Conditions of use · Every effort has been made to
reproduce the code accurately. However there could be errors which would
change the effect of the code. Permission to use these materials is given
only on the condition that the user will be solely responsible for verifying the
accuracy of the information contained herein.x
Text size · You may adjust the size of the text from
your browser's control bar: View, Text Size.
Printing · If the top menu bar stays at the top of the
window as you scroll in your browser, return the browser to the top of the page
before printing or the menu bar may obscure some text. You may print
selected pages of the web page by printing from File, Page Preview
instead of Print. More printing
tips.
Annotations · We have added notes linking to cases and
other information to some sections of the code. You may chose to
or
the annotations.
Redline Display · The Bankruptcy Code
shown is as amended by The Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005. You may choose to or
the redline version showing the changes made by the act.
Link to the Code · You may link your web page directly
to this version of the code, or to any subsection. More link
information.
TITLE
11. BANKRUPTCY · UNITED STATES CODE
Chapter 7.
Liquidation
Subchapter I. Officers and Administration
§ 701. Interim
trustee
§ 702. Election of
trustee
§ 703. Successor
trustee
§ 704. Duties of
trustee
§ 705. Creditors'
committee
§ 706. Conversion
§ 707. Dismissal of
a case or conversion to a case under chapter 11 or 13
Subchapter II. Collection, Liquidation, and Distribution of
the Estate
§ 721. Authorization to operate business
§ 722. Redemption
§ 723. Rights of
partnership trustee against general partners
§ 724. Treatment of
certain liens
§ 725. Disposition of
certain property
§ 726. Distribution
of property of the estate
§ 727. Discharge
§ 728. Special tax
provisions
Subchapter III. Stockbroker Liquidation
Omitted
Subchapter IV. Commodity Broker Liquidation
Omitted
Chapter 7.
Liquidation
Subchapter I. Officers and
Administration
11
USC § 701. Interim trustee
(a)
(1) Promptly after the order for relief under
this chapter, the United States trustee shall appoint one disinterested
person that is a member of the panel of private trustees established under section
586(a)(1) of title 28 or that is serving as trustee in the case
immediately before the order for relief under this chapter to serve as
interim trustee in the case.
(2) If none of the members of such panel is
willing to serve as interim trustee in the case, then the United States
trustee may serve as interim trustee in the case.
(b) The service of an interim trustee under this
section terminates when a trustee elected or designated under section
702 of this title to serve as trustee in the case qualifies under section
322 of this title.
(c) An interim trustee serving under this section is a
trustee in a case under this title.
[Rev. 5-20-05]
11
USC § 702. Election of trustee
(a) A creditor may vote for a candidate for trustee
only if such creditor--
(1) holds an allowable, undisputed, fixed,
liquidated, unsecured claim of a kind entitled to distribution under section
726(a)(2), 726(a)(3),
726(a)(4),
752(a),
766(h),
or 766(i)
of this title;
(2) does not have an interest materially adverse,
other than an equity interest that is not substantial in relation to such
creditor’s interest as a creditor, to the interest of creditors entitled
to such distribution; and
(3) is not an insider.
(b) At the meeting of creditors held under section
341 of this title, creditors may elect one person to serve as trustee in
the case if election of a trustee is requested by creditors that may vote
under subsection (a) of this section, and that hold at least 20 percent in
amount of the claims specified in subsection (a)(1) of this section that are
held by creditors that may vote under subsection (a) of this section.
(c) A candidate for trustee is elected trustee if--
(1) creditors holding at least 20 percent in
amount of the claims of a kind specified in subsection (a)(1) of this
section that are held by creditors that may vote under subsection (a) of
this section vote; and
(2) such candidate receives the votes of
creditors holding a majority in amount of claims specified in subsection
(a)(1) of this section that are held by creditors that vote for a trustee.
(d) If a trustee is not elected under this section,
then the interim trustee shall serve as trustee in the case.
[Rev. 5-20-05]
11
USC § 703. Successor trustee
(a) If a trustee dies or resigns during a case, fails
to qualify under section
322 of this title, or is removed under section
324 of this title, creditors may elect, in the manner specified in section
702 of this title, a person to fill the vacancy in the office of trustee.
(b) Pending election of a trustee under subsection (a)
of this section, if necessary to preserve or prevent loss to the estate, the
United States trustee may appoint an interim trustee in the manner specified
in section
701(a).
(c) If creditors do not elect a successor trustee
under subsection (a) of this section or if a trustee is needed in a case
reopened under section
350 of this title, then the United States trustee--
(1) shall appoint one disinterested person that is a member of the panel
of private trustees established under section
586(a)(1) of title 28 to serve as trustee in the case; or
(2) may, if none of the disinterested members of such panel is willing to
serve as trustee, serve as trustee in the case.
