Deck 32: Bankruptcy and Reorganization

Question 1

After filing a voluntary Chapter 7 bankruptcy petition,assets that a debtor gains are generally not part of the bankruptcy estate unless they fall under an exemption.

Answer 1

True

Question 2

Which of the following was NOT a reason cited for passing the comprehensive changes to bankruptcy law included in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

A)The fact that some bankruptcy debtors were able to repay a significant portion of their debt
B)Significant losses associated with bankruptcy filings
C)The increased numbers of bankruptcy filings
D)Making it simper and easier for consumers to file for bankruptcy
E)Loopholes and incentives that allowed and sometimes encouraged opportunistic personal filings and abuse

Answer 2

D
Explanation: A)Reasons cited in support of passage of the act include:
1.The increased numbers of bankruptcy filings.
2.Significant losses associated with bankruptcy filings.
3.Loopholes and incentives that allowed and sometimes encouraged opportunistic personal filings and abuse.
4.The fact that some bankruptcy debtors were able to repay a significant portion of their debt.
B)Reasons cited in support of passage of the act include:
1.The increased numbers of bankruptcy filings.
2.Significant losses associated with bankruptcy filings.
3.Loopholes and incentives that allowed and sometimes encouraged opportunistic personal filings and abuse.
4.The fact that some bankruptcy debtors were able to repay a significant portion of their debt.
C)Reasons cited in support of passage of the act include:
1.The increased numbers of bankruptcy filings.
2.Significant losses associated with bankruptcy filings.
3.Loopholes and incentives that allowed and sometimes encouraged opportunistic personal filings and abuse.
4.The fact that some bankruptcy debtors were able to repay a significant portion of their debt.
D)Reasons cited in support of passage of the act include:
1.The increased numbers of bankruptcy filings.
2.Significant losses associated with bankruptcy filings.
3.Loopholes and incentives that allowed and sometimes encouraged opportunistic personal filings and abuse.
4.The fact that some bankruptcy debtors were able to repay a significant portion of their debt.
E)Reasons cited in support of passage of the act include:
1.The increased numbers of bankruptcy filings.
2.Significant losses associated with bankruptcy filings.
3.Loopholes and incentives that allowed and sometimes encouraged opportunistic personal filings and abuse.
4.The fact that some bankruptcy debtors were able to repay a significant portion of their debt.

Question 3

Which of the following is NOT something a bankruptcy judge can make decisions on?

A)What a debtor's assets are
B)The administration of bankruptcy proceedings
C)State law claims.
D)What assets a debtor can keep
E)How a debtor's assets are to be sold

Answer 3

C
Explanation: A)Bankruptcy judges make decisions regarding the administration of bankruptcy
proceedings.However,the judge cannot make decisions about state law claims.
B)Bankruptcy judges make decisions regarding the administration of bankruptcy proceedings.However,the judge cannot make decisions about state law claims.
C)Bankruptcy judges make decisions regarding the administration of bankruptcy proceedings.However,the judge cannot make decisions about state law claims.
D)Bankruptcy judges make decisions regarding the administration of bankruptcy proceedings.However,the judge cannot make decisions about state law claims.
E)Bankruptcy judges make decisions regarding the administration of bankruptcy proceedings.However,the judge cannot make decisions about state law claims.

Question 4

Retirement funds in an IRA are not exempt in a Chapter 7 bankruptcy proceeding.

Question 5

For a collective bargaining agreement to be rejected under Chapter 11,the debtor must have first presented the proposed changes to the collective bargaining agreement to the employees' representative,and the employees reject the changes without good cause.

Question 6

Liquidation may be voluntary,but not involuntary,under Chapter 7

Question 7

It is possible to file for Chapter 7 bankruptcy and then immediately file for bankruptcy again three months after the first bankruptcy is complete.

Question 8

Legal actions against a debtor can continue after a bankruptcy petition is filed.

Question 9

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 included only minor changes to bankruptcy law.

Question 10

Congress first addressed bankruptcy relief in the ________.

A)Insolvency Act of 1900
B)Protection Act of 1934
C)Securities Act of 1934
D)Bankruptcy Act of 1898
E)Bankruptcy Act of 1934

Question 11

Some debts that are dischargeable under Chapter 13 are not dischargeable under Chapter 7.

Question 12

If a debtor fails to appear at the Chapter 7 creditors' meeting,the court may refuse to grant the bankruptcy.

