Chapter 7 Bankrupcy

Bionol Clearfield files for bankrupcy, heads for liquidation block

Bionol Clearfield filed for Chapter 7 liquidation bankruptcy to liquidate its assets, which are listed between $50-$100 million with liabilities of $100-$500 million.

The plant began having difficulties just months after opening in December 2009. In July 2010, the company announced that its biggest customer, Getty Oil/Lukoil had defaulted on its five-year contract to purchase nearly all of the plant’s ethanol output.

Potential Problems In Filing Chapter 7 Bankruptcy | Bankruptcy

Any person filing for Chapter 7 bankruptcy targets to have all debts to be discharged if possible. Typically, the rule says that financial obligations are wiped out if they were created before a person has filed for Chapter 7 . All debts are eradicated, and debt collectors can no longer collect from the debtor once the debts are discharged. Although debts can be discharged, debts like mortgage or car loan aren’t discharged by filing of Chapter 7.

The universal rule that all debts will be discharged has a few very important exclusions. For instance, a creditor can seek to contest a debt discharge using the provisions of eleven U.S.C. 523. A debtor could be accused of false pretenses or actual fraud. If the court doesn’t wipe out any financial obligation, the creditor has to be repaid and this will have a considerable impact on a person’s bankruptcy filing goals.

Why don’t we proceed with this blog post. The explanation for the exemptions is to ensure that financial obligation discharge is only given to individuals who are deserving to be given relief and not filing bankruptcy with the intention of being dishonest. The Bankruptcy Code has some debt discharge exclusions. A financial obligation may not be discharged for the grounds that’s was obtained by means of any form of dishonesty or it the debt was created according to public policy.

Debts that were created by a person’s illegal actions aren’t dischargeable. The non-dischargeable debts due to public policy consist of educational loan, child support, alimony, customs duties and taxes, government fines, penalties, and forfeitures, unscheduled claims, and certain debts that survive a preceding bankruptcy case. These 2 types of exceptions won’t make a debt dischargeable so the debt continues.

There are potential problems that can happen with debts such as a credit card debt since 523 also has a provision that any debt made from purchasing luxury services or items within ninety days before filing Chapter 7 is not dischargeable. Furthermore, several courts have found certain credit card debts to be not dischargeable because whenever a person charges something to a credit card it means that the person can pay and will pay for the charged amount.

Aside from creditors pursuant to 523, the pursuant of U.S.C. 727 by a creditor or the trustee can result in a court’s dismissal of a final discharge in bankruptcy, regardless of its nature, if the person applying for bankruptcy fails to sufficiently clarify how any asset was lost, disobeys court orders, withholds estate records, acts or refrains to act with a view to obtain an advantage, intentionally makes a wrongful claim, oath, or account in a bankruptcy case, fails to preserve or falsifies financial report, and hides or abolishes the debtor’s property subsequent to bankruptcy filing or within the period of one year prior to the date of filing, in order to deceive or hinder a creditor. A bankruptcy court judge can also deny a bankruptcy case for any unlisted debt, fees or payments that weren’t paid, or causing proceedings delay without acceptable reason.

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Sine Die

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