Talk:Bankruptcy in the United States/Archives/2012

Untitled

On 19 January 2006, I removed the following text from the end of the main article:

The 2005 Bankruptcy reform is the second attempt by Congress to reverse the Deprizio case a.k.a. Levitt v. Ingersoll Rand financil, 874 F.2d 1186 (7th Cir., 1989). In Deprizio, the court held that while a non-insider was paid by the debtor before the 90 day window for avoidable preferences, the fact that the payment benefited an insider who was a guarantor of the debt made the transaction fall within the one year window of Section 547(b). Congress in 1994 amended Section 550 to say that the bankruptcy trustee cannot get the payment back from the non-insider, but that was not good enough for the courts. In 2005 Congress added Section 547(i).

The above verbiage is arguably interesting but fairly opaque for someone who is not a bankruptcy specialist, and needs some reworking before (perhaps) being re-inserted into the article. The concepts of "preferences" and "insiders" should arguably be further elaborated, as well as the treatment of the statutes by the courts after Deprizio. It would also be helpful to explain what the statute said both before and after Deprizio, and what change was made by the 2005 legislation. Also, the statement that amended section 550 "was not good enough for the courts" can definitely be improved for purposes of an encyclopedia. I will try to rework this as soon as I can. Famspear 18:26, 19 January 2006 (UTC)

Also, having Deprizio in the "History" section of the article -- rather than in, say, a section on "preferences" -- is arguably affording too much emphasis to this particular matter in the context of the history of bankruptcy in the United States. Famspear 18:29, 19 January 2006 (UTC)

Note: Full citation to Deprizio is Levit v. Ingersoll Rand Financial Corp. (In re Deprizio), 874 F.2d 1186 (7th Cir. 1989). Famspear 19:43, 19 January 2006 (UTC)

We really need to find a place to put DePrizio because it was a wacky case that reaches the fair result but the judge used a strained definition of insider to do so. John wesley 22:14, 19 January 2006 (UTC) Would there need to be a different article within bankruptcy. John wesley 22:14, 19 January 2006 (UTC)

Dear John wesley: Well, I was thinking about writing two more subheadings -- one for Preferences and the other for Fraudulent Conveyances -- both to go in the Bankruptcy in the United States article. Maybe Deprizio would go in the discussion of "insiders" under the "Preferences" topic. What do you think? Famspear 22:19, 19 January 2006 (UTC)

I'm going to take a crack at adding a section entitled Avoidance Actions. Once that's done, DePrizio will fit easily in the preferences subsection. Brettmender 15:37, 30 July 2007 (UTC)

Spendthrift trusts

On 23 Jan 2006 I edited certain materials from the article on Bankruptcy in the United States. Prior to the edit, the wording was as follows:

Prior to bankruptcy laws, common law courts recognized trust devices to shield from creditors of the beneficiary payments made by the trust grantor. Therefore, bankrupcty laws will not disturb such pre-existing non-bankruptcy law. An important example of such spendthrift trust are ERISA pension plans. The Supreme Court has recently held that IRA funds coming from ERISA pension plans are spendthrift trusts.

First, ERISA plans, strictly speaking, are not spendthrift trusts. Some (but not all) ERISA plans are, however, required to contain "anti-alienation provisions" similar to those found in spendthrift trusts.

Second, an IRA is, broadly speaking, an ERISA plan in the sense that the Internal Revenue Code provisions for IRAs (sections 219 and 408, if I recall correctly) were put into the Internal Revenue Code by ERISA. However, IRAs are not spendthrift trusts. IRAs are not required to have (and generally do not have) anti-alienation provisions.

The Supreme Court did not hold that IRA funds coming from ERISA pension plans are spendthrift trusts. The Court did hold, in Rousey v. Jacoway, that under section 522(d)(10)(E) of the U.S. Bankruptcy Code (11 U.S.C. § 522(d)(10)(E)), a debtor in bankruptcy can exempt his or her IRA from the bankruptcy estate. That is a separate provision from the Bankruptcy Code provision that protects beneficiaries of spendthrift trusts (i.e., Bankruptcy Code section 541(c)(2)). Famspear 17:36, 23 January 2006 (UTC)

Debtor's Discharge

I removed "government guaranteed" as a modifier for student loans, because the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 or BAPCPA expanded protection from discharge to all student loans. 11 U.S.C.§ 523(a)(8)(B). —Preceding unsigned comment added by 74.240.123.145 (talk) 12:53, 3 December 2009 (UTC)

Copyvio

The section "Famous and Broke" was taken from the page http://www.bankruptcyreliance.com/. I deleted that section.