Question 13

Chapter 11 reorganization may be involuntary but not voluntary.

Question 14

Under Chapter 7,a debtor must be insolvent to file a voluntary petition for bankruptcy.

Question 15

All bankruptcy cases begin with a filing of a petition.

Question 16

In bankruptcy,debtors who cannot pay their debts in a timely fashion are referred to as which of the following?

A)Statutory debtors
B)Failed transactors
C)Insolvent debtors
D)Foreclosed debtors
E)Acknowledged transactors

Question 17

An individual must complete credit counseling from a nonprofit budget and credit counseling agency to avoid having his bankruptcy petition dismissed.

Question 18

Before a debtor files for one specific type of relief,the clerk of courts must give the debtor written notice of the other types of relief available.

Question 19

In which of the following did Congress make comprehensive changes to bankruptcy law?

A)The Bankruptcy Fraud Protection Act of 2007
B)The Bankruptcy Trust,Reconciliation,and Remedial Amendments of 2000
C)The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
D)The Insolvency Protection Amendments of 2006
E)The Bankruptcy Fraud and Consumer Shield Act of 2006

Question 20

A bankruptcy trustee may,at times,take over a debtor's business during a Chapter 7 proceeding.

Question 21

Which of the following is NOT part of the basic set of procedures for bankruptcy cases?

A)The creditors meet with the debtor
B)Discharging debts
C)The petition for the prompt repayment of secured creditor claims
D)A determination on whether an order of relief should be granted
E)The granting of an automatic stay

Question 22

Which of the following is the first step in bankruptcy proceedings?

A)Filing of a petition for bankruptcy
B)Debts are discharged
C)A determination on whether an order of relief should be granted
D)Creditors meet with the debtor
E)The granting of an automatic stay

Question 23

Once a voluntary liquidation proceeding under Chapter 7 is filed,the debtor's prepetition assets form the ________.

A)Bankruptcy estate
B)Remainder
C)Relinquished asset pool
D)Residual estate
E)Corpus

Question 24

Which of the following is false regarding bankruptcy proceedings in Spain?

A)Insolvency means that the business has failed to meet at least some financial obligations for at least six months.
B)In order to be effective,an arrangement representing a proposed settlement between the debtor and creditors must be approved by creditors representing at least 20 percent of the debtor's liabilities and by the judge.
C)The bankruptcy filing may be done voluntarily by the debtor company,or it may be done involuntarily by the debtor's creditors in an enforced bankruptcy.
D)A failure to obtain the necessary approval of a proposed settlement between the debtor and creditors may result in the debtor's liquidation.
E)Bankruptcy proceedings start with a finding of insolvency.

Question 25

Which of the following terms is sometimes referred to as straight bankruptcy?

A)Acknowledgment
B)Liquidation
C)Reorganization
D)Avoidance
E)Reformation

Question 26

What is the first action the court takes after a petition for bankruptcy is filed?

A)A determination on whether an order of relief should be granted
B)Discharging debts
C)The granting of an automatic stay
D)Ordering a creditor meeting
E)The creation of a payment plan

Question 27

Which of the following is considered a debtor eligible for Chapter 7 relief in bankruptcy?

A)Banks
B)Health maintenance organizations
C)Railroads
D)Insurance companies
E)Partnerships

Question 28

What must a debtor be able to demonstrate to file Chapter 7 bankruptcy?

A)That he is unable to pay.
B)That he faces undue hardship
C)That he is insolvent.
D)That he owes money to someone
E)That debts were acquired due to unforeseen circumstances

Question 29

In every Chapter ________ bankruptcy,a trustee takes over management of a debtor's assets and sells nonexempt assets

A)9
B)15
C)11
D)7
E)13

Question 30

The sale of a debtor's assets by a trustee and the distribution of money to creditors in provided for under which of the following chapters?

A)Chapter 9
B)Chapter 11
C)Chapter 7
D)Chapter 13
E)?Chapter 15

Question 31

Which of the following is false regarding bankruptcy cases?

A)Bankruptcy cases are referred to bankruptcy judges,under the authority of the district courts.
B)A jury is not allowed in a bankruptcy proceeding.
C)The Bankruptcy Rules set forth procedures for bankruptcy cases.
D)Bankruptcy cases are filed in federal district courts.
E)An appeal of a bankruptcy ruling goes to the district court judge.

