Deck 6: Bankruptcy Intake Continued

Question 1

Bankruptcy protects all forms of real estate the debtor resides in.

Answer 1

False

Question 2

Homestead equity limits are the same in each state.

Answer 2

False

Question 3

A divorce case won't affect a bankruptcy since jurisdiction in family law cases is in state court while bankruptcy is in federal court.

Answer 3

False

Question 4

When a debtor has fallen behind on secured debt payments, the debtor is automatically required to file Chapter 13.

Question 5

Since the debtor is two months behind on car payments, if the debtor wants to keep the car, the debtor should file __________.

A) Chapter 7.
B) Chapter 13.

Question 6

In order to reduce the balance on the first mortgage on homestead property, the debtor should _________.

A) file Chapter 7.
B) file Chapter 13.
C) file an adversary proceeding.
D) none of the above.

Question 7

You can lien strip a junior mortgage.

A) Always because it helps the debtor get a "fresh start."
B) Only in Chapter 7 bankruptcies.
C) Sometimes in Chapter 13 bankruptcies.
D) For both Chapter 7 and 13, but only if the debtor passes the Means Test.

Question 8

The debtor plans to relocate to another state but first wants to file for bankruptcy to get a fresh start. However, since there is equity in the property, the debtor is prohibited from surrendering the property.

Question 9

Escrow means that the taxes and insurances are paid separately by the homeowner.

Question 10

The following can be escrowed:

A) property taxes.
B) property insurance.
C) all of the above.
D) none of the above.

Question 11

How does an escrow affect calculations for a mortgage?

A) Escrow is only relevant for Chapter 13 cases.
B) Escrow isn't relevant if the client is current on the mortgage.
C) Escrow is relevant because if taxes and insurance are paid separately from the mortgage, the expense has to be accounted for in Schedule J.
D) Escrow isn't relevant unless it exceeds the exemption escrow limits.

Question 12

All mortgages are automatically escrowed.

Question 13

The expense of taxes and insurance are listed on Schedule _____.

A) G
B) H
C) I.
D) J.

Question 14

What is escrow?

Question 15

How do you confirm if a client's mortgage is escrowed?

Question 16

A homeowner's association cannot initiate foreclosure proceedings, only a mortgage lender.

Question 17

Liens and judgments accrue interest.

Question 18

Once bankruptcy is filed, any lien placed on the home is removed automatically.

Question 19

A deficiency judgment is:

A) a judgment obtained because the respondent/defendant failed to reply to the complaint.
B) a judgment that is deficient because the creditor failed to follow the proper rules of procedure.
C) a judgment that is deficient because the debtor has no assets of value, and therefore, the creditor will not be able to collect on the judgment.
D) the balance on a debt after a creditor has taken back property.

Question 20

A deficiency judgment means the judgment is deficient because the creditor will not be able to collect on the judgment due to the debtor's lack of assets.

A) True. In this case because the debtor has no assets, bankruptcy isn't required.
B) False. A deficiency judgment means a secured creditor has repossessed property and after disposing of the asset by sale, there still remains an outstanding balance.
C) False. A deficiency judgment means that the creditor did not follow the proper procedure in pursuing a collection matter against a debtor.
D) True. A deficiency judgment allows the creditor to proceed with the lawsuit even if the debtor failed to reply to the petition/complaint.

Question 21

Your office represented Anny four years ago in a Chapter 13 bankruptcy. Since she's in the process of selling her home, the realtor told her she had a lien in the amount of $4,500 that has accumulated interest at ten percent. If the lien was placed prior to the bankruptcy process, what steps can Anny take to remove the lien?

Question 22

Explain what a deficiency judgment is.

Question 23

Kerry, a widow, is considering filing for bankruptcy but is concerned she may lose her cemetery lot. However, online, she read that the trustee won't be interested in the cemetery lot because it's next to her husband.

Question 24

In order to save money, Benny moved into his parent's home and purchased a 5,500 square foot lot in Orlando, Florida to build on it when he saves enough money. However, since Benny owes approximately $22,000 in credit card debt, he's considering filing for bankruptcy. What are the issues?

Question 25

A trustee's avoidance powers gives the trustee the authority to void a preferential transfer from nine months ago to an insider.

