Question 1

Bankruptcy proceedings are commenced under ________.

Accepted Answer

A)  state law 
B)  federal law 
C)  county law 
D)  state or federal law, at the option of the debtor 
A)  state law 
B)  federal law 
C)  county law 
D)  state or federal law, at the option of the debtor B

Question 2

Explain median income test with an example.

Accepted Answer

The first step in determining whether a debtor qualifies for Chapter 7 relief is to apply the median income test.A state's median income is defined as that income where half of the state's families of a specified size have incomes above that figure and half of the state's families of that size have incomes below that figure.If a family has median family income equal to or below the state's median family income for the size of the debtor's family,the debtor qualifies for Chapter 7 bankruptcy.The debtor may proceed with his or her Chapter 7 case and be granted discharge of his or her unsecured debts.For instance,a state's median income for a family of four is $80,000 and the median income of the debtor's family of four is $70,000,the debtor automatically qualifies for Chapter 7 bankruptcy relief.

Question 3

The individual debtor is not responsible for paying prepetition debts out of postpetition income under a Chapter 7 discharge.

Accepted Answer

A) True 
 B)False  True

Question 4

Under the Bankruptcy Code,a trustee in a Chapter 11 proceeding is not given authority to assume or reject executory contracts.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a federal exemption that a debtor can claim under the Bankruptcy Code?

Accepted Answer

A)  interest in jewelry worth $1,000 
B)  unmatured life insurance policy owned by the debtor 
C)  interest in wrongful death benefits 
D)  interest of $3,500 in a motor vehicle 
A)  interest in jewelry worth $1,000 
B)  unmatured life insurance policy owned by the debtor 
C)  interest in wrongful death benefits 
D)  interest of $3,500 in a motor vehicle

Question 6

The filing of a Chapter 11 petition stays actions by creditors to recover the debtor's property.

Accepted Answer

A) True 
 B)False

Question 7

The filing of either a voluntary petition or an unchallenged involuntary petition constitutes a(n)________.

Accepted Answer

A)  prayer for relief 
B)  discharge 
C)  order for relief 
D)  composition 
A)  prayer for relief 
B)  discharge 
C)  order for relief 
D)  composition

Question 8

A(n)________ is an agreement entered into by the creditor and the debtor whereby the debtor agrees to pay the creditor for a debt that is dischargeable in bankruptcy.

Accepted Answer

A)  reaffirmation agreement 
B)  order for relief 
C)  discharge agreement 
D)  acceptance agreement 
A)  reaffirmation agreement 
B)  order for relief 
C)  discharge agreement 
D)  acceptance agreement

Question 9

Which of the following is a feature of the Chapter 11 plan of reorganization?

Accepted Answer

A)  an equilateral division of the Chapter 11 estate among all creditors 
B)  division of the bankruptcy estate according to the debt to be paid to each creditor 
C)  discharge of a debtor's unsecured debts and payment of secured debts 
D)  a proposed new capital structure for a debtor to assume when it emerges from Chapter 11 bankruptcy 
A)  an equilateral division of the Chapter 11 estate among all creditors 
B)  division of the bankruptcy estate according to the debt to be paid to each creditor 
C)  discharge of a debtor's unsecured debts and payment of secured debts 
D)  a proposed new capital structure for a debtor to assume when it emerges from Chapter 11 bankruptcy

Question 10

The debtor's Chapter 13 plan of payment is summarily rejected if an unsecured creditor doesn't accept the plan.

Accepted Answer

A) True 
 B)False

Question 11

A reaffirmation agreement must be entered into after discharge is granted.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following does a Chapter 11 automatic stay provide?

Accepted Answer

A)  automatic discharge of secured debts 
B)  suspension of certain legal actions against the debtor 
C)  creditors' foreclosure on assets given as collateral for loans 
D)  automatic discharge of unsecured debts 
A)  automatic discharge of secured debts 
B)  suspension of certain legal actions against the debtor 
C)  creditors' foreclosure on assets given as collateral for loans 
D)  automatic discharge of unsecured debts

Question 13

What is Chapter 7 discharge?

Accepted Answer

A)  The termination of the legal duty of an individual debtor to pay both secured and unsecured debts before he or she is granted a court trial. 
B)  The termination of the legal duty of an individual debtor to pay unsecured debts that remain unpaid upon the completion of a Chapter 7 proceeding. 
C)  The cancellation of all debts of a debtor that remain unpaid upon the completion of a Chapter 13 proceeding. 
D)  An instruction to the debtor to propose a plan to pay all or a portion of the debts he or she owes in installments. 
A)  The termination of the legal duty of an individual debtor to pay both secured and unsecured debts before he or she is granted a court trial. 
B)  The termination of the legal duty of an individual debtor to pay unsecured debts that remain unpaid upon the completion of a Chapter 7 proceeding. 
C)  The cancellation of all debts of a debtor that remain unpaid upon the completion of a Chapter 13 proceeding. 
D)  An instruction to the debtor to propose a plan to pay all or a portion of the debts he or she owes in installments.