Question 32

Which of the following is false regarding provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005?

A)Under the act,if a party completes a Chapter 7 bankruptcy,the party is not permitted to seek a Chapter 7 bankruptcy again for 180 days.
B)Under the act,an individual may not generally be considered a debtor unless within 180 days prior to filing,the debtor receives credit counseling from a nonprofit budget and credit counseling agency.
C)Under the act,if a party completes a Chapter 7 bankruptcy,the party is not permitted to seek a Chapter 7 bankruptcy again for eight years.
D)Under the act,if a previous bankruptcy was completed rather than dismissed,the individual is generally permitted to file for bankruptcy again.
E)Under the act,if an individual was a debtor in a bankruptcy case that was dismissed within 180 days of the current case,the individual is generally not eligible to be a debtor under Chapters 7,11,or 13.

Question 33

Creditors can attempt to force a debtor into bankruptcy by filing a[n] ________ petition under Chapter 7.

A)Involuntary
B)Complaint
C)Dispute
D)Voluntary
E)Accusatory

Question 34

Which statement is true regarding the type of law that is relevant to bankruptcy claims?

A)Only federal statutory law is relevant.
B)Only federal common law is relevant to bankruptcy claims.
C)Only state statutory law is relevant.
D)While bankruptcy law is state law,federal law applies to bankruptcy cases in the sense that federal laws regarding debtor's property and creditor claims may apply.
E)While bankruptcy law is federal law,state law applies to bankruptcy cases in the sense that state laws regarding debtor's property and creditor claims may apply.

Question 35

The Bankruptcy Code is contained within which of the following titles of the United States Code?

A)Title 9
B)Title 15
C)Title 11
D)Title 34
E)Title 7

Question 36

A moratorium for almost all creditor litigation against a debtor in a Chapter 7 bankruptcy is referred to as which of the following?

A)A stop order
B)A semi-discharge
C)An automatic stay
D)A semi-automatic dismissal
E)There is no such moratorium in a Chapter 7 proceeding

Question 37

Which test may allow a court to presume that an individual is abusing the bankruptcy provisions of Chapter 7 when an individual's debt is primarily consumer debt and the individual's income is above the median income in his or her state?

A)The means test
B)The median test
C)The liquidation test
D)The assets test
E)The bankruptcy test

Question 38

An individual who takes over administration of the debtor's estate is referred to as which of the following?

A)Administrator
B)Trustee
C)Aligner
D)Organizer
E)Reformer

Question 39

What is the last of the basic steps of a bankruptcy proceeding?

A)The granting of an automatic stay
B)A determination on whether an order of relief should be granted
C)The creditors meet with the debtor
D)Discharging debts
E)The petition for the prompt repayment of secured creditor claims

Question 40

Which of the following occurs when a debtor turns over all assets to a trustee?

A)Reorganization
B)Acknowledgment
C)Liquidation
D)Avoidance
E)Reformation

Question 41

Which of the following is false regarding rights of a trustee in a Chapter 7 bankruptcy?

A)If someone else holds the debtor's property,the trustee has the power to require the person to return that properly.
B)The trustee separates the exempt property from the nonexempt property and sells the nonexempt property.
C)The trustee takes possession of the debtor's property and has it appraised.
D)The trustee examines the debtor's records but may not even temporarily take over the debtor's business.
E)The trustee can initiate collection actions but must also defend against creditor actions.

Question 42

Which of the following is true regarding who may receive a discharge of debt under Chapter 7 of the bankruptcy code?

A)Individuals may receive a discharge,but partnerships and corporations may not.
B)Partnerships and individuals may receive a discharge,but corporations may not.
C)Corporations may receive a discharge,but individuals and partnerships may not.
D)Individuals,partnerships,and corporations may all receive a discharge.
E)Corporations and individuals may receive a discharge,but partnerships may not.

Question 43

A payment made by an insolvent debtor that gives preferential treatment to one creditor over another is called which of the following?

A)An unapproved payment
B)An unendorsed payment
C)An unfair payment
D)An unequal payment
E)A preferential payment

Question 44

How is a determination made regarding the identity of the trustee in a Chapter 7 proceeding?

A)The debtor appoints the trustee.
B)The court clerk appoints the trustee.
C)The district court judge appoints the trustee.
D)The bankruptcy judge appoints the trustee.
E)The creditors elect the trustee.

