/* The second and final part of part 5 of Chapter 5 of the Bankruptcy Court. */

(e) Any institution-affiliated party of a depository

institution or insured credit union shall be considered to be acting in a fiduciary capacity with respect to the purposes of subsection (a)(4) or (11).

SECTION 524 (11 U.S.C. 524)

524. Effect of discharge.

(a) A discharge in a case under this title-

(1) voids any judgment at any time obtained, to the extent that such judgment is a determination of the personal liability of the debtor with respect to any debt discharged under section 727, 944, 1141, 1228, or 1328 of this title, whether or not discharge of such debt is waived;

(2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived; and

(3) operates as an injunction against the commencement

or continuation of an action, the employment of process, or

an act, to collect or recover from, or offset against, property of the debtor of the kind specified in section 541(a)(2) of this title that is acquired after the commencement of the case, on account of any allowable community claim, except a community claim that is excepted from discharge under section 523, 1228(a)(1), or 1328(a)(1) of this title, or that would be so excepted, determined in accordance with the provisions of sections 523(c) and 523(d) of this title, in a case concerning the debtor's spouse commenced on the date of the filing of the petition in the case concerning the debtor, whether or not discharge of the debt based on such community claim is waived.

(b) Subsection (a) (3) of this section does not apply

if-

(1)(A) the debtor's spouse is a debtor in a case under this title, or a bankrupt or a debtor in a case under the Bankruptcy Act, commenced within six years of the date of the filing of the petition in the case concerning the debtor; and

(B) the court does not grant the debtor's spouse a

discharge in such case concerning the debtor's spouse; or

(2)(A) the court would not grant the debtor's spouse

a discharge in a case under chapter 7 of this title

concerning such spouse commenced on the date of the filing

of the petition in the case concerning the debtor; and

(B) a determination that the court would not so grant

such discharge is made by the bankruptcy court within the

time and in the manner provided for a determination under

section 727 of this title of whether a debtor is granted a

discharge.

(c) An agreement between a holder of a claim and the

debtor, the consideration for which, in whole or in part, is

based on a debt that is dischargeable in a case under this

title is enforceable only to any extent enforceable under

applicable nonbankruptcy law, whether or not discharge of

such debt is waived, only if-

(1) such agreement was made before the granting of the

discharge under section 727,1141, 1228, or 1328 of this

title;

(2) such agreement contains a clear and conspicuous

statement which advises the debtor that the agreement may be

rescinded at any time prior to discharge or within sixty

days after such agreement is filed with the court, whichever

occurs later, by giving notice of rescission to the holder

of such claim;

(3) such agreement has been filed with the court and,

if applicable, accompanied by a declaration or an affidavit

of the attorney that represented the debtor during the

course of negotiating an agreement under this subsection,

which states that such agreement

(A) represents a fully informed and voluntary agreement by the debtor; and

(B) does not impose an undue hardship on the debtor or

a dependent of the debtor;

(4) the debtor has not rescinded such agreement at any time prior to discharge or within sixty days after such agreement is filed with the court, whichever occurs later, by giving notice of rescission to the holder of such claim;

(5) the provisions of subsection (d) of this section have been complied with; and

(6)(A) in a case concerning an individual who was not represented by an attorney during the course of negotiating

an agreement under this subsection, the court approves such

agreement as-

(i) not imposing an undue hardship on the debtor or a dependent of the debtor; and

(ii) in the best interest of the debtor.

(B) Subparagraph (A) shall not apply to the extent

that such debt is a consumer debt secured by real property.

(d) In a case concerning an individual, when the court has determined whether to grant or not to grant a discharge under section 727, 1141, 1228, or 1328 of this title, the court may hold a hearing at which the debtor shall appear in person. At any such hearing, the court shall inform the debtor that a discharge has been granted or the reason why a discharge has not been granted. If a discharge has been granted and if the debtor desires to make an agreement of the kind specified in subsection (c) of this section, then the court shall hold a hearing at which the debtor shall appear in person and at any such hearing the court shall-

(1) inform the debtor

(A) that such an agreement is not required under this title, under nonbankruptcy law, or under any agreement not made in accordance with the provisions of subsection (c) of this section; and

(B) of the legal effect and consequences of-

(i) an agreement of the kind specified in subsection (c) of this section; and

(ii) a default under such an agreement;

(2) determine whether the agreement that the debtor

desires to make complies with the requirements of subsection

(c)(6) of this section, if the consideration for such

agreement is based in whole or in part on a consumer debt

that is not secured by real property of the debtor.

(e) Except as provided in subsection (a)(3) of this

section, discharge of a debt of the debtor does not affect

the liability of any other entity on, or the property of any

other entity for, such debt.

(f) Nothing contained in subsection (c) or (d) of this

section prevents a debtor from voluntarily repaying any

debt.

SECTION 525 (11 U.S.C. 525)

525. Protection against discriminatory treatment.

(a) Except as provided in the Perishable Agricultural

Commodities Act, 1930 (7 U.S.C. 499a-499s), the Packers and

Stockyards Act, 1921 (7 U.S.C. 181-229), and section 1 of the Act entitled "An Act making appropriations for the Department of Agriculture for the fiscal year ending June 30, 1944, and for other purposes," approved July 12, 1943 (57 Stat. 422; 7 U.S.C. 204), a governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act, or another person with whom such bankrupt or debtor has been associated, solely because such bankrupt or debtor is or has been a debtor

under this title or a bankrupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of the case under this title, or during the case but before the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act.

