Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Collecting Support from a Payor Who Has Filed Under Chapter 11
Bankruptcy filings under Chapter 7 are generally available to individuals seeking a fresh economic start. A Chapter 7 proceeding involves the appointment of a trustee who collects assets and pays debts, with any unpaid debts subject to discharge unless a particular creditor is entitled to avoid the discharge of the obligation under specific statutory provisions. By contrast, bankruptcy filings under Chapter 11 are generally available to reorganize a business, although filings under this chapter are available to individuals as well. Chapter 11 individual bankruptcy filings typically do not entail the discharge of obligations until all payments under the reorganization plan have been made. In a Chapter 11 'debtor in possession' proceeding, the debtor is appointed as a kind of self-trustee who collects his or her own assets, pays obligations, and during the course of the Chapter 11 proceeding reports to the court, and thereby to the creditors, with regard to assets, liabilities, income, and expenses.
Of primary concern to matrimonial creditors and debtors alike are the concepts of 'property of the estate' and the 'automatic stay.' Upon the filing of the bankruptcy petition, the bankruptcy 'estate' is created. It is comprised of all the 'property of the estate' from which payment will be made to the debtor's creditors and from which assets will be allocated to the debtor's reorganization. Section 541(a)(1) of the Bankruptcy Code provides that 'property of the estate' includes 'all legal or equitable interests of the debtor in property as of the commencement of the case.' Also arising upon the filing of a bankruptcy petition, pursuant to ' 362(a) of the Bankruptcy Code, is an 'automatic stay' of all litigation, lien execution, and other actions involving the property of the estate or the debtor. Significantly for support creditors, the Code carves out an exception to the automatic stay for 'commencement or continuation of a ' proceeding ' for the dissolution of a marriage,' ' 362(b)(2)(A), and for 'collection of a domestic support obligation,' ' 362(b)(2)(B), but only if these proceedings do not seek to collect or determine 'property of the estate.' This latter provision links the automatic stay's support exception to the concept of bankruptcy estate property.
In a Chapter 7 filing, income that was earned or accrued and paid before the filing of the petition is clearly 'property of the estate,' and income that was earned or accrued and paid after the filing of the bankruptcy petition is not 'property of the estate.' This bright line distinction is important because a support creditor is permitted to invoke state law remedies to collect out of post-petition earnings pre- and post-petition support obligations as these earnings are not part of the Chapter 7 bankruptcy estate.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?