Question 1

Forever Yours,Inc.has a secured and perfected security interest in Sally's big-screen TV.On the filing date of Sally's Chapter 7 petition,the balance of the debt owed to Forever Yours is $2,000.The value of the TV is estimated at $1,500.This means that Forever Yours:

Accepted Answer

A)   is secured for the entire debt, $2,000.
B)   is unsecured for $500, the excess of the debt over the value of the TV.
C)   has a high priority claim of $500. This means that Forever Yours, Inc. will be allowed $500 worth of other unsecured property before other unsecured creditors get anything.
D)   is unsecured for the entire debt.

Question 2

Which of the following is a primary goal of bankruptcy:

Accepted Answer

A)   to preserve as much of the debtor's property as possible.
B)   to divide the debtor's assets fairly between the debtor and the creditors.
C)   to divide the debtor's assets fairly among the creditors.
D)   All of the above.

Question 3

Chapters 11 and 13 are liquidation chapters.

Accepted Answer

A) True 
 B)False

Question 4

Creditors of Northern Hydraulics file an involuntary bankruptcy petition against it.Northern continues to operate its business until the court officially acknowledges that Northern is under the jurisdiction of the court.Any expenses Northern incurs in the ordinary course of business during this gap period are:

Accepted Answer

A)   priority claims.
B)   administrative expenses of the bankruptcy.
C)   unsecured claims.
D)   secured claims.

Question 5

Alimony and child support obligations are considered priority claims.

Accepted Answer

A) True 
 B)False

Question 6

Kylie filed a Chapter 7 bankruptcy petition in which she exempted her home,valued at $125,000.Kylie can exempt her entire home from all creditors if:

Accepted Answer

A)   she claims her exemptions under the federal Bankruptcy Code.
B)   she lives in a state that allows for an exemption amount of $125,000 or more.
C)   she lives in a state that allows an exemption amount of $125,000 or more, she has lived in that state for at least two years prior to the bankruptcy, and there are no secured creditors with perfected liens against the home.
D)   None of the above.

Question 7

The start of the bankruptcy process is:

Accepted Answer

A)   the submission of a plan of repayment.
B)   the bankruptcy court's issuance of an order for relief.
C)   a meeting of creditors.
D)   the appointment of a trustee.

Question 8

Kathleen filed for voluntary bankruptcy and the automatic stay went into effect.The automatic stay:

Accepted Answer

A)   acts to automatically discharge Kathleen's debts.
B)   stops any and all acts to collect, assess, or recover a claim against Kathleen that arose before she filed bankruptcy.
C)   stops only secured creditors from taking any act to collect, assess, or recover a claim against Kathleen that arose before she filed bankruptcy.
D)   stops creditors from trying to collect from Kathleen, but it does not stop them from filing lawsuits against her.

Question 9

Which of the following statements concerning a Chapter 11 reorganization plan is true?

Accepted Answer

A)   A reorganization plan will be confirmed by the court only if a majority of each class of creditors votes in favor of the plan.
B)   A reorganization plan can be confirmed by the court over objections of some creditors if the court determines that the plan is feasible and fair.
C)   Only the bankruptcy court has the authority to confirm or reject the reorganization plan. Creditors do not have a right to vote on the plan.
D)   A reorganization plan binds only the debtor and not the creditors.

Question 10

In Chapter 11 only the debtor may propose plans of reorganization.

Accepted Answer

A) True 
 B)False

Question 11

Chapter 7 bankruptcy petitions may only be filed voluntarily..

Accepted Answer

A) True 
 B)False

Question 12

Link negligently ran his car into John,causing $50,000 in injuries.Link was intoxicated at the time of the accident.Can Link discharge this debt in bankruptcy?

Accepted Answer

A)   Yes, claims based on negligence are dischargeable.
B)   Yes, as long as he didn't intend to hit John's car.
C)   No, such claims are not dischargeable in bankruptcy.
D)   No, because Link breached a fiduciary duty.

