BUL 3310 Unit 9

In a typical chapter 13 bankruptcy, one half of the debtors take home pay is allocated to repay debts. True False

False

Information about a consumer's bankruptcy may remain in the files of a credit reporting agency for up to 15 years. True False

False

Legal actions to collect back child support and alimony are among those subject to the automatic stay. True False

False

Once a debtor files a Chapter 7 petition, the debtor cannot request that the case be converted to a Chapter 11 or Chapter 13 proceeding. True False

False

The Electronic Funds Transfer Act established a national fraud alert system to help consumers whose identities had been stolen. True False

False

The Fair Credit Reporting Act requires the person who is the target of a credit inquiry to consent to the disclosure of his or her credit information. True False

False

The Fair Debt Collection Practices Act applies both to third party collectors (like collection agencies) and to the original creditor. True False

False

The Fair Debt Collection Practices Act applies both to third party collectors (like collection agencies) and to the original creditor. True False

False

The bankruptcy judge is the person who handles the assets and obligations of the debtor during the bankruptcy proceeding. True False

False

The debts of partnerships, limited liability companies, and corporations that go through liquidation proceedings are usually discharged. True False

False

There is no evidence that information included on labels and packaging influences consumers' purchase decisions. True False

False

To establish a claim for deceptive advertising, its must be proven that actual customers were mislead into purchasing he product. True False

False

Under Chapter 11, holders of claims or interests in the debtor's property are not permitted to participate in the approval process of a proposed plan of reorganization. True False

False

Under certain circumstances, a consumer may be incarcerated for nonpayment of a debt. True False

False

Under the Electronic Funds Transfer Act, a banking institution has 5 days after determining that an electronic transfer had been erroneously made to a customer's account to correct the error. True False

False

Under the Equal Credit Opportunity Act, a creditor is permitted to ask whether an applicant is married when considering the applicant's creditworthiness. True False

False

The federal agency this is charged with stopping unfair or deceptive advertising is the Federal Trade Commission Interstate Commerce Commission Consumer Products Safety Commission Robinson-Patman Commission

Federal Trade Commission

To be eligible for Chapter 13, the debtors secured debts cannot exceed 336900 545900 1010650 3200000

1010650

Creditors may petition the bankruptcy court to convert a Chapter _________bankruptcy in to a Chapter __________bankruptcy. 7 into 13 11 into 7 11 into 13 13 into 11

11 into 7

If a debtor has 12 or more unsecured creditors, at least _________ of these creditors with aggregate claims of $13, 475 must sign the petition to force the debtor into an involuntary bankruptcy. 3 6 7 12

3

Under Regulation Z, when a credit card is lost or stolen, the credit card holder's liability for unauthorized charges is limited to_____________. 25 50 100 250

50

A customer who finds an error in a credit card statement has ___days from the time of discovery to notify the bank. 20 30 60 90

60

Under the 2009 Credit Card Accountability, Responsibility and Disclosure Act, credit card companies may not raise interest rates on existing credit card balances unless the borrower is at least _____________days late in making a payment. 10 30 60 90

60

To determine if a preferential transfer has taken place, the debtor is presumed to be insolvent for a period of __________days prior to filing the bankruptcy petition. 30 60 90 120

90

In a ______ credit transaction, the amount of the loan is set. Revolving. Open-end. Closed-end. Credit card.

Closed-end.

Under the BAPCPA, Congress instituted a mechanism to reduce the ____ of Chapter 7 bankruptcy filings. Legality. Accessibility. Abuse. Cost.

Abuse.

The Fair Debt Collection Practices Act prohibits debt collectors from participating in _______. All debt collection activities. Abusive and deceptive behaviors. Collection of small or insignificant debts. Judicial debt collection procedures.

Abusive and deceptive behaviors.

