. THREE KEY CHAPTERS on bankruptcy, there are basically three chapters under the Bankruptcy Act in the United States. Chapter 7: Liquidation Chapter 11: Reorganization Chapter 13: Adjustment of debts of individuals with regular income. CHAPTER 7: The bankruptcy liquidation under this chapter proposes a new beginning for the people. In this chapter, most of the debtor’s assets will be sold to increase the amount of the creditor. If the value of the asset exceeds the debt, the remaining amount will be paid to the debtor. After 2005, the enactment by Congress, is required to pass the test is meant to qualify for filing bankruptcy under Chapter 7. Like many cases, by removing under Chapter 7 1. Petition The case begins with filing the voluntary petition with the Registry of the bankruptcy court. The debtor must also file the following documents shortly after filing the application are 1. the list if creditors 2. list of products 3. the financial situation, if the debtor fails to pay taxes at a time, may request to pay in installments. It is not always necessary that the creditor must present the petition. Although creditors can initiate bankruptcy proceedings, which are known as the involuntary petitions. If the debtor has more than 11 creditors, a creditor can petition involuntary. If more than 12 creditors, three creditors must join together to present a petition. 2. The automatic suspension once the application submitted before the bankruptcy court, there will be an automatic suspension. Remains the costumes, applications, appeals against the other before or after 3. Trustee selection, after the filing of a voluntary petition in bankruptcy court, a notice will be sent to all CR & # xe9; anciers. Creditors are required to be present in the trustee selection. Then the case will be assigned to the bankruptcy court and added to the ranks of the United States Trustee. Foundation of the United States maintains a list of cases trustees. These trustees liquidate the assets of the debtor’s business in auction or private transactions, and collection of money deposited in the account maintained for that purpose. 4. The meeting of creditors is also called the SEC. 341 meeting. Transitional Administrator will chair the meeting. After issuing a notice to creditors, creditors must appear before the court and to participate in the meeting. If the creditor is not found, will be published in the newspapers, when the creditors must appear in court. It is mandatory that the debtor must be present at the meeting. The debtor is put under oath and will be asked questions by various creditors. The purpose of this meeting is to familiarize with the activities hidden or undervalued assets of the debtor. And to know there is a claim by the debtor, which gives more money, if pursued. And the goal is to accumulate more money for the bankrupt estate. 5. Liquidation of assets after the creditors’ meeting, the directors in case of sale of the assets of the debtor, or for sale to enche; res or its private transactions. If the debtor is a business, it will cease to exist. If it is an individual, will be released. However, some debts are not dischargeable, such as food, taxes, etc. 6. Collection of mass failure Once the assets are liquidated, the trustee in the event that the amount of deposits in bank account associated with any other amount accumulated # & xe9, the prosecution. 7. Distribution of the bankrupt estate after the deposit of the amount of the account, the amount deposited will be divided between CR & # xe9; anciers. most cases, no cause of activity. If there are no resources to distribute the trust case will simply be laid before the court a report no activity distribution. Although there is no money to distribute, at times, the creditors would not receive the full amount due to him by the d & # xe9; biteurs. Sometimes, creditors will receive less, some creditors will receive more. The question arises in our mind is that, to be paid first. In the distribution phase, the administration of estates, such as fees of the trustee, lawyer or an accountant appointed by the bankruptcy estate are paid first. 8. I think there are two types of debt and creditors in bankruptcy. One is the secured loan and another is unsecured. The secured loans are those that give the creditor an interest in the property as security for payment. For example, people secure home loans. If the loan is not repaid, there will be a foreclosure and sale of the house. Holders of unsecured claims can not consider such payments. Under unsecured claims are once again divided in two: the senior unsecured debt and unsecured claims-priority. Unsecured creditors have priority must be paid before paying the non-priority unsecured claims. In V. Campbell Countrywide Home Loans, Inc., 2008 U. S. App LEXIS 21,405 (5th Cir. October 13, 2008, Filed) It was felt that a suspension system serves to protect the assets of the failed measures taken by creditors outside of bankruptcy court forum, no legal action taken in bankruptcy court. 