chapter 7 case study quizlet

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Case Studies

Chapter 7: Case Study

Susan and Steve have decided to tie the knot, but they don’t have much time to plan their wedding. They want the big day to be unforgettable. They want to invite many people and provide a great time. They’ve always dreamed of a June wedding, but it’s already January. Just thinking about all of the details involved is overwhelming. Susan has been dreaming of the big day since she was 12, but it seems that there’s so little time for all the tasks to be completed. When they were choosing the paper for the invitations, the couple realized that they needed help.

Much work has to be done before June. First, Sally figures out what work needs to be done. She starts to put together a to-do list:

• Invitations
• Wedding cake
• Dinner menu
• Reception venue preparation
• Transportation

Since many different people are involved in the making of the wedding, it takes much planning to coordinate all the work in the right order by the right people at the right time. Initially, Sally was worried that she didn’t have enough time to make sure that everything would be done properly. However, she knew that she had some powerful time management tools on her side when she took the job, and these tools would help her to synchronize all the required tasks.

Please answer the following questions about the business case:

• List some activities  to accomplish the above to-do-list and organize them under major deliverables in WBS.
• What method should Sally estimate (bottom-up, top-down) the time for these activities? Explain.
• Discuss what tools that Sally can use to manage the schedule.

Attribution 

“ Project Schedule Planning ” in Project Management 2nd Edition by Adrienne Watt is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License

Chapter 7: Case Study Copyright © 2022 by Debra Patterson. All Rights Reserved.

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How Chapter 7 Works — Bankruptcy Law Basics

A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. 3 In addition to the petition, the debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a statement of financial affairs; and (4) a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007(b). Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began). 11 U.S.C. § 521. Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a). Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors. (The Official Forms may be purchased at legal stationery stores or downloaded from the internet at www.uscourts.gov/bkforms/index.html . They are not available from the court.)

As of October 17, 2005, the courts must charge a $220 case filing fee, a $39 miscellaneous administrative fee, and a $15 trustee surcharge. Normally, the fees must be paid to the clerk of the court upon filing. With the court's permission, however, individual debtors may pay in installments. 28 U.S.C. § 1930(a); Fed. R. Bankr. P. 1006(b); Bankruptcy Court Miscellaneous Fee Schedule, Item 8. The number of installments is limited to four, and the debtor must make the final installment no later than 120 days after filing the petition. Fed. R. Bankr. P. 1006. For cause shown, the court may extend the time of any installment, provided that the last installment is paid not later than 180 days after filing the petition. Id. The debtor may also pay the $39 administrative fee and the $15 trustee surcharge in installments. If a joint petition is filed, only one filing fee, one administrative fee, and one trustee surcharge are charged. Debtors should be aware that failure to pay these fees may result in dismissal of the case. 11 U.S.C. § 707(a).

If the debtor's income is less than 150% of the poverty level (as defined in the Bankruptcy Code), and the debtor is unable to pay the chapter 7 fees even in installments, the court may waive the requirement that the fees be paid. 28 U.S.C. § 1930(f).

In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must provide the following information:

• A list of all creditors and the amount and nature of their claims;
• The source, amount, and frequency of the debtor's income;
• A list of all of the debtor's property; and
• A detailed list of the debtor's monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.

Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse is required so that the court, the trustee and creditors can evaluate the household's financial position.

Among the schedules that an individual debtor will file is a schedule of "exempt" property. The Bankruptcy Code allows an individual debtor 4 to protect some property from the claims of creditors because it is exempt under federal bankruptcy law or under the laws of the debtor's home state. 11 U.S.C. § 522(b). Many states have taken advantage of a provision in the Bankruptcy Code that permits each state to adopt its own exemption law in place of the federal exemptions. In other jurisdictions, the individual debtor has the option of choosing between a federal package of exemptions or the exemptions available under state law. Thus, whether certain property is exempt and may be kept by the debtor is often a question of state law. The debtor should consult an attorney to determine the exemptions available in the state where the debtor lives.

Filing a petition under chapter 7 "automatically stays" (stops) most collection actions against the debtor or the debtor's property. 11 U.S.C. § 362. But filing the petition does not stay certain types of actions listed under 11 U.S.C. § 362(b), and the stay may be effective only for a short time in some situations. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.

Between 20 and 40 days after the petition is filed, the case trustee (described below) will hold a meeting of creditors. If the U.S. trustee or bankruptcy administrator 5 schedules the meeting at a place that does not have regular U.S. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the order for relief. Fed. R. Bankr. P. 2003(a). During this meeting, the trustee puts the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding the debtor's financial affairs and property. 11 U.S.C. § 343. If a husband and wife have filed a joint petition, they both must attend the creditors' meeting and answer questions. Within 10 days of the creditors' meeting, the U.S. trustee will report to the court whether the case should be presumed to be an abuse under the means test described in 11 U.S.C. § 704(b).

It is important for the debtor to cooperate with the trustee and to provide any financial records or documents that the trustee requests. The Bankruptcy Code requires the trustee to ask the debtor questions at the meeting of creditors to ensure that the debtor is aware of the potential consequences of seeking a discharge in bankruptcy such as the effect on credit history, the ability to file a petition under a different chapter, the effect of receiving a discharge, and the effect of reaffirming a debt. Some trustees provide written information on these topics at or before the meeting to ensure that the debtor is aware of this information. In order to preserve their independent judgment, bankruptcy judges are prohibited from attending the meeting of creditors. 11 U.S.C. § 341(c).