(b) No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt

(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;

(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or

(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.

/* A section of the code which is one of the more important ones.

For example, this section prohibits governments from cancelling persons driver's licenses for failing to pay judgment related to car accidents, or, from refusing to issue a license to someone who does not pay debts of some kind. It also prevents employment discharges due to a person seeking or obtaining banckruptcy relief. */

SUBCHAPTER III

The Estate

SECTION 541 (11 U.S.C. 541)

541. Property of the estate.

(a) The commencement of a case under section 301, 302, or 303 of this title creates an estate. Such estate is comprised of all the following property, wherever located and by whomever held:

(1) Except as provided in subsections (b) and (c)(2) of this section, all legal or equitable interests of the debtor in property as of the commencement of the case.

/* This section was designed to achieve the greatest possible inclusion of assets within the bankruptcy. */

(2) All interests of the debtor and the debtor's spouse in community property as of the commencement of the case that is-

(A) under the sole, equal, or joint management and control of the debtor; or

(B) liable for an allowable claim against the debtor, or for both an allowable claim against the debtor and an allowable claim against the debtor's spouse, to the extent that such interest is so liable.

(3) Any interest in property that the trustee recovers under section 329(b), 363(n), 543, 550, 553, or 723 of this title.

(4) Any interest in property preserved for the benefit of or ordered transferred to the estate under section 510(c) or 551 of this title.

(5) Any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date-

(A) by bequest, device, or inheritance;

(B) as a result of a property settlement agreement

with debtor's spouse, or of an interlocutory or final

divorce decree; or

(C) as beneficiary of a life insurance policy or of a

death benefit plan.

/* One of the reasons why persons who file bankruptcy request that third parties take them off wills during the six month window. This is one of the few exceptions to Chapter 7's rule of clevage, where the pre-petition debts and assets are all that the court will deal with. */

(6) Proceeds, product, offspring, rents, or profits of or from property of the estate, except such as are earnings from services performed by an individual debtor after the commencement of the case.

(7) Any interest in property that the estate acquires after the commencement of the case.

(b) Property of the estate does not include-

(1) any power that the debtor may exercise solely for the benefit of an entity other than the debtor;

(2) any interest of the debtor as a lessee under a lease of nonresidential real property that has terminated at the expiration of the stated term of such lease before the commencement of the case under this title, and ceases to include any interest of the debtor as a lessee under a lease of nonresidential real property that has terminated at the

expiration of the stated term of such lease during the case;

or

(3) any eligibility of the debtor to participate in programs authorized under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.; 42 U.S.C. 2751 et seq.), or any accreditation status or State licensure of the debtor as an educational institution.

(c)(1) Except as provided in paragraph (2) of this subsection, an interest of the debtor in property becomes property of the estate under subsection (a)(1), (a)(2), or

(a) (5) of this section notwithstanding any provision in an

agreement, transfer instrument, or applicable nonbankruptcy

law-

(A) that restricts or conditions transfer of such

interest by the debtor; or

(B) that is conditioned on the insolvency or financial condition of the debtor, on the commencement of a case under

this title, or on the appoint. ment of or taking possession

by a trustee in a case under this title or a custodian before such commencement, and that effects or gives an option to effect a forfeiture, modification, or termination of the debtor's interest in property.

/* A second place in which insolvency clauses are disapproved and rendered useless. */

(2) A restriction on the transfer of a beneficial interest of the debtor in a trust that is enforceable under applicable nonbankruptcy law is enforceable in a case under this title.

/* This means that a true "spendthrift trust" under state law will be recognized within bankruptcy, and the corpus of the spendthrift trust will not be part of the estate. */

(d) Property in which the debtor holds, as of the commencement of the case, only legal title and not an equitable interest, such as a mortgage secured by real property, or an interest in such a mortgage, sold by the debtor but as to which the debtor retains legal title to service or supervise the servicing of such mortgage or interest, becomes property of the estate under subsection (a)(1) or (2) of this section only to the extent of the debtor's legal title to such property, but not to the extent of any equitable interest in such property that the debtor does not hold.

SECTION 542 (11 U.S.C. 542)

542. Turnover of property to the estate.

(a) Except as provided in subsection (c) or (d) of this section, an entity, other than a custodian, in possession, custody, or control, during the case, of property that the trustee may use, sell, or lease under section 363 of this title, or that the debtor may exempt under section 522 of this title, shall deliver to the trustee, and account for, such property or the value of such property, unless such property is of inconsequential value or benefit to the estate.

(b) Except as provided in subsection (c) or (d) of this section, an entity that owes a debt that is property of the estate and that is matured, payable on demand, or payable on order, shall pay such debt to, or on the order of, the trustee, except to the extent that such debt may be offset under section 553 of this title against a claim against the debtor.

(c) Except as provided in section 362(a)(7) of this title, an entity that has neither actual notice nor actual knowledge of the commencement of the case concerning the debtor may transfer property of the estate, or pay a debt owing to the debtor, in good faith and other than in the manner specified in subsection (d) of this section, to an entity other than the trustee, with the same effect as to the entity making such transfer or payment as if the case under this title concerning the debtor had not been commenced.

(d) A life insurance company may transfer property of the estate or property of the debtor to such company in good faith, with the same effect with respect to such company as if the case under this title concerning the debtor had not been commenced, if such transfer is to pay a premium or to carry out a nonforfeiture insurance option, and is required to be made automatically, under a life insurance contract with such company that was entered into before the date of the filing of the petition and that is property of the estate.

