Deck 38: Bankruptcy

Question 1

Which of following debts can be avoided by bankruptcy?

A)Medical bills
B)Debts owed by reason of embezzlement
C)Educational loan debts
D)Claims for alimony and child support

Answer 1

A

Question 2

Jake, a businessman, filed for bankruptcy and was declared insolvent by the courts. He owed $15,000 each to two creditors and $5,000 each to two others. The courts also decreed that he should sell his house worth $30,000, to pay his debts. Which of the following is legally permissible in this scenario?

A)After selling his house, Jake will pay the creditors on a pro-rata basis.
B)After selling his house, Jake will pay whomsoever he chooses.
C)After selling his house, Jake will pay the creditors he to which owes the maximum amount of money.
D)After selling his house, Jake will pay the creditors to which he owes the least amount of money.

Answer 2

A

Question 3

Under Chapter 11, the Bankruptcy Code provides a special rehabilitation system designed for businesses so that they may be reorganized rather than liquidated.

Answer 3

True

Question 4

Creditors may join together to force a debtor into bankruptcy, called an involuntary bankruptcy.

Question 5

Which of the following best describes cram down?

A)It is a duty that the debtor must perform during bankruptcy as assigned by court.
B)It is a past money transfer to a debtor's relative disallowed by court.
C)It is an involuntary bankruptcy suit filed against a debtor.
D)It is a reorganization plan imposed by court in spite of creditors' objections.

Question 6

Which of the following is prohibited 90 days prior to filing a bankruptcy petition?

A)A debtor inheriting ancestral property
B)A debtor receiving valuable property from relatives and friends
C)A debtor selling his assets to liquidate them
D)A debtor clearing his debts to one creditor while ignoring others

Question 7

Claims for alimony and child support can be avoided by bankruptcy.

Question 8

Which of the following is true of bankruptcy petitions?

A)Involuntary petitions require petitions from a minimum of two creditors.
B)A creditor's claims must not be subject to a valid dispute.
C)A creditor's claims can be contingent.
D)Voluntary petitions cannot be filed by farmers.

Question 9

Bankruptcy law uses different procedures in liquidating the estate under a voluntary bankruptcy proceeding and an involuntary one.

Question 10

In order to obtain a discharge, debtors must either attend prefiling credit counseling.

Question 11

What are the distinguishing features of a Chapter 13 plan?

A)Each unsecured creditor must receive the same percentage of debt payments as the secured creditors.
B)In exchange for a longer bankruptcy term the debtor may keep more personal assets.
C)The debtor's assets are not liquidated, but disposable income is used to pay creditors for up to five years.
D)Chapter 13 plans may be filed every year, as necessary.

Question 12

Partially secured creditors have a lien on some assets, but not enough to satisfy the full amount of their claim.

Question 13

A cram down can be imposed even if dissenting unsecured creditors are not paid in full.

Question 14

State the debts that cannot be avoided by bankruptcy. ​

Question 15

Which of the following can file for bankruptcy under Chapter 11?

A)any insurance company
B)any person
C)any savings and loan association with fixed capital
D)any state-chartered banks

Question 16

A husband and wife cannot file a bankruptcy petition jointly.

Question 17

Any person who has a property in the United States can be a debtor under the Bankruptcy Code. ​

Question 18

Household effects and personal clothing is exempt from seizure for the payment of debts.

Question 19

Debts due on a judgment for intentional injury to others cannot be avoided by bankruptcy.

Question 20

Which claims have the lowest priority in payment?

A)tax claims
B)administrative claims
C)unsecured claims
D)wage claims