chapter 44 business law smartbook

How is the Pension Benefit Guaranty Corporation primarily financed?

By insurance premiums paid by companies that sponsor pension plans and investment returns

According to the Bankruptcy Code, which of the following debts would be paid last?

Certain taxes owed to governmental units

A debtor seeking bankruptcy relief must file with the court a listing of all but which of the following?

Family members

Once a pension plan is terminated in bankruptcy, the Blank______ takes over the pension benefits.

PBGC

Bankruptcy cases and proceedings are filed in Blank______.

federal district courts

For a creditor to participate in the distribution of the assets of the bankruptcy estate, the creditor's claim must be Blank______.

allowed

Chapter 11 of the Bankruptcy Code is primarily for Blank______.

businesses

If an individual debtor in a voluntary Chapter 7 case or in a Chapter 13 case fails to file the required documentation within 45 days of the filing of the petition, the Blank______.

case will be automatically dismissed

Under the Bankruptcy Code, the treatment of a preferential lien is Blank______.

consistent with the treatment of a preferential payment

In the case of an individual debtor whose debts are primarily Blank______ debts, the trustee is not entitled to avoid preferences unless the aggregate value of the property is $Blank______ or more.

consumer; 800

The Bankruptcy Code provides several exceptions to the trustee's avoiding power that are designed to allow a debtor and creditors to engage in ordinary business transactions. The exceptions include transfers that are intended by the debtor and creditor to be a Blank______ exchange for Blank______ value.

contemporaneous; new

A reorganization plan is essentially a Blank______ between a debtor and its creditors.

contract

Chapter 13 allows for Blank______.

debtors to pay for debts out of future income under the protection of a federal court

A Chapter 11 proceeding is intended for Blank______, particularly Blank______, whose financial problems may be solvable if they are given some time and guidance and if they are relieved of some pressure from creditors.

debtors; businesses

In a Chapter 11 proceeding, Blank______.

debts are restructured via contractual agreement

If the bankrupt debtor fails to show up for a hearing regarding objections to discharge, the court will likely Blank______.

deny the discharge

If the bankruptcy trustee has a valid defense to a creditor's claim, the trustee can use the defense to Blank______ the claim.

disallow or reduce

If the bankrupt person has been honest in their business transactions and in the Chapter 7 bankruptcy proceeding, they are usually given a Blank______ of their debts.

discharge

Debtors who have been guilty of dishonest acts may not be entitled to a Blank______.

discharge in bankruptcy

Bankruptcy law is Blank______ law.

federal

The Bankruptcy Code considers payments of accounts in the ordinary course of business as Blank______.

not preferential

A involuntary petition in bankruptcy comes from Blank______.

one or more creditors

Insolvency most closely means Blank______.

one's debts exceed the fair value of their assets

Any transfer of property made by a debtor with the intent to hinder, delay, or defraud creditors is a(n) Blank______.

fraudulent transfer

When creditors petition a debtor into bankruptcy, the objective is usually to Blank______.

have the debtor's assets liquidated

In the 1990s, a number of companies that were the subject of Blank______, including a number of retailers and numerous real estate developers, resorted to Chapter 11 to seek Blank______.

highly leveraged buyouts; restructuring and relief from creditors

When objections to discharge are filed, the court must Blank______.

hold a hearing to determine if the objection is valid

A debtor's right to redeem property is the right to Blank______.

pay secured creditors in full to keep exempt property

All bankruptcy proceedings start with a Blank______.

petition

A lien created on the property of an insolvent debtor within 90 days of the filing of the bankruptcy proceeding to secure a preexisting debt is known as a Blank______.

preferential lien

Ivan, a bankrupt debtor, fails to properly account for assets missing from the bankruptcy estate. This action may Blank______.

prevent Ivan from being discharged

If creditors want to participate in the estate of a bankrupt debtor, they must file a Blank______ within a designated time after the Blank______ meeting of creditors.

proof of claim; first

The first creditors paid in bankruptcy are Blank______.

secured creditors to the extent of the proceeds of their collateral

When an attorney signs a debtor's petition for bankruptcy, the attorney certifies Blank______.

that the petition is warranted based on existing law or a good faith legal argument

A Chapter 13 filing can be initiated by Blank______. Multiple choice question. the individual debtor only

the individual debtor only

Once a debtor redeems exempt personal property from a secured creditor, the creditor is Blank______ as to any remaining debt owed by the debtor.

unsecured

A secured creditor whose secured claim exceeds the value of the collateral is a(n) Blank______ to the extent of the deficiency, and a(n) Blank______ must be filed to support the recovery of the deficiency.

unsecured; proof of claim

Pension plans are Blank______ terminated in corporate reorganization and Blank______ terminated in liquidation.

usually; always

In what year were Chapter 12 proceedings made available to family fishermen?

