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Bankruptcy Notes

Bankruptcy Notes

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Published by jjjin1
Bankruptcy Law Outline
Bankruptcy Law Outline

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Published by: jjjin1 on Jul 10, 2012
Copyright:Attribution Non-commercial


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Bankruptcy Notes
- The Nature of Debt and the Meaning of Life- Non-judicial Collection methods
: Obligation to pay money a court of competent jurisdiction will enforce
Classification of Debt
:(1) Legal Status:- Contractual (voluntary)- Implied at law (torts)- Statutory Obligation (tax)(2) Purpose:- Consumer (personal, family, household)- Business (trying to make profit)
Constitution: Art.1 §8 c.4
The right for Congress to establish uniform laws of bankruptciesthroughout the U.S.
 © United States v. Kras
Holding: No constitutional or fundamental right to discharge bankruptcy. “Bankruptcy legislation isin area of legislation…”
What lawsuit does/doesn’t do
Does: money judgment (liability + judgment amount)
Doesn’t: make debtor pay (not self 
Peaceful Repo
is lawful (as long as doesn’t break peace)
possible liability for conversion
want to document (video and witnesses)Religious Notions
(Moral Obligation): Owe to God, “The wicked borrow and do not repay.” “Let nodebt stand outstanding except to love others.”
Why people repay debts (MEPRS)
:(1) Moral Duty (obligation: right thing to do)(2) Fear of Public Enforcement(3) Peer Group Pressure/Disapproval(4) Reward when Promise kept(5) Social Expectation
: Can get leverage against debtor if know what button to push. “similar to possessingnukes”
Notions of Punishment
:(1) Retribution (sanctions)
notion of proportionality(2) Utilitarian (appropriate when overall consequences are better)Look at Hostess Articles
Chapter 22? (When a corporate files for Chapter 11 for 2
- Priorities Among Creditors- Other Collection Issues
What is debt
Good debt/bad debt
? Mortgage
Classification of debt by legal status
?(1) voluntary(2) implied in law(3) statutory
by purpose
?(1) consumer(2) businessAll debts incur danger of default.Constitution
Art.1 §8 c.4< Questions >(1)
Why have Americans taken on so much debt
? (greed? Excess? Credit?)
Default judgment
: ∆ doesn’t respond
Consent judgment
: both parties agree (not-uncommon)
(expedites legal process)
by confession
(illegal in many states): if someone defaults,someone can gain judgment on that person automatically (debtor is in default by default)
see Overmeyer v. Frick Co.
JbC ok in business setting, not in consumer
who has it?Question 1.2 (pg 29)- What is strategy going to be?- What order will Talis put priority on?- How could we improve legal position?- We want to know full picture
more information needed
- Collection Remedies
Why people repay debts
? (5)
3 kinds of judgments
?(1) consent judgment: both parties agree to stipulations/may reduce(2) default
 judgment: didn’t respond according to rules of civil procedure
 caveat) has to prove damages(3) judgment by confession: must be included in original documentMost states prohibit (class D misdemeanor)
consumer or business?
Fair Credit Reporting Act (FCRA)
- Gives debtor opportunity to fix monster inaccurate information- Asked to enter own view regarding disputable information- Entitled to copy of credit report
Fair Debt Collection Practices Act
Are attorneys bound by FDCPA?
Yes, if engaged in collection practices.-
Can’t harass consumer debtor to gain info on them
Can’t call at unusual hours
Can’t call if you know debtor is represented by attorney
Can’t call debtor at work if you know that employer prohibits
 - Caller must stop communicating if debtor requests cessation-
Collection Agency can’t use threatening language
Can’t impersonate
someone else
Judgment Creditor’s Objectives
conceptual framework for all cases)(1) Identify property available to satisfy judgment- unencumbered assets (assets with no security interest)- non-exempt assets(2) Locate assets (physical)(3) Keep assets in place (prevent transfer, sale, disposition)
(4) Realizing (execute) assets (levying, liquidating…)
Beneficial to client
** Don’t get fixed on
one asset!! Multiple assets!!
Should always have backup plan!!
: Non-bankruptcy negotiated settlement that consensually modifies contractual rights ofcreditors, in order to resolve the financial difficulties of debtors
Readjustment in credito
expectations! (possible in both consumer/business)Examples) may give an extra day, change in interest rate, change in issuance ofdividend, allow debtor some security interest status
Why workout
?- can avoid bankruptcy, avoid costs- can influence business-
found out security interest doesn’t exist
?- Not feasible- General economic situation-
Problem with complexity of claims (unions, environmental, products liability, tax…)
Aging judgments
(law rewards the diligent)(1) Dormancy: Lack of effort to collect
still valid but unenforceable (mostly procedural and socould probably revive)
Some creditors may attempt to collect once a year to keep it alive(2) Limitations: Judgment no longer (good, valid, enforceable)
ways around
file new claimbased on old judgment before limitations and get new judgment and extend another 10 years.

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