Business concepts and applications

Business

Under the Bankruptcy Code, Janet is obliged to file several documents and schedules. These include a certificate of credit counseling, evidence of employer payment 60 days before the filing, a statement of monthly net income and anticipated income increase or expenses after filing, and a record of interest in terms of federal or state qualified education or tuition accounts. These documents must be filed 60 days prior to filing the Chapter 7 petition.

If this deadline is missed, the likelihood is that the filing will be dismissed or modified to a different type of filing, which could have financial implications for Janet.

To determine whether Janet is involved in substantial abuse of Chapter 7, the court would determine whether the debts are primarily consumer oriented. If the income exceeds the minimum threshold determined by 11 USC 702 (B) of the code, it would be considered as substantial abuse. If the current monthly income exceeds allowable expenses multiplied by 60, to the minimum of $10,000 or the maximum of 25% of unsecured nonpriority claims, this implies abuse. Those with a disposable income of $50,000 would more likely than not be prevented from filing a Chapter 7 claim. In Janet's case, her disposable income is far below this mark, which means that she would probably be allowed to proceed with the Chapter 7 filing.

Were the court however to find an ability to pay the medical debts from her disposable income, the order would likely be to do so on a monthly basis, in an amount that is considered reasonable for Janet's situation.

A prejudgment attachment provides for the recovery of money damages by levying security interest on the property of a party obliged to pay these damages.

A writ of execution involves a court order to satisfy a monetary judgment obtained by a plaintiff. This provides for a court to order a sheriff or other official to take possession of property that is owned by a judgment debtor. This can then be sold in a sheriff's sale to partially or fully satisfy the judgment.

A Garnishment means that monetary judgment is collected against a defendant by ordering payment from a third party, directly payable to the plaintiff. The most common type is a wage garnishment, which involves payment from an employee's compensation; the entire debt is paid in this way, r arrangements are made to pay off the debt. Common examples of such debt include child support, defaulted student loans, taxes, and unpaid court fines.

An estate in property generally includes all legal and equitable interests of the debtor, along with property hat is considered community property for the debtor and his or her spouse. This includes the right to file a lawsuit, stock options, the right to inheritances within 6 months after filing the bankruptcy, tax refunds, and tax attributes. Exclusions form estate in property are the debtor's rights in spendthrift trusts and ERISA qualified retirement plans. Also included are 401K plans. Assets that are not estate property are automatically exempt.