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Bankruptcy Basics
Bankruptcy Judges Division
Administrative Office of the United States Courts
APRIL 2006
Revised Third Edition
For cases filed on or after October 17, 2005



The Discharge in Bankruptcy

Chapter 7. Liquidation Under the Bankruptcy Code

Chapter 13. Individual Debt Adjustment

Chapter 11. Reorganization Under the Bankruptcy Code

Chapter 12. Family Farmer Bankruptcy

Chapter 9. Municipality Bankruptcy

Chapter 15. Ancillary and Other Cross-Border Cases

SCRA. Servicemembers' Civil Relief Act

SIPA. Securities Investor Protection Act

Bankruptcy Terminology


Securities Investor Protection Act

Although the Bankruptcy Code provides for a stockbroker liquidation proceeding (11 U.S.C. 741 et seq.), it is far more likely that a failing brokerage will find itself involved in a proceeding under the Securities Investor Protection Act of 1970 ("SIPA") (15 U.S.C. 78aaa et seq.), rather than a Bankruptcy Code liquidation case.

a. Overview

b. History


d. Bankruptcy Liquidation versus the SIPA Liquidation in Bankruptcy Court

e. Role of the District Court

f. Removal to Bankruptcy Court

g. Liquidation Proceedings

h. Powers of the Trustee

i. Claims

j. Distribution

k. Advances

l. Direct Payment Under SIPA Outside the Bankruptcy Court

m. Role of Securities and Exchange Commission

n. Compensation in a SIPA Action