BLAW- Bankruptcy
1. Carol, a resident of Arkansas, has filed for bankruptcy under Chapter 7. Carol has never been married and has no children or other dependents. She owns a small house which is worth $100,000 (fully paid for). She has jewelry which has been recently appraised at $25,000, household furniture which has been appraised at $15,000, and Wal-Mart stock which is valued at $50,000. What is the total dollar amount of the above listed assets which are exempt under Arkansas law? A. 0 B. $15,000 C. $40,000 D. $50,000 E. $100,000
A
1. Tad filed for bankruptcy as the amount of his debts far exceeded the amount of his assets. In the bankruptcy the trustee seized all of Tad's non exempt property, which he sold in order to pay off the creditors. Unfortunately the amount of money generated by the sale of the assets was insufficient to pay all of the debts, and very few of the creditors were fully paid. This form of bankruptcy is known as: A. Ch. 7 B. Ch. 11 C. Ch. 12 D. Ch. 13 E. None of the above. Since the creditors could not be paid in full, the bankruptcy proceeding was illegal
A
1. The person filing a bankruptcy case is the ______ and must file the case in _____. A. Debtor; federal bankruptcy court B. Creditor; federal bankruptcy court C. Trustee; federal bankruptcy court D. Debtor; state court
A
1. Which of the following Bankruptcy Chapters is the most popular in the U.S.? A. Ch. 7 B. Ch. 11. C. Ch. 12 D. Ch. 13 E. Ch. 17
A
1. At the end of Meg's Chapter Seven bankruptcy case the judge issues an order discharging her $3,000 credit card debt. What does this mean? A. Meg must pay the debt under a plan of reorganization. B. Meg has no legal obligation to pay the credit card debt C. When the automatic stay lifts Meg must pay the credit card debt D. The trustee will gather and sell some of Meg's exempt assets to pay the credit card debt in full. E. Meg's Chapter Seven filing will be dismissed due to the fact that Meg could not pay all of her debts.
B
1. Jill earns $200,000/year. This level of income is far above the median annual income in her state. She has some outstanding debts and has decided to file a Ch. 7 bankruptcy. Based on these facts a bankruptcy judge will probably do which of the following? A. Dismiss her case and order that she cannot file for bankruptcy again for 10 years. B. convert her Ch. 7 filing to a Ch. 13 filing. C. convert her Ch. 7 filing to a Ch. 11 filing. D. convert her Ch. 7 filing to a Ch. 9 filing. E. Order that since she has so much cash on hand she would not be allowed to use a trustee in the proceeding.
B
1. Blondie filed for bankruptcy in 20XX. Which of the following is considered to be a "priority debt"? I. Debt owed to a credit card company (such as Master Card) II. Debt owed to the trustee as part of administrative expenses. III. Debts owed for child support. A. I only. B. II only. C. III only. D. II and III only. E. I, II and III.
D
1. Carol has filed for bankruptcy on January 30, 20XX. At the time of the filing Carol owned Dillard's stock valued at $50,000. Two weeks after the bankruptcy filing she received a $500 dividend check from Dillard's. She also had a job with the U of A which paid her at the end of every month; the most recent payment ($3,000) was on January 31. Sadly her aunt died on February 20, but the good news is that Carol inherited $20,000 from this aunt. Which of these will be included in her "estate" for bankruptcy purposes? I. The Dillard's stock II. The $500 dividend check III. The $3,000 payment from the U of A IV. The $20,000 inherited from her aunt A. I only. B. I and II only C. I, II, and III only. D. I, II and IV only E. III, and IV
D
1. Clark uses a credit card issued by Big Bank. Clark stopped paying his credit card bills and now owes Big Bank $2,000. Big Bank calls Clark daily demanding payment and intends to file a civil lawsuit in state court. Clark files bankruptcy on April 3rd. On April 4th, may Big Bank continue calling Clark and file the civil lawsuit in state court? A. Yes, Clark has breached his contract. B. Yes, bankruptcy is federal court and the civil lawsuit will be in state court. C. Yes, unless the Trustee declares Big Bank's claims invalid D. No, because of the Automatic Stay E. No, because of fraudulent transfers
D
1. Tony has filed for Chapter Seven bankruptcy. He has many debts owed to various creditors. Which of the debts listed below are non-dischargeable under the laws of bankruptcy? I. A default on a contract wherein Tony engaged in deliberate fraud. II. Alimony and child support III. An unpaid medical bill A. I only. B. II only. C. III only. D. I and II only. E. I, II and III
D
1. A bankruptcy judge may deny a debtor's request for bankruptcy discharge for which of the following reasons? I. Destroying or falsifying records. II. Making a false statement under oath. III. Having received a discharge in the prior 8 years. A. I only. B. II only. C. III only. D. I and II only. E. I, II and III.