[Rev. 5-20-05]
11
USC § 704. Duties of trustee
(a) The trustee shall--
(1) collect and reduce to money the property of
the estate for which such trustee serves, and close such estate as
expeditiously as is compatible with the best interests of parties in
interest;
(2) be accountable for all property received;
(3) ensure that the debtor shall perform his
intention as specified in section
521(2)(B) [sic--reference to previous subsection; now
521(a)(2)(B)] of this title;
(4) investigate the financial affairs of the
debtor;
(5) if a purpose would be served, examine proofs
of claims and object to the allowance of any claim that is improper;
(6) if advisable, oppose the discharge of the
debtor;
(7) unless the court orders otherwise, furnish
such information concerning the estate and the estate’s administration as
is requested by a party in interest;
(8) if the business of the debtor is authorized
to be operated, file with the court, with the United States trustee, and
with any governmental unit charged with responsibility for collection or
determination of any tax arising out of such operation, periodic reports and
summaries of the operation of such business, including a statement of
receipts and disbursements, and such other information as the United States
trustee or the court requires;
(9) make a final report and file a final account
of the administration of the estate with the court and with the United
States trustee;
(10) if with respect to the
debtor there is a claim for a domestic support obligation, provide the
applicable notice specified in subsection
(c);
(11) if, at the time of the
commencement of the case, the debtor (or any entity designated by the
debtor) served as the administrator (as defined in section 3 of the Employee
Retirement Income Security Act of 1974) of an employee benefit plan,
continue to perform the obligations required of the administrator; and
(12) use all reasonable and best
efforts to transfer patients from a health care business that is in the
process of being closed to an appropriate health care business that--
(A) is in the vicinity of the health care business that
is closing;
(B) provides the patient with services that are
substantially similar to those provided by the health care business that
is in the process of being closed; and
(C) maintains a reasonable quality of care.
(b)
(1) With respect to a debtor who
is an individual in a case under this chapter--
(A) the United States trustee (or the bankruptcy
administrator, if any) shall review all materials filed by the debtor and,
not later than 10 days after the date of the first meeting of creditors,
file with the court a statement as to whether the debtor's case would be
presumed to be an abuse under section
707(b); and
(B) not later than 5 days after receiving a statement
under subparagraph (A), the court shall provide a copy of the statement to
all creditors.
(2) The United States trustee (or
bankruptcy administrator, if any) shall, not later than 30 days after the
date of filing a statement under paragraph (1), either file a motion to
dismiss or convert under section
707(b) or file a statement setting forth the reasons the United States
trustee (or the bankruptcy administrator, if any) does not consider such a
motion to be appropriate, if the United States trustee (or the bankruptcy
administrator, if any) determines that the debtor's case should be presumed
to be an abuse under section
707(b) and the product of the debtor's current monthly income,
multiplied by 12 is not less than--
(A) in the case of a debtor in a household of 1 person,
the median family income of the applicable State for 1 earner; or
(B) in the case of a debtor in a household of 2 or more
individuals, the highest median family income of the applicable State for
a family of the same number or fewer individuals.
(c)
(1) In a case described in subsection
(a)(10) to which subsection
(a)(10) applies, the trustee shall--
(A)
(i) provide written notice to the holder of the claim
described in subsection
(a)(10) of such claim and of the right of such holder to use the
services of the State child support enforcement agency established under
sections 464 and 466 of the Social Security Act for the State in which
such holder resides, for assistance in collecting child support during
and after the case under this title;
(ii) include in the notice provided under clause (i)
the address and telephone number of such State child support enforcement
agency; and
(iii) include in the notice provided under clause (i)
an explanation of the rights of such holder to payment of such claim
under this chapter;
(B)
(i) provide written notice to such State child
support enforcement agency of such claim; and
(ii) include in the notice provided under clause (i)
the name, address, and telephone number of such holder; and
(C) at such time as the debtor is granted a discharge
under section
727, provide written notice to such holder and to such State child
support enforcement agency of--
(i) the granting of the discharge;
(ii) the last recent known address of the debtor;
(iii) the last recent known name and address of the
debtor's employer; and
(iv) the name of each creditor that holds a claim
that--
(I) is not discharged under paragraph
(2), (4),
or (14A)
of section
523(a); or
(II) was reaffirmed by the debtor under section
524(c).
(2)
(A) The holder of a claim described in subsection
(a)(10) or the State child support enforcement agency of the State in
which such holder resides may request from a creditor described in paragraph
(1)(C)(iv) the last known address of the debtor.
(B) Notwithstanding any other provision of law, a
creditor that makes a disclosure of a last known address of a debtor in
connection with a request made under subparagraph (A) shall not be liable
by reason of making such disclosure.
[Rev. 5-20-05]
11
USC § 705. Creditors’ committee
(a) At the meeting under section
341(a) of this title, creditors that may vote for a trustee under section
702(a) of this title may elect a committee of not fewer than three, and
not more than eleven, creditors, each of whom holds an allowable unsecured
claim of a kind entitled to distribution under section
726(a)(2) of this title.
(b) A committee elected under subsection (a) of this section may consult
with the trustee or the United States trustee in connection with the
administration of the estate, make recommendations to the trustee or the
United States trustee respecting the performance of the trustee’s duties,
and submit to the court or the United States trustee any question affecting
the administration of the estate.
[Rev. 5-20-05]
11
USC § 706. Conversion
(a) The debtor may convert a case under this chapter to a case under chapter
11, 12,
or 13
of this title at any time, if the case has not been converted under section
1112, 1208,
or 1307
of this title. Any waiver of the right to convert a case under this subsection
is unenforceable.
(b) On request of a party in interest and after notice and a hearing, the
court may convert a case under this chapter to a case under chapter
11 of this title at any time.
