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In how many ways can bankruptcy affect various types of contracts? A person needs to mention lots of things while filing for bankruptcy. The person may have to mention most of his/her assets in the bankruptcy petition. An individual’s taxes and income may also be affected by bankruptcy. Another thing that is affected is executory contracts. Issues related to contracts might give rise to many questions that are asked to civil lawyers online. This article provides answers to some of the most commonly asked questions about such issues. Does filing of bankruptcy cancel an individual’s postal contracts?
Usually a person does not lose the postal contracts due to the filing of bankruptcy. The bankruptcy code debars any person from being discriminated against by any government agency just because he/she has filed for bankruptcy. Is Exclusive Distributorship Agreement considered an Executory Contract in a bankruptcy?
If the Exclusive Distributorship is in force and has not been cancelled it may be considered an Executory Contract. When the person files for bankruptcy it may be included on Schedule G. Is a creditor allowed to sell his/her contract to a third party under Chapter 13 bankruptcy?
Usually a creditor is allowed to sell the contract to a third party under Chapter 13 bankruptcy when the contract includes a clause that permits the transfer or sale of the account or contract to another person. However this is unlikely to change the terms of the contract or the bankruptcy. It is possible that the creditor would file an assignment of claim form and inform the trustee that they pay the new owner of the account. Can someone sign a contract with a cell phone company before he/she files for bankruptcy?
In most cases it is possible for a person to sign a cell phone contract before filing for bankruptcy. After the filing it may not be possible for the company to charge the person with cancellation fee. The company may go for signing a new contract with the person after terminating the service or change the terms of the contract to a monthly one. However, if the bankruptcy court considers it to be a fraud it may dismiss the bankruptcy filing altogether. Is it possible that a business files for a Chapter 11 Bankruptcy for the purpose of delaying the cancellation of a contract for deed?
In most cases a Chapter 11 bankruptcy provides the business time to pay its debt and remain operative. Hence it is possible that a business may file for a Chapter 11 bankruptcy to delay the cancellation of a contract for deed. Will the filing of a Chapter 7 Bankruptcy by a company affect a person’s payment who has signed a contract with it?
The person’s contract may not come under the ambit of the Chapter 7 bankruptcy petition filed by the company since he/she has done so after the filing of the petition by the said company. Hence, in all likelihood there will not be any bankruptcy stay on the contract and the payment of the individual will not get affected. However, if the company files an amendment petition and requests the court to include the contract in the bankruptcy filing, then the case might be different. If a company files for bankruptcy would an employee’s employment contract remain valid?
Usually when a company files for Chapter 7 bankruptcy, the employee’s employment contract does not remain in force. In such cases all the contracts and proceedings of the company might get cancelled. The bankruptcy court might liquidate the company. Any funds available with the company will be distributed among all the creditors and the employees. Bankruptcy has the potential to affect both parties in a contract. It is necessary for an individual to know how a bankruptcy petition will affect a contract. Since the finer points of bankruptcy law are sometimes difficult for a lay person to understand it is advisable to ask a lawyer to decide the best course of action.
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executory contracts, bankruptcy contract, forward contract bankruptcy,
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