A) Only if the transfer of property was made with the intent to defraud the bankruptcy estate.
B) No, as the transfer was not made within ninety days of filing for bankruptcy.
C) No, if there was a legitimate debt owed to the insider.
D) Yes, because preferential transfers to an insider date back one-year pre-petition

Question 26

Avoidance powers refers to:

A) The bankruptcy judge having the power to avoid certain issues in dispute so that the case is argued in the district court.
B) The power of the trustee to avoid certain transfers.
C) The power of the Bankruptcy Appellate Panel to avoid cases that should be argued before the District Courts of Appeals.
D) The power of the District Court to avoid bankruptcy related issues so that the matter is heard before the bankruptcy court in that district.

Question 27

Which of the following can be categorized as the trustee's avoidance powers?

A) Strong arm clause
B) Preferential transfers
C) Fraudulent transfers
D) Post-petition transfers
E) All of the above.

Question 28

Does a trustee's avoidance power allow for the trustee to have lien authority superior to that of a legitimate creditor?

A) No, because the debtor and the creditor have a contractual obligation that cannot be superseded after the fact.
B) Yes, under the strong-arm clause, one of the trustee's avoidance powers is lien authority over that of a creditor.
C) No, unless the trustee can prove there was fraudulent intent.
D) No, if the creditor can prove that at least 30% of the debt was paid prior to filing for bankruptcy.

Question 29

Define avoidance powers.

Question 30

Describe the strong-arm clause.

Question 31

If a vehicle loan is titled in the debtor's name, but a third party makes the monthly payment, then the debt is not listed in the petition.

Question 32

Jackie has a car loan in her name because she has better credit than her boyfriend, Raul, who is making the payments and drives it. The car's equity exceeds the exemption limits, but since it's really Raul's car, there's no need for Jackie to list it in the petition.

Question 33

Marty is filing for bankruptcy at the end of the week. He's currently leasing his car, but he's decided to purchase the vehicle when the lease expires in two months. The car is _________.

A) listed on Schedules A/B.
B) exempted on Schedule C.
C) listed on Schedule G
D) none of the above.

Question 34

Auto leases are listed on Schedule __________

A) Schedule A/B
B) Schedule C
C) Schedule F
D) Schedule G

Question 35

A deficiency judgment is listed in ___________

A) SOFA
B) Schedule F
C) Schedule G
D) Statement of Intentions

Question 36

A car loan is listed on Schedule _____.

A) Schedule A/B
B) Schedule C
C) Schedule D

Question 37

Maria wants to file for Chapter 7 to eliminate $25,000 in credit cards. She also wants to surrender her car which has a $27,500 balance. Maria's car will be listed on Schedule ____.

A) Schedule A/B
B) Schedule D
C) Schedule F
D) Statement of Intentions

Question 38

The client was recently divorced. Per the divorce settlement, the ex-spouse shall keep possession of the car and make payments.

A) On the petition, the expense of the car should be listed just in case the ex-spouse stops making payments.
B) The car is exempted on Schedule
C) If the client is listed on the auto loan, it should be excluded from the Means Test because per the divorce settlement, the client is not responsible for the debt.
D) The debt is listed Schedule D and the client shall confirm the intent on Form 108.

Question 39

In a divorce settlement, your client is in possession of the car, but the debt is not titled in the client's name. How is that information listed on the petition?

A) There is nothing to list because the debt is not in the client's name.
B) The ex-spouse is listed on the petition as the debtor.
C) If the client is making payments on the car, the expense is listed on Schedule J.
D) None of the above.

Question 40

Name two credible online sources to appraise vehicles.

Question 41

The lease expires on the debtor's vehicle in six months. The debtor wants to keep the vehicle. How will the exemptions of your state affect the debtor's case?

Question 42

Which of the following is considered personal property and is listed in the petition?

A) clothing.
B) jewelry.
C) bank accounts.
D) retirement accounts.
E) all of the above.

Question 43

Your client borrowed $2,500 against his retirement account and is making payments in the amount of $100 per month towards that debt. You should ________.

A) List the debt on Schedule J as it is an expense.
B) List the debt on Schedule D as it is a secured debt.
C) Both Answers a and c
D) Do nothing because the retirement account belongs to the debtor and legally, he can't loan himself money.

Question 44

How is personal property such as furniture valued?