Module 8 Quiz

The correct answer "is a farmer." The creditors will be unsuccessful if Gina is a farmer. Congress created Chapter 12, a special provision in the Bankruptcy Code, to provide relief for family farmers. A family farmer is defined as one who derives 50% of gross income from farming. Chapter 12 Bankruptcy is voluntary only.

Gina's creditors attempt to force her into bankruptcy proceedings. The creditors will be unsuccessful if Gina refuses to comply. is also a creditor. is a farmer. owns a business with ten or more employees.

The correct answer is "a list of the debtor's creditors and the amount of the debt owed to each." A voluntary petition in bankruptcy must include a list of the debtor's creditors and the amount owed to each. The petitioner must also include: a statement of their financial affairs, a list of all property owned by the debtor, including property that the debtor claims is exempt, a list of current income and expenses, a certificate of credit counseling, proof of payments received from employers within sixty days prior to the filing of the petition, a statement of the amount of monthly income, itemized to show how the amount is calculated, a copy of the debtor's federal income tax return for the most recent year ending immediately before the filing of the petition.

A voluntary petition in bankruptcy must include statement indicating that the debtor understands basic economics. proof of each creditor's claim. a list of the debtor's creditors and the amount of the debt owed to each. a copy of the petitioner's state income tax return.

The correct answer is "a portion of a lien on a debtor's real property." The homestead exemption can sometimes operate to cancel out a portion of a lien on a debtor's real property. The purpose of the homestead exemption is to ensure that the debtor will retain some form of shelter. As a general rule, each state permits the debtor to retain the value of the family home up to a specified dollar amount free from the claims of unsecured creditors or trustees in bankruptcy. (Note that federal bankruptcy law places a cap on the amount that debtors filing bankruptcy can claim as exempt under their states' homestead exemption.) As such, this cancels out a portion of the lien on the property.

Because the homestead exemption interacts with other areas of the law that relate to creditors' rights and remedies, it can sometimes operate to cancel out any right that the creditor has against the debtor. the creditor's rights in bankruptcy. rights to collateral possessed by the creditor. a portion of a lien on a debtor's real property.

The correct answer is "allows a debtor to retain possession of his or her assets." A Chapter 13 plan allows a debtor to retain possession of his or her assets. Chapter 13 allows a debtor to repay an individual's debt out of regular income. There are limits to the debt that may be repaid: $419,275 for unsecured debt, $1,257,850 for secured debt.

Compared to Chapter 7 and 11 plans, a Chapter 13 plan is more expensive and more complicated. permits any interested party to file a repayment plan. allows a debtor to retain possession of his or her assets. permits creditors to force a debtor into involuntary bankruptcy.

The correct answer is "puts into place an automatic stay." If the debtor's petition is found to be proper, the entry of an order for relief puts into place an automatic stay. The order for relief is the court's grant of assistance to the debtor. The trustees and creditors must be informed by mail within twenty days of order of relief. The automatic stay exempts domestic support, obligations arising from divorce, domestic violence, child custody, investigations by a securities agency, and certain liens for property taxes.

If a voluntary petition in bankruptcy is found to be proper, the court's entry of an order for relief distributes the debtor's assets to his or her creditors. dismisses the petition. discharges the debtor's obligations. puts into place an automatic stay.

The correct answer is "a certificate proving the receipt of credit counseling." A voluntary petition in bankruptcy must include a certificate proving the receipt of credit counseling. The petitioner must also include: a statement of their financial affairs, a list of all property owned by the debtor, including property that the debtor claims is exempt, a list of current income and expenses, financial statements, proof of payments received from employers within sixty days prior to the filing of the petition, a statement of the amount of monthly income, itemized to show how the amount is calculated, a copy of the debtor's federal income tax return for the most recent year ending immediately before the filing of the petition.

In addition to financial statements, each voluntary petition in bankruptcy must include statement of preference for one creditor over another. a plan outlining how debt payments will be made. a certificate proving the receipt of credit counseling. a creditors' agreement allowing the debtor to continue in business.

