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Unsecured Claims

Unsecured debt may be generally described as a debt where credit was granted based solely upon the promise or ability of the debtor to pay. Claims that are not secured by any collateral or subject to setoff are generally unsecured claims. For purposes of bankruptcy, unsecured claims are classified and paid based on a priority list described in the Bankruptcy Code. Each class must be paid in full before the next lower class is paid anything.

Disclosure Statements

Debtors must report assets, liabilities, contested claims, and other business affairs. The purpose of these disclosures is to allow creditors an opportunity to evaluate proposed plans. Disclosure statements must contain "adequate information." The specific information required is determined on a case by case basis by the court and may include any information which the court deems reasonable and necessary for parties in interest to reach informed decisions before voting on plan confirmation.

Setoffs in Bankruptcy

Setoff is an equitable right of a creditor to deduct a debt it owes to the debtor from a claim it has against the debtor arising out of a separate transaction. The Bankruptcy Code is not an independent source of law that authorizes a setoff; it recognizes and preserves rights that exist under non-bankruptcy law.

Dischargeability of Taxes in Bankruptcy

Debtors may be able to discharge some or all of their older income tax obligations in bankruptcy. Dischargeability of these taxes turns on the question whether or not they are "priority" claims. Tax obligations that are non-priority are dischargeable.

Property Interests of Debtor and Other Family Members Affected by Bankruptcy Case

Analysis of the extent and nature of the bankruptcy estate is essential to determining what will happen to a debtor's property in bankruptcy, a subject that is often of enormous importance to the debtor's spouse or former spouse and to other members of the debtor's family.