Question 45

A meeting of all creditors listed in the Chapter 7 required schedules for liquidation is referred to as which of the following?

A)A counseling meeting
B)A creditors' meeting
C)A control meeting
D)A debt meeting
E)An enforcement meeting

Question 46

For how many days prior to the filing of a Chapter 7 bankruptcy petition is a debtor assumed insolvent?

A)60
B)90
C)30
D)45
E)120

Question 47

When the debtor agrees to pay a debt even though it could be discharged,it is referred to as which of the following?

A)A settlement
B)An affirmance
C)A reaffirmation agreement
D)An acknowledgement agreement
E)An accord and compromise

Question 48

Which of the following means that bankruptcy relief is ordered and that the bankruptcy proceedings can continue?

A)An approval order
B)An order of relief
C)A documentation order
D)A stay enforcement order
E)A liquidation order

Question 49

Which of the following is false regarding nondischargeable debts under a Chapter 7 bankruptcy filing?

A)Nondischargeable debts include claims for back taxes or government fines within four years of filing for bankruptcy.
B)Nondischargeable debts include debts not discharged in previous bankruptcies.
C)Nondischargeable debts include specific student loans,unless payment of the loans imposes undue hardship on the debtor.
D)Nondischargeable debts include claims of willful or malicious conduct by the debtor that caused injury to another person or property.
E)Nondischargeable debts include judgments against a debtor for claims resulting from the debtor's drinking and driving.

Question 50

What if a creditor continues to engage in legal action against a debtor when an automatic stay is in effect?

A)The creditor forfeits all claims against the defendant.
B)The debtor can recover damages,costs,attorney fees,and even possibly punitive damages.
C)The creditor can continue with repossession proceedings but not with garnishment.
D)The creditor can continue as long as the creditor can prove that the legal action was underway before the stay went into effect.
E)The debtor must ask the court to reinstate the stay and to issue an injunction against the creditor.

Question 51

A[n] ________ is a written federal court order signed by a bankruptcy judge stating that the debtor is immune from creditor actions to collect debts.

A)Grant of immunity
B)Release
C)Abandonment
D)Discharge
E)Relinquishment

Question 52

A bank cannot continue to try to repossess a vehicle from a debtor who has filed for bankruptcy because of the ________.

A)An automatic stay
B)A stop order
C)A semi-automatic dismissal
D)A semi-discharge
E)There is no such moratorium in a Chapter 7 proceeding

Question 53

Which of the following does NOT fall under an exception to the automatic stay?

A)Legal actions to collect alimony payments.
B)The debtor was a debtor in a bankruptcy case dismissed within a year of the current bankruptcy case filing.
C)Creditors who are involved in repossession proceedings.
D)Secured creditors who do not have adequate protection under the stay.
E)Legal actions to determine paternity or collect child support.

Question 54

If an automatic stay is in effect in a Chapter 7 proceeding,which of the following actions may not be taken?

A)Legal actions to collect child support payments are subject to the stay.
B)Creditors cannot attempt to repossess property during bankruptcy proceedings.
C)The court may exclude secured creditors from the stay if they petition the court to show that they do not have adequate protection under the stay.
D)If the debtor was a debtor in a bankruptcy case that was dismissed within a year of the current bankruptcy case filing,the stay automatically terminates 30 days after the current filing.
E)A creditor who received a judgment against a debtor prior to the bankruptcy filing may not act to enforce the judgment.

Question 55

What if a debtor fails to appear at a creditor's meeting?

A)The meeting will be rescheduled.
B)Nothing;the meeting is for the creditors.
C)The debtor loses the chance to determine who will act as trustee.
D)The court may refuse to grant the bankruptcy.
E)The debtor is fined $100.00.

Question 56

Which of the following is true regarding the effect of an automatic stay on claims of secured creditors in a Chapter 7 proceeding?

A)Secured creditors with claims of over $5,000 are not affected by the stay.
B)The stay affects claims of secured creditors in the same way in which it affects claims of unsecured creditors.
C)The court may exclude secured creditors from the stay if they petition the court to show that they do not have adequate protection under the stay.
D)Secured creditors with claims of over $20,000 are not affected by the stay.
E)Secured creditors with claims of over $15,000 are not affected by the stay.

Question 57

What happens when an order of relief is granted?