Which of the following unsecured creditors has first priority when the assets are distributed in a Chapter 7 bankruptcy? Administrative expenses Wages, salaries and commissions Wrongful death or personal injury awards against the debtor for accidents caused by the debtor's wrongful use of alcohol or drugs. Alimony, child support and other domestic support claims.

Alimony, child support and other domestic support claims.

Which of the following is eligible to file for bankruptcy under Chapter 7? An insurance company An individual A railroad A savings and loan association

An individual

In a liquidation proceeding, a debtor surrenders all _______, from which creditors are paid as much as possible. Liabilities. Assets. Unsecured debts. Goodwill.

Assets.

The filing of the petition by a debtor triggers an ________, which has the effect of suspending almost all actions by creditors against the debtor. Voluntary dismissal. Automatic stay. Express written waiver. Notice of default.

Automatic stay.

The _______ consists of all legal or equitable interests of the debtor in property. Account receivable. Court registry. Bankruptcy estate. General ledger.

Bankruptcy estate.

The Fair Packaging and Labeling Act mandates that _______ be included in the labeling and packaging of most products. Nutritional information. Basic information. Chemical composition. Cost of production.

Basic information.

Which of the following industries are subject to particular FTC scrutiny? Funeral homes Tanning salons Home insulation providers Both a and c

Both a and c

The Fair Credit Billing Act provides a mechanism for consumers to remedy errors received on ______. Credit card bills. Loan applications. Bank statements. Financial statements.

Credit card bills.

In a bankruptcy proceeding, the ________ is the individual, business organization, municipality or farmer that the bankruptcy proceeding involves. Debtor. Creditor. Interested party. Trustee.

Debtor.

A material misrepresentation or omission likely to mislead a potential customer and would mislead a reasonable consumer is _________. Puffery. Usury. Fraud in the inducement. Deceptive advertising.

Deceptive advertising.

The purpose of the Telemarketing and Consumer Fraud and Abuse Prevention Act is to prohibit _______ telemarketing practices. Substantially all. Deceptive. Time-consuming. Aggravating or annoying.

Deceptive.

A ______ is an order by the bankruptcy judge that a debtor is relieved of paying specific debts. Confessed judgment. Discharge. Foreclosure. Liquidation.

Discharge.

Under the Telemarketing and Consumer Fraud and Abuse Protection Act, consumers may avoid telemarketing calls by putting their names on a federally maintained list called the ___________registry. Consumer opt out Nuisance call Do not call Phone exemption

Do not call

An act of Congress that forbids creditors from discriminating against potential debtors on the basis of selected attributes is the ________. Truth in Lending Act. Equal Credit Opportunity Act. Sherman Act. Equal Protection Act.

Equal Credit Opportunity Act.

The federal legislation that prohibits banks from taking money from a customer's checking or savings account to pay a delinquent credit card account with them is the Fair Debt Collection Practices Act Fair Credit Billing Act Fair and Accurate Credit Transaction Act Electronic Funds Transfer Act

Fair Credit Billing Act

A bankruptcy trustee does not have the power to invest the assets of the bankruptcy estate. True False

False

A bankruptcy trustee does not have the power to invest the assets of the bankruptcy estate. True False

False

A consumer's liability for an unauthorized electronic transfer of funds is limited to $150. True False

False

A debtor's intangible property will not become part of the bankruptcy estate. True False

False

All businesses have a right to liquidation proceedings. True False

False

All debtors who are eligible to file under Chapter 7 will receive a discharge. T/F

False

At a meeting of creditors, the debtor may refuse to answer any questions about property that may have been removed from the list of assts. True False

False

Consumers have up to $2,000 of liability for losses due to unauthorized electronic transfers if they do not report the unauthorized transfer to the bank within two business days of learning of it. True False

False

Debt collection agencies may publish in newspapers and on a special Web site "bad debt" lists with consumers' names and addresses. True False

False

Debt collectors may make harmless misleading statements, such as "I am a lawyer", but may not threaten the debtor. True False