In order to accord the debtor complete relief, the Bankruptcy Code allows the debtor to convert a chapter 7 case to case under chapter 11, 12 or 13 6 as long as the debtor is eligible to be a debtor under the new chapter. However, a condition of the debtor's voluntary conversion is that the case has not previously been converted to chapter 7 from another chapter. 11 U.S.C. § 706(a). Thus, the debtor will not be permitted to convert the case repeatedly from one chapter to another.

• An involuntary chapter 7 case may be commenced under certain circumstances by a petition filed by creditors holding claims against the debtor. 11 U.S.C. § 303.
• Each debtor in a joint case (both husband and wife) can claim exemptions under the federal bankruptcy laws. 11 U.S.C. § 522(m).
• In North Carolina and Alabama, bankruptcy administrators perform similar functions that U.S. trustees perform in the remaining 48 states. These duties include establishing a panel of private trustees to serve as trustees in chapter 7 cases and supervising the administration of cases and trustees in cases under chapters 7, 11, 12, and 13 of the Bankruptcy Code. The bankruptcy administrator program is administered by the Administrative Office of the United States Courts, while the U.S. trustee program is administered by the Department of Justice. For purposes of this publication, references to U.S. trustees are also applicable to bankruptcy administrators.
• A fee is charged for converting, on request of the debtor, a case under chapter 7 to a case under chapter 11. The fee charged is the difference between the filing fee for a chapter 7 and the filing fee for a chapter 11. 28 U.S.C. § 1930(a). Currently, the difference is $780. Id. There is no fee for converting from chapter 7 to chapter 13.

Last reviewed October 2023

Bankruptcy Law Center Contents   

• Bankruptcy Law Center
• Automatic Stays Under Bankruptcy Law
• Chapter 7 Bankruptcy Law
• Chapter 13 Bankruptcy Law
• Chapter 11 Bankruptcy Law
• Chapter 12 Bankruptcy Law
• Repeat Bankruptcy Filings & Legal Requirements
• Business Bankruptcy Law
• Emergency Bankruptcy Filings & Legal Requirements
• Involuntary Bankruptcy Filings & Legal Requirements
• Credit Counseling and Debtor Education Courses Legally Required for Bankruptcy
• Joint Bankruptcy Petitions for Married Couples & Legal Implications
• Bankruptcy Exemption Laws
• Collections Laws and Bankruptcy
• Bankruptcy Legal Procedures
• Eviction Legal Issues Related to Bankruptcy
• Foreclosure Legal Issues Related to Bankruptcy
• Lien Avoidance Under Chapter 7 Bankruptcy Law
• Lien Stripping Under Chapter 13 Bankruptcy Law
• How Unemployment Can Legally Affect Filing for Bankruptcy
• Protecting Your Assets During the Bankruptcy Legal Process
• Tax Law Issues Related to Bankruptcy
• Alternatives to Bankruptcy Under the Law
• Bankruptcy Legal Forms
• Elderly People Filing for Bankruptcy & Distinctive Legal Concerns
• Divorce Law Issues Related to Bankruptcy
• Preparing for the Bankruptcy Legal Process
• Employment Discrimination Laws Related to Bankruptcy
• Working With a Bankruptcy Lawyer
• Bankruptcy Law FAQs
• Find a Bankruptcy Lawyer

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APPENDIX C:  Answers to Case Study Questions

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Sedative-Hypnotic Drugs

What is the most likely reason for R.S.'s poor performance in the morning rehabilitation sessions?

The sedative-hypnotic (flurazepam) appeared to be producing a hangover-like effect, which limited the patient's cognitive skills during the early daily activities. Flurazepam is a benzodiazepine drug with a half-life of 2.3 hours and a duration of action of 7 to 8 hours. This drug, however, is metabolized in the liver to active metabolites with half-lives ranging from 30 to 200 hours. It seems likely that R.S. was continuing to experience sedative effects from these active metabolites well into the next morning.

What would be the likely solution?

The therapists can deal with this problem initially by reserving the early morning session for stretching and ROM activities and then gradually moving into upper-body strengthening. Activities that require more patient learning and comprehension can be done later in the morning or in the afternoon. The hangover-like problem should also be brought to the attention of the physician. In this case, the physician switched the hypnotic drug to zolpidem (Ambien), 10 mg administered at bedtime. Zolpidem has a half-life of 2.5 hours and a duration of action of 6 to 8 hours, so R.S. should still get the benefit of a full night's sleep. Because zolpidem is not metabolized to active metabolites, it is unlikely that it will continue to exert sedative-hypnotic effects into the next morning. Zolpidem also affects neuronal GABA receptors differently than benzodiazepines such as flurazepam. This difference might reduce the risk of problems, such as rebound insomnia, when it is time to discontinue the drug.

Antidepressant Drugs

How can the therapist reduce the risk of orthostatic hypotension during rehabilitation sessions?

To reduce orthostatic hypotension, the therapist decided to place the patient on the tilt table for the first day after imipramine was started and to monitor blood pressure regularly. The therapist had the patient perform weight shifting and upper-extremity facilitation activities while he was on the tilt table. The patient tolerated this well, so the therapist had him resume ambulation activities using the parallel bars on the following day. With the patient standing inside the bars, the therapist carefully watched for any subjective signs of dizziness or syncope in the patient (i.e., facial pallor, inability to follow instructions). Standing bouts were also limited in duration. By the third day, ambulation training continued with the patient outside the parallel bars, but the therapist made a point of having the patient's wheelchair close at hand in case the patient began to appear faint. These precautions of careful observation and short, controlled bouts of ambulation were continued throughout the remainder of the patient's hospital stay, and the therapist observed no incident of orthostatic hypotension during physical therapy.

Will clinicians notice an immediate improvement in J.G.'s mood after starting this?

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