(c) The court may not convert a case under this chapter to a case under chapter
12 or 13
of this title unless the debtor requests or consents to
such conversion.
(d) Notwithstanding any other provision of this section, a case may not be
converted to a case under another chapter of this title unless the debtor may
be a debtor under such chapter.
[Rev. 5-20-05]
11
USC § 707. Dismissal of a case or conversion to a
case under chapter 11 or 13
(a) The court may dismiss a case under this chapter
only after notice and a hearing and only for cause, including--
(1) unreasonable delay by the debtor that is
prejudicial to creditors;
(2) nonpayment of any fees or charges required
under chapter
123 of title 28; and
(3) failure of the debtor in a voluntary case to
file, within fifteen days or such additional time as the court may allow
after the filing of the petition commencing such case, the information
required by paragraph
(1) [sic--reference to previous paragraph number; now
paragraph (a)(1)] of section
521, but only on a motion by the United States trustee.
(b)
(1) After notice and a
hearing, the court, on its own motion or on a motion by the United States
trustee,
trustee
(or bankruptcy administrator, if any), or any party in interest, may
dismiss a case filed by an individual debtor under this chapter whose debts
are primarily consumer debts, or, with the debtor's consent,
convert such a case to a case under chapter 11 or 13 of this title,
if it finds that the granting of relief would be
an
abuse of the provisions of this chapter.
In
making a determination whether to dismiss a case under this section, the
court may not take into consideration whether a debtor has made, or
continues to make, charitable contributions (that meet the definition of
"charitable contribution" under section
548(d)(3)) to any qualified religious or charitable entity or
organization (as that term is defined in section
548(d)(4)).
(2)
(A)
(i) In considering under paragraph
(1) whether the granting of relief would be an abuse of the
provisions of this chapter, the court shall presume abuse exists if the
debtor's current monthly income reduced by the amounts determined under clauses
(ii), (iii),
and (iv),
and multiplied by 60 is not less than the lesser of--
(I) 25 percent of the debtor's
nonpriority unsecured claims in the case, or $6,000 [],
whichever is greater; or
(II) $10,000 [].
(ii)
(I) The debtor's monthly expenses
shall be the debtor's applicable monthly expense amounts specified
under the National
Standards and Local
Standards, and the debtor's actual monthly expenses for the
categories specified as Other
Necessary Expenses issued by the Internal
Revenue Service for the area in which the debtor resides, as in
effect on the date of the order for relief, for the debtor, the
dependents of the debtor, and the spouse of the debtor in a joint
case, if the spouse is not otherwise a dependent. Such expenses shall
include reasonably necessary health insurance, disability insurance,
and health savings account expenses for the debtor, the spouse of the
debtor, or the dependents of the debtor. Notwithstanding any other
provision of this clause, the monthly expenses of the debtor shall not
include any payments for debts. In addition, the debtor's monthly
expenses shall include the debtor's reasonably necessary expenses
incurred to maintain the safety of the debtor and the family of the
debtor from family violence as identified under section
309 of the Family Violence Prevention and Services Act, or other
applicable Federal law. The expenses included in the debtor's monthly
expenses described in the preceding sentence shall be kept
confidential by the court. In addition, if it is demonstrated that it
is reasonable and necessary, the debtor's monthly expenses may also
include an additional allowance for food and clothing of up to 5
percent of the food and clothing categories as specified by the
National Standards issued by the Internal Revenue Service.
(II) In addition, the debtor's
monthly expenses may include, if applicable, the continuation of
actual expenses paid by the debtor that are reasonable and necessary
for care and support of an elderly, chronically ill, or disabled
household member or member of the debtor's immediate family (including
parents, grandparents, siblings, children, and grandchildren of the
debtor, the dependents of the debtor, and the spouse of the debtor in
a joint case who is not a dependent) and who is unable to pay for such
reasonable and necessary expenses.
(III) In addition, for a debtor
eligible for chapter 13, the debtor's monthly expenses may include the
actual administrative expenses of administering a chapter 13 plan for
the district in which the debtor resides, up to an amount of 10
percent of the projected plan payments, as determined under schedules
issued by the Executive
Office for United States Trustees.
(IV) In addition, the debtor's
monthly expenses may include the actual expenses for each dependent
child less than 18 years of age, not to exceed $1,500 []
per year per child, to attend a private or public elementary or
secondary school if the debtor provides documentation of such expenses
and a detailed explanation of why such expenses are reasonable and
necessary, and why such expenses are not already accounted for in the National
Standards, Local
Standards, or Other
Necessary Expenses referred to in subclause
(I).
(V) In addition, the debtor's
monthly expenses may include an allowance for housing and utilities,
in excess of the allowance specified by the Local Standards for
housing and utilities issued by the Internal Revenue Service, based on
the actual expenses for home energy costs if the debtor provides
documentation of such actual expenses and demonstrates that such
actual expenses are reasonable and necessary.
(iii) The debtor's average monthly
payments on account of secured debts shall be calculated as the sum of--
(I) the total of all amounts
scheduled as contractually due to secured creditors in each month of
the 60 months following the date of the petition; and
(II) any additional payments to
secured creditors necessary for the debtor, in filing a plan under chapter
13 of this title, to maintain possession of the debtor's primary
residence, motor vehicle, or other property necessary for the support
of the debtor and the debtor's dependents, that serves as collateral
for secured debts;
divided by 60.
