What is bankruptcy?
Bankruptcy is a legal process where a debtor reveals comprehensive financial information about assets, liabilities, a budget, and recent financial transactions in return for protection from creditors and the discharge or elimination of many kinds of debts.
What is divorce?
Divorce is the legal process to terminate the marital relationship and address the legal consequences of marriage such as support, division of property, allocation of debts, and the custody, visitation and support of minor children.
What is the automatic stay?
The automatic stay is an immediate court order at the filing of a bankruptcy case prohibiting everyone from starting or continuing efforts at collecting debts or exercising control over property subject to the bankruptcy, with few exceptions.
Is a divorce case stopped by a bankruptcy filing?
While the entry of the divorce itself, or the establishment or collection of support, are not stopped by a bankruptcy filing, much of the related relief sought in divorce is, such as the division of assets or allocation of debt.
What is a domestic support obligation?
A Domestic Support Obligation is a defined term in the bankruptcy code, broader than just spousal or child support, and can include things in the nature of support, such as an obligation to make mortgage payments or an award of attorney’s fees in certain circumstances.
What are some of the debts that may not be discharged in bankruptcy?
The debts that might not be discharged in bankruptcy includes most tax debts, a debt incurred through fraud, an undisclosed debt, a debt incurred by committing a defalcation while acting in a fiduciary capacity, a debt owed to a spouse, former spouse, or child, a debt owed for a willful and malicious injury to another or property of another, a government fine, penalty, or forfeiture, a debt owed for death or personal injury caused by operation of a vehicle, vessel, or aircraft wile intoxicated from alcohol, drugs, or other substance, a debt that could have been discharged had it been listed, or debt that was denied discharge, in a previous bankruptcy case, a debt owed for malicious or reckless failure to fulfill any commitment owed to a federal depository institution, criminal restitution obligations, any debt incurred in order to pay tax debts that would have been nondischargeable, debts related to court costs, student loan debt, and homeowners’ assessments.
What is a proof of claim?
A proof of claim is a writing filing in a plan bankruptcy setting forth the amount and basis for a debt to be paid.
What is an adversary proceeding?
An adversary proceeding is a separate lawsuit in bankruptcy court directly related to the main bankruptcy case.
What is a contested matter?
A contested matter is a motion or request for relief in the main bankruptcy case.
What is a fraudulent transfer?
A fraudulent transfer occurs when a debtor gives, conveys, assigns, or transfers, or places a charge upon, property with the intent to delay, hinder or defraud creditors or purchasers, or to put it out of the reach of creditors or purchasers.
What is a voluntary transfer?
A voluntary transfer occurs when a debtor gives, conveys, assigns, or transfers, or places a charge upon, property without consideration or with inadequate consideration or upon consideration of marriage, that renders the debtor insolvent, or by a debtor who was insolvent at the time.
What is the significance of a fraudulent or voluntary transfer?
A fraudulent or voluntary transfer may be undone or set aside by a creditor of the debtor, or by a trustee in bankruptcy, to satisfy a debt or liability of the debtor.
What is a preferential transfer?
A preference or preferential transfer occurs when a debtor prefers one or more creditors over the others, by paying down or paying off those debts at the expense of similarly situated creditors.
What is the significance of a preference or preferential transfer in bankruptcy?
The policy of the Bankruptcy Code is to treat similarly situated creditors alike. Thus, a preference or preferential transfer may be avoided or recovered in bankruptcy and spread among the similarly situated creditors equally.
What is an “insider”?
An “insider” is a defined term in the Bankruptcy Code and refers to someone with whom a debtor would likely have a closer relationship and favor in insolvency. Insiders include a relative, a general partner, a partnership or corporation or persons in charge of a partnership or corporation in which the debtor is involved in some official capacity or is the corporation or the partnership, an elected official if the debtor is a municipality, an affiliate, and a managing agent of the debtor.
What is the burden of proof?