The correct answer is "a reorganization." Retail Stores, Inc. should file under Chapter 11 for relief through a reorganization. A reorganization plan to rehabilitate the debtor is a plan to conserve and administer the debtor's assets in the hope of an eventual return to successful operation and solvency. The plan must be fair and equitable and must do the following: 1. Designate classes of claims and interests. 2. Specify the treatment to be afforded to the classes of creditors. (The plan must provide the same treatment for all claims in a particular class.) 3. Provide an adequate means for the plan's execution. (Individual debtors are required to utilize post-petition assets as necessary to execute the plan.) 4. Provide for payment of tax claims over a five-year period. The plan need not provide for full repayment to unsecured creditors. Instead, creditors receive a percentage of each dollar owed to them by the

Retail Stores Inc. wants to agree with its creditors on a plan under which it pays a portion of its debt and is discharged of the rest. To accomplish this goal, the corporation should file a petition in bankruptcy under Chapter 11 for relief through a reorganization. an adjustment plan. a repayment plan. a liquidation.

The correct answer is "Chapter 7." In Chapter 7 when the debts are discharged, the debtor is given the opportunity of a fresh start. Chapter 7 is the most common and well-known type of bankruptcy. The petitioner turns over all his or her assets, with exemptions, to the trustee for liquidation and to satisfy the debts. Once the liquidation is complete, the debt is discharged, and the debtor is given the opportunity for a fresh start.

The Chapter of bankruptcy in which the debts are discharged, and the debtor is given the opportunity of a fresh start is: Chapter 11. Chapter 7. Chapter 13. Chapter 12.

The correct answer is "a creditors' committee of unsecured creditors is appointed." In Chapter 11, soon after the entry of the order of relief, a creditor's committee of unsecured creditors is appointed. Chapter 11 is used by businesses to reorganize and restructure their debts while continuing to operate. The committee can consult with the trustee and/or the debtor in the development of a repayment plan.

Under Chapter 11, soon after the entry of the order for relief the debtor's assets are liquidated to pay tax claims. the debtor's creditors file a plan to distribute the debtor's assets. a creditors' committee of unsecured creditors is appointed. any business debtor can choose to avoid creditors' committees

The correct answer "domestic support." The highest priority class comprises claims for domestic support. Once the petition is accepted, the court will issue an automatic stay barring further collection actions against the debtor. The domestic support obligations are exempted from the stay and must be paid.

Under Chapter 7, creditors are paid in a certain order of priority. The highest-priority class comprises claims for the debtor's equity in his or her residence. domestic support. student loans. debts related to motor vehicles, household goods, and trade tools.

The correct answer is "void a judgment on a discharged debt and prohibit an action to collect it." The primary effect of a discharge is to void a judgment on a discharged debt and prohibit an action to collect it. The result of Chapter 7 is that they debtor's assets are liquidated to pay off the creditors. Once the debts that could be paid are paid, the bankruptcy is discharged. The purpose of the discharge is to give the debtor a fresh start. A discharge voids any judgment against the debtor and prevents any action to collect it.

Under Chapter 7, the primary effect of a discharge is to void a judgment on a discharged debt and prohibit an action to collect it. force a creditor to obtain a new judgment on a discharged debt. allow a creditor to collect a previous judgment on a discharged debt. extend the time for the debtor's payment of overdue debts.

The correct answer is "the dismissal of the petition." Failing to file the necessary documents can result in the dismissal of the petition. All bankruptcy proceedings require that with the exception of tax returns, all necessary documents must be submitted within 45 days unless an extension is granted. The debtor has up to seven days before the creditor's meeting to file the tax returns. Failure to supply those documents can result in dismissal of the petition.

Under any chapter of the Bankruptcy Code, failing to file the necessary documents with the debtor's petition for relief can result in the distribution of the debtor's assets to his or her creditors. the immediate discharge of the debtor's obligations. an automatic stay. the dismissal of the petition.