(iv) The debtor's expenses for payment
of all priority claims (including priority child support and alimony
claims) shall be calculated as the total amount of debts entitled to
priority, divided by 60.
(B)
(i) In any proceeding brought under
this subsection, the presumption of abuse may only be rebutted by
demonstrating special circumstances, such as a serious medical condition
or a call or order to active duty in the Armed Forces, to the extent
such special circumstances that justify additional expenses or
adjustments of current monthly income for which there is no reasonable
alternative.
(ii) In order to establish special
circumstances, the debtor shall be required to itemize each additional
expense or adjustment of income and to provide--
(I) documentation for such
expense or adjustment to income; and
(II) a detailed explanation of
the special circumstances that make such expenses or adjustment to
income necessary and reasonable.
(iii) The debtor shall attest under
oath to the accuracy of any information provided to demonstrate that
additional expenses or adjustments to income are required.
(iv) The presumption of abuse may only
be rebutted if the additional expenses or adjustments to income referred
to in clause
(i) cause the product of the debtor's current monthly income reduced
by the amounts determined under clauses
(ii), (iii),
and (iv)
of subparagraph (A) when multiplied by 60 to be less than the lesser
of--
(I) 25 percent of the debtor's
nonpriority unsecured claims, or $6,000 [],
whichever is greater; or
(II) $10,000 [].
(C) As part of the schedule of current
income and expenditures required under section
521, the debtor shall include a statement of the debtor's current
monthly income, and the calculations that determine whether a presumption
arises under subparagraph
(A)(i), that show how each such amount is calculated.
(D) Subparagraphs (A) through (C) shall not
apply, and the court may not dismiss or convert a case based on any form
of means testing, if the debtor is a disabled veteran (as defined in section
3741(1) of title 38), and the indebtedness occurred primarily during a
period during which he or she was--
(i) on active duty (as defined in section
101(d)(1) of title 10); or
(ii) performing a homeland defense
activity (as defined in section
901(1) of title 32).
(3) In considering under paragraph (1) whether
the granting of relief would be an abuse of the provisions of this chapter
in a case in which the presumption in subparagraph (A)(i) of such paragraph
does not arise or is rebutted, the court shall consider--
(A) whether the debtor filed the petition in
bad faith; or
(B) the totality of the circumstances
(including whether the debtor seeks to reject a personal services contract
and the financial need for such rejection as sought by the debtor) of the
debtor's financial situation demonstrates abuse.
(4)
(A) The court, on its own initiative or on
the motion of a party in interest, in accordance with the procedures
described in rule
9011 of the Federal Rules of Bankruptcy Procedure, may order the
attorney for the debtor to reimburse the trustee for all reasonable costs
in prosecuting a motion filed under section
707(b), including reasonable attorneys' fees, if--
(i) a trustee files a motion for
dismissal or conversion under this subsection; and
(ii) the court--
(I) grants such motion; and
(II) finds that the action of
the attorney for the debtor in filing a case under this chapter
violated rule
9011 of the Federal Rules of Bankruptcy Procedure.
(B) If the court finds that the attorney for
the debtor violated rule
9011 of the Federal Rules of Bankruptcy Procedure, the court, on its
own initiative or on the motion of a party in interest, in accordance with
such procedures, may order--
(i) the assessment of an appropriate
civil penalty against the attorney for the debtor; and
(ii) the payment of such civil penalty
to the trustee, the United States trustee (or the bankruptcy
administrator, if any).
(C) The signature of an attorney on a
petition, pleading, or written motion shall constitute a certification
that the attorney has--
(i) performed a reasonable
investigation into the circumstances that gave rise to the petition,
pleading, or written motion; and
(ii) determined that the petition,
pleading, or written motion--
(I) is well grounded in fact; and
(II) is warranted by existing
law or a good faith argument for the extension, modification, or
reversal of existing law and does not constitute an abuse under
paragraph (1).
(D) The signature of an attorney on the
petition shall constitute a certification that the attorney has no
knowledge after an inquiry that the information in the schedules filed
with such petition is incorrect.
(5)
(A) Except as provided in subparagraph (B)
and subject to paragraph (6), the court, on its own initiative or on the
motion of a party in interest, in accordance with the procedures described
in rule
9011 of the Federal Rules of Bankruptcy Procedure, may award a debtor
all reasonable costs (including reasonable attorneys' fees) in contesting
a motion filed by a party in interest (other than a trustee or United
States trustee (or bankruptcy administrator, if any)) under this
subsection if--
(i) the court does not grant the
motion; and
(ii) the court finds that--
(I) the position of the party
that filed the motion violated rule
9011 of the Federal Rules of Bankruptcy Procedure; or
(II) the attorney (if any) who
filed the motion did not comply with the requirements of clauses (i)
and (ii) of paragraph (4)(C), and the motion was made solely for the
purpose of coercing a debtor into waiving a right guaranteed to the
debtor under this title.
(B) A small business that has a claim of an
aggregate amount less than $1,000 []
shall not be subject to subparagraph (A)(ii)(I).