A)The bankruptcy can continue
B)The debtor gets protection from collection efforts
C)The creditor gets relief from the automatic stay
D)The bankruptcy is dismissed
E)The debtor is relieved of all obligations to repay debts

Question 58

In Margaret Kawaauhau v.Paul W.Geiger,the text case in which the plaintiff claimed that the defending doctor,who had no malpractice insurance,could not discharge in bankruptcy a judgment for malpractice on the basis that he deliberately chose less effective treatment to cut costs while knowing that he was providing substandard care resulted in which of the following?

A)That the defendant could not discharge the judgment because he was negligent.
B)That the defendant could discharge the judgment because he did not intend to cause injury.
C)That the defendant could not discharge the judgment because he was reckless.
D)That as a matter of public policy,the defendant could not discharge the judgment because he failed to carry malpractice insurance.
E)That the defendant could discharge the judgment because as a matter of public policy,all malpractice judgments may be discharged.

Question 59

Who organizes the creditors' meeting in a Chapter 7 proceeding?

A)The trustee
B)The interim trustee
C)At least three of the creditors
D)The district court judge
E)The bankruptcy judge

Question 60

Juanita agrees to repay debt to Broderick even though Juanita is filing for bankruptcy and could have the debt discharged.What type of agreement will Juanita and Broderick make?

A)An accord and compromise
B)A settlement
C)A reaffirmation agreement
D)An affirmance
E)An acknowledgement agreement

Question 61

Which of the following is true regarding the number of creditors who must vote to accept a reorganization plan under a Chapter 11 proceeding?

A)For the plan to be accepted,one-half of the class of secured creditors must vote to approve it.
B)For the plan to be accepted,two-thirds of the creditors of each class of creditors must vote to approve it.
C)For the plan to be accepted,three-fourth of the creditors of each class of creditors must vote to approve it.
D)For the plan to be accepted,one-fourth of the class of unsecured creditors must vote to approve it.
E)For the plan to be accepted,one-third of the class of unsecured creditors must vote to approve it.

Question 62

Which of the following is NOT true of a Chapter 13 repayment plan?

A)The plan is not required to provide for full payment of all claims.
B)The plan must provide for full payment of all claims.
C)If the court approves of the repayment plan,it is accepted.
D)The plan is required to treat all same-class creditors equally.
E)Creditors do not vote to approve a chapter 13 repayment plan.

Question 63

[Consumer Debt] Isabel had not been keeping up with her spending and bought several expensive items.Between numerous credit cards and some unsecured loans,she had a total of 14 creditors.All her debt was consumer debt,and Isabel really wished that she had not put all those new clothes on her credit card.Although Isabel was struggling,she did not want to file for bankruptcy because she did not want a bad credit score.However,three of her credit card companies signed and filed an involuntary bankruptcy petition against her under Chapter 7.Isabel is unsure about how to proceed.While she is several months behind on a number of payments,including alimony payments she believes were unfairly awarded to her ex-husband,she does not particularly want to go bankrupt.She believes that the creditors have been unfair in not allowing her additional time in which to pay.On the other hand,she would really like to be rid of her excessive debt and stop collection efforts on the part of her ex-husband.
Which of the following is true regarding the involuntary petition for bankruptcy filed by some of Isabel's creditors?

A)Involuntary petitions are not allowed under Chapter 7.
B)The petition was properly filed because 3 or more creditors with unsecured claims signed the petition for involuntary bankruptcy.
C)The petition was properly filed because only 2 or more creditors with secured or unsecured claims must sign a petition for involuntary bankruptcy.
D)Only 3 creditors may file an involuntary petition,but their aggregate claims must be $20,100;therefore,the petition will be dismissed in Isabel's case.
E)At least 5 creditors must file in order for an involuntary petition to be accepted;therefore,the involuntary petition will be dismissed in Isabel's case.

Question 64

What is the status of the exemptions Liane claimed on the car and jewelry?

A)The exemption claimed for the vehicle will likely be granted,but the exemption claimed for the jewelry will likely be disallowed because no exemption may be claimed for jewelry.
B)The exemption claimed or the jewelry will likely be allowed,but the exemption claimed for the vehicle will likely be denied because the federal exemption for a vehicle is limited to $1,000.
C)The exemption claimed for the vehicle will likely be granted,but the exemption claimed for the jewelry will likely be disallowed because a federal exemption may only be claimed for jewelry consisting of a wedding band worth less than $400.
D)Both exemptions will likely be granted because their type and value are within allowable federal exemptions.
E)The exemption claimed for the jewelry will likely be granted;but in order to ascertain the status of the vehicle,further information is needed in regard to whether it is used in business.

