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.
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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 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. Code › Title 11 › Chapter 7 › Subchapter II › § 723
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.
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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
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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.