(e) Subject to any applicable privilege, after notice and a hearing, the court may order an attorney, accountant, or other person that holds recorded information, including books, documents, records, and papers, relating to the debtor's property or financial affairs, to turn over or disclose such recorded information to the trustee.

SECTION 543 (11 U.S.C. 543)

543. Turnover of property by a custodian.

(a) A custodian with knowledge of the commencement of a case under this title concerning the debtor may not make any disbursement from, or take any action in the administration of, property of the debtor, proceeds, product, offspring, rents, or profits of such property, or property of the estate, in the possession, custody, or control of such custodian, except such action as is necessary to preserve such property.

(b) A custodian shall-

(1) deliver to the trustee any property of the debtor

held by or transferred to such custodian, or proceeds,

product, offspring, rents, or profits of such property, that

is in such custodian's possession, custody, or control on

the date that such custodian acquires knowledge of the

commencement of the case; and

(2) file an accounting of any property of the debtor,

or proceeds, product, offspring, rents, or profits of such

property that, at any time, came into the possession,

custody, or control of such custodian.

(c) The court, after notice and a hearing, shall-

(1) protect all entities to which a custodian has

become obligated with respect to such property or proceeds,

product, offspring, rents, or profits of such property;

(2) provide for the payment of reasonable compensation

for services rendered and costs and expenses incurred by

such custodian; and

(3) surcharge such custodian, other than an assignee

for the benefit of the debtor's creditors that was appointed

or took possession more than 120 days before the date of the

filing of the petition, for any improper or excessive

disbursement, other than a disbursement that has been made

in accordance with applicable law or that has been approved,

after notice and a hearing, by a court of competent

jurisdiction before the commencement of the case under this

title.

(d) After notice and hearing, the bankruptcy court-

(1) may excuse compliance with subsection (a), (b), or

(c) of this section, if the interests of creditors and, if

the debtor is not insolvent, of equity security holders

would be better served by permitting a custodian to continue

in possession, custody, or control of such property, and

(2) shall excuse compliance with subsections (a) and

(b)(1) of this section if the custodian is an assignee for

the benefit of the debtor's creditors that was appointed or

took possession more than 120 days before the date of the

filing of the petition, unless compliance with such

subsections is necessary to prevent fraud or injustice.

SECTION 544 (11 U.S.C. 544)

544. Trustee as lien creditor and as successor to

certain creditors and purchasers.

(a) The trustee shall have, as of the commencement of

the case, and without regard to any knowledge of the trustee

or of any creditor, the rights and powers of, or may avoid

any transfer of property of the debtor or any obligation

incurred by the debtor that is voidable by-

(1) a creditor that extends credit to the debtor at

the time of the commencement of the case, and that obtains,

at such time and with respect to such credit, a judicial

lien on all property on which a creditor on a simple

contract could have obtained such a judicial lien, whether

or not such a creditor exists;

(2) a creditor that extends credit to the debtor at

the time of the commencement of the case, and obtains, at

such time and with respect to such credit, an execution

against the debtor that is returned unsatisfied at such

time, whether or not such a creditor exists; or

(3) a bona fide purchaser of real property, other than

fixtures, from the debtor, against whom applicable law

permits such transfer to be perfected, that obtains the

status of a bona fide purchaser and has perfected such

transfer at the time of the commencement of the case,

whether or not such a purchaser exists.

(b) The trustee may avoid any transfer of an interest

of the debtor in property or any obligation incurred by the

debtor that is voidable under applicable law by a creditor

holding an unsecured claim that is allowable under section

502 of this title or that is not allowable only under

section 502(e) of this title.

SECTION 545 (11 U.S.C. 545)

545. Statutory liens. The trustee may avoid the fixing

of a statutory lien on property of the debtor to the extent

that such lien-

(1) first becomes effective against the debtor-

(A) when a case under this title concerning the debtor

is commenced;

/* This section invalidates local laws which ""cleverly"" try to create a lien which only goes into effect one bankruptcy is filed. The problem, of course, being that Congress under the U.S. constitution has the sole right to set bankruptcy law. */

(B) when an insolvency proceeding other than under

this title concerning the debtor is commenced;

(C) when a custodian is appointed or authorized to

take possession;

(D) when the debtor becomes insolvent;

(E) when the debtor's financial condition fails to

meet a specified standard; or

(F) at the time of an execution against property of

the debtor levied at the instance of an entity other than

the holder of such statutory lien;

(2) is not perfected or enforceable at the time of the

commencement of the case against a bona fide purchaser that

purchases such property at the time of the commencement of

the case, whether or not such a purchaser exists;

(3) is for rent; or

(4) is a lien of distress for rent.

/* Except for shopping centers, landlords were major losers in the bankruptcy code's drafting. Landlord's seizure and distress liens are simply eradicated by bankruptcy. */

SECTION 546 (11 U.S.C 546)

546. Limitations on avoiding powers.

(a) An action or proceeding under section 544, 545,

547, 548, or 553 of this title may not be commenced after

the earlier of

(1) two years after the appointment of a trustee under

section 702, 1104, 1163,1302, or 1202 of this title; or

(2) the time the case is closed or dismissed.

(b) The rights and powers of a trustee under sections

544, 545, and 549 of this title are subject to any generally

applicable law that permits perfection of an interest in

property to be effective against an entity that acquires

rights in such property before the date of such perfection.

If such law requires seizure of such property or commencement of an action to accomplish such perfection, and such property has not been seized or such action has not been commenced before the date of the filing of the petition, such interest in such property shall be perfected by notice within the time fixed by such law for such seizure or commencement.

