Exam 26: Bankruptcy

Under Chapter 7, once the proceeds have been distributed, the obligations of the debtor most likely to be discharged are

Under Chapter 13, a plan may provide for the payment of all of the debtor's obligations in full.

Bankruptcy relief is provided under state, not federal, law.

In a Chapter 7 proceeding, at a meeting of creditors, one of the creditors is elected to take over the debtor's assets.

In a Chapter 11 proceeding, a debtor corporation and its creditors agree on a plan under which the corporation pays a portion of its debt.

With respect to debtors, the main goal of bankruptcy law is to

In a Chapter 7 proceeding, the bankruptcy trustee collects the debtor's estate and reduces it to cash, preserving the interests of the debtor and creditors.

Construction 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

Each state permits a debtor in bankruptcy to retain the family home in order to preserve some equity to pay any debts that are discharged.

In a Chapter 7 bankruptcy, on a finding that the use of Chapter 7 would constitute substantial abuse, the court is most likely to

Shippers Dispatch Corporation orders office equipment from Office Outfitters, Inc., which has an unperfected security interest in the equipment until it is paid for. Meanwhile, Shippers Dispatch takes out a loan from Capital Credit, Inc., subject to a security interest in Shippers Dispatch's building and equipment, which Capital perfects. Shippers Dispatch files a bankruptcy petition under Chapter 7. If the petition is granted, in what order will Shippers Dispatch's creditors be paid?

eGear is a retail seller of phones, TVs, and other consumer electronic equipment. eGear sells Fiona a $2,400 television set on a retail installment security agreement on which she pays $100 down and agrees to pay the balance in equal installments. eGear retains a security interest in the set, and perfects that interest by filing a financing statement. Two months later, Fiona is in default on the payments to eGear and is involuntarily petitioned into bankruptcy by other creditors. Discuss eGear's right to repossess the TV set or to be paid on the debt.

A bankruptcy trustee must determine whether the debtor's financial situation warrants relief based on a comparison of the debtor's income with

Under Chapter 11, soon after the entry of the order for relief

A debtor cannot defend against an involuntary bankruptcy petition because that would be contrary to the definition of involuntary.

A debtor who makes false statements under oath may be denied a discharge of his or her debts in the bankruptcy proceeding.

Only the debtor may file a plan under Chapter 13.

In addition to financial statements, each voluntary petition in bankruptcy must include

Under Chapter 11, the debtor's obligations most likely to be discharged are

Dana operates Energy Inc., a corporation in the fuel-supply business. Dana wants to create a plan under which the firm pays a portion of its debts, is discharged of the remainder, and is allowed to continue in business. Energy should file a petition in bankruptcy for relief through