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thesame2
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Posted: 29 Dec 2009 at 23:59 \| IP Logged

two points on Chapter 7 bankruptcy got from Becker seem to be contradictory with each other.

(1) R7-15. For chapter 7 liquidation, debtor can be individual, can be artificial entity (e.g., a corporation) as well.

(2)R7-25:

"The following will prevent the debtor from receiving any discharge: 1. Debtor not an individual....." more over, it states "artificial entities seeking relief under Chapter 7 usually are dissolved at the conclusion of the case, and so their debts are wiped out"

I am confused. based on point (1), chapter7 liquidation applies to artificial entities (e.g.m corporation) as well. Based on point 2, artificial entities can't get discharge. Moreover, it also says that artificial entities' debt can be wiped out.

If their debts are wiped out, how can we say that they can't get discharge under Chapter 7??

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goldengold
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Posted: 30 Dec 2009 at 12:58 \| IP Logged

thesame2 wrote:

two points on Chapter 7 bankruptcy got from Becker seem to be contradictory with each other.

(1) R7-15. For chapter 7 liquidation, debtor can be individual, can be artificial entity (e.g., a corporation) as well.

(2)R7-25:

If their debts are wiped out, how can we say that they can't get discharge under Chapter 7??

it is only the art of language. Chapter 7 can apply to individuals, corporations and partnerships, but for individuals, most of debts will be discharged but for corporations and partnerships, they simply dissolved.
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thesame2
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Posted: 30 Dec 2009 at 13:26 \| IP Logged

goldengold wrote:

but based on Becker, artificial entities' debts can be "wiped out". Does it mean that debt of artificial entities (corporation) will be discharged as well?

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goldengold
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Posted: 30 Dec 2009 at 13:49 \| IP Logged

thesame2 wrote:

goldengold wrote:

but based on Becker, artificial entities' debts can be "wiped out". Does it mean that debt of artificial entities (corporation) will be discharged as well?

if the entity is not existing, i don't think creditors can get their money back. I don't know if i am correct or not but that is my understanding.
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EAK5455
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Posted: 12 Jan 2010 at 14:55 \| IP Logged

"In a Chapter 7 case, a corporation or partnership does not
receive a bankruptcy dischargeinstead, the entity is
dissolved. Only an individual can receive a Chapter 7
discharge (see 11 U.S.C. § 727(a)(1)). Once all assets of
the corporate or partnership debtor have been fully
administered, the case is closed. The debts of the
corporation or partnership theoretically continue to exist
until applicable statutory periods of limitations expire."

This is taken from wikipedia article on Chapter 7
bankruptcy.

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