(c) Except as provided in subsection (d) of this section, the rights and powers of a trustee under sections 544(a), 545, 547, and 549 of this title are subject to any statutory or common-law right of a seller of goods that has sold goods to the debtor, in the ordinary course of such seller's business, to reclaim such goods if the debtor has received such goods while insolvent, but-

(1) such a seller may not reclaim any such goods unless such seller demands in writing reclamation of such goods before ten days after receipt of such goods by the debtor; and

(2) the court may deny reclamation to a seller with such a right of reclamation that has made such a demand only if the court-

(A) grants the claim of such a seller priority as a claim of a kind specified in section 503(b) of this title;

or

(B) secures such claim by a lien.

(d) In the case of a seller who is a producer of grain sold to a grain storage facility, owned or operated by the debtor, in the ordinary course of such seller's business (as such terms are defined in section 557 of this title) or in the case of a United States fisherman who has caught fish sold to a fish processing facility owned or operated by the debtor in the ordinary course of such fisherman's business, the rights and powers of the trustee under sections 544(a), 545, 547, and 549 of this title are subject to any statutory or common law right of such producer or fisherman to reclaim such grain or fish if the debtor has received such grain or fish while insolvent, but-

(1) such producer or fisherman may not reclaim any

grain or fish unless such producer or fisherman demands, in

writing, reclamation of such grain or fish before ten days

after receipt thereof by the debtor; and

(2) the court may deny reclamation to such a producer

or fisherman with a right of reclamation that has made such

a demand only if the court secures such claim by a lien.

(e) Notwithstanding sections 544, 545, 547, 548(a)(2),

and 548(b) of this title, the trustee may not avoid a

transfer that is a margin payment, as defined in section

101(34), 741(5), or 761(15) of this title, or settlement

payment, as defined in section 101(35) or 741(8) of this

title, made by or to a commodity broker, forward contract

merchant, stockbroker, financial institution, or securities

clearing agency, that is made before the commencement of the

case, except under section 548(a)(1) of this title.

(f) Notwithstanding sections 544, 545, 547, 548(a)(2),

and 548(b) of this title, the trustee may not avoid a

transfer that is a margin payment, as defined in section

741(5) or 761(15) of this title, or settlement payment, as

defined in section 741(8) of this title, made by or to a

repo participant, in connection with a repurchase agreement

and that is made before the commencement of the case, except

under section 548(a)(1) of this title.

(g) Notwithstanding sections 544, 545, 547, 548(a)(2)

and 548(b) of this title, the trustee may not avoid a

transfer under a swap agreement, made by or to a swap

participant, in connection with a swap agreement and that is

made before the commencement of the case, except under

section 548(a)(1) of this title.

SECTION 547 (11 U.S.C. 547)

547. Preferences.

(a) In this section-

(1) "inventory" means personal property leased or

furnished, held for sale or lease, or to be furnished under

a contract for service, raw materials, work in process, or

materials used or consumed in a business, including farm

products such as crops or livestock, held for sale or lease;

(2) "new value" means money or money's worth in goods,

services, or new credit, or release by a transferee of

property previously transferred to such transferee in a

transaction that is neither void nor voidable by the debtor

or the trustee under any applicable law, including proceeds

of such property, but does not include an obligation

substituted for an existing obligation;

(3) "receivable" means right to payment, whether or

not such right has been earned by performance; and

(4) a debt for a tax is incurred on the day when such

tax is last payable without penalty, including any

extension.

(b) Except as provided in subsection (c) of this

section, the trustee may avoid any transfer of an interest

of the debtor in property

(1) to or for the benefit of a creditor;

(2) for or on account of an antecedent debt owed by

the debtor before such transfer was made;

(3) made while the debtor was insolvent;

(4) made-

(A) on or within 90 days before the date of the filing

of the petition; or

(B) between 90 days and one year before the date of

the filing of the petition, if such creditor at the time of

such transfer was an insider; and

(5) that enables such creditor to receive more than

such creditor would receive if-

(A) the case were a case under chapter 7 of this

title;

(B) the transfer had not been made; and

(C) such creditor received payment of such debt to the

extent provided by the provisions of this title.

(c) The trustee may not avoid under this section a

transfer

(1) to the extent that such transfer was-

(A) intended by the debtor and the creditor to or for

whose benefit such transfer was made to be a contemporaneous

exchange for new value given to the debtor; and

(B) in fact a substantially contemporaneous exchange;

(2) to the extent that such transfer was-

(A) in payment of a debt incurred by the debtor in the

ordinary course of business or financial affairs of the

debtor and the transferee.

(B) made in the ordinary course of business or financial affairs of the debtor and the transferee; and

(C) made according to ordinary' business terms;

(3) that creates a security interest in property acquired by the debtor-

(A) to the extent such security interest secures new

value that was-

(i) given at or after the signing of a security

agreement that contains a description of such property as

collateral;

(ii) given by or on behalf of the secured party under

such agreement;

(iii) given to enable the debtor to acquire such property; and

(iv) in fact used by the debtor to acquire such property; and

(B) that is perfected on or before 10 days after the

debtor receives possession of such property;

(4) to or for the benefit of a creditor, to the extent

that, after such transfer, such creditor gave new value to

or for the benefit of the debtor-

(A) not secured by an otherwise unavoidable security

interest; and

(B) on account of which new value the debtor did not

make an otherwise unavoidable transfer to or for the benefit

of such creditor;