(C) For purposes of this paragraph--
(i) the term "small business"
means an unincorporated business, partnership, corporation, association,
or organization that--
(I) has fewer than 25 full-time
employees as determined on the date on which the motion is filed; and
(II) is engaged in commercial or
business activity; and
(ii) the number of employees of a
wholly owned subsidiary of a corporation includes the employees of--
(I) a parent corporation; and
(II) any other subsidiary
corporation of the parent corporation.
(6) Only the judge or United States trustee (or
bankruptcy administrator, if any) may file a motion under section 707(b), if
the current monthly income of the debtor, or in a joint case, the debtor and
the debtor's spouse, as of the date of the order for relief, when multiplied
by 12, is equal to or less than--
(A) in the case of a debtor in a household
of 1 person, the median family income of the applicable State for 1
earner;
(B) in the case of a debtor in a household
of 2, 3, or 4 individuals, the highest median family income of the
applicable State for a family of the same number or fewer individuals; or
(C) in the case of a debtor in a household
exceeding 4 individuals, the highest median family income of the
applicable State for a family of 4 or fewer individuals, plus $525 []
per month for each individual in excess of 4.
(7)
(A) No judge, United States trustee (or
bankruptcy administrator, if any), trustee, or other party in interest may
file a motion under paragraph (2) if the current monthly income of the
debtor, including a veteran (as that term is defined in section 101 of
title 38), and the debtor's spouse combined, as of the date of the order
for relief when multiplied by 12, is equal to or less than--
(i) in the case of a debtor in a
household of 1 person, the median family income of the applicable State
for 1 earner;
(ii) in the case of a debtor in a
household of 2, 3, or 4 individuals, the highest median family income of
the applicable State for a family of the same number or fewer
individuals; or
(iii) in the case of a debtor in a
household exceeding 4 individuals, the highest median family income of
the applicable State for a family of 4 or fewer individuals, plus $525 []
per month for each individual in excess of 4.
(B) In a case that is not a joint case,
current monthly income of the debtor's spouse shall not be considered for
purposes of subparagraph (A) if--
(i)
(I) the debtor and the debtor's
spouse are separated under applicable nonbankruptcy law; or
(II) the debtor and the debtor's
spouse are living separate and apart, other than for the purpose of
evading subparagraph (A); and
(ii) the debtor files a statement
under penalty of perjury--
(I) specifying that the debtor
meets the requirement of subclause (I) or (II) of clause (i); and
(II) disclosing the aggregate,
or best estimate of the aggregate, amount of any cash or money
payments received from the debtor's spouse attributed to the debtor's
current monthly income.
[Dollar amounts in subsection 707(b) are adjusted on
April 1 every 3 years by section
104. Adjusted amounts effective
are in brackets.]
(c)
(1) In this subsection--
(A) the term "crime of violence"
has the meaning given such term in section
16 of title 18; and
(B) the term "drug trafficking
crime" has the meaning given such term in section
924(c)(2) of title 18.
(2) Except as provided in paragraph (3), after
notice and a hearing, the court, on a motion by the victim of a crime of
violence or a drug trafficking crime, may when it is in the best interest
of the victim dismiss a voluntary case filed under this chapter by a
debtor who is an individual if such individual was convicted of such
crime.
(3) The court may not dismiss a case under
paragraph (2) if the debtor establishes by a preponderance of the evidence
that the filing of a case under this chapter is necessary to satisfy a
claim for a domestic support obligation.
[Rev. 5-20-05]
Subchapter II. Collection,
Liquidation, and Distribution of the Estate
11
USC § 721. Authorization to operate business
The court may authorize the trustee to operate the business of the debtor for
a limited period, if such operation is in the best interest of the estate and
consistent with the orderly liquidation of the estate.
[Rev. 5-20-05]
11
USC § 722. Redemption
An individual debtor may, whether or not the debtor has waived the right to
redeem under this section, redeem tangible personal property intended primarily
for personal, family, or household use, from a lien securing a dischargeable
consumer debt, if such property is exempted under section
522 of this title or has been abandoned under section
554 of this title, by paying the holder of such lien the amount of the
allowed secured claim of such holder that is secured by such lien in
full at the time of redemption.
[Rev. 5-20-05]
11
USC § 723. Rights of partnership trustee against general partners
(a) If there is a deficiency of property of the estate to pay in full all
claims which are allowed in a case under this chapter concerning a partnership
and with respect to which a general partner of the partnership is personally
liable, the trustee shall have a claim against such general partner to the
extent that under applicable nonbankruptcy law such general partner is
personally liable for such deficiency.
(b) To the extent practicable, the trustee shall first seek recovery of
such deficiency from any general partner in such partnership that is not a
debtor in a case under this title. Pending determination of such deficiency,
the court may order any such partner to provide the estate with indemnity for,
or assurance of payment of, any deficiency recoverable from such partner, or
not to dispose of property.
(c) Notwithstanding section
728(c) [sic--Section 728 was deleted by BAPCPA]
of this title, the trustee has a claim against the estate of each general
partner in such partnership that is a debtor in a case under this title for
the full amount of all claims of creditors allowed in the case concerning such
partnership. Notwithstanding section
502 of this title, there shall not be allowed in such partner’s case a
claim against such partner on which both such partner and such partnership are
liable, except to any extent that such claim is secured only by property of
such partner and not by property of such partnership. The claim of the trustee
under this subsection is entitled to distribution in such partner’s case
under section
726(a) of this title the same as any other claim of a kind specified in
such section.
