Question 1

Francesca cannot serve as a trustee in a bankruptcy case because she is not a lawyer.

Accepted Answer

A) True 
 B)False

Question 2

Karen has filed for bankruptcy. Who has the authority to confirm or reject a plan of payment, and what factors will be considered when deciding whether to approve a repayment plan under Chapter 13?

Accepted Answer

The court has the sole authority to conf...

Question 3

Grand Lighting Co. has filed a petition for voluntary bankruptcy under Chapter 7 of the Code. Which of the following will prohibit creditors from collecting debts that Grand Lighting incurred before the petition was filed?

Accepted Answer

A)   an automatic stay
B)   a proof of claim
C)   a voluntary petition
D)   a discharge statementE) A) and C)
F) C) and D) A

Question 4

When a debtor no longer has an obligation to pay a debt, that debt has been

Accepted Answer

A)   terminated.
B)   revoked.
C)   completed.
D)   discharged.E) None of the above
F) C) and D)

Question 5

Which of the following statements concerning a Chapter 11 reorganization plan is true?

Accepted Answer

A)   A reorganization plan will be confirmed by the court only if a majority of each class of creditors votes in favor of the plan.
B)   A reorganization plan can be confirmed by the court over objections of some creditors if the court determines that the plan is feasible and fair.
C)   Only the bankruptcy court has the authority to confirm or reject the reorganization plan. Creditors do not have a right to vote on the plan.
D)   A reorganization plan binds only the debtor and not the creditors.E) A) and B)
F) A) and C)

Question 6

Alimony and child support obligations are considered priority claims.

Accepted Answer

A) True 
 B)False

Question 7

Debts that cannot be discharged in bankruptcy include all EXCEPT

Accepted Answer

A)   money owed for alimony.
B)   income taxes for 3 years prior to filing.
C)   money owed to utility companies.
D)   money obtained fraudulently.E) A) and D)
F) None of the above

Question 8

A trustee can void any transfer that meets all of the following requirements EXCEPT

Accepted Answer

A)   if the transfer was to a creditor of the debtor.
B)   if the pre-petition payment was made in the ordinary course.
C)   if the transfer was used to pay an existing debt.
D)   if the debtor's liabilities exceeded assets at the time of the transfer.E) C) and D)
F) A) and B)

Question 9

Artistic Framing, a business with $120,000 of unsecured debt, needs to file for bankruptcy but wants to continue in business. Discuss what chapter of the Bankruptcy Code should be used, and explain the plan of reorganization that should be used.

Accepted Answer

If Artistic wants to continue in busines...

Question 10

In a Chapter 13 bankruptcy, creditors cannot force a debtor into bankruptcy; nor can they vote to confirm or reject a plan of reorganization.

Accepted Answer

A) True 
 B)False  True

Question 11

Under all chapters of the Bankruptcy Code, most of the debtor's assets are distributed to creditors and the debtor has no obligation to share future earnings with creditors.

Accepted Answer

A) True 
 B)False

Question 12

Chapter 7 bankruptcy petitions may only be filed voluntarily.

Accepted Answer

A) True 
 B)False

Question 13

In Chapter 11 bankruptcy, only the debtor may propose plans of reorganization.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a primary goal of the Bankruptcy Code?

Accepted Answer

A)   to preserve as much of the debtor's property as possible
B)   to pay off the debtor's creditors as quickly as possible
C)   to secure debt counseling for the debtor
D)   to keep the debtor from falling behind in paymentsE) A) and D)
F) All of the above

Question 15

Which is an example of a priority claim?

Accepted Answer

A)   alimony
B)   income tax
C)   child support
D)   All of these are correct.E) None of the above
F) A) and C)

Question 16

Ramona has received a discharge in bankruptcy, but wants to reaffirm a debt to her sister. To be valid, the reaffirmation

Accepted Answer

A)   will be scrutinized by the court to make sure her sister has not unfairly pressured Ramona.
B)   will be automatically disallowed because allowing Ramona to promise to pay a discharged debt would be contrary to the goals of the bankruptcy proceedings.
C)   will be automatically allowed if Ramona voluntarily chooses to make it.
D)   must clearly disclose that Ramona has the right to rescind at any time since the debt was already discharged.E) C) and D)
F) B) and D) A

Question 17

Under what circumstances might the court reject a debtor's Chapter 13 plan?