Enigmatic edit reverted

A fellow editor deleted the reference to section 101 of the 1978 Bankruptcy Act, the specific provision enacting the 1979 bankruptcy code as title 11 of the United States Code -- the code that succeeded the 1898 Act (which, incidentally, had also been codified as title 11 of the United States Code), with the following comment:

codified statutory provisions do not enact legislative bills; bills, once executed, enact themselves

I'm not sure what my fellow editor meant by this statement, but the 1978 Act did indeed enact the Bankruptcy Code as stated in the article, and the specific section of the 1978 Act that did this was section 101. This is easily verified by reference to the United States Statutes at Large.

Nothing in the article says that "statutory provisions enact legislative bills" (whatever that means). Further, it is correct to say that "bills" do not enact themselves -- but nothing in the article says that bills enact themselves.

At any rate, the reference to section 101 of the Act is correct. I reinserted the reference to section 101. Yours, Famspear 04:34, 4 December 2006 (UTC)

The change was mine and perhaps I was a little glib about it. Sorry for that. The sentence reads "The current Bankruptcy Code was enacted in 1978 by § 101 of the Bankruptcy Reform Act of 1978[34], and generally became effective on October 1, 1979." My quip was with "was enacted in 1978 by § 101 of the Bankruptcy Reform Act." I have actually checked the statute -- I stand corrected. Section 101 of the Act says it "codified and enacted" what is now the current Code. The confusion was because § 101 of Title 11 is the definitions section, and I had thought the statement was pointing to where it is codified, and not 'how'. This isn't a big deal, of course.LH 15:15, 29 March 2007 (UTC)

Perhaps there should be a discussion as to whether or not is is necessary to refer to the particular section of a bill that "enacts" a law. This isn't done in legal scholarship (instead the reference would be to the Act, not the particular section of the Act). Some places this might be appropriate (e.g. Lanham act, or 10b-5 of securities law), but I don't think here is one. That beign said, the statement is technically correct. Thanks for the correction.LH 15:15, 29 March 2007 (UTC)

Dear L33th4x0rguy/LH: I'm not sure what you mean by the comment that this "isn't done in legal scholarship." I suppose you could read a sampling of law review articles and get a sense of how things are done there (off the top of my head, I cannot say that you are right or wrong on this point).

Putting "legal scholarhip" aside, I would point out that in the editorial enactment notes following a section in a commercially-published version of a provision of the United States Code, it is common practice for the publisher to cite not only the section of the Act that enacted the Code provision in question, but to also get down specifically to the subsection, paragraph, subparagraph level, etc. Anything that saves the reader time in trying to locate the source should be considered helpful, in my view.

Let's set aside, for a moment, the example of "Act" sections versus "Code" sections, and just look at finding stuff in a Code. Suppose that you and I are having a discussion about confidential information in tax returns, and when the IRS can release your tax return information to someone else. Suppose that I happen to point out that the Internal Revenue Code authorizes the Internal Revenue Service to provide, to personnel at the U.S. Department of Education, certain confidential information from tax returns of individuals who have received something called an "applicable student loan," and whose loan repayment amounts are based at least in part on taxpayer income. Perhaps you might respond (if you were curious) with the question: "Well, gee, where is that found in the Internal Revenue Code?"

If I were to answer by saying "It's found in section 6103" and you went looking for it, you would still be left with the task of wading through all of Code section 6103 -- which is approximately forty-three pages in length (depending on the kind of printer you have). That's just one section of the Internal Revenue Code.

If, however, I told you that the student loan provision was specifically found in subsection (l) (by the way that's the letter "l", not the number "1"), paragraph (13), subparagraph (A), that cuts your search time down - especially if you have a 43-page paper copy of section 6103, and for whatever reason you don't have access to the online versions of the United States Code where you can do a quick electronic search using key words or phrases like "applicable student loan."

When you found the language on student loans, you would discover that subsection (l), paragraph (13), subparagraph (A) is buried in the middle -- somewhere around page 31 out of that 43 page printout for section 6103 (again, depending on your printer).