9. Converting a Chapter 7 debtor has the right to convert to a Chapter 7 case under chapter 11 or 13 at any time during the procedure. In Re South Star Oil Co., 2008 BankRate. LEXIS 2426 (D. Or Bankr.., 15 September 2008, decided) ruled that the cause of conversion or release includes a number of criteria, including a substantial or continuing loss or decrease in the property sector and the absence of a reasonable likelihood of rehabilitation Toibb V. Radloff, 501 U.S. 157 (1991) In this case, the petitioner’s voluntary action after discovering a company, and power electronics, has substantial value, decided to prevent its liquidation, trying to convert to Chapter 11 . His proposal was accepted and was authorized to submit a plan of reorganization. But the court rejected his request, saying he was not entitled to compensation under Chapter 11 because it was not engaged in a course of business. The District Court and Court of Appeals affirmed. 10. Dispute Resolution The petition can be challenged after the filing of the bankruptcy petition through an adversarial process. that party may incur legal action against the other to the submission of the complaint and challenge the validity of the claim will be resolved and if the parties are willing to act. There may also be proposed to oppose the release of the debtor’s objections to the sale of assets of the nut; biteur. In Dewsnup c. Timm et al]. Dewsnup petitioner, the debtor in a case under chapter 7 of the Bankruptcy Code, filed an adversary proceeding, arguing that the debt of $ that about 120,000 respondents had exceeded the market value of land secured debt and, therefore, the Court Bankruptcy should reduce the privilege of R & # xe9; stagnation on the ground at the fair market value of land under 11 USC § 506 (d), the Court ruled then that the value of the land in question was $ 39,000, but refused to grant the requested relief and issued a sentence of dismissal with prejudice. The District Court and Court of Appeals affirmed. Held: Section 506 (d) not Dewsnup to “dismantle” the privilege of respondents to the value set by a court security, as respondents contend ‘is secured by a lien and was fully authorized under the & # Xa7, 502, and therefore can not be classified as “not a request for permission granted” for the privilege & # xe8; ge emptying provision of § 506 (d). Pp 414-420. 11. Discharge and closure of cases, after the debtor’s property is sold and distributed among its creditors, the debtor will be downloaded. However, debts, like child support, food and taxes certainly against the public administration can not get discharged. in Roe v. College Access Network, 2008 U. S. 21362nd App LEXIS (10th Cir., October 9, 2008, Filed) It was found that the permanent medical condition will certainly contribute to improbabilit & # xe9; a debtor earning enough money to repay his student debt, but a this condition is not a prerequisite for the former & # xe9; implementation of the debt. Hlavin In re, 2008 BankRate. LEXIS 2397 (D. BankRate. Ohio, September 30, 2008, decided) it was estimated that in 11 USCS § 707 (b) (1) May the Court to dismiss a lawsuit filed by an individual debtor to under Chapter 7 in which debts are primarily consumer debts if it finds that the repairs would be an abuse Chapter 7. 12. Call when there is a discharge of the debt or discharge of the application for bankruptcy, there may be an appeal. If the complaint dismissed, the debtor may go to appeal. If there is discharge, without any payment to creditors, creditors can go to appeal. Call may be preferable to the district court or bankruptcy appellate committee. In cases where there is no sign of action for bankruptcy, the action is always preferred the district court. CHAPTER 11: REORGANIZATION This chapter is known as the chapter on corporate reorganization. Sometimes, people can also seek compensation under this chapter. Once the application is made under this chapter, the debtor is also the file of the plan for R & # xe9; organization. debtor is also the following file with the petition of volunteering. Ø Appendices A to OJ & # xA0; or appendices Financial Affairs SUMMARY OF O & # xA0; Matrix Ø; No statement of O & # xA0 first deposit and a list of shareholders safety and termination of business (if applicable) or Declaration debtor Pro SE as the procedure takes place under Chapter 11 1. Petition There is a demand for voluntary or involuntary 2. The automatic stay There will be an automatic suspension after the application. Forletta In re, 2008 BankRate. LEXIS 2491 (Bankr. dny, 10 October 2008, decided) Held: defendant could not extend the automatic stay under 11 USCS Xa7 & #; 362 (c) (3) (B), as previously the debtor’s Chapter 7 proceeding was closed on a trial and final discharge under 11 USCS § 727 and § 362 (c) (3) (B) shall not apply unless the case was dismissed with 11 USCS § 707. Extension of stay is warranted pursuant to § 362 (c) (3) (C). 3. Continuous monitoring by management, as in Chapter 7 cases, the trustee of the United States not to appoint a trustee to the trustee, but the sheath of the United States monitors the progress s the case. Examined the financial reports of the debtor, who has continued to manage the assets and the adequacy of the declaration and plan of reorganization. 