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Meaning / Definition of

Bankruptcy Proceedings

Categories: Bankruptcy Assistancelegal, ,

Legal proceedings covered by bankruptcy code. The proceedings could result in liquidation or reorganization of the firm.

The bankruptcy procedure is: a) filing a petition (voluntary or involuntary) to declare a debtor person or business bankrupt, or, under chapter 11 or 13, to allow reorganization or refinancing under a plan to meet the debts of the party unable to meet his/her/its obligations. This petition is supposed to include a schedule of debts, assets and income potential. b) A hearing called "first meeting of creditors" with notice to all known creditors. This is usually brief and the judge assignes the matter to a professional trustee. c) Later the trustee reports and there is a determination of what debts are dischargeable, what assets are exempt, and what payments are possible. d) If there are assets available then the creditors are requested in writing to file a "creditor's claim." e) There may be other hearings, reports, proposals, hearings on claims of fraudulent debts, petitions for removing the stay on foreclosures and other matters. f) The final step is a hearing on discharge of the bankrupt, which wipes out unsecured debts (or a pro rata share of them).

Under chapter 11 and 13 proceedings, the process will be more drawn out and can go on for years as plans are proposed, possibilities of refinancing are considered and, in effect, the debtor tries either to legitimately get out from under his/her/its financial woes or delay while current profits are made and prayers for economic salvation are made.

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Definition / Meaning of

Catch-up Contribution

Categories: Retirement and Pension,

You are entitled to make an annual catch-up contribution to your employer sponsored retirement savings plan and individual retirement account (IRA) if you're 50 or older. The catch-up amounts, which are larger for employer plans than for IRAs, increase from time to time based on the rate of inflation. You are eligible to make catch-up contributions whether or not you have contributed the maximum amount you were eligible for in the past. And if you participate in an employer plan and also put money in an IRA, you are entitled to use both catch-up options.Earnings on catch-up contributions accumulate tax deferred, just as other earnings in your account do. And when your primary contributions are tax deferred, so are your catch-up contributions.health savings accounts (HSAs), which you're eligible to open if you have a high deductible health plan (HDHP), allow catch-up contributions if you're at least 55. Your eligibility to make any contributions to an HSA ends when you turn 65.

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