Question

This is the scenario: David has debts of $18,000 and few assets. Because his debts are less than $25,000, he decides to file for bankruptcy using the state court system rather than the federal system. Briefly describe the procedure he should follow to file for bankruptcy at the state level. Now asume that David is irregularly employed and has developed a plan for paying off his creditors. What type of bankruptcy should he use, Chapter 7, 11, or 13 and why? Also assume that David owns the following unsecured property: a $3,000 oboe, a $1,000 piano, a $2,000 car, and a life insurance policy with a cash surrender value of $8,000. How much of this property is available for distribution to his creditors in a bankruptcy? Explain. If David owes his ex-wife alimony (maintenance) payments and is obligated to pay $12,000 for an educational loan, what effect will his discharge have on these obligations? Assume that David owns a corporation that he wants to liquidate under Chapter 7. After the corporate assets are distributed to creditors, there is still money owing to many of them. What obstacle does David face in obtaining a discharge for the corporation?

Answer 1

Above question is all is answered according to Bankruptcy and overview of the 2005 Bankruptcy Act.There are two courts in the country 1. local or distric court and 2. Fedral court .

There is a bankruptcy court for each judicail distric in the country. There are almost 90 bankruptcy district court across the country. The court officails with decision making power over federal bankruptcy cases.The bankruptcy judge may decide any matters connected with a bankruptcy case , such as eligibility to file or weather a debtor should receive a discharge of debts.Most of the bankruptcy process is administrative however and is conducted away from the couthouse.

In cases under chapter 7, 12, or 13 and in chapter 11 cases, this administartive process is carried out by a trustee who is appointed to oversee the case

A debtor's involment with the bankruptcy judge is usually very limted . chapter 7 debtor will not appear in the court and will not see the bankruptcy judge unless an objection is raised in the case.

chapter 13 debtor may only have to appear before the bankruptcy judge at a plan confirmation hearing. usually the only formal proceeding at which a debtor must appear is the meeting of creditors which is usually held at the offices of the U.S. trustee.

Before we going to answer the 2nd part of the question lets us understand the rule as per chapter 7,11 and 13.

"chapter 7:-entitled liquidation,contemplates an orderly, court supervised procedure by which a trustee takes over the assets of the debtor's estate,reduce them to cash and makes distribution to creditors subject to the debtor's rights to retin certain exempt property and rights f secured credits.because there is usually little or no noe exempt property in most chpter 7 case, ther ay not be an actual liquidation of the debtor's assets.these cases are clled no asset case.a creditor holding an unsecured claim will get a distribution from the bankruptcy estate only if the caase is an asset case and creditor files a proof of claim with the bankruptcyh court.

chapter 11:- entitles reorganisation, ordinarilly is used by the commercial enterprises that desire to continue operation a business and repay creditors concurrently through a court approved plan of reoragantion.the chpter 11 debtor usaully has the exclusive rigt to file a plan of reorganation for the first 120 days after it files the case nd must provide creditors with a disclusore stateent containing information adequTE TO ENABLE CREDITORS to evalute plan.

chapter 13:- entitle adjustment of debtsof an individual with regular income is designed for individual debtor who has a regular source of income.chapter 13 is often preferable to chpter 7 because it enables the debtor to keep a valuable asset.

so as devid is irregulary employed so he should file a bankruptcy through chapter 7. explanation is witten above in chapter 7.

part 3.

$14000.