Bus Law 2 - Chap 30 Bankruptcy

Because of the abuse of Chapter ______ bankruptcy filings, Congress has instituted control mechanisms under the BAPCPA.

(a. 7) b. 11 c. 13 d. 12

Which of the following comprises the debtor's legal and equitable interests in property?

(a. Bankruptcy estate) b. General ledger c. Account receivable d. Court registry

______proceedings are used to eliminate most of the debts of a debtor.

(a. Liquidation) b. Dissolution c. Foreclosure d. Garnishment

In an adjustment of debts under Chapter 13, whose rights may not be modified?

(a. Mortgage holders) b. Judicial lien holders c. Secured creditors d. Unsecured creditors

______ determines in which order creditors' claims will be paid.

(a. Priority) b. Need for payment c. Judicial discretion d. Recognized amount of the debt

Which of the following is TRUE of bankruptcy cases filed under one chapter?

(a. They can generally be converted to other chapters.) b. They can only be converted to another chapter by the creditors. c. They can only be converted to another chapter by the debtor. d. They can only be converted to another chapter by a farmer.

For a debtor to retain a certain portion of the equity in their home, the debtor would use the _________ exemption.

(a. homestead) b. family protection c. family purpose d. fresh start

When the bankruptcy judge finds that the debtor is entitled to the protection of the bankruptcy law, the judge files a(n) ______.

(a. order of relief) b. judgment c. order of default d. notice of removal

If an insolvent debtor pays some creditors a greater percentage of the debts owed than other creditors in the same class, a ______ exists.

(a. preference) b. malicious prosecution c. priority d. voluntary dissolution

If a creditor owes the debtor money, filing a ______ allows the creditor to cancel such obligations.

(a. setoff) b. redemption c. execution d. levy in distress

Claim

A creditor's right to payment in a bankruptcy case

Discharge

An order by a bankruptcy court that a debt is no longer valid - in essence, the debtor's forgiven obligation

Preference

Occurs when an insolvent debtor pays some creditors a greater percentage of the debts than other creditors in the same class and when the payments are made within ninety days prior to filing a bankruptcy petition; illegal and voidable payments to one creditor over another

Stay

The order of relief that prevents all creditors from taking any action to collect debts owed by the protected debtor

Debtor

The party that files a bankruptcy petition or against whom such a petition is filed

Trustee

The person named to handle the debtor's assets and obligations during the bankruptcy proceeding

Liquidation

The process of winding up the affairs of a corporation or firm for the purpose of paying its debts and disposing of its assets

Order of relief

The ruling by a bankruptcy judge that a particular case is properly before the bankruptcy court

Chapter 13 debtors cannot have secured debts that exceed ______ to be eligible for Chapter 13?

a. $3,200,000 b. $2,500,000 c. $2,010,650 (d. 1,184,200)

If a debtor has 12 or more creditors, how many creditors, with aggregate claims of $15,775 or more, must sign the petition to force the debtor into an involuntary bankruptcy?

a. 2 (b. 3) c. 6 d. 12

Chapter 7 bankruptcy filing is allowed for which of the following?

a. A railroad b. A savings and loan association c. An insurance company (d. An individual)

If a creditor wishes to share in the debtor's estate, the creditor must file which of the following?

a. Articles of Dissolution b. Mechanic's lien (c. Proof of claim) d. Financial statement

Which of the following bankruptcy codes allows a business to reorganize its business operations?

a. Chapter 13 (b. Chapter 11) c. Chapter 7 d. Chapter 5

Which of the following does NOT apply for Chapter 13 eligibility?

a. Complete the mandatory consumer creditor counseling class (b. Have secured debts of $394,726 or more) c. Have a regular income d. Have unsecured debts of $394,726 or less

Who is responsible for managing the debtor's assets and for satisfying creditors' claims to the extent possible?

a. Creditor (b. Trustee) c. Bankruptcy judge d. Attorney in fact

The automatic stay is used to prevent which of the following?

a. Creditors from filing involuntary bankruptcy petitions b. Creditors from converting a Chapter 11 into a Chapter 7 c. Debtors from hiding personal property (d. Creditors from collecting on debts)

Which of the following is a creditor's right to payment in a bankruptcy case?

a. Debt b. Security interest c. Discharge (d. Claim)

Involuntary Chapter 13 bankruptcy cannot be forced by creditors because it is considered a violation of the debtor's ______ Amendment right against involuntary servitude.

a. Fifth (b. Thirteenth) c. Twenty-second d. Twenty-seventh

______ is not permissible by the bankruptcy trustee.

a. Investing assets of the estate (b. Selling collateral without adequate protection for secured creditors) c. Filing tax returns for the estate d. Recovering property of the debtor that had been conveyed in a fraudulent transfer

Chapter 7 discharge includes all EXCEPT which of the following?

a. The discharge operates as an injunction against creditors trying to collect on a debt. b. The discharge requires that most of the debtor's assets be used to pay the debts. (c. The debts of corporations and partnerships are discharged.) d. The discharge covers all the scheduled debts that arose before the order of relief.