2005

Which of the following does the debtor typically file at the same time they file a Chapter 13 bankruptcy petition? (Check all that apply.)

A list of the debtor's creditors A list of the debtor's liabilities A list of the debtor's assets

Which section of the Bankruptcy Code is dedicated to family farming operations and family-owned commercial fishing operations? Multiple choice question. Chapter 13

Chapter 12

All but which of the following debts are nondischargeable in bankruptcy?

Consumer credit card debt incurred within six months of the bankruptcy filing

All but which of the following are types of bankruptcy proceedings recognized by the Bankruptcy Code?

Debtor incarceration

Under Chapter 13 bankruptcy, a court is not required to grant the debtor a discharge for which of the following debts? (Check all that apply.)

Debts covered by a waiver of discharge executed by the debtor and approved by the court Debts for restitution or a criminal fine included in a sentence on the debtor's conviction of a crime Debts that are for taxes required to be collected or paid and for which the debtor is liable

Which of the following are major contributing factors as to why corporations file for Chapter 11 bankruptcy? (Check all that apply.)

Efforts to shed product liability, pensions, and collective bargaining agreements High levels of debt Economic conditions

True or false: For a debtor to be eligible for bankruptcy relief, the debtor must receive "in-person" credit counseling.

False

True or false: In a liquidation proceeding, the debtor is generally required to give up all of their property.

False

True or false: The provisions of the Bankruptcy Code that negate preferential payments and liens effectively prevent a debtor from engaging in current business transactions.

False

Rank the following claims in order of the priority in which they would be paid. Position 1 of 6 Alimony and child support correct toggle button unavailable Alimony and child support

1. alimony 2. expenses 3. unsecured claims in involuntary cases 4. unsecured claims of up to 15,150 5. unsecured claims up to 7475 6. Certain taxes owed.

Under the 2005 revisions, individuals are ineligible for relief under any chapter of the Bankruptcy Code unless within Blank______ days preceding their bankruptcy filing they received individual or group credit counseling from an approved Blank______ budget and credit counseling agency or receive an exemption from the requirement.

180; nonprofit

In what year did the U.S. Congress amend the Bankruptcy Code by adding a new Chapter 12 targeted to the financial problems of the family farm?

1986

Actions held in abeyance by an automatic stay include all but which of the following?

Actions related to the bankruptcy petition and proceeding itself

Chapter 13 of the Bankruptcy Code differs from Chapter 7 bankruptcy in which of the following ways?

After a Chapter 13 filing, the debtor is still required to pay creditors

When does the trustee sell the bankrupt debtor's nonexempt property?

As soon as it is possible and consistent with the best interest of the creditors

All but which of the following are types of bankruptcy proceedings recognized by the Bankruptcy Code?

Incorporation

Chapter 13 of the Bankruptcy Code is available to which of the following?

Individuals

Bankruptcy does all but which of the following?

It provides the debtor with unlimited personal property exemptions.

Why did the U.S. Congress authorize the bankruptcy courts to dismiss cases that they determine are a substantial abuse of the bankruptcy process?

It was concerned that too many individuals with an ability to pay their debts under Chapter 13 were filing petitions under Chapter 7

Which of the following is false regarding liquidation bankruptcy?

Its primary objective is debt restructuring.

Kent, a debtor, has received a bankruptcy discharge. This means that Blank______.

Kent does not have further responsibility for discharged debts

Which of the following is included in the Chapter 7 bankruptcy estate? (Check all that apply.)

Property received by the bankruptcy trustee because the debtor made a fraudulent transfer of their assets to another person Profits, royalties, rents, and revenues, along with the proceeds from the debtor's estate, received during the Chapter 7 proceeding

All but which of the following acts may bar a bankruptcy discharge?

Redeeming exempt property

The Chapter 11 reorganization plan must do which of the following? (Check all that apply.)

