6 UNIT SIX: CREDITORS’ RIGHTS AND BANKRUPTCY
• Chapter 11 governs reorganizations.
• Chapters 12 and 13 provide for the adjustment of debts by parties with regular incomes (family
farmers under Chapter 12).
D. SPECIAL REQUIREMENTS OF CONSUMER DEBTORS
A clerk of court must provide consumer-debtors (those whose debts arise primarily from purchases of
goods for personal or household use) with certain information (details in the text).
II. Liquidation Proceedings
In a Chapter 7 liquidation (an ordinary or “straight” bankruptcy), a debtor states his or her debts and turns his
or her assets over to a trustee, who sells nonexempt assets and distributes the proceeds to creditors. With
exceptions, the rest of the debts are discharged.
A. VOLUNTARY BANKRUPTCY
Within 180 days of receiving credit counseling from an approved nonprofit agency, a debtor can file a
voluntary petition. The debtor’s attorney must verify the information in the petition. A debtor does not
have to be insolvent—anyone liable to a creditor can file. A husband and wife can file jointly.
Voluntary Bankruptcy Information
In the case from which the following is excerpted, In re Riddle, 344 Bankr.702 (S.D. Fla. 2006), the court
held that the information provided by the debtors was complete and, thus their case was not subject to
automatic dismissal under the BAPCPA.
SUA SPONTE ORDER DETERMINING DEBTORS' COMPLIANCE WITH FILING REQUIREMENTS OF
A. JAY CRISTOL, Chief Judge.
Pursuant to 11 U.S.C. § 521(i), if an individual debtor in a voluntary case under Chapter 7 or 13 fails to
file all of the information required under 11 U.S.C. § 521(a)(1) within 45 days after the date of the filing of the
petition, the case shall be “automatically dismissed” effective on the 46th day after the date of the filing of the
The Court has reviewed the docket and the papers filed by debtors in this case and believes the
information required by 11 U.S.C. § 521(a)(1), and provided by the debtors, is complete. Moreover, no party
in interest has filed a request for an order of dismissal pursuant to 11 U.S.C. § 521(i)(2). Notwithstanding, the
Court feels compelled to comment on the unusual and confusing language in this statutory provision.
I do not like dismissal automatic,
It seems to me to be traumatic.
I do not like it in this case,
I do not like it any place.
As a judge I am most keen
to understand, What does it mean?