(d) If the aggregate that the trustee recovers from the estates of general
partners under subsection (c) of this section is greater than any deficiency
not recovered under subsection (b) of this section, the court, after notice
and a hearing, shall determine an equitable distribution of the surplus so
recovered, and the trustee shall distribute such surplus to the estates of the
general partners in such partnership according to such determination.
[Rev. 5-20-05]
11
USC § 724. Treatment of certain liens
(a) The trustee may avoid a lien that secures a claim of a kind specified
in section
726(a)(4) of this title.
(b) Property in which the estate has an interest and that is subject to a
lien that is not avoidable under this title and that secures an allowed claim
for a tax, or proceeds of such property, shall be distributed--
(1) first, to any holder of an allowed claim secured by a lien on such
property that is not avoidable under this title and that is senior to such
tax lien;
(2) second, to any holder of a claim of a kind specified in section
507(a)(1), 507(a)(2),
507(a)(3),
507(a)(4),
507(a)(5),
507(a)(6),
or 507(a)(7)
of this title, to the extent of the amount of such allowed tax claim that is
secured by such tax lien;
(3) third, to the holder of such tax lien, to any extent that such
holder’s allowed tax claim that is secured by such tax lien exceeds any
amount distributed under paragraph (2) of this subsection;
(4) fourth, to any holder of an allowed claim secured by a lien on such
property that is not avoidable under this title and that is junior to such
tax lien;
(5) fifth, to the holder of such tax lien, to the extent that such
holder’s allowed claim secured by such tax lien is not paid under
paragraph (3) of this subsection; and
(6) sixth, to the estate.
(c) If more than one holder of a claim is entitled to distribution under a
particular paragraph of subsection (b) of this section, distribution to such
holders under such paragraph shall be in the same order as distribution to
such holders would have been other than under this section.
(d) A statutory lien the priority of which is determined in the same manner
as the priority of a tax lien under section
6323 of the Internal Revenue Code of 1986 shall be treated under
subsection (b) of this section the same as if such lien were a tax lien.
[Rev. 5-23-05]
11
USC § 725. Distribution of property of the estate
(a) Except as provided in section
510 of this title, property of the estate shall be distributed--
(1) first, in payment of claims of the kind specified in, and in the
order specified in, section
507 of this title, proof of which is timely filed under section
501 of this title or tardily filed before the date on which the trustee
commences distribution under this section;
(2) second, in payment of any allowed unsecured claim, other than a claim
of a kind specified in paragraph (1), (3), or (4) of this subsection, proof
of which is--
(A) timely filed under section
501(a) of this title;
(B) timely filed under section
501(b) or 501(c)
of this title; or
(C) tardily filed under section
501(a) of this title, if--
(i) the creditor that holds such claim did not have notice or actual
knowledge of the case in time for timely filing of a proof of such claim
under section
501(a) of this title; and
(ii) proof of such claim is filed in time to permit payment of such
claim;
(3) third, in payment of any allowed unsecured claim proof of which is
tardily filed under section
501(a) of this title, other than a claim of the kind specified in
paragraph (2)(C) of this subsection;
(4) fourth, in payment of any allowed claim, whether secured or
unsecured, for any fine, penalty, or forfeiture, or for multiple, exemplary,
or punitive damages, arising before the earlier of the order for relief or
the appointment of a trustee, to the extent that such fine, penalty,
forfeiture, or damages are not compensation for actual pecuniary loss
suffered by the holder of such claim;
(5) fifth, in payment of interest at the legal rate from the date of the
filing of the petition, on any claim paid under paragraph (1), (2), (3), or
(4) of this subsection; and
(6) sixth, to the debtor.
(b) Payment on claims of a kind specified in paragraph
(1), (2),
(3),
(4),
(5),
(6),
(7),
or (8)
of section
507(a) of this title, or in paragraph (2), (3), (4), or (5) of subsection
(a) of this section, shall be made pro rata among claims of the kind specified
in each such particular paragraph, except that in a case that has been
converted to this chapter under section
1009, 1112,
1208,
or 1307
of this title, a claim allowed under section
503(b) of this title incurred under this chapter after such conversion has
priority over a claim allowed under section
503(b) of this title incurred under any other chapter of this title or
under this chapter before such conversion and over any expenses of a custodian
superseded under section
543 of this title.
(c) Notwithstanding subsections (a) and (b) of this section, if there is
property of the kind specified in section
541(a)(2) of this title, or proceeds of such property, in the estate, such
property or proceeds shall be segregated from other property of the estate,
and such property or proceeds and other property of the estate shall be
distributed as follows:
(1) Claims allowed under section
503 of this title shall be paid either from property of the kind
specified in section
541(a)(2) of this title, or from other property of the estate, as the
interest of justice requires.
(2) Allowed claims, other than claims allowed under section
503 of this title, shall be paid in the order specified in subsection
(a) of this section, and, with respect to claims of a kind specified in a
particular paragraph of section
507 of this title or subsection (a) of this section, in the following
order and manner:
(A) First, community claims against the debtor or the debtor’s spouse
shall be paid from property of the kind specified in section
541(a)(2) of this title, except to the extent that such property is
solely liable for debts of the debtor.
