Bankruptcy Law
Threshold = $5,475
Insolvent
More than would have been received in bankruptcy distribution
Distribution Order
Secured Debts
Child support
Administrative expenses/attorney fees
Middlemen
Composition Agreement
• Participation is optional
• Creditors agree to take early payment of debt in exchange for full
satisfaction
Surety Agreements
• Creditor must go after debtor before the guarantor
(uncompensated, secondary liability)
• Compensated Surety contract = Surety primarily liable
• Unless a creditor specifically preserves his rights, a release of a
co-surety releases the other co-sureties in the amount of the
released surety’s share
Surety Remedies:
Indemnification- (surety recovers from debtor after paying creditor)
Contribution- (surety recovers from co-sureties who underpaid their
share)
Debtor and Creditor Relations
Exoneration- (bring suit against solvent debtor who won’t pay)
Subrogation- (surety’s right to succeed to the rights of the creditor
once the surety
has satisfied the debtors obligation)