Author Question: Any creditor wishing to avoid the effect of the Automatic Stay must bring a(n) ________, with good ... (Read 80 times)

wrbasek0 · **on:** Aug 3, 2018

Any creditor wishing to avoid the effect of the Automatic Stay must bring a(n) ________, with good cause, before the bankruptcy court to receive the court's permission to proceed with collecting its debt.

A) Injunction
B) Motion
C) Petition
D) Ex-parte hearing

Question 2

What is an insider? Are transfers the debtor makes to insiders treated differently from other types of transfers? Why or why not? Explain and support your answer.

What will be an ideal response?

kjohnson · **Reply #1 on:** Aug 3, 2018

Answer to Question 1

B

Answer to Question 2

An insider-creditor is someone to whom the debtor owes money who happens to be a close friend, relative or a person the debtor had business dealings with in the past. These types of creditors are referred to as insiders as they often receive preferential treatment from the debtor, most often to the exclusion of other creditors. The reason it is important for the paralegal to inquire about this type of creditor centers on the fact that the bankruptcy attorney will need to prepare the client for the harsh realities and ramifications of the debtor's actions. The bankruptcy court will look back further for payments made to insider creditors than it does for ordinary creditors such as credit card companies.