Bankruptcy Code

“ Bankruptcy exists to provide relief for an overburdened debtor. If a creditor beats the debtor into court, the debtor is nevertheless entitled to his exemptions." H.R.Rep. No. 595, supra, at 126-127, U.S.Code Cong. & Admin.News 1978, pp. 6087-6088.
One factor supporting the view that Congress intended § 522 (f) (1) to thwart a rush to the courthouse is Congress' contemporaneous elimination of § 67 of the 1898 Bankruptcy Act, 30 Stat. 564. Prior to its repeal, § 67 (a) invalidated any lien obtained on an exempt interest of an insolvent debtor within four months of the bankruptcy filing. ”

“ Any or all of these provisions may be implicated when a debtor files serially under Chapter 7 and Chapter 13. But given the availability of these provisions, and given Congress' intent that "claim" be construed broadly, we do not believe that Congress intended the bankruptcy courts to use the Code's definition of "claim" to police the Chapter 13 process for abuse.
The Bank renews here its claim that the Bankruptcy Court erred in finding petitioner's plan to be in good faith for purposes of § 1325 (a) (3) and feasible for purposes of § 1325 (a) (6) of the Code. ”

“ Banking institutions and insurance companies engaged in business in this country are excluded from liquidation under the bankruptcy laws because they are bodies for which alternate provision is made for their liquidation under various State or Federal regulatory laws. Conversely, when a foreign bank or insurance company is not engaged in the banking or insurance business in the United States, then those regulatory laws do not apply, and the bankruptcy laws are the only ones available for administration of any assets found in United States. ”

“ Pub. L. 99-554, title II, Sec. 252, Oct. 27, 1986, 100 Stat. 3104; Pub. L. 106-554, Sec. 1 (a) (5) [title I, Sec. 112 (c) (5) (A) ] , Dec. 21, 2000, 114 Stat. 2763, 2763A- 394; Pub. L. 109-8, title VIII, Sec. 802 (a) , Apr. 20, 2005, 119 Stat. 145.)
HISTORICAL AND REVISION NOTES SENATE REPORT NO. 95-989 Section 103 prescribes which chapters of the proposed bankruptcy code apply in various cases. All cases, other than cases ancillary to foreign proceedings, are filed under chapter 7, 9, 11, or 13, the operative chapters of the proposed bankruptcy code. ”

“ The equitable distribution of the bankrupt's assets, or the equitable adjustment of creditors' claims in respect of those assets, by way of reorganization, may therefore be regulated by a bankruptcy law which impairs the obligation of the debtor's contracts. Indeed every Bankruptcy Act avowedly works such impairment. ”

“ The law provides a complete system throughout the United States, and for its administration by the United States courts in place of the different systems formerly in existence in the various States administered by State courts. In bankruptcy proceedings, a bankrupt debtor may turn over all his property to the court, to be administered for the benefit of his creditors, and then get a complete discharge from his debts. ”

“ Under that act all persons may be adjudged bankrupt, whether they be traders or not. A person becomes a bankrupt when adjudged so by the court, upon the petition of a creditor having a liquidated and unsecured debt of not less than £50, or of several creditors having like debts to that amount. But before such petition can be presented, the debtor must have committed some one of the acts of bankruptcy specified in the statute, which are: 1, making a general assignment of his property for the benefit of creditors ”

“ Conflict-of-law problems have a beguiling tendency to be made even more complicated than they are. Therefore, they are often, as now, fitting occasions for observing the classic admonition to begin at the beginning. The business of bankruptcy administration is to determine how existing debts should be satisfied out of the bankrupt's estate so as to deal fairly with the various creditors. The existence of a debt between the parties to an alleged creditor-debtor relation is independent of bankruptcy and precedes it. ”

“ We agree with the conclusion of the Circuit Court of Appeals that the claim for interest on interest should not be permitted to share in the debtor's assets, but disagree with the reasons given for that conclusion.
A purpose of bankruptcy is so to administer an estate as to bring about a ratable distribution of assets among the bankrupt's creditors. What claims of creditors are valid and subsisting obligations against the bankrupt at the time a petition in bankruptcy is filed, is a question which, in the absence of overruling federal law, is to be determined by reference to state law. ”

“ The bankruptcy rule, it is said, is commonly so called because enforced by bankruptcy courts in the exercise of their 'peculiar' jurisdiction, and the courts which refuse to apply the rule generally declare that it arose from express provisions in bankrupt statutes requiring a creditor to surrender his collaterals, or deduct for their value, before proving against the estate. ”

“ Bankruptcy proceedings may be taken either by the debtor or by a creditor for a commercial debt, or may be ordered by the court. The amount of the debt is immaterial: a small sum will suffice, provided its non-payment is proof of insolvency. Bankruptcy can only be declared where there is insolvency. The judgment adjudicating a debtor bankrupt deprives the bankrupt of the right to administer his affairs, and nominates a trustee to realize the property under the superintendence of a judge and a commission of creditors. ”

“ The rules in bankruptcy cases proceeded from the express provisions of the statute, and they are not at all controlling upon a court administering, in equity, upon the estates of insolvent debtors. The bankruptcy act requires the creditor to give up his security, in order to be entitled to prove his whole debt; or, if he retains it, he can only prove for the balance of the debt, after deducting the value of the security held. ”

“ A debtor may thus be insolvent without becoming bankrupt, but he cannot be a bankrupt without being insolvent, for bankruptcy is a legal declaration of his insolvency and operates as a statutory system for the administration of his property, which is thereby taken out of his personal control.
In primitive communities bankruptcy systems were unknown. Early methods. Individual creditors were left to pursue their remedies by such means as the law or practice of the community might sanction, and these were generally of a very drastic character. ”

“ The Bankrupt Act had a very different purpose. It was to secure equality of distribution of that which insolvents have when proceedings in bankruptcy are commenced, and of that which they have collusively with some of their creditors attempted to withdraw from ratable distribution, with intent to prefer some creditors over others. ”

“ Congress has thus treated liens as outside the policy of equal treatment of creditors in bankruptcy. 3 Collier, supra, 57.07. A lienor does not hold simply a first priority; he has 'a right to enforcement independent of bankruptcy,' id., 64.02, at 2061. The Bankruptcy Act deals with the distribution of unencumbered assets among unsecured creditors. Id., 60.01. Lienholders need no Bankruptcy Act. Liens are independent of and essentially unaffected by bankruptcy proceedings. I agree with the court below that liens are unaffected by § 57, sub. ”