bankruptcy proceedings

General term for the various types of proceedings under the Bankruptcy Code (11 U.S.C.A.) that are initiated either by an insolvent individual or business (termed a voluntary bankruptcy) or by creditors (termed an involuntary bankruptcy) seeking to either have the debtor's remaining assets distributed among the creditors and to thereby discharge the debtor from any further obligation or to restructure and reorganize the insolvent's debt structure.

See Bankruptcy Code, and various types of bankruptcy.

See also adequate protection

- automatic stay

- composition with creditors

- core proceeding

- cram down

- debtor in possession

- workout.

Adjudication of bankruptcy.

The judgment or decree of the bankruptcy court that a person against whom a petition in bankruptcy has been filed, or who has filed his voluntary petition, be ordered and adjudged to be a bankrupt.

See bankruptcy discharge

Business reorganizations (Chapter 11)

When a debtor business entity realizes that it will become insolvent or will be unable to pay its debts as they mature, it can petition for reorganization under Chapter 11 of the Bankruptcy Code. The debtor business normally is permitted to continue its operations under court supervision until some plan of reorganization is approved by two-thirds of the creditors. If the business is insolvent at the time a petition for reorganization is filed, a majority of the shareholders must also approve the plan. If agreement cannot be reached, then the court will supervise liquidation proceedings for the business as in any other situation of bankruptcy.

See also family farmer bankruptcy.

Family farmer bankruptcy (Chapter 12).

Chapter 12 of the Bankruptcy Code provides special debt repayment relief for a "family farmer with regular income" whose annual income is sufficiently stable and regular to enable such farmer to make payments under a plan as provided under this Chapter.

Involuntary proceedings.

Creditors of an insolvent debtor may initiate proceedings under the Bankruptcy Code, thereby in effect forcing the debtor into bankruptcy.

See straight bankruptcy, below.

Straight bankruptcy (Chapter 7).

A proceeding designed to liquidate the debtor's property, pay off his or her creditors, and discharge the debtor from his or her other debts. It can be either voluntary (started by the debtor himself or herself) or involuntary (started by the debtor's creditors)

Compare business reorganizations (Chapter 11); wage earner's plan (Chapter 13), which are rehabilitative proceedings (See rehabilitation (Corporations).

Voluntary proceedings.

A proceeding under the Bankruptcy Code by which a debtor initiates action either to rehabilitate his business (e.g., Chapter 11 reorganization) or to liquidate (e.g., Chapter 7 liquidation).

Wage earner's plan (Chapter 13).

Under Chapter 13 of the Bankruptcy Code, any insolvent debtor who is a wage earner (earns wages, salary, or commission) can formulate and file a plan with the court that provides the debtor with additional time to pay off unsecured creditors. The debtor's plan must provide that future earnings will be subject to the supervision and control of the trustee until these debts are satisfied. A plan made in good faith and acceptable to the unsecured creditors will be confirmed by the court. Should the wage earner ultimately be unable to pay the debts, Chapter 7 liquidation is still an available alternative

@ adjudication of bankruptcy

The judgment or decree of the bankruptcy court that a person against whom a petition in bankruptcy has been filed, or who has filed his voluntary petition, be ordered and adjudged to be a bankrupt.

See bankruptcy discharge

@ bankruptcy courts

Federal courts which are concerned exclusively with the administration of bankruptcy proceedings and presided over by a bankruptcy judge. Legal bankruptcy is declared by such courts. 28 U.S.C.A. No. 151.

Bankruptcy courts exercise jurisdiction as generally provided in 28 U.S.C.A. No. 1334.

See also 11 U.S. C.A. No. 105

@ bankruptcy discharge

Order of Bankruptcy Court which discharges debtor from all dischargeable obligations and debts. For effect of, and exceptions to, discharge, see Bankruptcy Code No.No. 523, 524, 727

@ bankruptcy distribution

After payment of administration, priority and other debts and expenses of bankrupt estate, trustee in bankruptcy makes pro rata distribution to creditors.

See Bankruptcy Code No. 726

@ bankruptcy estate

The "bankruptcy estate" is comprised of all legal and equitable interests in property of debtors as of filing of bankruptcy petition. Matter of Madden, Bkrtcy.N.J., 18 B.R. 18, 19. 11 U.S.C.A. No. 541 et seq

@ bankruptcy forms

Official forms used in Bankruptcy Court for most matters (e.g. petitions, schedules)

@ bankruptcy rules

Rules governing proceedings in bankruptcy courts; many of which make the Federal Rules of Civil Procedure and Evidence applicable in adversary proceedings

@ bankruptcy schedules

Official forms for listing of debtor's assets, liabilities, and all unsecured creditors

@ bankruptcy trustee

Person appointed by Bankruptcy Court or elected by creditors to take charge of debtor estate, to collect assets, to bring suit on debtor's claims, to defend actions against it, and otherwise administer debtor's estate; he has power to examine debtor, to initiate actions to set aside preferences, etc. 11 U.S.C.A. No. 321 et seq., 704; 28 U.S.C.A. No. 581 et seq

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