county in which the bankrupt has had his principal place of business, or has resided; or if that place is manifestly inconvenient, then at such place as is most convenient to all the parties.

NOTICES TO CREDITORS: (a) Creditors shall have at least ten days notice by mail, to their respective addresses as they appear in the list of creditors of the bankrupt, or as afterwards filed with the papers in the case by the creditors, unless they waive notice in writing, of (1) all examinations of the bankrupt; (2) all hearings upon applications for the confirmation of compositions or the discharge of bankrupts; (3) all meetings of creditors; (4) all proposed sales of property; (5) the declaration and time of payment of dividends; (6) the filing of the final accounts of the trustee, and the time when and the place where they will be examined and passed upon; (7) the proposed compromise of any controversy, and (8) the proposed dismissal of the proceedings.

NOTICE TO CREDITORS OF FIRST MEETING: Notice to creditors of the first meeting shall be published at least once and may be published such number of additional times as the Court may direct; the last publication shall be at least one week before the date fixed for the meeting. Other notices may be published as the Court shall direct.

OBJECT OF FIRST MEETING OF CREDITORS: The object of the first meeting of creditors is to select a trustee, examine the bankrupt, and other witnesses respecting the acts, conduct and property of the bankrupt, file claims against the estate, and to take such other steps as may be pertinent and necessary for the promotion of the best interests of the estate and affairs of the bankrupt.

CREDITORS RIGHTS AND DUTIES: Before creditors can participate in any meeting of creditors and have a right to object to any proceeding, it is necessary for them to file their claims. Before they can vote upon the selection or a trustee, or other matter, their claims must be allowed by the referee or Court. The prudent thing to do is to file the creditors' claim at once (unless perhaps, there are no assets in the estate, and the filing would be a needless and useless expense).

Proof of claims consist of a statement under oath, in writing, signed by a creditor, describing the claim, its consideration, whether any, and, if so, what securities are held for it; whether any,

and, if so, what payments have been made on it; that the sum claimed is justly owing from the bankrupt to the creditor. A form is prescribed by the Supreme Court of the United States to be used in filling out claims. While proving a claim is apparently a simple matter, it should be attended to with great care, as it may be disallowed by technical objections.

TO PROVE CLAIMS: Claims cannot be proved against a bankrupt estate after one year from the adjudication; or if they are liquidated by litigation and the final judgment on them is rendered within thirty days before or after the expiration of such time, then within sixty days after the rendition of such judgment. But the right of infants and insane persons without guardians, without notice of the proceedings, may continue six months longer. CLAIMS FOUNDED ON NOTE OR OTHER WRITTEN INSTRUMENT: Whenever a claim is founded upon an instrument in writing, such instrument, unless lost or destroyed, must be filed with the proof of claim. If it is lost or destroyed, a statement of such fact and of the circumstances of such loss or destruction must be filed under oath with the claim. After the claim is allowed or disallowed, such instrument may be withdrawn by permission of the Court, upon leaving a copy.

TIME WHEN ALLOWED: Claims which have been duly proved shall be allowed, upon receipt by or upon presentation to the Court, unless objection to their allowance shall be made by parties in interest, or their consideration be continued.

OBJECTIONS TO CLAIMS: A properly prepared claim establishes a prima facie case for the person filing the claim, and the burden of disproving it rests upon the person objecting to the allowance of the claim.

Objections are heard and determined as soon as the convenience of the Court and the best interests of the estates and the claimants permit. Upon filing objections, it is the duty of the referee to set it down for hearing, notify the claimant and objector of the date, and proceed to hear the issue and allow or disallow the claims. The referee may disallow a claim on his own motion, on the ground that it does not show facts sufficient on its face to constitute a valid claim.

Claims which have been allowed may be reconsidered for cause and reallowed or rejected in whole or in part (according to the

equities of the case), before the estate has been closed, but not after.

VOTERS AT CREDITORS' MEETINGS: Creditors shall pass upon matters submitted to them at their meetings by a majority vote in number and amount of claims of all creditors whose claims have been allowed and are present, except as herein noted. VOTING POWER OF SECURED CREDITORS: Claims of secured creditors and those who have priority may be allowed, to enable such creditors to participate in the proceedings at creditors' meetings held before the determination of the value of their securities or priorities, but shall be allowed for such sums only as may to the Courts seem to be owing, over and above the value of their securities or priorities.

Creditors holding claims which are secured or have priority are not, in respect to such claims, entitled to vote at creditors' meetings; nor are such claims counted in computing either the number of creditors or the amount of their claims, unless the amounts of such claims exceed the values of such securities or priorities, and then only for such excess.

Upon application to the Court, unliquidated claims may be liquidated in such manner as it shall direct, and may afterward be proved and allowed.

