Deck 5: The Voluntary Chapter 7 Bankruptcy Liquidation

Question 1

The property of the estate of an individual debtor may not be distributed by the trustee until the debtor has been discharged.

Answer 1

False

Question 2

An individual debtor with consumer debts secured by property of the estate must perform under a statement of intention within 15 days of the filing of the statement of intention.

Answer 2

False

Question 3

Within 10 days of the filing of a petition, the court clerk must provide a notice to all creditors if a presumption of abuse arises under § 707(b).

Answer 3

True

Question 4

A creditor may file a notice with any bankruptcy court designating the address to be used by the courts for sending notice to that particular creditor.

Question 5

Any party in interest may move for the dismissal of a Chapter 7 bankruptcy case if the debtor's current monthly income exceeds a certain amount.

Question 6

The Federal Rules of Bankruptcy Procedure require the debtor's attorney to transmit a copy of the statement of compensation to the United States trustee.

Question 7

A debtor's homestead exemption is limited to $146,450 if the homestead was acquired by the debtor within 1,215 days prior to the bankruptcy filing, unless the previous homestead was located in the same state.

Question 8

In determining whether an abuse exists under § 707(b), the bankruptcy court is permitted to take into consideration past and future charitable contributions of the debtor.

Question 9

Only an individual debtor and his or her spouse may file a joint petition.

Question 10

Support obligations but not property division obligations under a decree of divorce are nondischargeable in a Chapter 7 bankruptcy case.

Question 11

If the Chapter 7 petition is accompanied by a list of creditors, the debtor has up to 15 days thereafter to file the schedules and statement of financial affairs.

Question 12

Only an individual debtor may file for relief under Chapter 7.

Question 13

The purpose of the means test is to establish whether the granting of relief under Chapter 7 would be an abuse of the provisions of Chapter 7.

Question 14

In a Chapter 7 case the meeting of creditors must be held no fewer than 20 nor more than 40 days after the Order for Relief.

Question 15

When the current monthly income of the debtor and the debtor's spouse, multiplied by twelve, is equal to or less than the median family income of a comparably-sized family living in the same state as the debtor, the presumption of abuse test does not apply.

Question 16

If a debtor passes the means test, the bankruptcy court may not consider whether the granting of relief to the debtor under Chapter 7 would constitute an abuse.

Question 17

The bankruptcy case of an individual debtor will be dismissed automatically if, within 30 days of the filing of the petition, the debtor does not file, among other things, evidence of payments received by the debtor from an employer within 60 days of the filing of the petition.

Question 18

All individual debtors who file for relief under Chapter 7 receive a discharge.

Question 19

The Code requires any attorney representing a debtor in a case under the Bankruptcy Code to file with the court a statement of the compensation paid or agreed to be paid for services connected with the bankruptcy case and the source of the compensation. This statement must be completed regardless of whether the attorney applies to the court for compensation.

Question 20

In a Chapter 7 bankruptcy, only individuals may receive a discharge; partnerships and corporations do not receive discharges.

Question 21

An individual debtor whose schedule of assets and liabilities includes consumer debts secured by property of the estate must file with the bankruptcy court clerk a statement of intention with respect to the retention or surrender of the property. If the property is claimed as exempt, the debtor must state whether he or she intends to redeem the property or to reaffirm debts secured by the property.

Question 22

Willy Walton, a tenant at the Silver Dollar Apartments, fell two months behind in his rent. The landlord procured a judgment in small claims court and told Willy, "I don't care whether you file bankruptcy or not, I have a judgment and I'm going to collect it." Upon hearing this, Willy filed a petition in bankruptcy under Chapter 7. Before receiving notice of Willy's petition in bankruptcy, but after the bankruptcy petition was filed, the landlord filed a forcible entry and detainer and had a summons served on Willy to evict him. The landlord has violated the automatic stay and is subject to contempt proceedings in the bankruptcy court.

Question 23

The debtor must carry out his or her intention with respect to the retention or surrender of property of the estate secured by a lien within ______ days after the date set for the meeting of creditors.

Question 24

In anticipation of filing a petition in bankruptcy, a debtor has the absolute right to convert nonexempt property into exempt property.

Question 25

The debtor must have a present possessory right in the property for it to be considered property of the estate.