(5) that creates a perfected security interest in

inventory or a receivable or the proceeds of either, except

to the extent that the aggregate of all such transfers to

the transferee caused a reduction, as of the date of the

filing of the petition and to the prejudice of other

creditors holding unsecured claims, of any amount by which

the debt secured by such security interest exceeded the

value of all security interests for such debt on the later

of-

(A)(i) with respect to a transfer to which

subsection (b)(4)(A) of this section applies, 90 days before

the date of the filing of the petition; or

(ii) with respect to a transfer to which subsection

(b)(4)(B) of this section applies, one year before the date

of the filing of the petition; or

(B) the date on which new value was first given under

the security agreement creating such security interest;

(6) that is the fixing of a statutory lien that is not

avoidable under section 545 of this title; or

(7) if, in a case filed by an individual debtor whose

debts are primarily consumer debts, the aggregate value of

all property that constitutes or is affected by such

transfer is less than $600.

(d) The trustee may avoid a transfer of an interest in

property of the debtor transferred to or for the benefit of

a surety to secure reimbursement of such a surety that

furnished a bond or other obligation to dissolve a judicial

lien that would have been avoidable by the trustee under

subsection (b) of this section. The liability of such

surety under such bond or obligation shall be discharged to

the extent of the value of such property recovered by the

trustee or the amount paid to the trustee.

(e)(1) For the purposes of this section

(A) a transfer of real property other than fixtures,

but including the interest of a seller or purchaser under a

contract for the sale of real property, is perfected when a

bona fide purchaser of such property from the debtor against

whom applicable law permits such transfer to be perfected

cannot acquire an interest that is superior to the interest

of the transferee; and

(B) a transfer of a fixture or property other than

real property is perfected when a creditor on a simple

contract cannot acquire a judicial lien that is superior to

the interest of the transferee.

(2) For the purposes of this section, except as

provided in paragraph (3) of this subsection, a transfer is

made-

(A) at the time such transfer takes effect between the

transferor and the transferee, if such transfer is perfected

at, or within 10 days after, such time;

(B) at the time such transfer is perfected, if such

transfer is perfected after such 10 days; or

(C) immediately before the date of the filing of the

petition, if such transfer is not perfected at the later of-

(i) the commencement of the case; or

(ii) 10 days after such transfer takes effect between

the transferor and the transferee.

(3) For the purposes of this section, a transfer is

not made until the debtor has acquired rights in the

property transferred.

(f) For the purposes of this section, the debtor is

presumed to have been insolvent on and during the 90 days

immediately preceding the date of the filing of the

petition.

(g) For the purposes of this section, the trustee has

the burden of proving the avoidability of a transfer under

subsection (b) of this section, and the creditor or party in

interest against whom recovery or avoidance is sought has

the burden of proving the nonavoidability of a transfer

under subsection (c) of this section.

/* The American legal system is the one which created the principal of equality (or equally shared misery) in bankruptcy. Therefore, if someone is paid in full before the filing of the petition, they may have the pleasure of repaying the amount above the dividend for the rest of the creditors which they received. */

SECTION 548 (11 U.S.C. 548)

548. Fraudulent transfers and obligations.

(a) The trustee may avoid any transfer of an interest

of the debtor in property, or any obligation incurred by the

debtor, that was made or incurred on or within one year

before the date of the filing of the petition, if the debtor

voluntarily or involuntarily

(1) made such transfer or incurred such obligation

with actual intent to hinder, delay, or defraud any entity

to which the debtor was or became, on or after the date that

such transfer was made or such obligation was incurred,

indebted; or

(2) (A) received less than a reasonably equivalent

value in exchange for such transfer or obligation; and

(B)(i) was insolvent on the date that such transfer

was made or such obligation was incurred, or became

insolvent as a result of such transfer or obligation;

(ii) was engaged in business or a transaction, or was

about to engage in business or a transaction, for which any

property remaining with the debtor was an unreasonably small

capital; or

(iii) intended to incur, or believed that the debtor would incur, debts that would be beyond the debtor's ability to pay as such debts matured.

(b) The trustee of a partnership debtor may avoid any

transfer of an interest of the debtor in property, or any

obligation incurred by the debtor, that was made or incurred

on or within one year before the date of the filing of the

petition, to a general partner in the debtor, if the debtor

was insolvent on the date such transfer was made or such

obligation was incurred, or became insolvent as a result of

such transfer or obligation.

(c) Except to the extent that a transfer or obligation

voidable under this section is voidable under section 544,

545, or 547 of this title, a transferee or obligee of such a

transfer or obligation that takes for value and in good

faith has a lien on or may retain any interest transferred

or may enforce any obligation incurred, as the case may be,

to the extent that such transferee or obligee gave value to

the debtor in exchange for such transfer or obligation.

(d)(1) For the purposes of this section, a transfer is

made when such transfer is so perfected that a bona fide

purchaser from the debtor against whom applicable law

permits such transfer to be perfected cannot acquire an

interest in the property transferred that is superior to the

interest in such property of the transferee, but if such

transfer is not so perfected before the commencement of the

case, such transfer is made immediately before the date of

the filing of the petition.

(2) In this section-

(A) "value" means property, or satisfaction or securing of a present or antecedent debt of the debtor, but does not include an unperformed promise to furnish support to the debtor or to a relative of the debtor;

(B) a commodity broker, forward contract merchant, stockbroker, financial institution, or securities clearing

agency that receives a margin payment, as defined in section

101(34), 741(5) or 761(15) of this title, or settlement

payment, as defined in section 101(35) or 741(8) of this

title, takes for value to the extent of such payment;

(C) a repo participant that receives a margin payment,

as defined in section 741(5) or 761(15) of this title, or

settlement payment, as defined in section 741(8) of this

title, in connection with a repurchase agreement, takes for

value to the extent of such payment; and

(D) a swap participant that receives a transfer in

connection with a swap agreement takes for value to the

extent of such transfer.

