Question 1

A(n)________ provides for the reduction of a debtor's debts.

Accepted Answer

A) extension 
B) liquidation 
C) limitation 
D) composition 
A) extension 
B) liquidation 
C) limitation 
D) composition D

Question 2

Under Chapter 13, a debtor retains more property than is exempt under Chapter 7 liquidation.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following is true of a Chapter 13 petition?

Accepted Answer

A) It can be filed by all individual debtors, irrespective of their income. 
B) The petitioner need not demand an extension or composition. 
C) To qualify for Chapter 13, the debts must primarily be consumer debt. 
D) Creditors can file a Chapter 13 petition claiming payment from a debtor. 
A) It can be filed by all individual debtors, irrespective of their income. 
B) The petitioner need not demand an extension or composition. 
C) To qualify for Chapter 13, the debts must primarily be consumer debt. 
D) Creditors can file a Chapter 13 petition claiming payment from a debtor. C

Question 4

If the value of the collateral securing the secured loan is less than the secured interest, the secured creditor is an oversecured creditor.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is true of a debtor's bankruptcy estate?

Accepted Answer

A) Only intangible personal property constitutes the bankruptcy estate. 
B) No property solely owned by the debtor is exempted from constituting the bankruptcy estate. 
C) Creditors are allowed to claim exempt property. 
D) Government benefits and compensations are exempted from constituting the bankruptcy estate. 
A) Only intangible personal property constitutes the bankruptcy estate. 
B) No property solely owned by the debtor is exempted from constituting the bankruptcy estate. 
C) Creditors are allowed to claim exempt property. 
D) Government benefits and compensations are exempted from constituting the bankruptcy estate.

Question 6

A means test is used to determine whether ________.

Accepted Answer

A) the debtor's median family income is less than the state's median family income 
B) the debtor's median family income is more than the state's median family income 
C) the debtor has the capability to pay prepetition debts out of postpetition income 
D) the debtor would qualify to file for bankruptcy under Chapter 13 
A) the debtor's median family income is less than the state's median family income 
B) the debtor's median family income is more than the state's median family income 
C) the debtor has the capability to pay prepetition debts out of postpetition income 
D) the debtor would qualify to file for bankruptcy under Chapter 13

Question 7

Sam wants to file a petition for bankruptcy.Which of the following is true in this context?

Accepted Answer

A) Sam need not submit a list of creditors; it is obtained by the court upon investigation. 
B) Sam's bankruptcy petition cannot be filed electronically. 
C) Only Sam's attorney can file his bankruptcy petition. 
D) Sam's attorney is liable for perjury if information filed by Sam is incorrect. 
A) Sam need not submit a list of creditors; it is obtained by the court upon investigation. 
B) Sam's bankruptcy petition cannot be filed electronically. 
C) Only Sam's attorney can file his bankruptcy petition. 
D) Sam's attorney is liable for perjury if information filed by Sam is incorrect.

Question 8

According to the 2005 bankruptcy act, when is a debtor granted Chapter 7 relief?

Accepted Answer

A) six years following Chapter 11 relief 
B) four years following Chapter 11 relief 
C) six years following Chapter 12 relief 
D) twelve years following Chapter 13 relief 
A) six years following Chapter 11 relief 
B) four years following Chapter 11 relief 
C) six years following Chapter 12 relief 
D) twelve years following Chapter 13 relief

Question 9

What is liquidation? How does the Bankruptcy Abuse Prevention and Consumer
Protection Act of 2005 affect the process of liquidation?

Accepted Answer

In liquidation, the debtor is permitted

Question 10

A creditor's action of perfecting liens against a debtor's property cannot be stayed.

Accepted Answer

A) True 
 B)False

Question 11

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 makes it more difficult for debtors to file for bankruptcy and have their unpaid debts discharged.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following does a Chapter 11 automatic stay provide?

