Reba Files a Chapter 7 Petition in Bankruptcy

Multiple Choice

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?

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.