Question 13

Which of the following would not be considered a fraudulent conveyance or a voidable preference under the provisions of the Code? Immediately prior to filing bankruptcy:

Accepted Answer

A)   debtor sells assets well below fair market price to Freddie, a friend.
B)   debtor sells his car at a public auction, thinking that it would bring a decent price, but the car brings an amount well below fair market value.
C)   debtor's corporation transfers assets to stockholders in lieu of cash dividends.
D)   debtor pays $650 to "Nation on Line" for the past ten months of Internet service.

Question 14

Grand Lighting Co.has filed a petition for voluntary bankruptcy under Chapter 7 of the Code.The following property will be exempt from the bankruptcy process:

Accepted Answer

A)   work tools.
B)   up to three company cars.
C)   up to $20,200 in the value of the company's real property.
D)   All of the above.
E)   None of the above.

Question 15

Which of the following actions would prevent a discharge of debts under Chapter 7?

Accepted Answer

A)   Discharge under Chapters 7 or 11 within the past eight years.
B)   Falsified records presented to bankruptcy court by debtor.
C)   Failure to disclose assets.
D)   All of the above would prevent a discharge of debts.

Question 16

Brad was having financial difficulties and thought bankruptcy might be in his future.He transferred his sports car to his brother with the agreement that if he didn't file for bankruptcy within the next 18 months,his brother would return the car to him.Brad did file for bankruptcy in ten months.The bankruptcy trustee can bring the car back into Brad's estate for the purpose of providing assets for Brad's creditors.

Accepted Answer

A) True 
 B)False

Question 17

Agnes plans to file for bankruptcy under Chapter 7.One month prior to filing,Agnes gives Joe's Filling Station $700 to apply to her gas bill.Joe has been so kind to let her charge the gas she needed for her car over the past year.The bankruptcy trustee appointed to the case:

Accepted Answer

A)   can cancel the payment to Joe as a fraudulent transfer.
B)   cannot cancel the payment to Joe because it is payment for an existing debt.
C)   cannot cancel the payment to Joe because he is not an insider.
D)   can cancel the payment to Joe as a voidable preference.

Question 18

When Dudley files his Chapter 7 petition,he lists the following debts:
a.
$25,000 in back child support and alimony.
b.
$15,000 for liabilities incurred after drinking and driving.
c.
$10,000 for past-due student loans.
d.
$5,000 for past-due rent to his landlord.
e.
$550 for a past-due phone bill.
How will each of these debts be treated by the bankruptcy court.

Accepted Answer

Certain debts are never discharged and t...

Question 19

Debts that cannot be discharged in bankruptcy include all EXCEPT:

Accepted Answer

A)   alimony.
B)   income taxes.
C)   negligence judgments.
D)   fraud judgments.

Question 20

The bankruptcy designed for family farmers is:

Accepted Answer

A)   Chapter 7.
B)   Chapter 9.
C)   Chapter 11.
D)   Chapter 12.

Exam 37: Bankruptcy

Which of the following is a primary goal of bankruptcy:

Correct Answer
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Kylie filed a Chapter 7 bankruptcy petition in which she exempted her home,valued at $125,000.Kylie can exempt her entire home from all creditors if:

Correct Answer
verified

Kathleen filed for voluntary bankruptcy and the automatic stay went into effect.The automatic stay:

Correct Answer
verified

Agnes plans to file for bankruptcy under Chapter 7.One month prior to filing,Agnes gives Joe's Filling Station $700 to apply to her gas bill.Joe has been so kind to let her charge the gas she needed for her car over the past year.The bankruptcy trustee appointed to the case:

Correct Answer
verified

Chapter 7 bankruptcy petitions may only be filed voluntarily..

Correct Answer
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Forever Yours,Inc.has a secured and perfected security interest in Sally's big-screen TV.On the filing date of Sally's Chapter 7 petition,the balance of the debt owed to Forever Yours is $2,000.The value of the TV is estimated at $1,500.This means that Forever Yours:

Correct Answer
verified

Link negligently ran his car into John,causing $50,000 in injuries.Link was intoxicated at the time of the accident.Can Link discharge this debt in bankruptcy?

