Asked by Widelyne Loiseau on Apr 24, 2024
Verified
Which of the following is a moratorium for almost all creditor litigation against a debtor in a Chapter 7 bankruptcy proceeding?
A) A stop order
B) An automatic stay
C) A temporary injunction
D) A permanent injunction
E) An interlocutory appeal
Chapter 7 Bankruptcy
A provision of the bankruptcy code that involves the liquidation of a debtor's assets to repay creditors.
Moratorium
A temporary suspension or delay of an activity or law, often used by governments in response to economic or emergency situations.
Creditor Litigation
Legal proceedings initiated by a creditor to recover debts owed by a debtor, usually when other debt recovery methods have failed.
- Identify the effects of an automatic stay on both secured and unsecured creditors during Chapter 7 proceedings.
Verified Answer
RP
Regina Puma-atMay 02, 2024
Final Answer :
B
Explanation :
Once a voluntary or involuntary petition is filed,the Bankruptcy Code provides for an automatic stay,or moratorium,for almost all creditor litigation against the debtor.During the stay,creditors cannot bring or continue legal action against the debtor or the debtor's property.
Learning Objectives
- Identify the effects of an automatic stay on both secured and unsecured creditors during Chapter 7 proceedings.