Also known as: bankrupt · bankrupts · bankrupted · bankrupting · bankruptcies · bankerout · insolvency · insolvent
Written by attorneys · grounded in primary & secondary sources — see below
A statutory procedure by which a debtor obtains financial relief and undergoes judicially supervised reorganization or liquidation of assets for the benefit of creditors. The procedure is authorized by federal law and produces a discharge of eligible debts while distributing nonexempt assets according to statutory priorities.
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Bei Bai, a resident of State A, files a Chapter 7 petition listing creditors located in three different states. The bankruptcy court applies the same eligibility and discharge rules that would govern an identical filing in State B. Bai receives a discharge of eligible debts under the single federal statute.
Brandon Black files Chapter 11. His estate includes a prepetition state-law breach-of-contract claim against a private counterparty. The bankruptcy court declines to enter final judgment on that claim alone because it is the type traditionally resolved by Article III courts.
Bianca Baker receives a Chapter 7 discharge of a $40,000 unsecured loan. After the case closes, Baker signs a written promise to repay the full amount to the original lender. The promise is enforceable despite the prior discharge.
Brendan Burns owns land subject to a recorded conservation servitude. Burns files Chapter 11 and the trustee attempts to sell the land free of the servitude. The servitude remains enforceable against the purchaser because it is not a covenant to pay money outside a general plan of development.
Benson Motors LP is the debtor in a Chapter 7 case. A judgment creditor of the general partner seeks to levy on the partner's personal assets. The levy is barred because the partnership itself is the debtor in bankruptcy and the statutory conditions for piercing the partnership shield are not met.
Boulder Construction is a general partnership that files Chapter 11. A judgment creditor of one partner attempts to execute against that partner's separate assets on a partnership debt. Execution is stayed because the partnership is the debtor in bankruptcy and the required predicate judgment against the partnership remains unsatisfied.
Article I, Section 8 grants Congress the power to establish uniform laws on the subject of bankruptcies throughout the United States. This clause authorizes federal legislation that displaces conflicting state insolvency rules and creates a single nationwide discharge and distribution scheme.
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No. A broad grant of jurisdiction to non-Article III bankruptcy courts over private-rights contract claims violates Article III. Such claims must be decided by Article III judges unless the parties consent or the claim is otherwise within the bankruptcy court's core authority.
…Clause for special treatment. Accordingly, Congress could regulate all matters that "substantially affect" the Army and Navy, bankruptcies, tax collection, expenditures, and so on. In that case, the Clauses of § 8 all mutually overlap, something we can assume the Founding Fathers never intended. Our construction of the scope…
…1996, while J. Howard’s estate was subject to ongoing proceedings in Probate Court in Harris County, Texas, Vickie filed for bankruptcy
…no hearing held 120 days after action commenced); City of New York v. New York, N. H. & H. R. Co. , 344 U. S. 293, 294 (1953) (
…the competitive nature of the opportunity—whether prospectively harmful or unfair—; whether the corporation, by reason of insolvency
…judicial systems is simply too delicate and important to be reduced to any single standard. See Hill, The Erie Doctrine in
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Yes. An express promise to pay all or part of an indebtedness discharged or dischargeable in bankruptcy proceedings begun before the promise is made is binding under contract law.
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No. Most servitudes survive bankruptcy and remain enforceable against successors. Only certain monetary covenants outside a general plan of development may be extinguished by statute.
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Levy is ordinarily barred when the partnership itself is the debtor in bankruptcy. The creditor must first obtain a judgment against the partnership and return execution unsatisfied, or satisfy one of the statutory exceptions such as partner consent or court permission based on insufficient partnership assets.
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