(B) Second, to the extent that community claims against the debtor are
not paid under subparagraph (A) of this paragraph, such community claims
shall be paid from property of the kind specified in section
541(a)(2) of this title that is solely liable for debts of the debtor.
(C) Third, to the extent that all claims against the debtor including
community claims against the debtor are not paid under subparagraph (A) or
(B) of this paragraph such claims shall be paid from property of the
estate other than property of the kind specified in section
541(a)(2) of this title.
(D) Fourth, to the extent that community claims against the debtor or
the debtor’s spouse are not paid under subparagraph (A), (B), or (C) of
this paragraph, such claims shall be paid from all remaining property of
the estate.
[Rev. 5-23-05]
11
USC § 726. Distribution of property of the estate
(a) Except as provided in section
510 of this title, property of the estate shall be distributed--
(1) first, in payment of claims of the kind specified in, and in the
order specified in, section
507 of this title, proof of which is timely filed under section
501 of this title or tardily filed
on
or before the earlier of--
(A) the date that is 10 days after the mailing to
creditors of the summary of the trustee's final report; or
(B) the date on which the trustee commences final
distribution under this section;
(2) second, in payment of any allowed unsecured claim, other than a claim
of a kind specified in paragraph (1), (3), or (4) of this subsection, proof
of which is--
(A) timely filed under section
501(a) of this title;
(B) timely filed under section
501(b) or 501(c)
of this title; or
(C) tardily filed under section 501 (a) of this title, if--
(i) the creditor that holds such claim did not have notice or actual
knowledge of the case in time for timely filing of a proof of such claim
under section
501(a) of this title; and
(ii) proof of such claim is filed in time to permit payment of such
claim;
(3) third, in payment of any allowed unsecured claim proof of which is
tardily filed under section
501(a) of this title, other than a claim of the kind specified in
paragraph (2)(C) of this subsection;
(4) fourth, in payment of any allowed claim, whether secured or
unsecured, for any fine, penalty, or forfeiture, or for multiple, exemplary,
or punitive damages, arising before the earlier of the order for relief or
the appointment of a trustee, to the extent that such fine, penalty,
forfeiture, or damages are not compensation for actual pecuniary loss
suffered by the holder of such claim;
(5) fifth, in payment of interest at the legal rate from the date of the
filing of the petition, on any claim paid under paragraph (1), (2), (3), or
(4) of this subsection; and
(6) sixth, to the debtor.
(b) Payment on claims of a kind specified in paragraph
(1), (2),
(3),
(4),
(5),
(6),
(7),
or (8)
of section
507(a) of this title, or in paragraph (2), (3), (4), or (5) of subsection
(a) of this section, shall be made pro rata among claims of the kind specified
in each such particular paragraph, except that in a case that has been
converted to this chapter under
section
1112, 1208,
or 1307
of this title, a claim allowed under section
503(b) of this title incurred under this chapter after such conversion has
priority over a claim allowed under section
503(b) of this title incurred under any other chapter of this title or
under this chapter before such conversion and over any expenses of a custodian
superseded under section
543 of this title.
(c) Notwithstanding subsections (a) and (b) of this section, if there is
property of the kind specified in section
541(a)(2) of this title, or proceeds of such property, in the estate, such
property or proceeds shall be segregated from other property of the estate,
and such property or proceeds and other property of the estate shall be
distributed as follows:
(1) Claims allowed under section 503 of this title shall be paid either
from property of the kind specified in section
541(a)(2) of this title, or from other property of the estate, as the
interest of justice requires.
(2) Allowed claims, other than claims allowed under section
503 of this title, shall be paid in the order specified in subsection
(a) of this section, and, with respect to claims of a kind specified in a
particular paragraph of section
507 of this title or subsection (a) of this section, in the following
order and manner:
(A) First, community claims against the debtor or the debtor’s spouse
shall be paid from property of the kind specified in section
541(a)(2) of this title, except to the extent that such property is
solely liable for debts of the debtor.
(B) Second, to the extent that community claims against the debtor are
not paid under subparagraph (A) of this paragraph, such community claims
shall be paid from property of the kind specified in section
541(a)(2) of this title that is solely liable for debts of the debtor.
(C) Third, to the extent that all claims against the debtor including
community claims against the debtor are not paid under subparagraph (A) or
(B) of this paragraph such claims shall be paid from property of the
estate other than property of the kind specified in section
541(a)(2) of this title.
(D) Fourth, to the extent that community claims against the debtor or
the debtor’s spouse are not paid under subparagraph (A), (B), or (C) of
this paragraph, such claims shall be paid from all remaining property of
the estate.
