Bankruptcy Law

Type in the correct term: During the first [ ] after filing the petition, only the [ ]can file a plan of reorganization. This is called the [ ] period. The court then allows [ ]days to obtain creditor approval. If approval hasn't been obtained at the end of that time [ ] can propose a plan of reorganizatin.

- 120 - debtor - exclusivity - 60 - anyone

Once a corporation has filed bankruptcy, they are no longer subject to review by a governmental regulatory agency as they may have been prior to filing.

- False

What are the ways trustees are compensated? (Hint: there are 2 correct answers)

- Out of the debtor's filing fee - Out of a percentage of the money liquidated from the debtor's estate

How many days after the filing of a bankruptcy should the plan of reorganization be filed?

14 days

Bankruptcy judges are appointed for _____ terms.

14 year

The provision in place that acts as an injunction and prevents virtually all actions by creditors to collect their claims is called a(n) ____________.

Automatic stay

Bankruptcy cases are currently filed in US District Courts.

False

______________is the concept of the client being completely open and honest with the attorney about their financial affairs.

Full Disclosure

The document filed by a creditor which proves it is owed by the debtor is called a(n) ____________.

Proof of Claim

A Chapter 11 DIP will have many of the same duties as the trustee, if appointed.

True

The person who actually sends the payments to the creditors in a Chapter 13 case is the:

Trustee

When will a Chapter 13 Bankruptcy case be closed and the discharge granted (provided there is no hardship)?

When all payments have been made according to the Plan

Which of the following are not a valid reason a trustee will abandon property of the estate?

the trustee feels sorry for the debtor and chooses to "look the other way" regarding a piece of property

The Statement of Intention is a document that addresses which type of debt?

those including collateral

This is an active contract the debtor is in to use property of a creditor.

unexpired lease

A bankruptcy in which the debtor files the petition initiating the Bankruptcy proceedings is known as a:

voluntary bankruptcy

Claims that are paid before other claims; they are at the top of the payment tier; i.e. adminstrative expenses, wages. Claims of a creditor holding a lien or collateral against property. Claims that are not protected by a lien or collateral but payment will be made ahead of other claims. Claims that are not protected by a lien or collateral and payment will be made at the end of all other claims. Claim by one who holds shares of stock of ownership interest in a debtor company. Claims made when payment has not been made for services of materials provided with respect to real estate; lien is provided by state law.

- Priority claims - Secured claims/creditor - Nonpriority claim/creditor - Unsecured claims/creditors - Equity security holder - Statutory lien/lienholder

Schedule A Schedule B Schedule C Schedule D Schedule E Schedule F Schedule G Schedule H Schedule I Schedule J

- Real Property - Personal Property - Property Claimed as Exempt - Creditors HoldingSecured Claims - Creditors Holding Unsecure Priorty Claims - Creditors Holding Unsecured Nonprioriy Claims - Executory Contracts and Unexpired Leases - Codebtors - Current Income of Individal Debtors - Curent Expenditures of Individual Debtors

1 2 3 4

- US Bankruptcy Court - US District Court - US Court of Appeal - US Supreme Court

Select from the drop down: Susie Que finds herself in hard financial times. She was just notified by her employer that her wages will be garnished by a creditor beginning in 30 days. She is also afraid of losing her car by a self-help repossession because she is almost three months behind in her payments. She is concerned about the status of a past personal loan, since she signed a cognovit judgment , allowing the creditor to proceed with a judgment without notifying her if she defaults on the loan, which she has. Susie Que meets with an attorney about possibly filing bankruptcy . In their initial meeting, the attorney asks Susie if she has been successful in negotiating with her creditors to work out alternative payment arrangements for her debts. He also asks her if she has considered obtaining a consolidation loan , in order to pay off all her small debts and make only one payment each month toward one debt. The attorney recommends she see a financial counselor , for advice on her current finances, and because it will be required if she does file bankruptcy. After Susie has this meeting, she and the attorney decide to follow through on the bankruptcy. Since most of Susie's debts are unsecured debts and she owns no real property , they decide she should file a Chapter 7 bankruptcy.