Question 26

At any time after the order for relief, a creditor may file a complaint objecting to the dischargeability of a debt.

Question 27

The Schedules are Official Form No. ____.

Question 28

If a state has not "opted out" of the federal bankruptcy exemptions, the debtor has a choice between the state exemptions and the federal nonbankruptcy exemptions on the one hand, and the federal bankruptcy exemptions on the other.

Question 29

Darla Ravenswood, whose domicile is Portland, Maine, filed a petition in bankruptcy in the United States Bankruptcy Court for the District of Maine. Darla owns property in Portland, Maine, and in Florida, California, New York, and Paris, France. The United States Bankruptcy Court for the District of Maine has exclusive jurisdiction over Darla's property regardless of whether it is located in Maine, Florida, California, New York, or Paris.

Question 30

A complaint to determine the dischargeability of debt may be filed by a creditor, the case trustee, and the United States trustee, but never by the debtor.

Question 31

At the time the petition is filed, property of the estate consists of all legal and equitable interests of the debtor, including the property that the debtor may claim as exempt.

Question 32

The section 341 meeting is commonly referred to as the meeting of creditors.

Question 33

The debtor's car was encumbered for $1,500 although its value was only $1,000. The debtor filed a petition in bankruptcy under Chapter 7. If the debtor's trustee abandons the car, it is no longer subject to the automatic stay.

Question 34

The debtor and a party in interest may raise all of the same issues by motion.

Question 35

The debtor's statement of financial affairs, Official Form No. 7, must be completed by all debtors under Chapter 7.

Question 36

The attorney's disclosure of compensation statement must be filed with the court and transmitted to the United States trustee within ______ days after the petition has been filed, or by another date set by the court.

Question 37

The meeting of creditors in a Chapter 7 or Chapter 11 case must be held not less than ____ nor more than ____ days after the entry of the order for relief.

Question 38

At any time after the order for relief, but not later than 60 days following the first date set for the section 341 meeting of creditors, a creditor, the trustee, or the United States Trustee may file a complaint objecting to an individual Chapter 7 debtor's discharge.

Question 39

Identify each schedule by placing the letter of the schedule next to the title of the schedule.
Personal Property
Creditors Holding Secured Claims
Creditors Holding Unsecured Nonpriority Claims
Real Property
Property Claimed as Exempt
Codebtors
Current Income of an Individual Debtor(s)
Current Expenditures of an Individual Debtor(s)
Creditors Holding Unsecured Priority Claims
Executory Contracts and Unexpired Leases

Question 40

If the applicable state has "opted out" of the federal bankruptcy exemptions, the debtor who has resided in the state for at least the past 730 days has no choice and must claim the state exemptions and the federal nonbankruptcy exemptions.

Question 41

Five issues that can be raised by motion by a party in interest are:
______________________________
______________________________
______________________________
______________________________
______________________________
______________________________

Question 42

Explain the ramifications of an individual debtor retaining possession-for more than 45 days after the date first set for the meeting of creditors-of collateral securing a purchase-money security interest without redeeming the collateral or entering into a reaffirmation agreement.

Question 43

Briefly describe what occurs at the meeting of creditors.

Question 44

Explain what a reaffirmation agreement is and describe the types of information that must be included in such an agreement.

Question 45

Four issues that can be raised by the debtor by motion are:
______________________________
______________________________
______________________________
______________________________
______________________________

Question 46

Define "current monthly income" in the application of the means test.

Question 47

Briefly describe the significance of the following statement:
Upon filing the petition, which constitutes an order for relief, an estate is created and the automatic stay goes into effect.

Question 48

Discuss the functions served by the statement of attorney's compensation.

Question 49

When must the debtor supplement the schedules?

Question 50

Briefly describe the difference between raising an issue by motion or by complaint.

Question 51

Briefly describe "opt out" and how it affects the debtor.

Question 52

Explain the effect, if any, of an individual debtor not being domiciled in the state in which the case was filed 730 days prior to filing bankruptcy.

Question 53

The trustee has the following powers:
______________________________
______________________________
______________________________
______________________________
______________________________
______________________________

Question 54

Explain what a list of creditors is and how it is prepared.

Question 55

Explain what it means to redeem collateral.