[Rev. 5-23-05]
11
USC § 727. Discharge
(a) The court shall grant the debtor a discharge,
unless--
(1) the debtor is not an individual;
(2) the debtor, with intent to hinder, delay, or
defraud a creditor or an officer of the estate charged with custody of
property under this title, has transferred, removed, destroyed, mutilated,
or concealed, or has permitted to be transferred, removed, destroyed,
mutilated, or concealed--
(A) property of the debtor, within one year before the date of the
filing of the petition; or
(B) property of the estate, after the date of the filing of the
petition;
(3) the debtor has concealed, destroyed,
mutilated, falsified, or failed to keep or preserve any recorded
information, including books, documents, records, and papers, from which the
debtor’s financial condition or business transactions might be
ascertained, unless such act or failure to act was justified under all of
the circumstances of the case;
(4) the debtor knowingly and fraudulently, in or
in connection with the case--
(A) made a false oath or account;
(B) presented or used a false claim;
(C) gave, offered, received, or attempted to obtain money, property, or
advantage, or a promise of money, property, or advantage, for acting or
forbearing to act; or
(D) withheld from an officer of the estate entitled to possession under
this title, any recorded information, including books, documents, records,
and papers, relating to the debtor’s property or financial affairs;
(5) the debtor has failed to explain
satisfactorily, before determination of denial of discharge under this
paragraph, any loss of assets or deficiency of assets to meet the debtor’s
liabilities;
(6) the debtor has refused, in the case--
(A) to obey any lawful order of the court, other than an order to
respond to a material question or to testify;
(B) on the ground of privilege against self-incrimination, to respond
to a material question approved by the court or to testify, after the
debtor has been granted immunity with respect to the matter concerning
which such privilege was invoked; or
(C) on a ground other than the properly invoked privilege against
self-incrimination, to respond to a material question approved by the
court or to testify;
(7) the debtor has committed any act specified in
paragraph (2), (3), (4), (5), or (6) of this subsection, on or within one
year before the date of the filing of the petition, or during the case, in
connection with another case, under this title or under the Bankruptcy Act,
concerning an insider;
(8) the debtor has been granted a discharge under
this section, under section
1141 of this title, or under section 14, 371, or 476 of the Bankruptcy
Act, in a case commenced within 8
years before the date of the filing of the petition;
(9) the debtor has been granted a discharge under
section
1228 or 1328
of this title, or under section 660 or 661 of the Bankruptcy Act, in a case
commenced within six years before the date of the filing of the petition,
unless payments under the plan in such case totaled at least--
(A) 100 percent of the allowed unsecured claims in such case; or
(B)
(i) 70 percent of such claims; and
(ii) the plan was proposed by the debtor in good faith, and was the
debtor's best effort;
(10) the court approves a written waiver of
discharge executed by the debtor after the order for relief under this
chapter;
(11) after filing the petition,
the debtor failed to complete an instructional course concerning personal
financial management described in section
111, except that this paragraph shall not apply with respect to a debtor
who is a person described in section
109(h)(4) or who resides in a district for which the United States
trustee (or the bankruptcy administrator, if any) determines that the
approved instructional courses are not adequate to service the additional
individuals who would otherwise be required to complete such instructional
courses under this section (The United States trustee (or the bankruptcy
administrator, if any) who makes a determination described in this paragraph
shall review such determination not later than 1 year after the date of such
determination, and not less frequently than annually thereafter.); or
(12) the court after notice and
a hearing held not more than 10 days before the date of the entry of the
order granting the discharge finds that there is reasonable cause to believe
that--
(A) section
522(q)(1) may be applicable to the debtor; and
(B) there is pending any proceeding in which the debtor
may be found guilty of a felony of the kind described in section
522(q)(1)(A) or liable for a debt of the kind described in section
522(q)(1)(B).
(b) Except as provided in section
523 of this title, a discharge under subsection (a) of this section
discharges the debtor from all debts that arose before the date of the order
for relief under this chapter, and any liability on a claim that is determined
under section
502 of this title as if such claim had arisen before the commencement of
the case, whether or not a proof of claim based on any such debt or liability
is filed under section
501 of this title, and whether or not a claim based on any such debt or
liability is allowed under section
502 of this title.
(c)
(1) The trustee, a creditor, or the United States
trustee may object to the granting of a discharge under subsection (a) of
this section.
(2) On request of a party in interest, the court
may order the trustee to examine the acts and conduct of the debtor to
determine whether a ground exists for denial of discharge.
(d) On request of the trustee, a creditor, or the
United States trustee, and after notice and a hearing, the court shall revoke
a discharge granted under subsection (a) of this section if--
(1) such discharge was obtained through the fraud
of the debtor, and the requesting party did not know of such fraud until
after the granting of such discharge;
(2) the debtor acquired property that is property
of the estate, or became entitled to acquire property that would be property
of the estate, and knowingly and fraudulently failed to report the
acquisition of or entitlement to such property, or to deliver or surrender
such property to the trustee;
(3) the debtor committed an act specified in
subsection (a)(6) of this section;
or
(4) the debtor has failed to
explain satisfactorily--
(A) a material misstatement in an audit referred to in section
586(f) of title 28; or
(B) a failure to make available for inspection all
necessary accounts, papers, documents, financial records, files, and all
other papers, things, or property belonging to the debtor that are
requested for an audit referred to in section
586(f) of title 28.
(e) The trustee, a creditor, or the United States
trustee may request a revocation of a discharge--
(1) under subsection (d)(1) of this section
within one year after such discharge is granted; or
(2) under subsection (d)(2) or (d)(3) of this
section before the later of--
(A) one year after the granting of such discharge; and
(B) the date the case is closed.
[Rev. 5-23-05]
11
USC § 728. [Deleted]
[Rev. 5-23-05]
|
|
Doney
& Associates PLC Home Page
