Presentation on theme: "BANKRUPTCY CODE What is a code? A collection of written laws gathered, usually covering specific subject matter. A code is a type of legislation designed."— Presentation transcript:
BANKRUPTCY CODE What is a code? A collection of written laws gathered, usually covering specific subject matter. A code is a type of legislation designed to thoroughly cover a complete system of laws, by codification. In law, codification is the process of collecting and restating the law by subject matter and forming a legal code.
The United States Code is a consolidation and codification by subject matter of the general and permanent laws of the United States. ________________ The U.S. Code is divided into 54 Titles Each Title is separated into Chapters Each Chapter can have various sections.
U.S. Code: Table of Contents TITLE 1 - GENERAL PROVISIONS TITLE 2 - THE CONGRESS TITLE 3 - THE PRESIDENT TITLE 4 - FLAG AND SEAL, SEAT OF GOVERNMENT, AND THE STATES TITLE 5 - GOVERNMENT ORGANIZATION AND EMPLOYEES TITLE 6 - DOMESTIC SECURITY TITLE 7 - AGRICULTURE TITLE 8 - ALIENS AND NATIONALITY TITLE 9 - ARBITRATION TITLE 10 - ARMED FORCES TITLE 11 - BANKRUPTCY TITLE 12 - BANKS AND BANKING TITLE 13 - CENSUS TITLE 14 - COAST GUARD TITLE 15 - COMMERCE AND TRADE TITLE 16 - CONSERVATION TITLE 17 - COPYRIGHTS TITLE 18 - CRIMES AND CRIMINAL PROCEDURE TITLE 18 - APPENDIX TITLE 19 - CUSTOMS DUTIES TITLE 20 - EDUCATION TITLE 21 - FOOD AND DRUGS TITLE 22 - FOREIGN RELATIONS AND INTERCOURSE TITLE 23 - HIGHWAYS TITLE 24 - HOSPITALS AND ASYLUMS
TITLE 25 - INDIANS TITLE 26 - INTERNAL REVENUE CODE TITLE 27 - INTOXICATING LIQUORS TITLE 28 - JUDICIARY AND JUDICIAL PROCEDURE TITLE 28 - APPENDIX FEDERAL RULES OF EVIDENCE TITLE 29 - LABOR TITLE 30 - MINERAL LANDS AND MINING TITLE 31 - MONEY AND FINANCE TITLE 32 - NATIONAL GUARD TITLE 33 - NAVIGATION AND NAVIGABLE WATERS TITLE 35 - PATENTS TITLE 36 - PATRIOTIC AND NATIONAL OBSERVANCES, CEREMONIES, ANDORGANIZATIONS TITLE 37 - PAY AND ALLOWANCES OF THE UNIFORMED SERVICES TITLE 38 - VETERANS BENEFITS TITLE 39 - POSTAL SERVICE TITLE 40 - PUBLIC BUILDINGS, PROPERTY, AND WORKS TITLE 41 - PUBLIC CONTRACTS TITLE 42 - THE PUBLIC HEALTH AND WELFARE TITLE 43 - PUBLIC LANDS TITLE 44 - PUBLIC PRINTING AND DOCUMENTS TITLE 45 - RAILROADS
TITLE 46 - SHIPPING TITLE 47 - TELECOMMUNICATIONS TITLE 48 - TERRITORIES AND INSULAR POSSESSIONS TITLE 49 - TRANSPORTATION TITLE 50 - WAR AND NATIONAL DEFENSE TITLE 50, APPENDIX - WAR AND NATIONAL DEFENSE TITLE 51 - NATIONAL AND COMMERCIAL SPACE PROGRAMS TITLE 52 - VOTING AND ELECTIONS
Which Title of the US Code contains Bankruptcy Code? U.S. Code: Title 11 -Bankruptcy
The Bankruptcy Code is set up in Chapters 1, 3, 5, 7, 9, 11, 12,13, and 15 Chapters 1, 3, and 5 –are the administrative chapters. -What the court is -What the rights of creditor’s are -What the rights of a trustee are The primary Chapters, ones we hear about most are 7, 9, 11, 12, and 13
Example U.S. CodeU.S. Code › Title 11 › Chapter 7 › Subchapter II › § 723Title 11Chapter 7Subchapter II 11 U.S. Code Chapter 7, Subchapter II - COLLECTION, LIQUIDATION, AND DISTRIBUTION OF THE ESTATE § 721. Authorization to operate business § 722. Redemption § 723. Rights of partnership trustee against general partners § 724. Treatment of certain liens § 725. Disposition of certain property § 726. Distribution of property of the estate § 727. Discharge [§ 728. Repealed.]
Chapter 7 –the straight liquidation bankruptcy. The chapter of the Bankruptcy Code providing for “liquidation,” (i.e. the sale of a debtor’s nonexempt property and the distribution of the proceeds to the creditors.) Liquidate assets; turn it into money and pay creditors. It is where the debtor, the person who owes the money, is filing the bankruptcy. He takes his non-exempt assets, delivers them to a trustee who is appointed by the court, the trustee, turns those assets into dollars, and then distributes them to creditors according to a statutory priority. When there are no non-exempt assets, there is no money.
Chapter 11 –it’s a reorganization bankruptcy with a payment plan. It can reduce mortgages and liens on real property. It can also reduce unsecured debts, such as debts owed to vendors or credit cards. An individual filing for Chapter 11 can expect the court to order a payment plan or 5 years (60 months). It can be longer for a big business. Usually big companies like airlines, hotels, manufacturers always file first in Chapter 11. Chapter 11 gives the debtor, the opportunity to propose a plan to restructure its debts over time.
Chapter 13 –a wage earner reorganization for an individual who has a regular income, to propose a plan to pay some of its debts to creditors over time. ______________________________ Chapter 12 –is very much the same as Chapter 13 but it includes special protection for family farmers. It gives the farmer an opportunity to pay its creditors over time.
Chapter 9 –is a municipal organization. We’re hearing about it more these days. Cities, most recently Detroit, file a Chapter 9 Bankruptcy. There are very special rules involved _______________________________ Chapter 15 –is for the relationship between U.S. Bankruptcies and foreign bankruptcies. It implements foreign bankruptcy proceedings in the U.S. if their assets are here or it allows a U.S. company to export its bankruptcy to another country.
The important thing in every form of bankruptcy, other than a Chapter 7, whether bankruptcy works or not, will depend on how it compares to a liquidation. In most of these other Chapters, in order for their organization plan to be implemented by the court, it has to give the creditors more than they would get on liquidation and more than they would get on Chapter 7.