UNIT 7 LAW 206 HOMEWORK
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American Military University *
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Course
206
Subject
Law
Date
Jan 9, 2024
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docx
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2
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1.
Review page 860 of the text. What is the “Automatic Stay” in bankruptcy? Explain
fully.
Automatic stay in bankruptcy is actions held against debtors. There are four different
actions.
(1) “beginning or continuing judicial proceedings against the debtor;
(2) actions to obtain possession of the debtor’s property;
(3) actions to create, perfect, or enforce a lien against the debtor’s property; and
(4) setoff of indebtedness owed to the debtor before commencement of the bankruptcy
proceeding.”
LangVardt, A.W., Barnes, A.J., Prenkert, J.D., McRrory, M.A., & Perry, J.E. (2019).
Business Law
(17
th
ed.) (P.860)
In 1994 Congress included specific requirements for creditors that debtors must follow.
Debtors had to file a plan of reorganization or making monthly payments. There were
additional exceptions passed by Congress in 2005 for landlords who sought evictions
against tenants. First, if an eviction proceeding was obtained before judgment of
possession, the bankruptcy petition can be continued. Secondly, an eviction based on
illegal substances used on a property still stands if the use occurred within 30 days before
the filing.
2.
Review pages 870-874 of the text. What is a “discharge in bankruptcy”? Explain
fully.
Discharge in bankruptcy is. Having full entitlement to a discharge bankruptcy after
fulfilling his/her duties. Allowing the individual to have a fresh start. Corporations are not
entitled to a discharge in bankruptcy and an individual is only granted one if he/she did
not obtain one in the prior eight years after filing their current one. Although individuals
have this opportunity, there are other issues they must consider. Such as, “objections to
discharge.” This is filed by a trustee, creditor, or U.S. attorney. During this time the court
must determine if the bankrupt person committed an act that will grant a bar to discharge.
“ACTS That Bar Discharge.” Bankruptcy discharges are intended for honest debtors.
There are five acts that can bar a debtor from being discharged. Falsifying or destroying
records. False statements. Transferring or concealing property. Not accounting loss assets,
and not obeying court orders.
3.
Review pages 869-870 of the text. What are the “Priority Claims?” List three
priority claims that are identified in the text? Three short paragraphs, please.
Priority claims are special treatment claims that occur in the bankruptcy process. These
are handled first over claims that are non-priority claims. Three priority claims are.
- “Expenses and fees incurred in administering the bankruptcy estate.”
- “Unsecured claims in involuntary cases that arise in the ordinary course of the debtor’s
business after the filing of the petition but before the appointment of a trustee or the order
of relief.”
- “Allowed unsecured claims based on a commitment by the debtor to a federal
depository institution regulatory agency (such as FDIC).”
LangVardt, A.W., Barnes, A.J., Prenkert, J.D., McRrory, M.A., & Perry, J.E. (2019).
Business Law
(17
th
ed.) (P.860)
4.
Review pages 862-865 of the text. What are “exempt assets”? Explain fully then list
three types of exempt assets under the Federal Bankruptcy Code.
Exempt assets are. Assets that a debtor (properties, etc.) can keep in his/her possession
during the bankruptcy proceedings. These assets are unable to be claimed by any creditor
who doesn’t have a hold on any of the property from the debtor.
Three exempts under the Federal Bankruptcy Code are.
-
“Debtor’s interest (not to exceed $23, 675 in value) in real or personal property that
the debtor or a dependent of the debtor uses as a residence.
-
“The debtor’s interest (not to exceed $3,775 in value) in one motor vehicle.
-
“$1,250 in value of any property of the debtor’s choosing, plus up to $11,850 of any
unused homestead exemption.”
-
LangVardt, A.W., Barnes, A.J., Prenkert, J.D., McRrory, M.A., & Perry, J.E. (2019).
Business Law
(17
th
ed.) (P.864)
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