fin 240 kaplowitz worksheet 31.3: reorganizations and bankruptcy relief under chapter 12 and chapter 13

The type of bankruptcy proceeding most commonly used by corporate debtors is _____.

chapter 11

Under most Chapter 11 reorganizations, the debtor is removed from business management and a trustee takes over the business.

false

Workout

a contract between a debtor and the creditor(s) in which the parties agree to negotiate a payment plan for the amount due on the loan, instead of proceeding to foreclosure

Debtor in possession

the status of a chapter 11 debtor who is allowed to continue running the business operations

Cram-down provision

the ability of a court to confirm a plan even though not all classes of creditors have confirmed it

Once a Chapter 11 petition has been filed, a court may dismiss it if it would be better for the creditors to have it dismissed.

true

The debtor in possession may do all of the following except:

double the salary of the upper management

A reorganization plan must designate classes of _____ and interests. It also must specify the treatment to be afforded to the classes of creditors and ensure _____ treatment for all claims in a particular class. It must provide an adequate means for the plan's _____. Finally, it must provide for payment of tax claims over a _____ -year period.

claims, the same, execution, five

Most family farmers and fishermen choose a _____ filing for bankruptcy.

chapter 12

Chapter 13 repayment plans are available to _____.

individuals

Two major advantages of choosing a Chapter 13 repayment plan instead of a Chapter 11 reorganization plan are that Chapter 13 plans (select two):

are less expensive, are less complicated

A Chapter 13 repayment plan may be initiated by a(n) _____ petition or by a court conversion from a Chapter _____.

voluntary, 7

A court may dismiss a debtor's Chapter 13 petition when the debtor:

acts in bad faith

A Chapter 13 plan must provide for the turning over to the trustee of the _____ earnings or income necessary for the _____ of the plan. It also requires the full payment through _____ cash payments of all claims entitled to priority, such as _____. Finally all claims within a particular class must be treated _____.

future, execution, deferred, taxes, identically

The length of a Chapter 13 payment plan may be _____ years.

3 or 5

A court will confirm a plan under Chapter 13 if any of the following occur: first, if all of the _____ creditors accept the plan. Second, if the plan provides that the secured creditors _____ their liens until there is payment in full, or until the debtor receives a discharge. Finally, if the debtor _____ the property securing the claims to the creditors.

secured, retain, surrenders

Under Chapter 13, generally all debts are dischargeable except _____ claims not provided for by the plan, certain _____ debts provided for by the plan, certain tax claims and payments on _____ accounts, claims for _____ obligations, and debts related to _____ or property damage caused while driving under the influence of alcohol or drugs.

allowed, long-term, retirement, domestic-support, injury

To qualify as a family farmer, a person's income must be at least _____ percent dependent on the farm, and the person's debts must be at least _____ percent farm related.

50, 50

A farmer or fisherman who already has filed a reorganization or repayment plan may convert it to a Chapter 12 plan.

true