A Chapter 7 Debtor`s Agreement To Pay A Creditor

Amendments to the 2005 Bankruptcy Act added to Chapters 7 and 13 the requirements for consumers, requiring an “average test.” The resource test requires a careful examination of a debtor`s income and a reference level, including whether the debtor`s current monthly income multiplied by 12 is equal to or greater than the average annual family income of the debtor`s country of origin for the same family. Some bankruptcy procedures are introduced to allow a debtor to reorganize and establish a repayment plan for creditors, while others involve the liquidation of the debtor`s unpaid assets. To determine the average family income for each state, go www.usdoj.gov/ust/eo/bapcpa/meanstesting.htm. Circumstances may be in place to overcome the presumption of abuse in Chapter 7 cases. Not all creditors are treated in the same way in bankruptcy proceedings. All creditors have the right to participate in the payment of the bankrupt property, but only on the basis of the priority of their claims. Bankruptcy law promotes priority rights such as custody of children and guaranteed rights. Guaranteed receivables are receivables in which collateral guarantees the debt and where the creditor can take over and resell the property in the event of a late payment of the debtor. Filing a petition under Chapter 7 “Remains Automatic” (stops) most recovery actions against the debtor or the debtor`s property.

11 U.S.C 362. But the filing of the petition does not remain certain types of actions under 11 U.S.C. No. 362 (b), and the stay can only be effective for a short period in certain situations. The suspension is ensured by a final right and does not require legal action. As a general rule, as long as the stay is in effect, creditors cannot initiate or pursue actions, wage seizures or even phone calls requesting payments. The liquidator informs all creditors whose names and addresses are indicated by the debtor of the bankruptcy case. When bankruptcy proceedings are filed, an automatic suspension is imposed by the Bankruptcy Act. This automatic stay generally prevents creditors from taking further recovery actions against the debtor without the approval of the bankruptcy court.

Chapter 7: Section 726 (a) (3) authorizes the payment of late claims, but only after full payment of general unsecured claims filed in a timely manner. Decisions authorizing late claims in Chapter 7 include In re Sea Air Shuttle Corp., 168 B.R. 501 (Bankr. D.P.R. 1994); In re Brennan, 167 B.R.