SECTION 549 (11 U.S.C. 549)

549. Postpetition transactions.

(a) Except as provided in subsections (b) or (c) of

this section, the trustee may avoid a transfer of property

of the estate-

(1) made after the commencement of the case; and

(2)(A) that is authorized only under section 303(f) or 542(c) of this title; or

(B) that is not authorized under this title or by the

court.

(b) In an involuntary case, a transfer made after the

commencement of such case but before the order for relief to

the extent any value, including services, but not including

satisfaction or securing of a debt that arose before the

commencement of the case, is given after the commencement of

the case in exchange for such transfer, notwithstanding any

notice or knowledge of the case that the transferee has,

(c) The trustee may not avoid under subsection (a) of

this section a transfer of real property to a good faith

purchaser without knowledge of the commence. ment of the case and for present fair equivalent value unless a copy or notice of the petition was filed, where a transfer of such real property may be recorded to perfect such transfer, before such transfer is so perfected that a bona fide purchaser of such property, against whom applicable law permits such transfer to be perfected, could not acquire an interest that is superior to the interest of such good faith purchaser. A good faith purchaser without knowledge of the commencement of the case and for less than present fair

equivalent value has a lien on the property transferred to

the extent of any present value given, unless a copy or

notice of the petition was so filed before such transfer was

so perfected,

(d) An action or proceeding under this section may not

be commenced after the earlier of-

(1) two years after the date of the transfer sought to

be avoided; or

(2) the time the case is closed or dismissed.

SECTION 550 (11 U.S.C. 550)

550. Liability of transferee of avoided transfer.

(a) Except as otherwise provided in this section, to

the extent that a transfer is avoided under section 544, 545

547, 548, 549, 553(b), or 724(a) of this title, the trustee

may recover, for the benefit of the estate, the property

transferred, or, if the court so orders, the value of such

property, from-

(1) the initial transferee of such transfer or the

entity for whose benefit such transfer was made; or

(2) any immediate or mediate transferee of such

initial transferee.

(b) The trustee may not recover under subsection

(a)(2) of this section from-

(1) a transferee that takes for value, including

satisfaction or securing of a present or antecedent debt in

good faith, and without knowledge of the voidability of the

transfer avoided; or

(2) any immediate or mediate good faith transferee of

such transferee.

(c) The trustee is entitled to only a single

satisfaction under subsection (a) of this section.

(d)(1) A good faith transferee from whom the trustee

may recover under subsection (a) of this section has a lien

on the property recovered to secure the lesser of-

(A) the cost, to such transferee, of any improvement

made after the transfer, less the amount of any profit

realized by or accruing to such transferee from such

property; and

(B) any increase in the value of such property as a

result of such improvement, of the property transferred.

(2) In this subsection, improvement" includes-

(A) physical additions or changes to the property

transferred;

(B) repairs to such property;

(C) payment of any tax on such property;

(D) payment of any debt secured by a lien on such

property that is superior or equal to the rights of the

trustee; and

(E) preservation of such property.

(e) An action or proceeding under this section may not

be commenced after the earlier of-

(1) one year after the avoidance of the transfer on

account of which recovery under this section is sought; or

(2) the time the case is closed or dismissed.

SECTION 551 (11 U.S.C. 551)

551. Automatic preservation of avoided transfer. Any

transfer avoided under section 522, 544, 545, 547, 548, 549,

or 724(a) of this title, or any lien void under section

506(d) of this title, is preserved for the benefit of the

estate but only with respect to property of the estate.

SECTION 552 (11 U.S.C. 552)

552. Postpetition effect of security interest.

(a) Except as provided in subsection (b) of this section, property acquired by the estate or by the debtor after the commencement of the case is not subject to any lien resulting from any security agreement entered into by the debtor before the commencement of the case.

(b) Except as provided in section 363, 506(c), 522, 544, 545, 547, and 548 of this title, if the debtor and an entity entered into a security agreement before the commencement of the case and if the security interest created by such security agreement extends to property of the debtor acquired before the commencement of the case and to proceeds, product, offspring, rents, or profits of such property, then such security interest extends to such proceeds, product, offspring, rents, or profits acquired by the estate after the commencement of the case to the extent provided by such security agreement and by applicable nonbankruptcy law, except to any extent that the court, after notice and a hearing and based on the equities of the case, orders otherwise.

SECTION 553 (11 U.S.C. 553)

553. Setoff.

(a) Except as otherwise provided in this section and

in sections 362 and 363 of this title, this title does not

affect any right of a creditor to offset a mutual debt owing

by such creditor to the debtor that arose before the

commencement of the case under this title against a claim of

such creditor against the debtor that arose before the

commencement of the case, except to the extent that-

(1) the claim of such creditor against the debtor is

disallowed other than under section 502(b)(3) of this title:

(2) such claim was transferred, by an entity other

than the debtor, to such creditor-

(A) after the commencement of the case; or

(B)(i) after 90 days before the date of the filing

of the petition; and

(ii) while the debtor was insolvent; or

(3) the debt owed to the debtor by such creditor was

incurred by such creditor

(A) after 90 days before the date of the filing of the

petition:

(B) while the debtor was insolvent: and

(C) for the purpose of obtaining a right of setoff against the debtor.