- garnished - self-help repossession - cognovit judgment - bankruptcy - negotiating - consolidation loan - financial counselor - unsecured - real property - 7

Select from the drop down: Joy is contemplating filing bankruptcy. She begins to look at her [ Select ] to determine its classification. First she has to differentiate between [ Select ] property, that is, the land that she owns, and [ Select ] property, things that are movable. Once she makes that determination, she has to classify her interest in the property. Is her interest [ Select ], meaning she has current ownership, or is it [ Select ], meaning she will gain ownership at some other time? Then she has to decide if she is the only owner, making her ownership [ Select ], or if she shares ownership with someone else, making it concurrent . Lastly, she has to identify the [ Select ] of the property, even though she knows this will not protect it from the bankruptcy court.

- property - real - personal - present - future - entire - concurrent - location

Select from the drop down: Beth works as a paralegal for an attorney who likes her to do his legal research. Unfortunately, her attorney usually cannot give her the primary law governing the case she is working so she relies heavily on [select] sources to get her started. Her favorite starting place in the law library is the

- secondary - legal encyclopedias - treatises - legal periodicals - digests - legislative history - congressional record - internet - lexis - west law

Each of the following chapters govern ALL bankruptcies except:

2

I am the officiator in bankruptcy court proceedings. Who am I?

Bankruptcy Judge

I am called the official custodian of the records and dockets for the bankruptcy court. Who am I?

Bankruptcy clerk

I am the owner of a complex business who has been hit hard by the current downfall of the economy. I would like help to reorganize my business to try and save it. Which bankrupcy chapter should I file?

Chapter 11

I own a fleet of boats and my family helps me run a fishing business. Because of several seasons with massive hurricanes in our area, we have been unable to bring in the number of fish needed to pay our bills. What bankruptcy chapter should I consider filing?

Chapter 12

I am an individual with a good job but have been unable to pay my bills. I have real property left to me by my grandmother that I don't want to lose to creditors. What bankruptcy chapter should I file?

Chapter 13

I am an individual with no assets wanting to file bankrutpcy and move on quickly with a "fresh start". Which bankruptcy chapter should I file?

Chapter 7

Under which chapter would you find a trustee gathering nonexempt assets of the estate and reducing them to money in order to pay creditors?

Chapter 7

Which bankruptcy chapter does not provide for reorganization of debts?

Chapter 7

I am responsible for recording court proceedings and changing them into written transcripts. Who am I?

Court reporter

The criteria for all bankruptcy filings is all of the following except:

Debtor must be a US citizen

I have the most contact with the public regarding bankruptcy questions and filings. Who am I?

Deputy clerk

I am called in on a temporary basis to review company debtors to ensure that there hasn't been any fraud or intentional mismanagment of company funds which lead to the bankruptcy. Who am I?

Examiner

A business debtor will not remain in control of its business during the bankruptcy; the trustee will take over during the plan period.

False

A codebtor will become solely responsible for the debt once the debtor receives a dismissal in bankruptcy.

False

A creditor or the trustee has two years after the discharge to bring a accusation of fraud against a debtor?

False

A discharge which has been granted to a debtor may be revoked within two years if the debtor obtained the discharge through fraud.

False

A faithful performance bond is required of every husband and wife who file a joint petition for bankruptcy.

False

A filing fee is required for filing a motion.

False

Attendance at the First Meetings of Creditors is optional for the debtor.

False

Contested matters and adversary proceedings in bankruptcy are begun in the same manner.

False

Every person who finds themselves in bankruptcy does so because of mismanagement of money.

False

For the filing fee required in filing a bankruptcy petition, the clerk will accept cash, a business check from the debtor's attorney, or a personal check from the debtor.

False

If a creditor files a "tardy" claim, the BK Court will not allow it.

False

If a debtor does not have possession of an asset, even though he has ownership of it, it is automatically exempt from being brought into the bankruptcy estate.

False

If a debtor wishes to reaffirm a debt, the creditor must accept the reaffirmation agreement.

False

In a Chapter 13 bankruptcy, the debtor can be discharged from all domestic support obligations owed directly to the debtors' spouse/ex- spouse.

False

In a limited liability partnership, the limited partners are personally liable for the losses of the partnership.

False

Not even a trustee can release a debtor from an executory contract.

False

Notice of the §341 Meeting of Creditors does not need to be sent to unsecured creditors.

False

Once a Proof of Claim has been filed, neither the debtor nor the trustee can object to its validity.