False

If a bankruptcy trustee assigns a contract to a third party and the third party later breaches the contract, the trustee will be liable for the contract. True False

False

If a consumer places his or her name on the "Do Not Call Registry," telemarketers may only contact that individual during ordinary business hours. True False

False

The exemption that allows debtors to exempt a certain portion of the equity in their homes is called the ________________exemption. Family purpose Fresh start Homestead Family protection

Homestead

The Fair and Accurate Credit Transaction Act attempts to reduce the impact on individuals who are the target of ______. Unfair lending procedures. Deceptive advertising. Identify theft. Interference with business relations.

Identify theft.

A debtor is presumed to be _____ during the ninety-day period prior to the filing of the petition. Insolvent. Under duress. Incapacitated. Solvent.

Insolvent.

The process of winding up the affairs of a corporation or firm for the purpose of paying its debts and disposing of its assets is known as ________. Foreclosure. Garnishment. Liquidation. Dissolution.

Liquidation.

In an adjustment of debts under Chapter 13, the rights of ____________may not be modified Secured creditors Unsecured creditors Mortgagees Judicial lien holders

Mortgagees

FTC regulations provide that for mail-order sales, if the merchant cannot meet the stated date of shipping, the customer must be _______. Refunded. Discounted. Notified. Compensated.

Notified.

An ______ is entered by the bankruptcy judge when he or she finds that the debtor is entitled to the protection of the bankruptcy law. Order of default. Notice of removal. Order of relief. Judgment.

Order of relief.

In liquidation cases, the first meeting of creditors includes the important step of electing an __________. Presiding judge. Permanent trustee. Interim trustee. Administrative Law Judge.

Permanent trustee.

Under Chapter 11, the debtor may file an ________ in an attempt to extricate the business from its financial difficulties and help it to survive. Plan of reorganization. Contingency plan. Notice of default. Operating Agreement.

Plan of reorganization.

Much of federal legislation addressing labeling and packaging addresses products that are _________. Luxury goods. Potentially dangerous. Illegal. Imported from other countries.

Potentially dangerous.

A _______ exists where an insolvent debtor pays some creditors a greater percentage of the debts than the creditors 4in the same class.

Preference.

Creditors are required to file _______ if they are to share in the debtor's estate. Proof of their claims. Financial statement. Articles of Dissolution. Mechanic's lien.

Proof of their claims.

Beth went to Elegant Cakes to select a cake for her wedding. The owner gave her piece to sample and said: "If you live to be 200, this is the best cake you will ever eat in your whole life." Owner's statement is an example of Puffery An express warranty Deceptive advertising Fraudulent misrepresentation

Puffery

Promotional statements made by a business about a product or service that are not intended to be taken literally are known as ________. Guaranties. Material misrepresentations. Puffery. Deceptive advertising.

Puffery.

The important federal regulation that requires all creditors to disclose the annual percentage rate (APR) charged so that debtors can compare credit offers is _________________. Regulation D Regulation Z Subchapter S Chapter 7

Regulation Z

The most important regulation associated with the Truth in Lending Act is _______, which mandates certain disclosures be made for credit arrangements. Regulation Z. Fair Trade Act. Equal Protection Act. Sherman Act.

Regulation Z.

One purpose of the Consumer Product Safety Act is to establish _______ for consumer products. Safety standards. Judicial precedent. Recommendations. New ideas.

Safety standards.

A bankruptcy trustee may do all of the following except File tax returns for the state. Recover property of the debtor that had been conveyed in a fraudulent transfer Invest assets of the estate Sell collateral without adequate protection for the secured creditor

Sell collateral without adequate protection for the secured creditor

Any creditor who also owes the debtor money may have the right of _______, which allows the creditor to cancel out these obligations. Redemption. Execution. Levy in distress. Setoff.

Setoff.