DEBTS WHICH HAVE PRIORITY: The debts to have priority, and to be paid in full out of bankrupt estates, and their order of payment, are (1) the actual and necessary cost of preserving the estate before filing the petition; (2) the filing fees paid by creditors in involuntary cases and the reasonable expenses of recovery, where property of the bankrupt, transferred or concealed by him either before or after the filing of the petition, shall have been recovered for the benefit of his estate by the efforts and at the expense of one or more creditors; (3) the cost of administration, including the fees and mileage payable to witnesses as now or hereafter provided by the laws of the United States, and one reasonable attorney's fee, for the professional services actually rendered, irrespective of the number of attorneys employed, to the petitioning creditors in involuntary cases, to the bankrupt in involuntary cases while performing the duties herein prescribed, and to the bankrupt in voluntary cases, as the Court may allow; (4) wages due workmen, clerks or servants which have been earned

within three months before the date of the commencement of proceedings, not to exceed three hundred dollars to each claimant; and (5) debts owing to any person who by the laws of the States or the United States is entitled to priority.

LIENS: Unless claims would not have been valid liens as against the claims of the creditors of the bankrupt, they are not liens against his estate.

A lien created by or obtained in or pursuant to any suit or proceeding at law or in equity (including an attachment or a judgment by confession), which was begun against a person within four months before the filing of a petition in bankruptcy by or against such person, shall be dissolved by the adjudication, if (1) it appears that said lien was obtained and permitted while the defendant was insolvent, and that its existence and enforcement will work a preference, or (2) the party or parties to be benefited by it had reasonable cause to believe the defendant was insolvent and in contemplation of bankruptcy, or (3) that such lien was sought and permitted in fraud of the provisions of the Bankruptcy Act, or (4) if the dissolution of such lien would act against the best interests of the estate of such person and same should not be dissolved, but the trustee shall be substituted to the rights of the holder of such lien and empowered to perfect and enforce those rights.

A set-off or counterclaim should not be allowed in favor of any debtor of the bankrupt which (1) is not provable against the estate; or (2) was purchased by or transferred to him after the filing of the petition, or within four months before such filing, with a view to such use and with knowledge or notice that such bankrupt was insolvent, or had committed an act of bankruptcy.

The decisions are that the mere act of filing a petition in bankruptcy is notice to all the world of the fact, and automatically releases attachments and liens obtained through legal proceedings.

ATTACHMENTS AND EXEMPTIONS LEVIED WITHIN FOUR MONTHS: All levies, judgments, attachments, or other liens obtained through legal proceedings against a person who is insolvent, at any time within four months before the filing of a petition in bankruptcy against him, are null and void in case he is adjudged a bankrupt, and the property affected by the levy, judgment, attachment, or other lien, is to be wholly discharged and released from them, and passes to the trustee as a part of the

estate, unless the Court, on due notice, shall order that the right under such levy, judgment, attachment, or other lien shall be preserved for the benefit of the estate. The court may order such conveyance as shall be necessary to carry these provisions into effect. These provisions are not effective if they have the effect to destroy or impair the title obtained by such levy, judgment, attachment, or other lien, of a bona fide purchaser, for value, who shall have acquired it without notice or reasonable cause for inquiry.

PREFERENCES:

It very frequently happens and it is a very natural thing, that a person who is in a failing condition, or who is in contemplation of bankruptcy, desires to protect certain of his creditors by paying them in full, and transfers to them a portion of his property, either directly, or by giving a mortgage or by procuring or permitting a judgment and execution to be entered and issued against him. This constitutes what is known as a preference; (1) if done within four months before bankruptcy, and (2) if the person receiving the property or to be benefited by the transfer is enabled to obtain a greater percentage of his debt than other creditors of the same class, and (3) if the person receiving the property or to be benefitted by the transfer has reasonable cause to believe that the bankrupt was insolvent-the transaction can be set aside by the trustee, and the property recovered for the benefit of the estate.

If a creditor has been preferred, and afterwards in good faith gives the debtor further credit (without security of any kind) for property, which becomes a part of the debtor's estates,—the amount of such new credit remaining unpaid at the time of the adjudication may be set off against the amount which would otherwise be recoverable from him.

FRAUDULENT TRANSFERS: All conveyances, transfers, assignments, or encumbrances of his property, or any part of them, made or given by a person adjudged a bankrupt, and within four months before the filing of the petition, with the intent and purpose on his part to hinder, delay, or defraud his creditors, or any of them, are null and void as against the creditors of such debtor (except as to purchasers in good faith and for a present fair consideration). All property of the debtor thus conveyed, transferred, assigned, or encumbered (if he is adjudged a bankrupt,