Question 1

Bankruptcy is regulated by federal law.

Accepted Answer

A) True 
 B)False  True

Question 2

Creditor claims are divided into classes and the highest class must be satisfied in full before going to the next category.

Accepted Answer

A) True 
 B)False  True

Question 3

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

Accepted Answer

A) True 
 B)False  False

Question 4

Shoe Sunshine,Inc.filed for bankruptcy protection under Chapter 11 and submitted a plan of reorganization within 120 days after filing for relief.Two of the classes of creditors voted against the plan.However,the bankruptcy judge considered the plan to be reasonable,achievable,and fair,and approved it in spite of these creditors' objections.This action by the judge is called a "cramdown."

Accepted Answer

A) True 
 B)False

Question 5

Iris received a discharge under a Chapter 7 bankruptcy.She cannot receive another discharge under Chapter 7 for at least:

Accepted Answer

A)  six years after the prior filing. 
B)  eight years after the prior filing. 
C)  ten years after the prior discharge. 
D)  She cannot file another Chapter 7, but could file a Chapter 11 or 13 bankruptcy. 
A)  six years after the prior filing. 
B)  eight years after the prior filing. 
C)  ten years after the prior discharge. 
D)  She cannot file another Chapter 7, but could file a Chapter 11 or 13 bankruptcy.

Question 6

Chapter 13 bankruptcy:

Accepted Answer

A)  is used by businesses to reorganize their financial situations. 
B)  is an involuntary bankruptcy. 
C)  can be used only by individuals with a regular source of income. 
D)  is used by businesses to liquidate their debts. 
A)  is used by businesses to reorganize their financial situations. 
B)  is an involuntary bankruptcy. 
C)  can be used only by individuals with a regular source of income. 
D)  is used by businesses to liquidate their debts.

Question 7

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. 
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.

Question 8

Peggy's credit card debts are mounting as her costs of insurance and fuel have dramatically increased and her income,from sporadic free-lance jobs,has dropped.Chapter 13 of the Bankruptcy Code will allow her to reorganize her debt while she keeps most of her assets.

Accepted Answer

A) True 
 B)False

Question 9

Andy's business is not able to pay its debts,and the prospects for its finances to improve are slim.Andy decides not to continue the business.In this case,Andy should file a voluntary petition for which type of bankruptcy?

Accepted Answer

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

Question 10

The Bankruptcy Code uses the term "bankrupt" to refer to a person who cannot pay his debts.

Accepted Answer

A) True 
 B)False

Question 11

What are the three main purposes of the federal Bankruptcy Code? How are these purposes supported and fostered in the Code?

Accepted Answer

The primary goals of the Bankruptcy Code

Question 12

The correct order of payment of claims from the debtor's estate would be:

Accepted Answer

A)  secured claims, priority claims, unsecured claims. 
B)  secured claims, unsecured claims, priority claims. 
C)  priority claims, secured claims, unsecured claims. 
D)  priority claims, unsecured claims, secured claims. 
A)  secured claims, priority claims, unsecured claims. 
B)  secured claims, unsecured claims, priority claims. 
C)  priority claims, secured claims, unsecured claims. 
D)  priority claims, unsecured claims, secured claims.

Question 13

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

Question 14

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. 
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.

Question 15

Under the federal Bankruptcy Code,the exemption amount for the debtor's personal residence is:

Accepted Answer

A)  $20,200. 
B)  $37,100. 
C)  unlimited. 
D)  $50,000. 
A)  $20,200. 
B)  $37,100. 
C)  unlimited. 
D)  $50,000.

Question 16

Which of the following cannot file a bankruptcy petition under the Code?

Accepted Answer

A)  Aztec, a foreign corporation doing business in the United States. 
B)  Milan, a citizen of Bosnia, who owns property in the United States. 
C)  Debra, a resident of Michigan, whose liabilities do not exceed assets. 
D)  Stan, an American citizen, who refuses to undergo credit counseling. 
E)  All of the above. 
A)  Aztec, a foreign corporation doing business in the United States. 
B)  Milan, a citizen of Bosnia, who owns property in the United States. 
C)  Debra, a resident of Michigan, whose liabilities do not exceed assets. 
D)  Stan, an American citizen, who refuses to undergo credit counseling. 
E)  All of the above.

Question 17

Mark and Cynthia work for Bryson Supply Co.If the company files for Chapter 7 bankruptcy before paying their last month of wages and benefits,will they be able to recover anything from the company?

Accepted Answer

One goal of the Bankruptcy Code is to en

Question 18

A Chapter 7 debtor's agreement to pay a creditor on a debt after receiving a discharge in bankruptcy is called a:

Accepted Answer

A)  voidable preference. 
B)  reaffirmation. 
C)  fresh start. 
D)  redemption. 
A)  voidable preference. 
B)  reaffirmation. 
C)  fresh start. 
D)  redemption.

Question 19

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 discuss the effect of the 2005 amendment to the Code on the proceedings.

Accepted Answer

If Artistic wants to continue in busines

Question 20

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

Exam 37: Bankruptcy

Bankruptcy is regulated by federal law.

Creditor claims are divided into classes and the highest class must be satisfied in full before going to the next category.

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

Iris received a discharge under a Chapter 7 bankruptcy.She cannot receive another discharge under Chapter 7 for at least:

Chapter 13 bankruptcy:

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

Peggy's credit card debts are mounting as her costs of insurance and fuel have dramatically increased and her income,from sporadic free-lance jobs,has dropped.Chapter 13 of the Bankruptcy Code will allow her to reorganize her debt while she keeps most of her assets.

Andy's business is not able to pay its debts,and the prospects for its finances to improve are slim.Andy decides not to continue the business.In this case,Andy should file a voluntary petition for which type of bankruptcy?

The Bankruptcy Code uses the term "bankrupt" to refer to a person who cannot pay his debts.

What are the three main purposes of the federal Bankruptcy Code? How are these purposes supported and fostered in the Code?

The correct order of payment of claims from the debtor's estate would be:

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

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

Under the federal Bankruptcy Code,the exemption amount for the debtor's personal residence is:

Which of the following cannot file a bankruptcy petition under the Code?

Mark and Cynthia work for Bryson Supply Co.If the company files for Chapter 7 bankruptcy before paying their last month of wages and benefits,will they be able to recover anything from the company?

A Chapter 7 debtor's agreement to pay a creditor on a debt after receiving a discharge in bankruptcy is called a:

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 discuss the effect of the 2005 amendment to the Code on the proceedings.

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?

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