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Chapter 12 Debtor and Trustee Powers

Chapter 12 provides that a standing trustee will be appointed in each case, but in the ordinary course, actual operation of the farm will remain with the debtor. Additionally, the debtor, as debtor in possession, has all rights, responsibilities, and powers, as would a debtor in possession under Chapter 11. Chapter 12 does not provide for the appointment of creditors' committees.

Alimony and Support Claims

Filing for bankruptcy does not suspend or stop the obligation to pay child support or alimony. Whether an obligation imposed by a divorce decree is dischargeable depends on whether it is characterized as support or as a property settlement. In many instances, obligations for property settlement can be discharged in bankruptcy, while obligations for child support and alimony cannot be discharged in bankruptcy. Bankruptcy law, not state law, determines whether an obligation is a support obligation or a property settlement obligation.

Chapter 9 Eligibility

Only a "municipality" can file for relief under chapter 9. The term "municipality" is defined in the Bankruptcy Code to mean a political subdivision or public agency or instrumentality of a State. The definition is broad enough to include cities, counties, townships, school districts, and public improvement districts. It also includes revenue-producing bodies that provide services that are paid for by users rather than by general taxes, such as bridge authorities, highway authorities, and gas authorities.

Discharge of Indebtedness

Discharge of indebtedness is the process by which a Chapter 7 debtor eliminates a debt during bankruptcy proceedings. A creditor or lender cannot collect a debt that has been discharged.

Administrative Claims

Administrative expense claims in bankruptcy cases are entitled to first priority ahead of all other general unsecured claims and, therefore, they are paid in full before all other unsecured claims to the extent there are available unencumbered funds in the debtor's bankruptcy estate. Administrative expense claims are given first priority status in bankruptcy to induce parties to do business with the debtor's bankruptcy estate.