Question 65

What is the status of the exemption Liane claimed for individual retirement account funds?

A)The status of the exemption is unclear without further information regarding beneficiaries of the IRA.
B)She will be able to claim that exemption but only up to $25,000.
C)She will be able to claim that exemption but only up to $50,000.
D)She will not be able to claim that exemption.
E)She will be able to claim that exemption.

Question 66

[Friends and Family] Jasleen was very close to her family and friends.She also liked to spend money,and had a large amount of consumer debt for items such as jewelry,clothing,a personal watercraft,and a new car.Jasleen was having problems making her credit card payments as they became due,but she wanted to make every effort to pay her debts.She had borrowed money from her mother for some jewelry and repaid that loan on January 1st.She repaid a loan to her business partner on May 15th of the same year.On September 1st of that year,she also repaid a loan to Friendly Jewelry Store because she wanted to remain on good terms with the manager.Unfortunately,Jasleen was simply unable to continue making payments and on November 1st of that year,she filed a voluntary petition for bankruptcy relief under Chapter 7.
Assuming Jasleen's mother received more than would have been received through bankruptcy proceedings,which of the following is the most likely result of a claim of preferential payment based upon the payment to the mother?

A)The payment was preferential because it was made to a family member and made within two years of the filing of the bankruptcy petition unless Jasleen can establish that she was not insolvent when she made the payment.
B)The payment was not preferential because it was made over 180 days before the filing of the bankruptcy petition.
C)The payment was not preferential because it was made over 120 days before the filing of the bankruptcy petition.
D)The payment was preferential on the basis that it was made to a family member within two years of the filing of the bankruptcy petition only if the trustee is able to demonstrate that Jasleen was insolvent when she made the payment.
E)The payment was not preferential because it was made over 90 days before the filing of the bankruptcy petition.

Question 67

Which of the following is false regarding Chapter 13 of the bankruptcy code?

A)Any debtor who files under Chapter 13 could also have filed under Chapter 11.
B)By statute Chapter 13 plans last between 36 and 60 months.
C)Chapter 13 repayment plans are usually simpler and less expensive than Chapter 11 plans.
D)Individuals,partnerships,and corporations may file for a Chapter 13 repayment plan.
E)Chapter 13 permits individuals with regular income to pay their debts to creditors in installment plans under the supervision of the court.

Question 68

Which of the following are permitted to file under Chapter 11 reorganization?

A)Commodities brokers
B)Stockbrokers
C)Savings and loan companies
D)Banks
E)Corporate debtors

Question 69

If Isabel convinces the judge that the creditors have filed the involuntary bankruptcy frivolously,which of the following is true regarding what amounts,if any,the court may force the creditors to pay?

A)The court may award punitive damages,but not attorney costs or fees of the debtor.
B)The judge may dismiss the involuntary bankruptcy petition,but no other relief is available.
C)The court may award attorney costs and fees of the debtor,but not punitive damages.
D)The court may award attorney costs,fees of the debtor,and punitive damages.
E)The court may award fees of the debtor,but not attorney costs or punitive damages.

Question 70

Assuming the business partner received more than would have been received through bankruptcy proceedings,which of the following is the most likely result of a claim of preferential payment based on the payment to the business partner?

A)The payment was preferential because it was made to a business partner and made within one year of the filing of the bankruptcy petition unless Jasleen can establish that she was not insolvent when the payment was made.
B)The payment was preferential on the basis that it was made to a business partner within one year of the filing of the bankruptcy petition only if the trustee is able to demonstrate that Jasleen was insolvent when she made the payment.
C)The payment was not preferential because it was made over 90 days before the filing of the bankruptcy petition.
D)The payment was not preferential because it was made over 180 days before the filing of the bankruptcy petition.
E)The payment was not preferential because it was made over 120 days before the filing of the bankruptcy petition.

Question 71

Why is repayment under Chapter 13 distinct from other types of relief?

A)Because repayment plans are usually simpler and less expensive than Chapter 11 plans.
B)Because Chapter 13 is an option only for municipalities,not individuals and businesses.
C)Because Chapter 13 is the only type of relief available to debtors who are not insolvent.
D)Because repayment is voluntary only.A debtor cannot be forced into a repayment plan.
E)Because debts are discharged in Chapter 13 but not in other Chapters of bankruptcy.