The burden of proof is a legal term that identifies the responsible party and quality of evidence or proof that must be produced to convince the judge of something. The burden of proof can refer both to the burden of persuasion – the party who has the ultimate burden of convincing the judge of something, and the burden of production – the party who has the burden of proving or rebutting something at a particular stage of the trial. The burden of proof often rests on inferences and presumptions.
What are the different standards for burdens of proof?
The ordinary standard of the burden of proof in a civil case is preponderance of the evidence. The highest standard in a criminal case is beyond a reasonable doubt. An intermediate standard, usually applied to quasi-criminal acts, is clear and convincing evidence.
What is marital waste?
Martial waste occurs when a spouse spends or dissipates marital assets for his or her own separate purposes in contemplation of separation or divorce. The consequence of marital waste is a credit in favor of the other spouse for his or her equitable share of the value of the wasted property.
What is the burden of production?
The burden of production is the burden on a party at a particular stage in a trial of producing evidence to establish a prima facie case or an affirmative defense, or on a particular issue to rebut or overcome an inference or a presumption, or to rebut or overcome the establishment of a prima facie case. The burden of production is different from the burden of persuasion, which is the ultimate burden of convincing a judge or jury of the desired outcome in a case. The burden of production often shifts from one party to another during a trial.
What are exemptions?
Exemptions are laws that allow a debtor to protect assets or property from creditor process. There are both federal and state law exemptions available to debtors. Some exemptions deal with specific assets or types of rights in property, for instance, Social Security benefits, unemployment benefits, a protected portion of wages, or child support. Other exemptions may be wildcard or catch-all exemptions, allowing a certain amount of any asset or property. Exemptions can protect property from wage garnishments, bank account garnishments, judgment executions, writs of fieri facias, and other creditor process. The U.S. Bankruptcy Code contains it own set of exemptions for bankrupt debtors. Due to federalism, each state may accept the U.S. Bankruptcy Code exemptions, or restrict its residents to state law exemptions and other federal exemptions, or allow either Bankruptcy Code exemptions or state law exemptions. Those states, like Virginia, that do not allow its residents the exemptions in the U.S. Bankruptcy Code are referred to as “opt out” states, because they have opted out of those particular exemptions.
What is a lien?
A lien is a security interest in property. A lien may be voluntary, allowed by an agreement, like a mortgage or car loan, or involuntary, created and allowed by law, such as a judgment lien. The property may be referred to as collateral. While liens are created by a personal obligation of some kind, once created, the lien exists separate and apart from the personal obligation. The consequence of this aspect in bankruptcy is that a person may discharge an obligation to a creditor, but still have property subject to a lien. If the property were sold or refinanced, the lien would ordinarily have to be satisfied. In some instances, a lien may be avoided in bankruptcy, or the property may be stripped of a lien. A property may be sold in bankruptcy free and clear of liens, with liens attaching to any proceeds of sale. In general, a lienholder in bankruptcy is entitled to the value of the property securing its lien.
What is tenants by the entirety property?
A husband and wife can hold property in a special tenancy known as a tenancy by the entirety or entireties. This tenancy is based on an old English concept that a husband and wife were a single legal person, namely the husband. The characteristics of the tenancy are marriage and the right of survivorship. The tenancy is usually created by the following granting or conveyance language: to John Doe and Mary Doe, husband and wife, as tenants by the entirety with the common-law right of survivorship. A tenancy by the entirety may still be created by something less than the foregoing language, provided the marital status and/or survivorship aspects are indicated. This particular tenancy is not subject to the debts or claims of either spouse alone (other than a debt to the IRS), but only to joint debts. The tenancy can only be severed by divorce, the death of either party, or a joint conveyance from both spouses. The tenancy by the entirety has been the preferred and usual conveyance of real property to a married couple. It may also be created in certain types of personal property. The tenancy will also survive or be recognized in transfers to revocable or living trusts.