What is the hanging paragraph in bankruptcy?

What is the hanging paragraph in bankruptcy?

The hanging paragraph allows creditors that meet certain criteria to receive secured treatment for the full value of their claims, not just the amount attributable to the value of their collateral.

What is a discharge under 11 USC 1328?

11 U.S.C. § 1328(h). The discharge releases the debtor from all debts provided for by the plan or disallowed (under section 502), with limited exceptions.

What is the look back period for Chapter 11?

The courts require a look bankruptcy back period of six months, to ensure that there has not been a major liquidation of assets or deliberate reduction in income in anticipation of filing the bankruptcy petition. Your six month income lookback for bankruptcy includes: Wages earned. Commissions and bonuses earned.

What is cram down Chapter 13?

A “cramdown” in a Chapter 13 bankruptcy allows you to reduce the principal balance of a debt to the value of the property it is secured by. By taking advantage of a Chapter 13 cramdown, you may be able to save your car, investment real estate, or certain other properties.

What does a discharge under 11 USC 727 mean?

Under this provision, the debtor may be denied discharge if he refuses to obey any lawful order of the court, or if he refuses to testify after having been granted immunity or after improperly invoking the constitutional privilege against self-incrimination.

How far back does a trustee look?

The look-back period, or time that the trustee can go back to unwind these transfers, is ninety days for general creditors and one year for insiders.

Can Chapter 13 lower my car payment?

If the amount of your car loan is more than the value of your car (not an uncommon occurrence because cars depreciate so quickly), you might be able to reduce the amount of your loan in Chapter 13 bankruptcy (called a cramdown). Essentially, you can reduce the amount you owe to equal the value of the car.

What is absolute priority rule?

Related Content. The principle of bankruptcy law requiring the claims of a dissenting class of creditors to be paid in full before any class of creditors junior to such dissenting class may receive or retain any property in satisfaction of their claims (§ 1129(b)(2), Bankruptcy Code).

Are debts discharged in Chapter 11?

In the Chapter 11 case filed by a corporation, limited liability company, or other nonindividual, the debtor receives a discharge when a plan is confirmed by the court. The order of the court that confirms the plan also contains the debtor’s Chapter 11 discharge.

What happens if a creditor objects to discharge?

Getting a discharge means that your personal liability on qualifying debt is wiped out, and the creditor can no longer do anything to collect the debt from you. Creditors aren’t allowed to call you, sue you, garnish your wages, or continue any other collection efforts on the discharged debt.

Can I return my car in Chapter 13?

If you’re making vehicle payments but no longer want the car—for instance, it’s too costly or needs repairs—you can give it back to the lender in Chapter 13. It won’t cost any more than you’d have to pay otherwise to return the car and wipe out the debt.

Can you keep two cars in a Chapter 13?

You can keep two cars in Chapter 13 bankruptcy, but you’ll need to be prepared to show that you can pay creditors for any vehicle equity that isn’t covered by a bankruptcy exemption.

Who has first claim priority in a Chapter 11 proceeding?

The priority for payment of these claims is generally as follows: first, costs of administration (including professional fees and expenses and post- petition expenses of operating the debtor’s business), followed by a host of unsecured claims that Congress has determined deserve a special high priority (again, see §507 …

Who has first claim in Chapter 11?

The answer depends on whether a creditor has a priority or a nonpriority claim. Priority claims must be paid in full in cash under a Chapter 11 plan, unless a creditor agrees otherwise.

How long does it take to get out of Chapter 11?

There is no absolute limit on the duration of a Chapter 11 case. Some Chapter 11 cases wrap up within a few months, but it’s more usual for it to take six months to two years for a Chapter 11 case to come to a close.