Accepted Answer

A)   The plan requires future earnings to pay off debts.
B)   The plan promises to pay all secured and priority claims.
C)   The plan anticipates paying the unsecured creditors less than what they would get under Chapter 7.
D)   The plan treats all unsecured classes equally.E) A) and B)
F) All of the above

Question 18

When Dudley files his Chapter 7 petition, he lists the following debts:
a.
$25,000 in back child support and alimony
b.
$15,000 for liabilities incurred after drinking and driving
c.
$10,000 for past-due student loans
d.
$5,000 for past-due rent to his landlord
e.
$550 for a past-due phone bill
How will each of these debts be treated by the bankruptcy court.

Accepted Answer

Certain debts are never discharged, and ...

Question 19

Who is responsible for gathering the bankrupt's assets and dividing them among creditors?

Accepted Answer

A)   the executor
B)   the state court
C)   the creditors' committee
D)   the trusteeE) All of the above
F) A) and C)

Question 20

Forever Yours, Inc. has a secured and perfected security interest in Sally's big-screen TV. On the filing date of Sally's Chapter 7 petition, the balance of the debt owed to Forever Yours is $2,000. The value of the TV is estimated at $1,500. This means that Forever Yours

Accepted Answer

A)   is secured for the entire debt, $2,000.
B)   is unsecured for $500, the excess of the debt over the value of the TV.
C)   has a high priority claim of $500. This means that Forever Yours, Inc. will be allowed $500 worth of other unsecured property before other unsecured creditors get anything.
D)   is unsecured for the entire debt.E) None of the above
F) A) and B)

Exam 36: Bankruptcy

Francesca cannot serve as a trustee in a bankruptcy case because she is not a lawyer.

Correct Answer
verified

Karen has filed for bankruptcy. Who has the authority to confirm or reject a plan of payment, and what factors will be considered when deciding whether to approve a repayment plan under Chapter 13?

Correct Answer
verified
The court has the sole authority to conf...
View Answer

Grand Lighting Co. has filed a petition for voluntary bankruptcy under Chapter 7 of the Code. Which of the following will prohibit creditors from collecting debts that Grand Lighting incurred before the petition was filed?

Correct Answer
verified
A

When a debtor no longer has an obligation to pay a debt, that debt has been

Correct Answer
verified

Which of the following statements concerning a Chapter 11 reorganization plan is true?

Correct Answer
verified

Alimony and child support obligations are considered priority claims.

Correct Answer
verified

Debts that cannot be discharged in bankruptcy include all EXCEPT

Correct Answer
verified

A trustee can void any transfer that meets all of the following requirements EXCEPT

Correct Answer
verified

Artistic Framing, a business with $120,000 of unsecured debt, needs to file for bankruptcy but wants to continue in business. Discuss what chapter of the Bankruptcy Code should be used, and explain the plan of reorganization that should be used.

Correct Answer
verified
If Artistic wants to continue in busines...
View Answer

In a Chapter 13 bankruptcy, creditors cannot force a debtor into bankruptcy; nor can they vote to confirm or reject a plan of reorganization.

Correct Answer
verified
True

Under all chapters of the Bankruptcy Code, most of the debtor's assets are distributed to creditors and the debtor has no obligation to share future earnings with creditors.

Correct Answer
verified

Chapter 7 bankruptcy petitions may only be filed voluntarily.

Correct Answer
verified

In Chapter 11 bankruptcy, only the debtor may propose plans of reorganization.

Correct Answer
verified

Which of the following is a primary goal of the Bankruptcy Code?

