Publications
Recoupment: Creditors' Rights v. the Stay and Preference Actions
Published: 2006 | This paper discusses the general differences between set off and recoupment, as well as the differences in application of the two concepts in relation to the automatic stay provisions of the Bankruptcy Code and preference actions.
The Bankruptcy Code does not specifically address the issue of recoupment. All references to recoupment in case law are made after distinguishing the doctrine from that of “set off.” Set off is addressed under section 553 of the Code, which is why distinction of the two concepts is imperative. The paper discusses in detail the differences between recoupment and set off, as well as the effect of automatic stay on both set off and recoupment. Section 553 specifically states that setoffs are subject to section 362 and the automatic stay provisions of the Bankruptcy Code. Alternatively, courts have found that due to the silence of the Code on recoupment, it is not subject to the automatic stay provisions. Also discussed are the differences between setoff and recoupment in preference actions.
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