E
1. Eighteen months before filing bankruptcy, Todd sells his motorcycle to his brother for $1 with the agreement that his brother will sell it back to Todd after Todd files for bankruptcy and receives a discharge of his debts. If the trustee can prove that Todd intended to defraud creditors with this transaction, which of the following is likely to happen? A. Nothing because this is a valid contract with consideration given by both parties. B. This transaction will be reversed because it was a preference C. Nothing, because eighteen months is longer than 90 days, so the trustee has no power to take the motorcycle. D. Todd's brother will be charged with the crime of theft from the bankruptcy estate. E. Todd's brother will have to deliver the motorcycle to the trustee as this is a fraudulent transfer..
E
1. Which of the following bankruptcy chapters is intended for individuals who want to keep their assets and pay off their debts over a 3 to 5 year time period? A. Ch. 7 B. Ch. 9 C. Ch. 11 D. Ch. 12 E. Ch. 13
E
1. Which of the following debts CANNOT be discharged in bankruptcy? I. Credit card debt owed to a federally insured bank II. Government guaranteed student loans where there is no undue hardship III. Debts resulting from an intentional tort A. I only. B. I and II only. C. I, II, and III only. D. II only. E. II and III only
E
1. One year before filing for bankruptcy Jean gives her sister $10,000 worth of jewelry. Jean and her sister secretly agree that the sister will return the jewelry to Jean after her bankruptcy case is closed. During the bankruptcy case the trustee may do which of the following? A. Have the sister give the jewelry to the bankruptcy estate because it is a preference. B. Have the sister give the jewelry to the bankruptcy estate because it is a fraudulent transfer. C. Impose the automatic stay upon the jewelry "freezing" those assets. D. Nothing because the transfer was more than 90 days before bankruptcy E. Nothing because gifts up to $10,000 to related parties are allowed without penalty
B
1. When the bankruptcy trustee liquidates the debtor's non-exempt assets, this fund is called _____. A. Priority B. Bankruptcy estate C. Fraudulent transfers D. Schedules
B
1. Which of the following are considered "priority debts" (debts owed to priority creditors) under the bankruptcy code? A. Credit card debt B. Child support debts C. Unpaid tuition owed to public educational institutions D. Unpaid medical debts E. ALL of these.
B
1. Holly, a single woman with no dependents, files Chapter 7 bankruptcy in Arkansas on August 1st, 20XX. She lists the following assets on her schedules: 10 shares of Wal-Mart stock and a home she owns (no mortgage). On August 15, 20XX she receives a $2,000 paycheck. On November 20, 20XX, she inherits $10,000 from a distant relative. Which of the following assets will be in the bankruptcy estate and used to pay Holly's creditors? I. The stock II. The home III. The $2000 paycheck IV. The $10,000 inherited from the relative A. I only. B. I and II only. C. I, II and IV only. D. II and III only. E. I, III and IV.
C
1. Mary is a resident of Little Rock, Arkansas, and has decided to file for bankruptcy. She is a widow with three small children. She is claiming all exemptions to which she is entitled under Arkansas law. This would include which of the following? I. Her home (which she owns free and clear of any mortgage) II. Her household furniture III. Her wearing apparel IV. The wedding ring that she continues to wear even though her husband is deceased A. I only. B. I and II only. C. I and III only. D. I, III and IV only. E. I, II, III and IV
C
1. Norm has 10 general, unsecured creditors. Most of these are credit card companies, but one is a small local bar which has allowed him to run up a line of credit. He has decided to file for bankruptcy, but two weeks before doing so he pays off in full his tab at the local bar so that he can stay in good standing with them. Assuming that the trustee challenges the payment to the local bar, which of the following is correct? A. The payment is legal and the trustee will not be able to recover from the owner of the bar, as the debt was legally owed B. The payment is a fraudulent transfer and the bar owner must give the money to the trustee C. The payment is a preference and the owner of the bar must pay the money to the trustee D. The payment is allowable under bankruptcy law since debts owed to restaurants and bars are non-dischargeable E. The payment is allowable as Norm has fewer than 12 general, unsecured creditors
C
1. Terry has 15 unsecured creditors and has decided to declare bankruptcy. On November 25, 20XX he pays in full his debt to one of the creditors (Acme Finance Company). One week later Terry files for bankruptcy. On behalf of the creditors the trustee makes a claim against Acme demanding that Acme turn over to the trustee the payment which was made to Terry. Is Acme obligated to do this? A. No, as Terry filed for bankruptcy after the payment was made to Acme. B. No, as Acme is a priority creditor. C. Yes, as the payment to Acme was a preference D. Yes, as the payment to Acme was a fraudulent transfer
C
1. Which of the following is NOT legal grounds for a bankruptcy judge to DENY a debtor a discharge? A. Making a false statement under oath B. Destroying or falsifying records C. Quitting his job just before filing for bankruptcy D. Failing to explain a loss of assets E. Secretly transferring or concealing property
C
1. Which of the following would give the bankruptcy judge the right to deny a debtor a discharge in a Chapter Seven filing? A. Inability of the debtor the pay more than 50% of his outstanding debts. B. A debtor paying off a pre-existing debt which constituted a preference. C. A debtor making a false statement under oath. D. A debtor whose exempt property is worth more than the total amount of his outstanding debt E. NONE of these.
C