Unsecured obligations for which of the following have first priority when the assets are distributed in a Chapter 7 bankruptcy?

a. Wrongful death or personal injury awards against the debtor for accidents caused by the debtor's wrongful use of alcohol or drugs (b. Alimony, child support, and other domestic support claims) c. Administrative expenses d. Wages, salaries, and commissions

A bankruptcy case is voluntarily initiated when the debtor files a ______.

a. declaration (b. petition) c. complaint d. claim

To determine whether preferential transfers have occurred, a debtor is presumed to have been insolvent for 90 days prior to filing the _______.

a. dissolution statement b. writ of execution c. financing statement (d. bankruptcy petition.)

A bankruptcy judge will issue a ______ order to relieve a debtor of paying specific debts.

a. foreclosure b. liquidation c. confessed judgment (d. discharge)

Ninety days prior to the filing of the petition, the debtor is presumed to be ______.

a. incapacitated b. solvent (c. insolvent) d. under duress

A bankruptcy proceeding provides relief to an individual, business organization, municipality, or farmer, known as the ______.

a. interested party b. trustee (c. debtor) d. creditor

During the first meeting of creditors in a liquidation case, the ______ is elected.

a. interim trustee b. administrative Law Judge c. presiding judge (d. permanent trustee)

A transfer within two years of the filing of the petition with the intent to hinder, delay, or defraud creditors, is a ______.

a. negligent misrepresentation b. fraud in the inducement c. usurious lending practice (d. fraudulent conveyance)

To extricate the business from its financial difficulties and help it to survive, a debtor may file a ______ in a Chapter 11 bankruptcy.

a. notice of default b. credit counseling agreement (c. plan of reorganization) d. contingency plan

A hearing is held on the confirmation of a debtor's proposed reorganization plan to ensure that the plan is ______.

a. the least restrictive means of reorganization. b. In the best interests of the creditors c. In the best interest of the debtor. (d. fair and equitable)

A debtor must surrender all ______ in a liquidation proceeding in order to provide creditors as much money owed as possible.

a. unsecured debts b. goodwill c. Liabilities (d. Assets)

What comes into effect as soon as the petition is filed and has the effect of suspending almost all actions by creditors against the debtor?

a.Express written waiver b.Notice of default c.Voluntary dismissal (d.Automatic stay)

Who can file a single petition to create a joint bankruptcy case?

a.Members of an LLC (b.Spouses) c.Partners in a partnership d.Parents and children

A joint bankruptcy filing including both a husband and wife is NOT permitted; they must file separately.

false

A voluntarily filed Chapter 11 reorganization proceeding CANNOT be converted to a Chapter 7 proceeding.

false

After a debtor is discharged on a debt in a Chapter 7 proceeding, the creditor may file suit against the debtor on the claim and may try to collect the debt by calling the debtor.

false

All debts of the debtor will be discharged in a Chapter 11 bankruptcy.

false

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

false

During the approval process of a proposed Chapter 11 plan of reorganization, the holders of claims against a debtor's property are NOT permitted to participate.

false

Even after bankruptcy proceedings are commenced, creditors may attempt to collect their debts until final discharge.

false

Exempt property may be used to pay debts for child support and alimony only until the final bankruptcy order.

false

If a bankruptcy trustee assigns a contract to a third party and the third party later breaches the contract, the estate is liable for the contract.

false

Intangible property is NOT included in the debtor's bankruptcy estate.

false

Liquidation proceedings are available to all businesses.

false

Self-employed persons who incur trade debts are treated as individuals under Chapter 13.

false

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

false

The power to invest the assets of the bankruptcy estate is NOT granted to the bankruptcy trustee.

false

Under Chapter 7, a debtor's plan of reorganization must provide a means for its execution.

false chap 11 reorg

A Chapter 13 discharge can be granted to debtors who have completed the required consumer credit education course.

true

A bond in favor of the United States must be posted by the bankruptcy trustee.

true

A bond may be required by creditors who petition a debtor into bankruptcy.

true

Bankruptcy operates to stay other judicial or administrative proceedings against the debtor.

true

Both the debtor and creditor are protected by the automatic stay in a bankruptcy proceeding.

true

Fraudulent transfers of property by the debtor in bankruptcy can occur under federal or state law.

true

If property has been inherited by the debtor, it will become property of the bankruptcy estate if it is within 180 days of the bankruptcy petition date.

true

In bankruptcy, executory contracts that require the other party to make a loan, deliver equipment, or issue a security to the debtor may not be assumed by the trustee.

true

Partnerships, limited liability companies, and corporations that go through liquidation proceedings will NOT have their debts discharged.

true

Property held in a spendthrift trust for the benefit of the debtor does NOT become a part of the bankruptcy estate.

true

Questions about property that may have been removed from the list of assets must be answered by the debtor.

true

The rights of a bank that holds a home mortgage may NOT be modified in a Chapter 13 proceeding.

true

Whether debtor residents of a particular state may use the federal bankruptcy exemptions is decided by the state.

true