Question 1

A trustee under a Chapter 11 or 13 proceeding performs the same duties as a Chapter 7 trustee.

Accepted Answer

A) True 
 B)False  False

Question 2

If the debtor contests the involuntary petition for bankruptcy, the court must enter an order for relief against the debtor.

Accepted Answer

A) True 
 B)False  False

Question 3

According to the 1994 amendments to the Bankruptcy Act, the U.S. Judicial Conference must adjust for inflation the dollar amounts of the requirements for filing involuntary cases, priorities, and exemptions every seven years.

Accepted Answer

A) True 
 B)False  False

Question 4

The 2005 Act establishes a means test which determines a creditor's eligibility for a priority claim.

Accepted Answer

A) True 
 B)False

Question 5

Bankruptcy legislation serves a dual purpose. What are these purposes?

Accepted Answer

Bankruptcy legislation serves a dual pur

Question 6

Reba files a Chapter 7 petition in bankruptcy. She owns the following property: (1) an automobile valued at $2,800; (2) a homestead valued at $80,000, on which First Bank holds a mortgage of $60,000; (3) personal jewelry valued at $1,100; and (4) monthly disability payments of $1,000. Assuming Reba elects to use the exemptions listed in the Bankruptcy Code, what property may she keep?

Accepted Answer

A)  The disability payments only. 
B)  The disability payments and the homestead only. 
C)  The disability payments plus the automobile, the homestead, and the jewelry. 
D)  Nothing. She must sell all of her assets and have the proceeds distributed to the creditors, and she must turn the disability payments over to the trustee. 
A)  The disability payments only. 
B)  The disability payments and the homestead only. 
C)  The disability payments plus the automobile, the homestead, and the jewelry. 
D)  Nothing. She must sell all of her assets and have the proceeds distributed to the creditors, and she must turn the disability payments over to the trustee.

Question 7

Voidable preferences include all of the following EXCEPT:

Accepted Answer

A)  a transfer of property of the debtor to or for the benefit of a creditor. 
B)  payment of taxes owed to a governmental unit. 
C)  a transfer of property while the debtor was insolvent. 
D)  a transfer that enables a creditor to receive more than he would have received under Chapter 7. 
A)  a transfer of property of the debtor to or for the benefit of a creditor. 
B)  payment of taxes owed to a governmental unit. 
C)  a transfer of property while the debtor was insolvent. 
D)  a transfer that enables a creditor to receive more than he would have received under Chapter 7.

Question 8

Ken loaned Barbara $8,000 and took back a note secured by Barbara's car. If Barbara files for bankruptcy when the value of the car is $4,500, what is Ken's status? He has a (n):

Accepted Answer

A)  secured claim for $4,500. 
B)  unsecured claim for $8,000. 
C)  unsecured claim for $4,500. 
D)  secured claim for $8,000. 
A)  secured claim for $4,500. 
B)  unsecured claim for $8,000. 
C)  unsecured claim for $4,500. 
D)  secured claim for $8,000.

Question 9

A composition of creditors is a bankruptcy form of relief under Chapter 13 of the Bankruptcy Code.

Accepted Answer

A) True 
 B)False

Question 10

Margaret has $3,200 cash after selling off her television, sound system, and personal computer. She has debts of $4,800 owing to the following creditors: Anna - $900
Bob's Shop - $1500
Hyatt's - $2100
Jones - $300
If they all agree to a composition, how much will Hyatt's be able to collect?

Accepted Answer

A)  $2,100. 
B)  $1,400. 
C)  $700. 
D)  $1,050. 
A)  $2,100. 
B)  $1,400. 
C)  $700. 
D)  $1,050.

Question 11

A receiver is a disinterested person appointed at the discretion of the court to manage, liquidate, and conserve assets of a debtor.

Accepted Answer

A) True 
 B)False

Question 12

The debtor has an absolute right to have his bankruptcy case dismissed, whether the case is under Chapter 7, 11, or 13.

Accepted Answer

A) True 
 B)False

Question 13

Federal district courts may hear all matters collateral to the bankruptcy, even if these matters are not normally permitted to be brought in federal court.

