Question 1

The Bankruptcy Abuse,Prevention and Consumer Protection Act of 2005 is the most substantial revision of the bankruptcy law since the Bankruptcy Code was adopted.

Accepted Answer

A) True 
 B)False

Question 2

Which Chapter of the Bankruptcy Code covers liquidation?

Accepted Answer

A)  Chapter 7
B)  Chapter 13
C)  Chapter 5
D)  Chapter 11

Question 3

Straight bankruptcy,also known as liquidation,is covered under Chapter 7 of the Bankruptcy Code.

Accepted Answer

A) True 
 B)False

Question 4

Under the Bankruptcy Code,a judge is allowed to reduce the debtor's unsecured consumer debt by what percentage?

Accepted Answer

A)  20%
B)  30%
C)  50%
D)  75%

Question 5

An individual will not be granted a discharge,if such discharge has been granted to the individual within the previous:

Accepted Answer

A)  five years.
B)  six years.
C)  seven years.
D)  eight years.

Question 6

Bill's bicycle business has gone bust.The week before Bill went into bankruptcy,he paid $200 for a used bicycle that he intended to re-sell for a profit.This $200 payment is a preference under Chapter 7.

Accepted Answer

A) True 
 B)False

Question 7

In a reorganization petition under Chapter 11 of the Bankruptcy Code,if any particular class of creditors rejects the reorganization plan,the court will:

Accepted Answer

A)  disallow the claims of the rejecting creditors.
B)  force the trustee to renegotiate with the rejecting creditors so that a compromise may be reached at.
C)  order the debtor to file bankruptcy under Chapter 13.
D)  force the rejecting creditors to accept the reorganization plan,if the plan is fair and equitable toward the rejecting creditors.

Question 8

Which of the following statements about a Chapter 7 trustee is false?

Accepted Answer

A)  The trustee takes possession of the debtor's property and has it appraised.
B)  The trustee may operate the debtor's business.
C)  The trustee sells the bankrupt's exempt property as soon as possible,consistent with the best interest of the creditors.
D)  The trustee is required to keep an accurate account of all the property and money he receives and to promptly deposit moneys into the estate's accounts.

Question 9

In the case in the text,In re Rogers,the court found in favor of Rogers and held that she was entitled to her full homestead exemption.In reaching this conclusion,the court analyzed:

Accepted Answer

A)  the statute's legislative history.
B)  preemption law.
C)  whether Wallace was entitled to recover as a matter of law.
D)  when exactly Wallace and Rogers entered into the contract.

Question 10

Bankruptcy judges are appointed by the president for a term of ________ years.

Accepted Answer

A)  4
B)  8
C)  12
D)  14

Question 11

In the case in the text,In re Burt,the court concluded that:

Accepted Answer

A)  the negative equity was inadequate consideration.
B)  the entire transaction qualified as a purchase money security interest because there was a close nexus between the negative equity and the financing of the debtor's new vehicle.
C)  cram down was inapplicable because the vehicle was not purchased for personal use.
D)  the transaction could be dissected into smaller segments and therefore,any purchase money security interest that existed did not include the negative equity.

Question 12

Chapter 13 of the Bankruptcy Code provides an advantage to the debtor by which:

Accepted Answer

A)  the debtor is not obligated to reveal all of his assets.
B)  unsecured creditors are not recognized as valid creditors.
C)  the debtor can avoid the stigma of bankruptcy by getting an opportunity to pay the debts in installments under the protection of a federal court.
D)  the court does not appoint a trustee,as it relies on the good faith of the debtor for the settlement of all debts.

Question 13

Which of the following statements about the Bankruptcy Code is false?

Accepted Answer

A)  The Bankruptcy Code provides an organized procedure under the supervision of state courts for dealing with insolvent debtors.
B)  The Bankruptcy Code ensures that the debtor's property is fairly distributed to the creditors and that some creditors do not obtain unfair advantage over the others.
C)  The Bankruptcy Code protects all of the creditors against actions by the debtor that would unreasonable diminish the debtor's assets to which they are entitled.
D)  The Bankruptcy Code provides the honest debtor with a measure of protection against the demands for payment by his creditors.

Question 14

According to the 2005 revisions of the Bankruptcy Code,individual debtors must file,along with their schedules of assets and liabilities:

Accepted Answer

A)  copies of all payment advices and other evidence of payments they have received from any employer within 30 days before the filing of the petition.
B)  a statement of the amount of gross yearly income,itemized to show how the amount is calculated.
C)  a certificate from the Clerk of the Bankruptcy Court that they must receive credit counseling to be eligible for relief.
D)  a statement showing any anticipated increase in income or expenditures over the 24-month period following the date of filing the petition.