Question 72

Which of the following is false regarding Chapter 12 of the bankruptcy code?

A)At least 50 percent of the family farmer's debt must be farm-related.
B)The debt must be under a certain debt cap.
C)A family farmer under Chapter 12 must have regular annual income.
D)The family farmer's gross income must be at least 50 percent farm-dependent.
E)Congress modeled Chapter 12 after Chapter 7 relief.

Question 73

Which of the following is required to file Chapter 12 bankruptcy?

A)At least half of the debt must be farm related?
B)At least 90 percent of the debt must be farm related
C)Total debt must be under $1 million
D)The farmer must be completely unable to pay any money towards creditors
E)The farmer must be 100 percent insolvent.

Question 74

Assuming that Isabel does not object to the bankruptcy proceeding,what is the next step that should occur?

A)The court should appoint a trustee.
B)The court should determine if any claims have priority.
C)The court should enter an order of relief.
D)The court should hold a creditor's meeting.
E)The court should appoint a temporary trustee.

Question 75

[Exemptions] Liane is injured in an automobile accident and cannot work.She cannot pay her bills and files for bankruptcy relief under Chapter 7.Federal exemptions apply,and Liane lists as exempt $25,000 in equity in her residence;interest in a vehicle of $2,000;interest in jewelry of $400;and retirement funds in her individual retirement account.Her creditors filed an objection to all claimed exemptions except for the home equity claim.
Once the petition is filed,which of the following forms Liane's bankruptcy estate?

A)The personal goods only.
B)The nonexempt assets only.
C)The exempt assets only.
D)The real estate only.
E)All her prepetition assets.

Question 76

Which of the following is NOT required for a reaffirmation of debt?

A)The agreement should contain a statement notifying the creditor that the law does not require the agreement.
B)The reaffirmation agreement is made before the debt is discharged
C)The debtor must be able to cancel the agreement
D)The agreement must contain explicit information regarding the time period in which the debtor can cancel the agreement.
E)The reaffirmation agreement is made after the debt is discharged

Question 77

What is the maximum period of a Chapter 13 repayment plan that does not require special court approval?

A)Four years.
B)No limit.
C)One year
D)Two years.
E)Three years.

Question 78

Which of the following is true regarding the claims of Isabel's ex-husband for alimony?

A)Efforts to collect on past due alimony payments accrued only after the filing of the bankruptcy petition are stayed,but efforts to collect on alimony payments accrued before the filing of the bankruptcy petition are not stayed;and alimony payments are nondischargeable.
B)Any effort to collect on the past due alimony are stayed by the bankruptcy proceeding,but alimony payments are nondischargeable.
C)Efforts to collect on past due alimony payments accrued prior to the filing of the bankruptcy petition are stayed,but efforts to collect on alimony payments accruing after the filing of the bankruptcy petition are not stayed;and alimony payments are nondischargeable.
D)Legal action to collect alimony is not subject to an automatic stay,and alimony payments are nondischargeable.
E)Any efforts to collect on the past due alimony are stayed by the bankruptcy proceeding,and the claim for alimony is subject to discharge.

Question 79

What is the status of the exemptions Liane claimed on the residence?

A)It will likely be disallowed because the federal limit for an exemption for a residence is $10,000.
B)It will likely be disallowed because the federal limit for an exemption for a residence is $5,000.
C)The status of the exemption is unclear without further information regarding the resale value of the home.
D)It will likely be allowed because the value claimed is within the federal exemption allowed.
E)It will likely be allowed because although it is more than the federal exemption,no creditor filed an objection to it.

Question 80

Which of the following is the most likely result of a claim of preferential payment based on the payment to the jewelry store?

A)The payment will be considered preferential on the basis that it was made within 90 days of the filing of the bankruptcy petition only if the trustee is able to establish Jasleen's insolvency at the time of the payment.
B)Because it was for a consumer good,the payment was not preferential unless the bankruptcy trustee can prove intent to defraud.
C)The payment was not preferential because it was for a consumer good and was not made within 30 days of the filing of the bankruptcy petition.
D)The payment will be considered preferential if the trustee is able to establish that the jewelry store received more through the transfer than it would have received through bankruptcy proceedings.
E)The payment was preferential because it was made within 90 days of the filing of the bankruptcy petition.