/* An interesting section. If a person is expecting 7 cents on the dollar and owe the debtor money, then they might pay another person 8 cents on the dollar to gain the offset. */

(b)(1) Except with respect to a setoff of a kind described in sections 362(b)(6), 362(b)(7), 362(b)(14), 365(h)(2) or 365(i)(2), of this title, if a creditor offsets a mutual debt owing to the debtor against a claim against the debtor on or within 90 days before the date of the filing of the petition, then the trustee may recover from such creditor the amount so offset to the extent that any insufficiency on the date of such setoff is less than the insufficiency on the later of-

(A) 90 days before the date of the filing of the

petition; and

(B) the first date during the 90 days immediately

preceding the date of the filing of the petition on which

there is an insufficiency.

(2) In this subsection, "insufficiency" means amount,

if any, by which a claim against the debtor exceeds a mutual

debt owing to the debtor by the holder of such claim.

(c) For the purposes of this section, the debtor is

presumed to have been insolvent on and during the 90 days

immediately preceding the date of the filing of the

petition.

SECTION 554 (11 U.S.C. 554)

554. Abandonment of property of the estate.

(a) After notice and a hearing, the trustee may

abandon any property of the estate that is burdensome to the

estate or that is of inconsequential value and benefit to

the estate.

(b) On request of a party in interest and after notice

and a hearing, the court may order the trustee to abandon

any property of the estate that is burdensome to the estate

or that is of inconsequential value and benefit to the

estate.

(c) Unless the court orders otherwise, any property

scheduled under section 521(1) of this title not otherwise

administered at the time of the closing of a case is

abandoned to the debtor and administered for purposes of

section 350 of this title.

(d) Unless the court orders otherwise, property of the

estate that is not abandoned under this section and that is

not administered in the case remains property of the estate.

365(e)(1) of this title shall not be stayed, avoided, or

otherwise limited by operation of any provision of this

title or by order of a court or administrative agency in any

proceeding under this title unless such order is authorized

under the provisions of the Securities Investor Protection

Act of 1970 (15 U.S.C. 78aaa et seq.) or any statute

administered by the Securities and Exchange Commission. As

used in this section, the term "contractual right" includes

a right set forth In a rule or bylaw of a national securities exchange, a national securities association, or a securities clearing agency.

SECTION 555 (U.S.C. 555)

555. Contractual right to liquidate a securities contract.

The exercise of a contractual right of a stockbroker,

financial institution, or securities clearing agency to

cause the liquidation of a securities contract, as defined

in section 741(7), because of a condition of the kind

specified in section section365(e)(1) of this title, or by order of a court or administrative agency in any proceeding under this title unless such order is authirzed under the provisions of the Securities Investor's Protection Acot of 1970 (15 U.S.C. 78aaa et seq]or any statute administed by the Securities and Exchange Commission. As used in this section, the term "contractual right" includes a right set foth in arule or bylaw of a national securities exchange, a national securities associateion, or a securities clearing agency.

SECTION 556 (U.S.C. 556)

556. Contractual right to liquidate a commodities contract or forward contract.

The contractual right of a commodity broker or forward contract merchant to cause the liquidation of a commodity contract, as defined in section 761(4), or forward contract

because of a condition of the kind specified in section

365(e)(1) of this title, and the right to a variation or

maintenance margin payment received from a trustee with

respect to open commodity contracts or forward contracts,

shall not be stayed, avoided, or otherwise limited by

operation of any provision of this title or by the order of

a court in any proceeding under this title. As used in this

section, the term contractual right" includes a right set

forth in a rule or bylaw of a clearing organization or

contract market or in a resolution of the governing board

thereof and a right, whether or not evidenced in writing,

arising under common law, under law merchant or by reason of

normal business practice.

SECTION 557 (11 U.S.C. 557)

557. Expedited determination of interests in, and abandonment or other disposition of grain assets.

(a) This section applies only in a case concerning a debtor that owns or operates a grain storage facility and only with respect to grain and the proceeds of grain. This section does not affect the application of any other section of this title to property other than grain and proceeds of grain.

(b) In this section-

(1) "grain" means wheat, corn, flaxseed, grain sorghum, barley, oats, rye, soybeans, other dry edible beans, or rice;

(2) "grain storage facility" means a site or physical

structure regularly used to store grain for producers, or to

store grain acquired from producers for resale; and

(3) "producer" means an entity which engages in the

growing of grain.

(c)(1) Notwithstanding sections 362, 363, 365, and 554 of this title, on the court's own motion the court may,

and on the request of the trustee or an entity that claims

an interest in grain or the proceeds of grain the court

shall, expedite the procedures for the determination of

interests in and the disposition of grain and the proceeds

of grain, by shortening to the greatest extent feasible such

time periods as arc otherwise applicable for such procedures

and by establishing, by order, a timetable having a duration

of not to exceed 120 days for the completion of the

applicable procedure specified in subsection (d) of this

section, Such time periods and such timetable may be

modified by the court, for cause, in accordance with

subsection (f) of this section.

(2) The court shall determine the extent to which such

time periods shall be shortened, based upon-

(A) any need of an entity claiming an interest in such

grain or the proceeds of grain for a prompt determination of

such interest;

(B) any need of such entity for a prompt disposition

of such grain;

(C) the market for such grain;

(D) the conditions under which such grain is stored;

(E) the costs of continued storage or disposition of

such grain;

(F) the orderly administration of the estate;

(G) the appropriate opportunity for an entity to assert an interest in such grain; and

(H) such other considerations as are relevant to the

need to expedite such procedures in the case.

