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Bankruptcy There Are Essential Two Primary Purposes Essay

¶ … bankruptcy? There are essential two primary purposes for the existence of federal bankruptcy laws. The first purpose is to provide debtors with a legally recognized method for discharging their debt and affording said debtors with an opportunity for a fresh start financially. The second purpose is to provide creditors with protection of their interests in the estate of the bankrupt party. In all bankruptcy, all debts are listed and creditors are categorized as either secured or unsecured. Secured creditors enjoy a better position relative to any assets in the bankrupt estate as they have an enforceable interest in said assets. Bankruptcy, depending on the type utilized by the debtor, can either erase the indebtedness of the debtor or allow the debtor additional time to satisfy his debts without interference from his creditors.

What is a lien. Give an example.

In bankruptcy filings liens, claims against property that are filed in order to secure payment, enjoy a special status. The purpose for placing liens on property is to ensure payment in the event of possible bankruptcy and/or attempts by the debtor to transfer an interest in property prior to a debt on...

In bankruptcies there are several different types of liens: tax liens filed by government agencies; mechanics liens filed by contractor performing work on property; and homeowners liens that are filed primarily by condominium associations for unpaid dues.
3. Who abandons property of the bankruptcy estate? a. The Bankruptcy court; b. The debtor; c. The creditor; d. The trustee; e. All of the above

Answer: d. The trustee

4. When a Trustee avoids a preference payment to a creditor: a. The creditor goes to jail; b. The creditor gets to keep the money; c. The debtor's bankruptcy is dismissed; d. all of the above; e. none of the above

Answer: e. none of the above

5. Who would file an Administrative Claim in a bankruptcy and in what order would such creditor be paid?

Administrative claims are for goods sold to the debtor within 20 days prior to the date of the filing of the bankruptcy. In order to be eligible for possible consideration as a valid administrative claim the goods supplier must show 1) that the goods were sold to the debtor; 2) goods were received within 20 days prior to the filing; 3)…

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