Question 15

As demonstrated in the case in the text,In re Made in Detroit,a reorganization plan must be feasible.A plan is feasible when:

Accepted Answer

A)  the debtor's goals are realistic in relation to its abilities.
B)  confirmation of the plan is not likely to be followed by the liquidation or the need for further financial reorganization of the debtor.
C)  the debtor plans to pay off old liabilities quicker than it attains new liabilities.
D)  the debtor's creditors will not be adversely affected by the plan.

Question 16

Which of the following items of a debtor's property are exempt in a bankruptcy proceeding under the federal set of exemptions?

Accepted Answer

A)  Life insurance contracts valued at $10,000.
B)  Real or personal property valued at $50,000.
C)  Jewelry with value exceeding $10,000.
D)  Individual retirement account exceeding $2 million.

Question 17

Which of the following bankruptcy proceedings allows a debtor to work out a plan to solve his financial problems under the supervision of federal court?

Accepted Answer

A)  Straight bankruptcy
B)  Family farms and commercial fishing operations
C)  Reorganizations
D)  Consumer debt adjustments

Question 18

If there are insufficient funds to satisfy all the creditors within a class:

Accepted Answer

A)  the debtors have the last say on the amount that each member shall receive.
B)  the class members decide amongst themselves the amount that each of the members should receive.
C)  the court makes a decision regarding the share of each member.
D)  each class member receives a pro rata share of his claim.

Question 19

Which of the following can be discharged in bankruptcy?

Accepted Answer

A)  Debts for restitution or a criminal fine included in a sentence on the debtor's conviction of a crime.
B)  Debts for collection agency accounts.
C)  Debts for restitution or damages awarded in a civil action against the debtor as a result of willful or malicious injury by the debtor that caused personal injury or death.
D)  Debts that result from liabilities for obtaining money by false representations.

Question 20

Which of the following fits within one of the exceptions to the Bankruptcy Code's preference provision?

Accepted Answer

A)  A perfected Article 9 security interest.
B)  A transfer to an insider of the debtor.
C)  A transfer made in the ordinary course of the debtor's business.
D)  A consumer's transfer of less than $2,000 to a creditor who has sold her consumer goods.

Exam 30: Bankruptcy

Under the Bankruptcy Code,a judge is allowed to reduce the debtor's unsecured consumer debt by what percentage?

Correct AnswerverifiedShow Answer

Which Chapter of the Bankruptcy Code covers liquidation?

Correct AnswerverifiedShow Answer

In the case in the text,In re Rogers,the court found in favor of Rogers and held that she was entitled to her full homestead exemption.In reaching this conclusion,the court analyzed:

Correct AnswerverifiedShow Answer

Bill's bicycle business has gone bust.The week before Bill went into bankruptcy,he paid $200 for a used bicycle that he intended to re-sell for a profit.This $200 payment is a preference under Chapter 7.

Correct AnswerverifiedShow Answer

According to the 2005 revisions of the Bankruptcy Code,individual debtors must file,along with their schedules of assets and liabilities:

Correct AnswerverifiedShow Answer

Which of the following fits within one of the exceptions to the Bankruptcy Code's preference provision?

Correct AnswerverifiedShow Answer

Chapter 13 of the Bankruptcy Code provides an advantage to the debtor by which:

Correct AnswerverifiedShow Answer

In a reorganization petition under Chapter 11 of the Bankruptcy Code,if any particular class of creditors rejects the reorganization plan,the court will:

Correct AnswerverifiedShow Answer

If there are insufficient funds to satisfy all the creditors within a class:

Correct AnswerverifiedShow Answer

Straight bankruptcy,also known as liquidation,is covered under Chapter 7 of the Bankruptcy Code.

Correct AnswerverifiedShow Answer

An individual will not be granted a discharge,if such discharge has been granted to the individual within the previous:

Correct AnswerverifiedShow Answer

Bankruptcy judges are appointed by the president for a term of ________ years.

Correct AnswerverifiedShow Answer

Which of the following bankruptcy proceedings allows a debtor to work out a plan to solve his financial problems under the supervision of federal court?

Correct AnswerverifiedShow Answer

The Bankruptcy Abuse,Prevention and Consumer Protection Act of 2005 is the most substantial revision of the bankruptcy law since the Bankruptcy Code was adopted.

Correct AnswerverifiedShow Answer

Which of the following can be discharged in bankruptcy?

Correct AnswerverifiedShow Answer

Which of the following statements about the Bankruptcy Code is false?

Correct AnswerverifiedShow Answer

Which of the following items of a debtor's property are exempt in a bankruptcy proceeding under the federal set of exemptions?

Correct AnswerverifiedShow Answer

As demonstrated in the case in the text,In re Made in Detroit,a reorganization plan must be feasible.A plan is feasible when:

Correct AnswerverifiedShow Answer

In the case in the text,In re Burt,the court concluded that:

Correct AnswerverifiedShow Answer

Which of the following statements about a Chapter 7 trustee is false?

Correct AnswerverifiedShow Answer

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