(d) The procedures that may be expedited under subsection (c) of this section include-

(1) the filing of and response to-

(A) a claim of ownership;

(B) a proof of claim;

(C) a request for abandonment;

(D) a request for relief from the stay of action against property under section 362(a) of this title;

(E) a request for determination of secured status;

(F) a request for determination of whether such grain or the proceeds of grain --

(i) is property of the estate;

(ii) must be turned over to the estate; or

(iii) may be used, sold, or leased; and

(G) any other request for determination of an interest

in such grain or the proceeds of grain;

(2) the disposition of such grain or the proceeds of

grain, before or after determination of interests in such

grain or the proceeds of grain, by way of-

(A) sale of such grain;

(B) abandonment;

(C) distribution; or

(D) such other method as is equitable in the case;

(3) subject to sections 701, 702, 703,1104, 1202, and

1302 of this title, the appointment of a trustee or examiner

and the retention and compensation of any professional

person required to assist with respect to matters relevant

to the determination of interests in or disposition of such

grain or the proceeds of grain; and

(4) the determination of any dispute concerning a

matter specified in paragraph (1), (2), or (3) of this

subsection.

(e)(1) Any governmental unit that has regulatory

jurisdiction over the operation or liquidation of the debtor

or the debtor's business shall be given notice of any

request made or order entered under subsection (c) of this

section.

(2) Any such governmental unit may raise, and may

appear and be heard on, any issue relating to grain or the

proceeds of grain in a case in which a request is made, or

an order is entered, under subsection (c) of this section.

(3) The trustee shall consult with such governmental

unit before taking any action relating to the disposition of

grain in the possession, custody, or control of the debtor

or the estate.

(f) The court may extend the period for final disposition of grain or the proceeds of grain under this section beyond 120 days if the court finds that-

(I) the interests of justice so require in light of

the complexity of the case; and

(2) the interests of those claimants entitled to

distribution of grain or the proceeds of grain will not be

materially injured by such additional delay.

(g) Unless an order establishing an expedited procedure under subsection (c) of this section, or determining any interest in or approving any disposition of grain or the proceeds of grain, is stayed pending appeal-

(1) the reversal or modification of such order on appeal does not affect the validity of any procedure, determination, or disposition that occurs before such reversal or modification, whether or not any entity knew of the pendency of the appeal; and

(2) neither the court nor the trustee may delay, due

to the appeal of such order, any proceeding in the case in

which such order is issued.

(h)(1) The trustee may recover from grain and the proceeds of grain the reasonable and necessary costs and expenses allowable under section 503(b) of this title attributable to preserving or disposing of grain or the proceeds of grain, but may not recover from such grain or the proceeds of grain any other costs or expenses.

(2) Notwithstanding section 326(a) of this title, the dollar amounts of money specified in such section include

the value, as of the date of disposition, of any grain that

the trustee distributes in kind.

(i) In all cases where the quantity of a specific type

of grain held by a debtor operating a grain storage facility

exceeds ten thousand bushels, such grain shall be sold by

the trustee and the assets thereof distributed in accordance

with the provisions of this section.

SECTION 558 (11 U.S.C. 558)

558. Defenses of the estate.

The estate shall have the benefit of any defense available to the debtor as against any entity other than the estate, including statutes of limitation, statutes of frauds, usury, and other personal defenses. A waiver of any such defense by the debtor after the commencement of the case does not bind the estate.

SECTION 559 (11 U.S.C. 559)

559. Contractual right to liquidate a repurchase agreement.

The exercise of a contractual right of a repo participant to Cause the liquidation of a repurchase agreement because of a condition of the kind specified in section 365(e)(1) of this title shall not be stayed, avoided, or otherwise limited by operation of any provision of this title or by order of a Court or administrative agency in any proceeding under this title, unless, where the debtor is a stockbroker or securities clearing agency, such order is authorized under the provisions of the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) or any statute administered by the Securities and Exchange

Commission. In the event that a repo participant liquidates

one or more repurchase agreements with a debtor and under the terms of one or more such agreements has agreed to deliver assets subject to repurchase agreements to the debtor, any excess of the market prices received on liquidation of such assets (or if any such assets are not disposed of on the date of liquidation of such repurchase agreements, at the prices available at the time of liquidation of such repurchase agreements from a generally

recognized source or the most recent closing bid quotation from such a source) over the sum of the stated repurchase prices and all expenses in connection with the liquidation of such repurchase agreements shall be deemed property of the estate, subject to the available rights of setoff. As used in this section, the term "contractual right" includes a right set forth in a rule or bylaw, applicable to each party to the repurchase agreement, of a national securities exchange, a national securities association, or a securities clearing agency, and a right, whether or not evidenced in writing, arising under common law, under law merchant or by reason of normal business practice.

SECTION 560 (11 U.S.C, 560)

560. Contractual right to terminate a swap agreement

The exercise of any contractual right of any swap participant to cause the termination of a swap agreement

because of a condition of the kind specified in section

365(e)(l) of this title or to offset or net out any termination values or payment amounts arising under or in connection with any swap agreement shall not be stayed, avoided, or otherwise limited by operation of any provision of this title or by order of a court or administrative agency in any proceeding under this title. As used in this section, the term "contractual right" includes a right, whether or not evidenced in writing, arising under common law, under law merchant, or by reason of normal business practice.