State which claims (or classes of claims) are impaired or adversely affected by the plan Divide the creditors into classes Set forth how each creditor will be satisfied

Which of the following debts cannot be discharged in bankruptcy?

Taxes due to the federal, state or local government

Why did Purdue Pharma file for Chapter 11 bankruptcy in 2019?

The opioid addiction crisis in the United States and the significant role of the company in the crisis.

Which of the following is false regarding the duties of the trustee?

The trustee cannot operate the debtor's business.

Compared to Chapter 7 bankruptcy, Chapter 13 bankruptcy is more advantageous to the individual debtor for all but which of the following reasons?

They end up paying less to their creditors

True or false: Historically, farmers have been accorded special treatment in the Bankruptcy Code.

True

True or false: In Chapter 12 bankruptcy, the debtor remains in possession of the farm or fishing operation and continues to operate it while the plan is developed and implemented.

True

The Blank______ established that bankruptcies would be governed under Blank______ law.

U.S. Constitution; federal

How does Chapter 11 bankruptcy differ from Chapter 7 bankruptcy?

Under Chapter 11 debts are restructured, while under Chapter 7 debts are discharged.

Bankruptcy judges can hear and decide cases and issues related to Blank______.

a core proceeding

A preferential payment is Blank______.

a payment made by an insolvent debtor to one creditor over others

In 1984, the U.S. Congress authorized the bankruptcy courts to dismiss cases that they determined were Blank______.

a substantial abuse of the bankruptcy process

For contested involuntary petitions, Blank______.

a trial is held to determine if an order of relief is appropriate

A reaffirmation agreement is Blank______.

an agreement where the debtor agrees to pay a debt that was discharged

The filing of a bankruptcy petition creates a(n) Blank______ for all creditor actions.

automatic stay

The set of laws that allows for debtors to get a fresh start financially is called Blank______.

bankruptcy

The 2005 revisions to the Bankruptcy Code increased the legal responsibilities for Blank______.

bankruptcy attorneys

If a debtor agrees to reaffirm debt, it must be done Blank______ discharge.

before

Under Chapter 13 bankruptcy, a debtor who is obligated to pay a Blank______ must, in additional to making the payments pursuant to their plan, certify that all such amounts have been paid to be entitled to a Blank______.

domestic support obligation; discharge

When there are insufficient funds in a priority class to pay a claim, Blank______.

each class member receives a pro rata share of their claim

Martin has filed a Chapter 7 bankruptcy petition. 60 days after the filing, Martin receives $700,000 from his uncle's estate. This $700,000 would be Blank______ distributed to creditors.

included in the bankruptcy estate and

Bankruptcy exemptions are available to Blank______.

individual debtors only

Chapter 13 of the Bankruptcy Code is available for Blank______.

individuals only

Under the 2005 revisions to the Bankruptcy Code, the "household goods" as to which a nonpossessory purchase money security interest can be avoided have been Blank______.

limited

If a debtor's property is subject to the secured claim of a creditor, the Blank______.

secured creditor has first claim to the proceeds from the secured property to the extent of their claim

If a secured creditor's collateral sells for more than the secured claim, the excess Blank______.

may be used to satisfy the claims of other creditors

The Bankruptcy Code provides several exceptions to the trustee's avoiding power that are designed to allow a debtor and creditors to engage in ordinary business transactions. The exceptions include the creation of a security interest in Blank______ property where Blank______ value was given by the secured party to enable the debtor to obtain the property and where the value was in fact used by the debtor to obtain the property and the security interest was perfected within Blank______ days after the debtor took possession of the collateral.

new; new; 20

In Chapter 13 bankruptcy, a composition of debt is the Blank______ of debt.

reduction

For voluntary petitions or uncontested involuntary petitions, Blank______.

the order of relief is automatic

In Chapter 7 bankruptcy, the debtor must disclose all property they own and surrender it to the bankruptcy Blank______.

trustee

The debtor is permitted to Blank______ certain liens against exempt properties that impair the debtor's exemptions.

void

When a debtor has made a fraudulent transfer, the transfer is Blank______.

voidable by the trustee

Compared to Chapter 7 bankruptcy, Chapter 13 bankruptcy is more advantageous to creditors because the creditors Blank______.

will possibly recover a higher percentage of the debt owed to them