CH 30 LAW
Carol is the sole proprietor of Diners Cafe, which owes debts in an amount more than Carol believes she and the cafe can repay. The creditors agree that liquidating the business would not be in their best interests. To stay in business, Lora could file for bankruptcy under...
Chapter 11 or Chapter 13.
Drugs monthly income is $3,500, his monthly expenses are $3,000, and his debts are nearly $25,000. If he applied the difference between his income and expenses to pay off the debts, they could be eliminated within 5 years. The provision in the Bankruptcy Code that covers this plan is...
Chapter 13.
Rhonda's monthly income is $2,000, her monthly expenses are $2,800, and her debts are nearly $40,000. A debtor in Rhonda's position who files for bankruptcy would most likely seek relief under...
Chapter 7
National Corporation has not paid any of its 15 creditors, 6 of whom have unsecured claims of more than $8,000. The creditors can for National into bankruptcy under...
Chapter 7 or Chapter 11.
Regional Stores, Inc., files for bankruptcy. A corporation can file a petition for bankruptcy under...
Chapter 7 or Chapter 11.
A debtor must be insolvent to file a voluntary petition under Chapter 7. (T/F)
FALSE
Bankruptcy proceedings are held in state bankruptcy courts under state law. (T/F)
FALSE
No small business can avoid creditors' committees under Chapter 11. (T/F)
FALSE
The filing of a petition for bankruptcy will not stay most legal actions against the debtor. (T/F)
FALSE
Under Chapter 13, a bankruptcy may be commenced by voluntary petition only. (T/F)
FALSE
When a business debtor files for Chapter 11 protection, the debtor is not allowed to continue in business. (T/F)
FALSE
Generally, in a bankruptcy proceeding, any creditor's claim is allowed. (T/F)
TRUE
Under Chapter 13, a discharge obtained by fraud can be revoked within 1 year. (T/F)
TRUE
Under Chapter 13, the automatic stay applies only to consumer debt, not business debt. (T/F)
TRUE
With some exceptions, the same principles cover a liquidation petition and a reorganization proceeding. (T/F)
TRUE
Nina is appointed trustee of Owen's estate in bankruptcy. To collect the property of Owen's estate, Nina can set aside...
a transfer within 90 days prior to the petition's filing in preference to one creditor.
Pat files a Chapter 7 petition for a discharge in bankruptcy. Pat may be denied a discharge if Pat...
fails to explain a loss of assets.
As a bankruptcy trustee, Mica has the power to avoid...
fraudulent transfers, preferences, and transactions the debtor could rightfully avoid.
Bob files a bankruptcy petition under Chapter 7 to have his debts discharged. Assuming Bob passes the appropriate test, the debts most likely to be discharged include claims for...
student loans, if the payment would impose undue hardship on Bob.
Dora and Ed make down payments on goods to be received from Fine Furniture Store. Before the goods are delivered, Fine files for bankruptcy. Besides consumers like Dora and Ed, Fine owes wages to its employees and taxes to the government. The order in which these debts will be paid is...
unpaid wages, consumer deposits, and taxes.