Accepted Answer

A) True 
 B)False

Question 14

A writ of execution is issued after a judgment against the debtor is entered in court.

Accepted Answer

A) True 
 B)False

Question 15

Garnishment is only a post-judgment remedy.

Accepted Answer

A) True 
 B)False

Question 16

In bankruptcy law, an insider may include:

Accepted Answer

A)  a relative. 
B)  a general or limited partner of the debtor. 
C)  the trustee. 
D)  a close co-worker. 
A)  a relative. 
B)  a general or limited partner of the debtor. 
C)  the trustee. 
D)  a close co-worker.

Question 17

Edward's Excursions Inc. filed for Chapter 7 bankruptcy. It has $100,000 of assets and has the following debts outstanding: 
$50,000 to Arthur secured by a boat worth $25,000. 
$30,000 to Bradley secured by a truck worth $30,000. 
$20,000 to Clarence unsecured. 
The month before Edward's closed and filed for bankruptcy, its employees earned $10,000 for which they did not get paid. They also should have been credited with $3,000 for their pension plan. Edward's owes $4,000 in back taxes. In the process of administering the estate, the trustee paid $5,000 in attorney fees. In what order will these claims be paid?

Accepted Answer

Secured-Arthur gets $25,000 from the boa

Question 18

A Chapter 13 plan of reorganization may include all but which one of the following?

Accepted Answer

A)  Priority debts must be paid in full unless the debtor waives that right. 
B)  Future wages must be controlled by the trustee. 
C)  Assets must be liquidated. 
D)  The rights of unsecured creditors may be modified. 
A)  Priority debts must be paid in full unless the debtor waives that right. 
B)  Future wages must be controlled by the trustee. 
C)  Assets must be liquidated. 
D)  The rights of unsecured creditors may be modified.

Question 19

Which chapter of the Bankruptcy Act allows for the adjustment of debts of an individual with regular income?

Accepted Answer

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

Question 20

An involuntary petition for bankruptcy can be filed against a:

Accepted Answer

A)  non-profit charitable organization. 
B)  partnership that invests in real estate. 
C)  life insurance company. 
D)  wheat farmer. 
A)  non-profit charitable organization. 
B)  partnership that invests in real estate. 
C)  life insurance company. 
D)  wheat farmer.

Exam 38: Bankruptcy

A trustee under a Chapter 11 or 13 proceeding performs the same duties as a Chapter 7 trustee.

If the debtor contests the involuntary petition for bankruptcy, the court must enter an order for relief against the debtor.

According to the 1994 amendments to the Bankruptcy Act, the U.S. Judicial Conference must adjust for inflation the dollar amounts of the requirements for filing involuntary cases, priorities, and exemptions every seven years.

The 2005 Act establishes a means test which determines a creditor's eligibility for a priority claim.

Bankruptcy legislation serves a dual purpose. What are these purposes?

Voidable preferences include all of the following EXCEPT:

Ken loaned Barbara $8,000 and took back a note secured by Barbara's car. If Barbara files for bankruptcy when the value of the car is $4,500, what is Ken's status? He has a (n):

A composition of creditors is a bankruptcy form of relief under Chapter 13 of the Bankruptcy Code.

Margaret has $3,200 cash after selling off her television, sound system, and personal computer. She has debts of $4,800 owing to the following creditors: Anna - $900 Bob's Shop - $1500 Hyatt's - $2100 Jones - $300 If they all agree to a composition, how much will Hyatt's be able to collect?

A receiver is a disinterested person appointed at the discretion of the court to manage, liquidate, and conserve assets of a debtor.

The debtor has an absolute right to have his bankruptcy case dismissed, whether the case is under Chapter 7, 11, or 13.

Federal district courts may hear all matters collateral to the bankruptcy, even if these matters are not normally permitted to be brought in federal court.

A writ of execution is issued after a judgment against the debtor is entered in court.

Garnishment is only a post-judgment remedy.

In bankruptcy law, an insider may include:

A Chapter 13 plan of reorganization may include all but which one of the following?

Which chapter of the Bankruptcy Act allows for the adjustment of debts of an individual with regular income?

An involuntary petition for bankruptcy can be filed against a:

Introduction to Law

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