A joint case is a voluntary bankruptcy case filed by Spouses Partners in a partnership Members of an LLC All of the above

Spouses

Which of the following statement is false about the provisions of the Truth in Lending Act? The Act regulates both consumer and commercial credit transactions The Act's disclosure requirements apply only to creditors who are in the business of extending credit. The Act applies to all real estate transactions. The Act requires creditors to disclose interest, service, and credit reporting charges.

The Act regulates both consumer and commercial credit transactions

Which agency has broad powers to conduct research on the safety of consumer products, set safety standards for products, and recall products that are unsafe? The National Transportation and Safety Commission The Federal Trade Commission The Interstate Commerce Commission The Consumer Product Safety Commission

The Consumer Product Safety Commission

Which of the following statements about a discharge under Chapter 7 is false? The discharge is available to corporations and partnerships. The discharge covers all the scheduled debts that arose before the order of relief. The discharge operates as an injunction against creditors trying to collect on a debt. The discharge requires that most of the debtor's assets be used to pay the debts.

The discharge is available to corporations and partnerships.

Which of the following is not a requirement for advertising to be deceptive? It must contain a material misrepresentation or omission The misrepresentation or omission must be made with the intent to defraud The misrepresentation or omission is likely to mislead a customer. The misrepresentation or omission would mislead a reasonable customer.

The misrepresentation or omission must be made with the intent to defraud

Creditors may not force a debtor into an involuntary Chapter 13 bankruptcy because it would violate the debtor's __________Amendment right against involuntary servitude. First Fifth Thirteenth Twenty-second

Thirteenth

Regarding door-to-door sales, federal regulations mandate that consumers must be told that they have _______ within which to cancel any door-to-door sale. One hour. Three days. One year. Three years

Three days.

A consumer who does not complete the required consumer credit counseling course will not be given a discharge under Chapter 13. True False

True

A transfer of property may be fraudulent under either federal or state law. True False

True

A trustee may not assume an executory contract in a bankruptcy preceding that requires the other party to make a loan, deliver equipment or issue a security to the debtor. True False

True

Accurate information on labels and packaging is important because consumers rely on this information when comparing products and making purchasing decisions. True False

True

All bankruptcy trustees must post a bond in favor of the United States. True False

True

Congress has enacted legislation designed to prevent debt collectors from acting in an unconscionable fashion when attempting to collect a debt. True False

True

Consumers have the right to dispute information that is contained in their credit reports. True False

True

Creditors must receive as much in a Chapter 11 reorganization plan as they would receive in a Chapter 7 liquidation. True False

True

Creditors who petition a debtor into bankruptcy may be required to post a bond. True False

True

In Chapter 7 bankruptcy cases, certain debts of the debtor will not be discharged. True False

True

Once bankruptcy proceedings are commenced, creditors are prohibited from attempting to collect their debts. True False

True

Property inherited by the debtor within 180 days of the bankruptcy petition date becomes property of the bankruptcy estate. True False

True

States decide whether or not debtor residents may use the federal bankruptcy exemptions True False

True

States decide whether or not debtor residents may use the federal bankruptcy exemptions T/F

True

The FTC is given wide discretion by the courts in determining when advertising is deceptive. True False

True

The Poison Product Packaging Act of 1970 requires that certain products have child proof caps and packaging. True False

True

Under the Fair Credit and Reporting Act, information is obsolete after 7 years and must be purged from the files of credit reporting agencies. True False

True

Under the Fair Debt Collection Practices Act, debt collectors are prohibited threatening to arrest a debtor for failure to pay a debt. True False

True

Under the Fair and Accurate Credit Transaction Act, victims of identity theft may file a fraud alter with consumer credit reporting companies, which would appear on their credit report. True False

True

The ________ imposes duties on creditors who wish to extend credit, primarily in the area of making disclosures to potential debtors. Sherman Act. Truth in Lending Act. Clayton Act. Fair Trade Act.

Truth in Lending Act.