test folder

47 Municipalities, on the other hand, are determined to be insolvent based not on their balance sheets, but instead on whether or not they are paying (or are able to pay) their debts as they become due. 11 U.S.C. § 101(32)(C). B. Type of Filing 1. Voluntary Filing A voluntary bankruptcy case is commenced when the debtor files a petition under the particular Chapter of the Bankruptcy Code under which it wishes to proceed. The filing of the petition triggers the automatic stay (discussed below in Chapter V.C.) and constitutes the order for relief under the Chapter under which the petition is filed. 11 U.S.C. §§ 301, 362(a). Entry of such order for relief, however, is not a binding determination of either a debtor's eligibility to be a debtor under the Bankruptcy Code or any other substantive matter. A husband and wife may commence a voluntary joint case by filing a single petition under an appropriate Chapter of the Bankruptcy Code. 11 U.S.C. § 302. For a joint filing, both spouses must agree to the filing; neither spouse can file without the knowledge and consent of the other. Joint administration is primarily administrative in nature. After a joint case has been commenced, the court determines the extent, if any, to which the debtors' estates shall be substantively consolidated (i.e., their individual assets and liabilities will be combined into a single pool out of which creditors will be paid) based on a consideration of certain factors, including whether there is a substantial identity between assets, liabilities and the handling of financial affairs, and whether any harm may result from granting or denying the motion. 17 17 Substantive consolidation is discussed in greater detail in Chapter V.B.2. below.

• Cover