Correct Answer
verified

Debts that cannot be discharged in bankruptcy include all EXCEPT:

Correct Answer
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Correct Answer
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Correct Answer
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Alimony and child support obligations are considered priority claims.

Correct Answer
verified

In Chapter 11 only the debtor may propose plans of reorganization.

Correct Answer
verified

The start of the bankruptcy process is:

Correct Answer
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The bankruptcy designed for family farmers is:

Correct Answer
verified

Chapters 11 and 13 are liquidation chapters.

Correct Answer
verified

Correct Answer
verified
Certain debts are never discharged and t...
View Answer

Which of the following actions would prevent a discharge of debts under Chapter 7?

Correct Answer
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Which of the following statements concerning a Chapter 11 reorganization plan is true?

Correct Answer
verified

Which of the following would not be considered a fraudulent conveyance or a voidable preference under the provisions of the Code? Immediately prior to filing bankruptcy:

Correct Answer
verified

Grand Lighting Co.has filed a petition for voluntary bankruptcy under Chapter 7 of the Code.The following property will be exempt from the bankruptcy process:

Correct Answer
verified

Exam 37: Bankruptcy

Which of the following is a primary goal of bankruptcy:

Correct AnswerverifiedShow Answer

Kylie filed a Chapter 7 bankruptcy petition in which she exempted her home,valued at $125,000.Kylie can exempt her entire home from all creditors if:

Correct AnswerverifiedShow Answer

Kathleen filed for voluntary bankruptcy and the automatic stay went into effect.The automatic stay:

Correct AnswerverifiedShow Answer

Agnes plans to file for bankruptcy under Chapter 7.One month prior to filing,Agnes gives Joe's Filling Station $700 to apply to her gas bill.Joe has been so kind to let her charge the gas she needed for her car over the past year.The bankruptcy trustee appointed to the case:

Correct AnswerverifiedShow Answer

Chapter 7 bankruptcy petitions may only be filed voluntarily..

Correct AnswerverifiedShow Answer

Forever Yours,Inc.has a secured and perfected security interest in Sally's big-screen TV.On the filing date of Sally's Chapter 7 petition,the balance of the debt owed to Forever Yours is $2,000.The value of the TV is estimated at $1,500.This means that Forever Yours:

Correct AnswerverifiedShow Answer

Link negligently ran his car into John,causing $50,000 in injuries.Link was intoxicated at the time of the accident.Can Link discharge this debt in bankruptcy?

Correct AnswerverifiedShow Answer

Debts that cannot be discharged in bankruptcy include all EXCEPT:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Alimony and child support obligations are considered priority claims.

Correct AnswerverifiedShow Answer

In Chapter 11 only the debtor may propose plans of reorganization.

Correct AnswerverifiedShow Answer

The start of the bankruptcy process is:

Correct AnswerverifiedShow Answer

The bankruptcy designed for family farmers is:

Correct AnswerverifiedShow Answer

Chapters 11 and 13 are liquidation chapters.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedCertain debts are never discharged and t...View AnswerShow Answer

Which of the following actions would prevent a discharge of debts under Chapter 7?

Correct AnswerverifiedShow Answer

Which of the following statements concerning a Chapter 11 reorganization plan is true?

Correct AnswerverifiedShow Answer

Which of the following would not be considered a fraudulent conveyance or a voidable preference under the provisions of the Code? Immediately prior to filing bankruptcy:

Correct AnswerverifiedShow Answer

Grand Lighting Co.has filed a petition for voluntary bankruptcy under Chapter 7 of the Code.The following property will be exempt from the bankruptcy process:

Correct AnswerverifiedShow Answer

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Certain debts are never discharged and t...
View Answer

Correct Answer
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Correct Answer
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