Similarly, in citing to an Act of Congress (which can be just one page, or can be hundreds of pages in length), I would argue that on balance it should be more helpful in Wikipedia to cite the specific section than it would be to omit it merely because readers (most of whom are not lawyers) might become confused about the difference between an Act section and a Code section. Yours, Famspear 17:30, 29 March 2007 (UTC)

Executory contracts

Executory contracts are avoidable in practice, because breach results in damages but damages in bankruptcy yield no money for plaintiff because plaintiff is a general unsecured creditor. This means that contracts which are valuable will be performed by the petitioner, but executory contracts which are net negative cash for the petitioner will not be performed because petitioner will purposefully breach. Radio Guy (talk)

Mostly. Petitioner (debtor) will probably reject as opposed to breach, and the other contractor will most likely have an unsecured claim. This is not true in all cases. Some contracts such as leases and intellectual property licenses will continue, notwithstanding the debtor's rejection. Additionally, it's untrue to say that unsecured claims will always yield no return; often, particularly in cases where executory contracts are large, unsecureds will receive some recovery.LH (talk) 20:19, 13 December 2007 (UTC)

State Probate Court jurisdiction limited by Supreme Court

The Marshall v. Marshall decision cut back on an overreaching Tejas court. Ginsburg's opinion further explained the probate exception to the bankruptcy court's jurisdiction. Hammer of the year (talk) 13:27, 12 December 2007 (UTC)

Merge Largest bankruptcies in U.S. history?

I'm not responsible for the content of Largest bankruptcies in U.S. history; I just caught it on WP:NPP and cleaned it up. Seemed like it might fit better here than by itself. Agree? TheMolecularMan (talk) 03:20, 17 September 2008 (UTC)

Nevermind, no reason to debate. Done. Be bold! TheMolecularMan (talk) 03:27, 17 September 2008 (UTC)

General Motors can now be added as #3 on this list. —Preceding unsigned comment added by 75.88.229.191 (talk) 12:12, 1 June 2009 (UTC)

tax refunds

my wife and myself filed bankrupty in 2009,nowthat we are getting a good tax refund back the bankrupty court wants to take it away. is this what normally happens in bankrupty? houston.j.moss@infragard.org —Preceding unsigned comment added by 72.24.127.165 (talk) 19:09, 9 February 2010 (UTC)

    Wikipedia is a really bad place to get legal advice.  —Preceding unsigned comment added by 206.205.117.10 (talk) 21:39, 19 February 2010 (UTC) 

Legal terminology: Bankruptcy Court is a "unit" of the District Court

An anonymous editor wrote:

"Bankruptcy courts are Article I courts (subordinate to Congress) and, as such, are not in any way "units" of US District Courts - which are Article III courts (subordinate to the US Supreme Court..."

That is incorrect on a number of levels. First of all, the statement that Article I courts are "subordinate" to Congress, while Article III courts are "subordinate" to the Supreme Court, seems to imply that Article I courts are NOT "subordinate" to the Supreme Court, which is incorrect.

In a sense, all U.S. federal courts (other than the Supreme Court itself) are "subordinate" to the United States Supreme Court. All courts created by Congress are -- per the actual wording of the U.S. Constitution -- "inferior" courts. And essentially all U.S. federal courts -- except for the Supreme Court itself -- are created by acts of Congress.

Decisions of Article I courts are generally reviewable (e.g., appealable) to Article III courts. For example, with exceptions, decisions of the Bankruptcy Court (an Article I court) are appealable to the related U.S. District Court (an Article III court), of which the Bankruptcy Court is a "unit". The word "unit" is the legal term actually found in the statute enacted by Congress that created the bankruptcy courts. (See 28 U.S.C. section 151.) Decisions of the District Court are then appealable to the related Court of Appeals (also an Article III court).

Similarly, decisions of the U.S. Tax Court are (with certain exceptions) appealable to the related Court of Appeals (Article III courts).

And, generally, the decisions of the appeals courts (whether the case began in the Bankruptcy Court or the Tax Court or the District Court) may be reviewed by the U.S. Supreme Court. Again, all U.S. federal courts other than the Supreme Court are "subordinate" to the U.S. Supreme Court. They're all "inferior" courts.

Essentially, what distinguishes an Article III court from an Article I court is that the judges of Article III courts hold office "during good behavior" -- which means for life (unless removed from office through the impreachment process, through resignation, etc.). By contrast, an Article I court judge (Bankruptcy Court, Tax Court, etc.) holds office for a specified term, a specified period of time.

An attorney who wants to become admitted to the bar of the Bankruptcy Court will find that he or she must be admitted to the bar of the related District Court, because the Bankruptcy Court is a unit of the District Court. There is no "separate" bar admission to the Bankruptcy Court. The point that the Bankruptcy Court is an Article I court does not change the legal relationship between the Bankruptcy Court and the District Court: the Bankruptcy Court is a "unit" of the District Court. Famspear (talk) 13:11, 19 June 2012 (UTC)

What does bankruptcy mean?

Is there a definition in the article? It would be nice if it was in the intro, or there was a section on it near the top. — Preceding unsigned comment added by 143.60.130.107 (talk) 05:52, 6 December 2012 (UTC)