Correct Answer
verified

Which is an example of a priority claim?

Correct Answer
verified

Ramona has received a discharge in bankruptcy, but wants to reaffirm a debt to her sister. To be valid, the reaffirmation

Correct Answer
verified
A

Under what circumstances might the court reject a debtor's Chapter 13 plan?

Correct Answer
verified

Correct Answer
verified
Certain debts are never discharged, and ...
View Answer

Who is responsible for gathering the bankrupt's assets and dividing them among creditors?

Correct Answer
verified

Forever Yours, Inc. has a secured and perfected security interest in Sally's big-screen TV. On the filing date of Sally's Chapter 7 petition, the balance of the debt owed to Forever Yours is $2,000. The value of the TV is estimated at $1,500. This means that Forever Yours

Correct Answer
verified

Exam 36: Bankruptcy

Francesca cannot serve as a trustee in a bankruptcy case because she is not a lawyer.

Correct AnswerverifiedShow Answer

Karen has filed for bankruptcy. Who has the authority to confirm or reject a plan of payment, and what factors will be considered when deciding whether to approve a repayment plan under Chapter 13?

Correct AnswerverifiedThe court has the sole authority to conf...View AnswerShow Answer

Grand Lighting Co. has filed a petition for voluntary bankruptcy under Chapter 7 of the Code. Which of the following will prohibit creditors from collecting debts that Grand Lighting incurred before the petition was filed?

Correct AnswerverifiedA

When a debtor no longer has an obligation to pay a debt, that debt has been

Correct AnswerverifiedShow Answer

Which of the following statements concerning a Chapter 11 reorganization plan is true?

Correct AnswerverifiedShow Answer

Alimony and child support obligations are considered priority claims.

Correct AnswerverifiedShow Answer

Debts that cannot be discharged in bankruptcy include all EXCEPT

Correct AnswerverifiedShow Answer

A trustee can void any transfer that meets all of the following requirements EXCEPT

Correct AnswerverifiedShow Answer

Artistic Framing, a business with $120,000 of unsecured debt, needs to file for bankruptcy but wants to continue in business. Discuss what chapter of the Bankruptcy Code should be used, and explain the plan of reorganization that should be used.

Correct AnswerverifiedIf Artistic wants to continue in busines...View AnswerShow Answer

In a Chapter 13 bankruptcy, creditors cannot force a debtor into bankruptcy; nor can they vote to confirm or reject a plan of reorganization.

Correct AnswerverifiedTrue

Under all chapters of the Bankruptcy Code, most of the debtor's assets are distributed to creditors and the debtor has no obligation to share future earnings with creditors.

Correct AnswerverifiedShow Answer

Chapter 7 bankruptcy petitions may only be filed voluntarily.

Correct AnswerverifiedShow Answer

In Chapter 11 bankruptcy, only the debtor may propose plans of reorganization.

Correct AnswerverifiedShow Answer

Which of the following is a primary goal of the Bankruptcy Code?

Correct AnswerverifiedShow Answer

Which is an example of a priority claim?

Correct AnswerverifiedShow Answer

Ramona has received a discharge in bankruptcy, but wants to reaffirm a debt to her sister. To be valid, the reaffirmation

Correct AnswerverifiedA

Under what circumstances might the court reject a debtor's Chapter 13 plan?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedCertain debts are never discharged, and ...View AnswerShow Answer

Who is responsible for gathering the bankrupt's assets and dividing them among creditors?

Correct AnswerverifiedShow Answer

Forever Yours, Inc. has a secured and perfected security interest in Sally's big-screen TV. On the filing date of Sally's Chapter 7 petition, the balance of the debt owed to Forever Yours is $2,000. The value of the TV is estimated at $1,500. This means that Forever Yours

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The court has the sole authority to conf...
View Answer

Correct Answer
verified
A

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
If Artistic wants to continue in busines...
View Answer

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified
Certain debts are never discharged, and ...
View Answer

Correct Answer
verified

Correct Answer
verified