False

Once the schedules have been filed with the bankruptcy court, the debtor no continuing obligation to supplement or amend those schedules.

False

The Bankruptcy Code allows a debtor who is redeeming secured property to pay for that property in installments.

False

The Statement of Financial Affairs is a short and simple document in which the debtor declares his/her insolvency.

False

The bankruptcy chapter for municipalities to reorganize is Chapter 12.

False

The bankruptcy chapter that is the simplest and cheapest for individuals to reorganize is Chapter 11.

False

The debtor's attendance at the §341 First Meeting of creditors is optional.

False

The debtor's salary is turned over to the trustee after the bankruptcy petition is filed.

False

There is no mandatory First Meeting of Creditors in a Chapter 13 bankruptcy.

False

When a debtor files bankruptcy and successfully completes all requirements, ALL his debts are discharged.

False

I am responsible for keeping the judge's personal and professional calendars. Who am I?

Judicial assistant

Which motion asks a court to remove itself from hearing an issue in the bankruptcy case?

Motion for Abstention

All bankruptcies filed after (date) are governed by the present Bankruptcy Code.

October 1, 1979

A Chapter 13 debtor cannot be forced to remain in that chapter of bankruptcy against his/her/its will.

True

A benefit of providing a master mailing list to the clerk is to assist in providing "notice" to all parties of the happenings within the bankruptcy case.

True

A creditor can file a complaint against a debtor claiming the debtor fraudulently transferred property, knowing they were about to file bankruptcy.

True

A filing fee is required for filing an adversary proceeding.

True

A party in interest may move for relief from the automatic stay in regard to its own claim.

True

An important part of the initial meeting is to comfort and educate the debtor about the bankruptcy process.

True

Any creditor may object to the debtor's claim of exemption.

True

Attendance of a witness can be compelled by the bankrupctcy court.

True

If an objection to a claim of exemption is not timely filed, the exemption is allowed, even if there was no colorable basis for the exemption.

True

Knowingly violating the automatic stay is considered a bankruptcy crime and could be punishable by the bankruptcy court.

True

Knowingly violating the automatic stay is considered contempt and could be punishable by the bankruptcy court.

True

One of the purposes of the Statement of Compensation required to be filed by the debtors attorney is to ensure the attorney is charging an appropriate amount.

True

Our current Bankruptcy Code provides for both voluntary and involuntary bankruptcies to be filed.

True

Past bankruptcy laws were centered around punishment.

True

The Bankrupcy Code governs whether certain issues are raised by a motion or by a complaint.

True

The Plan of Reorganization must provide that creditors receive at least as much as they would have received if the debtor had filed a Chapter 7 case instead.

True

The bankruptcy chapter for liquidations is Chapter 7.

True

The bankruptcy chapter for the complex reorganization of businesses is Chapter 11.

True

The current US Bankruptcy Code can be found in Title 11 of the US Code.

True

The goals of bankruptcy include debt collection (for creditors)and debt relief (for the debtor).

True

Who presides over the First Meeting of Creditors?

Trustee

Who appoints the trustee to administer an individual Chapter 7 bankruptcy?

US Trustee

Grounds for the dismissal of a bankruptcy judge include:

all of the above

Reasons a Chapter 13 debtor may have a case dismissed include:

all of the above

This process is when a judge approved a debtor's proposed plan of reorganization, despite the objection of a creditor.

cram down

This is an active binding relationship the debtor is in with a creditor in which both sides have a remaining obligation to each other.

executory contract

Which of the following legal action is affected by the automatic stay provision of a bankruptcy filing?

garnishment of a paycheck for collection of a medical bill

A bankruptcy in which the creditors file a petition compelling the debtor to submit to the bankruptcy proceedings against his/her/its wishes:

involuntary bankruptcy

A bankruptcy in which the debtor subjects all nonexempt assets to be sold with the proceeds going to pay creditors is known as a:

liquidation

Which of the following is an example of an unsecured nonpriority claim.

medical bills

A type of business entity in which two or more individuals share the right to manage the business; also personally share the profits but also share the liabilities.

partnership

A bankruptcy in which the debtors' assets do not come into question, but rather, the debtor subjects him/her/itself to a plan of repayment to creditors:

reorganization