Section 553 - Setoff


Title 11 of the United States Code - Bankruptcy
CREDITORS, THE DEBTOR, AND THE ESTATE – CHAPTER 5


Setoff - Section 553
11 USCS § 553



(a) Except as otherwise provided in this section and in sections 362 and 363 of this title [11 USCS §§ 362 and 363], 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 [11 USCS §§ 101 et seq.] 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;
   (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 (except for a setoff of a kind described in section 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561 [11 USCS § 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561]); 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 (except for a setoff of a kind described in section 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561 [11 USCS § 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 559, 560, or 561]).
 
(b) (1) Except with respect to a setoff of a kind described in section 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 559, 560, 561, 365(h), 546(h), or 365(i)(2) of this title [11 USCS § 362(b)(6), 362(b)(7), 362(b)(17), 362(b)(27), 555, 556, 559, 560, 561, 365(h), 546(h), or 365(i)(2)], 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.


The US Bankruptcy Code, Title 11 (Bankruptcy) is arranged here in sections for your convenience.  This is the entire Bankruptcy Code and describes in detail Chapter 7 bankruptcy, Chapter 11 bankruptcy, Chapter 13 bankruptcy, and all other sections of the BK Code.  We have provided this to you because Sagaria Law promotes a “knowledge is power” approach to bankruptcy.  You will not see The Bankruptcy Code like this, in its entirety, on other bankruptcy sites.
In addition, our experienced bankruptcy attorneys are available to you in any of our 9 bankruptcy office locations, such as our corporate bankruptcy headquarters located in downtown San Jose. Our South Bay Area bankruptcy law firm provides bankruptcy services to all of Santa Clara County as well as supports our other offices in 9 other counties and locations.  We look forward to working with you!

Attorney Consultation!! $99 Retainer Fee!! Free Bankruptcy Evaluation
Motivation Bills Assets Budget
The law varies from state-to-state — please provide your zip code!

Why are you considering bankruptcy? (select all that apply)









Motivation Bills Assets Budget

What bills do you have? (select all that apply)








Motivation Bills Assets Budget
Do you own real estate ?
If Yes , are you behind in these payments?


Do you own an automobile ?
If Yes , are you behind in these payments?


Do you have any additional assets worth more than $1000.00?
Motivation Bills Assets Budget

What types of income do you have? (select all that apply)






$
Contact Info Your Evaluation

Call For A Consultation

toll free: 1-866-447-8460