Question 14

If the value of the collateral securing the secured loan exceeds the secured interest,the secured creditor is referred to as an undersecured creditor.

Accepted Answer

A) True 
 B)False

Question 15

The Helping Families Save Their Homes Act of 2009 was enacted to provide ways for some homeowners to easily retain their homes and prevent foreclosure.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following bankruptcy methods allows the reorganization of the debtor's financial affairs under the supervision of the bankruptcy court?

Accepted Answer

A)  Chapter 11 
B)  Chapter 13 
C)  Chapter 7 
D)  Chapter 12 
A)  Chapter 11 
B)  Chapter 13 
C)  Chapter 7 
D)  Chapter 12

Question 17

Paulo Dessario is the owner of Paulo's Pizzeria,which has not been doing well in the last year.He files for bankruptcy under Chapter 13.Which of the following is true in accordance with the constitution of the Chapter 13 estate?

Accepted Answer

A)  Paulo must terminate all his business operations in the United States. 
B)  If the pizzeria is not exempt from Chapter 13 estate, Paulo must surrender it. 
C)  Paulo is allowed to continue operating the pizzeria, irrespective of it being exempt. 
D)  Paulo can only operate the pizzeria but cannot remain in possession of it. 
A)  Paulo must terminate all his business operations in the United States. 
B)  If the pizzeria is not exempt from Chapter 13 estate, Paulo must surrender it. 
C)  Paulo is allowed to continue operating the pizzeria, irrespective of it being exempt. 
D)  Paulo can only operate the pizzeria but cannot remain in possession of it.

Question 18

The suspension of certain legal actions by creditors against a debtor or the debtor's property is known as a(n)________.

Accepted Answer

A)  discharge of debt 
B)  composition 
C)  automatic stay 
D)  order for relief 
A)  discharge of debt 
B)  composition 
C)  automatic stay 
D)  order for relief

Question 19

Discuss the features of Helping Families Save Their Home Act of 2009.

Accepted Answer

The Helping Families Save Their Home Act

Question 20

Sam wants to file a petition for bankruptcy.Which of the following is true in this context?

Accepted Answer

A)  Sam need not submit a list of creditors; it is obtained by the court upon investigation. 
B)  Sam's bankruptcy petition cannot be filed electronically. 
C)  Only Sam's attorney can file his bankruptcy petition. 
D)  Sam's attorney is liable for perjury if information filed by Sam is incorrect. 
A)  Sam need not submit a list of creditors; it is obtained by the court upon investigation. 
B)  Sam's bankruptcy petition cannot be filed electronically. 
C)  Only Sam's attorney can file his bankruptcy petition. 
D)  Sam's attorney is liable for perjury if information filed by Sam is incorrect.

Exam 24: Bankruptcy and Reorganization

Bankruptcy proceedings are commenced under ________.

Explain median income test with an example.

The individual debtor is not responsible for paying prepetition debts out of postpetition income under a Chapter 7 discharge.

Under the Bankruptcy Code,a trustee in a Chapter 11 proceeding is not given authority to assume or reject executory contracts.

Which of the following is a federal exemption that a debtor can claim under the Bankruptcy Code?

The filing of a Chapter 11 petition stays actions by creditors to recover the debtor's property.

The filing of either a voluntary petition or an unchallenged involuntary petition constitutes a(n)________.

A(n)________ is an agreement entered into by the creditor and the debtor whereby the debtor agrees to pay the creditor for a debt that is dischargeable in bankruptcy.

Which of the following is a feature of the Chapter 11 plan of reorganization?

The debtor's Chapter 13 plan of payment is summarily rejected if an unsecured creditor doesn't accept the plan.

A reaffirmation agreement must be entered into after discharge is granted.

Which of the following does a Chapter 11 automatic stay provide?

What is Chapter 7 discharge?

If the value of the collateral securing the secured loan exceeds the secured interest,the secured creditor is referred to as an undersecured creditor.

The Helping Families Save Their Homes Act of 2009 was enacted to provide ways for some homeowners to easily retain their homes and prevent foreclosure.

Which of the following bankruptcy methods allows the reorganization of the debtor's financial affairs under the supervision of the bankruptcy court?

Paulo Dessario is the owner of Paulo's Pizzeria,which has not been doing well in the last year.He files for bankruptcy under Chapter 13.Which of the following is true in accordance with the constitution of the Chapter 13 estate?

The suspension of certain legal actions by creditors against a debtor or the debtor's property is known as a(n)________.

Discuss the features of Helping Families Save Their Home Act of 2009.

Sam wants to file a petition for bankruptcy.Which of the following is true in this context?

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Judicial Alternative Administrative and E-Dispute Resolution

Intentional Torts and Negligence

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Ethics and Social Responsibility of Business

Nature of Traditional and E-Contracts

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Capacity and Legality

Genuineness of Assent and Statute of Frauds

Third-Party Rights and Discharge

Breach of Contract and Remedies

Digital Law and E-Commerce

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

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Creation and Transfer of Negotiable Instruments

Holder in Due Course and Liability of Parties

Banking System and Electronic Financial Transactions

Credit, Real Property Financing, and Secured Transactions

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