4. Role of the Committee of Creditors’ There will be a committee of unsecured creditors appointed by the U.S. trustee who is pre; t are used to pursue the matter. The unsecured creditors can not look at the specific properties of the debtor. Unlike credit, secured and unsecured claim of a secured loan is one that gives the creditor an interest in property as security for payment of a mortgage on the house to get a home loan, the holder of an unsecured credit is not may contact one of the owners; specific Ty the debtor for payment. The committee negotiates with the debtor to develop a plan that protects the interests of unsecured creditors. Why is there no trust in cases where section 11, the Board has the power to exercise of investigative duties such as reviewing the debtor’s assets, liabilities, and financial management determine its ability to continue operations. 5. Creditors meeting is also asked that the meeting of 341. It may take place within 20 to 40 days of filing the bankruptcy petition. Debtor oath about it. U.S. envoy trustee or vice-chairman of the meeting 341. 6. Reorganization plan, there is a proposal by the debtor to repay the amount in a certain period of time. Debtor to put before the court for approval. 7. Communication and disclosure statement, the debtor must submit the Disclosure Statement must be approved by the court. Once this filing, there will be an oral communication. Sometimes creditors objected May. Once the declaration was approved, he or she will also set a time limit for voting in favor or against the reorganization plan. 8. Voting and confirms once the debtor’s reorganization plan, the court must approve or confirm the plan. Before the confirmation hearing for each class of creditors have voted to split e-mail to accept the plan. If a majority of voters in each class, and holders of two thirds of the amount of claims in each class to approve the plan, the court generally grafted; Riner plan. The plan then becomes binding on all creditors prior to confirmation, voted in favor or against it. If a majority of creditors have approved the plan, the debtor attempted CRAM May downward. 9. Press release after the reorganization plan is confirmed, the debtor receives a discharge. The majority of claims for debts are wiped out before confirmation. The debtor must pay only the debts specified in the plan. Custom Mortg. Solutions, Inc. v. Hood (In re Hood), 2008 BankRate. LEXIS 2474 (D. BankRate. Ill. October 2, 2008, decided) the claimant has the burden of proof by a preponderance of the evidence to D & # xe9 show that the debt in question is not dischargeable under 11 USCS §; 523 (a) (6). In Re Timmerman, 379 BR 838, 2007 BankRate. Debtors LEXIS 4055 (D. BankRate. Iowa, December 10, 2007, decided) were legitimized by asking the dismissal of their appeal, the bankruptcy under 11 USCS § 707 (credit) as falsely claimed to have received advice and had the opportunity to Switz; failure harmfulness of 21 months and the provision of office would have affected creditors and affected the integrity of the syst & # xe8 my failure . 10. Pay creditors, the debtor must make payments under the plan of reorganization. If this is not met, therefore, the creditors may require the liquidation of the debtor by moving to convert to Chapter 7 cases, or they can sue to compel the debtor to make payments from the plan. 11. Costumes for the resolution of disputes, the issues of dispute will be resolved as appropriate. 12. Call Call is preferred, both in bankruptcy court or district court of appeal. CHAPTER 13: ADJUSTMENT OF DEBT TO PERSONS, INCLUDING ordinary income debtor in this chapter develops a plan, as he or she proposes to pay creditors. By agreeing to use future income payment plan, the debtor is able to maintain his property. In contrast to Chapter 7 and Chapter 13 of Chapter 7 of the debtor’s assets is liquidated, but does not include future earnings. But in the Chapter 13 debtor is allowed to retain his property and the borrowers have only 15 days to propose a plan, unlike the 120 days of Chapter 11 of the d & # xe9; biteurs. How is the procedure 1. Petition debtor files a voluntary petition in court. It is also required to file the following: o Annexes A to OJ & # xA0; Statement of Financial Accounting Matrix Business & Ø Ø, # xA0; No statement before filing Ø Paper & # xd8; disclosure of compensation – FRBP 2016 (b) & # xd8;; debtor Pro SE Declaration or Application Fee 2. The automatic suspension once the application is filed in court, all proceedings for the recovery of the debt will be suspended. . 3. Creditors meeting is also asked that the meeting of 341. That may occur after 15 to forty days after submission of the application. The creditors and the debtor to participate. Chapter 13 trustee or trustee permanent chair of the meeting 341. 4. Confirm before planning the cost of entry into force, the court must approve the plan. And ‘the work of the permanent trustee to review the plan and the opinion of the Court of Justice if it seems in fact or in law. Permanent Trustee recommends the plan. Creditors have no right to propose a new plan, but can not oppose the project. 5. Payment of creditors within thirty days after the filing of the plan, the debtor must begin to pay creditors. Debtor to be paid to the trustee who then pays creditors, as envisaged in the plan. The debtor has a maximum of five years to pay its debts. 6. The adversarial process of dispute resolution, if all the problems will be resolved at that stage. 7. Exhaust After completing the payment plan, the debtor receives a discharge. It discharges all debts except the home mortgage long term, food, child support obligations, and pr & # XEA; ts some education. 8. Call Call may be preferred to the district court or BAP.