Question 1

Peggy's credit card debts are mounting as her costs of insurance and fuel have dramatically increased and her income,from sporadic free-lance jobs,has dropped.Chapter 13 of the Bankruptcy Code will allow her to reorganize her debt while she keeps most of her assets.

Accepted Answer

A) True 
 B)False

Question 2

Individual debtors are allowed to keep some assets in a Chapter 7 bankruptcy.

Accepted Answer

A) True 
 B)False

Question 3

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 4

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 5

Under the federal Bankruptcy Code,the exemption amount for the debtor's personal residence is:

Accepted Answer

A)  $20,200.
B)  $37,100.
C)  unlimited.
D)  $50,000.

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

In a Chapter 13 bankruptcy,creditors cannot force a debtor into bankruptcy; nor can they vote to confirm or reject a plan of reorganization.

Accepted Answer

A) True 
 B)False

Question 8

Chapter 13 bankruptcy:

Accepted Answer

A)  is used by businesses to reorganize their financial situations.
B)  is an involuntary bankruptcy.
C)  can be used only by individuals with a regular source of income.
D)  is used by businesses to liquidate their debts.

Question 9

Which of the following is NOT a requirement for an involuntary Chapter 7 bankruptcy petition?

Accepted Answer

A)  The debtor must owe at least $50,000 in unsecured claims to the creditors who file.
B)  The debtor must have at least two creditors join in the petition if the debtor has 10 or more creditors.If the debtor has fewer than 10 creditors, any single creditor or group can file a petition.
C)  The debtor's debts must be secured.
D)  None of the above is a requirement for an involuntary Chapter 7 bankruptcy petition.

Question 10

In the In Re Fox case,the court:

Accepted Answer

A)  decided that Fox's plan of reorganization was not feasible.
B)  imposed a cramdown.
C)  refused to impose a cramdown.
D)  refused to discharge Fox's income tax debt.

Question 11

According to the case In Re: John & Julie Hoffman,a court:

Accepted Answer

A)  cannot approve a reaffirmation agreement under Chapter 7.
B)  may void reaffirmation agreements under Chapter 13.
C)  will approve a reaffirmation agreement provided there is proof that the debtor can make the required payments.
D)  will approve a reaffirmation agreement if it is signed by a financial institution.

Question 12

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

Accepted Answer

A)  Yes, claims based on negligence are dischargeable.
B)  Yes, provided a court orders discharge.
C)  No, such claims are not dischargeable in bankruptcy.
D)  No, unless discharge is expressly requested in the petition.

Question 13

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 14

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 15

Even though Lilian is neither a layer nor a CPA,she can serve as a trustee in a bankruptcy case.

Accepted Answer

A) True 
 B)False

Question 16

What are the three main purposes of the federal Bankruptcy Code? How are these purposes supported and fostered in the Code?

Accepted Answer

the primary goals of the Bankruptcy Code...

Question 17

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 18

In the Jackson v.Holiday Furniture,the court held that:

Accepted Answer

A)  Holiday was in violation of Chapter 13 provisions.
B)  Holiday was not in violation of the Bankruptcy Code.
C)  Holiday violated the automatic stay provision of the Bankruptcy Code.
D)  Jackson was not entitled to any damages.

Question 19

The Bankruptcy Code uses the term "bankrupt" for a person who cannot pay his debts.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following cannot file a bankruptcy petition under the Code?

Accepted Answer

A)  Aztec, a foreign corporation doing business in the United States.
B)  Milan, a citizen of Bosnia, who owns property in the United States.
C)  Debra, a resident of Michigan, whose liabilities do not exceed assets.
D)  Stan, an American citizen, who refuses to undergo credit counseling.
E)  All of the above.

Exam 26: Bankruptcy

Which of the following is NOT a requirement for an involuntary Chapter 7 bankruptcy petition?

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Which of the following cannot file a bankruptcy petition under the Code?

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Chapter 13 bankruptcy:

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Under the federal Bankruptcy Code,the exemption amount for the debtor's personal residence is:

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Individual debtors are allowed to keep some assets in a Chapter 7 bankruptcy.

Correct AnswerverifiedShow Answer

According to the case In Re: John & Julie Hoffman,a court:

Correct AnswerverifiedShow Answer

In the In Re Fox case,the court:

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

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

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

In a Chapter 13 bankruptcy,creditors cannot force a debtor into bankruptcy; nor can they vote to confirm or reject a plan of reorganization.

Correct AnswerverifiedShow Answer

The start of the bankruptcy process is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Peggy's credit card debts are mounting as her costs of insurance and fuel have dramatically increased and her income,from sporadic free-lance jobs,has dropped.Chapter 13 of the Bankruptcy Code will allow her to reorganize her debt while she keeps most of her assets.

Correct AnswerverifiedShow Answer

The Bankruptcy Code uses the term "bankrupt" for a person who cannot pay his debts.

Correct AnswerverifiedShow Answer

In the Jackson v.Holiday Furniture,the court held that:

Correct AnswerverifiedShow Answer

What are the three main purposes of the federal Bankruptcy Code? How are these purposes supported and fostered in the Code?

Correct Answerverifiedthe primary goals of the Bankruptcy Code...View AnswerShow 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

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

Correct AnswerverifiedShow Answer

Even though Lilian is neither a layer nor a CPA,she can serve as a trustee in a bankruptcy case.

Correct AnswerverifiedShow Answer

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the primary goals of the Bankruptcy Code...
View Answer

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