Accepted Answer

A) automatic discharge of secured debts 
B) suspension of certain legal actions against the debtor 
C) creditors' foreclosure on assets given as collateral for loans 
D) automatic discharge of unsecured debts 
A) automatic discharge of secured debts 
B) suspension of certain legal actions against the debtor 
C) creditors' foreclosure on assets given as collateral for loans 
D) automatic discharge of unsecured debts

Question 13

Briefly explain the Chapter 11 plan of reorganization.

Accepted Answer

The debtor has the exclusive right to fi

Question 14

Which of the following is true of Chapter 11 of the Bankruptcy Code?

Accepted Answer

A) Chapter 11 is a rehabilitation form of bankruptcy that permits bankruptcy courts to supervise the debtor's plan for the payment of unpaid debts. 
B) The filing of a Chapter 11 petition immediately enables creditors to recover the debtor's property. 
C) Chapter 11 helps the debtor reorganize with a new capital structure so that the debtor emerges from bankruptcy as a viable concern. 
D) Chapter 11 does not permit a debtor to reject executory contracts or unexpired leases. 
A) Chapter 11 is a rehabilitation form of bankruptcy that permits bankruptcy courts to supervise the debtor's plan for the payment of unpaid debts. 
B) The filing of a Chapter 11 petition immediately enables creditors to recover the debtor's property. 
C) Chapter 11 helps the debtor reorganize with a new capital structure so that the debtor emerges from bankruptcy as a viable concern. 
D) Chapter 11 does not permit a debtor to reject executory contracts or unexpired leases.

Question 15

A debtor-in-possession is a debtor who is left in place to operate the business during the reorganization proceeding.

Accepted Answer

A) True 
 B)False

Question 16

An executory contract refers to a contract or lease that has not been fully performed.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following bankruptcy methods allows the reorganization of the debtor's financial affairs under the supervision of the bankruptcy court?

Accepted Answer

A) Chapter 11 
B) Chapter 13 
C) Chapter 7 
D) Chapter 12 
A) Chapter 11 
B) Chapter 13 
C) Chapter 7 
D) Chapter 12

Question 18

What is a homestead exemption?

Accepted Answer

A) investment in realty that a debtor must forfeit 
B) equity in a home that a debtor is permitted to retain 
C) remainder of the debtor's interest in commercial property that is returned to him after fulfilling creditors' claims 
D) all of the debtor's assets converted to cash 
A) investment in realty that a debtor must forfeit 
B) equity in a home that a debtor is permitted to retain 
C) remainder of the debtor's interest in commercial property that is returned to him after fulfilling creditors' claims 
D) all of the debtor's assets converted to cash

Question 19

A(n)________ provision is a provision whereby the court confirms a plan of reorganization over an objecting class of creditors if certain requirements are met.

Accepted Answer

A) cram-down 
B) acceptance 
C) discharge 
D) liquidation 
A) cram-down 
B) acceptance 
C) discharge 
D) liquidation

Question 20

If the value of the secured interest is lesser than the collateral securing the secured loan, the secured creditor is a(n)________.

Accepted Answer

A) the secured creditor is an undersecured creditor 
B) the secured creditor is an oversecured creditor 
C) the debtor is at default 
D) the debtor does not qualify for Chapter 7 bankruptcy 
A) the secured creditor is an undersecured creditor 
B) the secured creditor is an oversecured creditor 
C) the debtor is at default 
D) the debtor does not qualify for Chapter 7 bankruptcy

Exam 28: Bankruptcy and Reorganization

A(n)________ provides for the reduction of a debtor's debts.

Under Chapter 13, a debtor retains more property than is exempt under Chapter 7 liquidation.

Which of the following is true of a Chapter 13 petition?

If the value of the collateral securing the secured loan is less than the secured interest, the secured creditor is an oversecured creditor.

Which of the following is true of a debtor's bankruptcy estate?

A means test is used to determine whether ________.

Sam wants to file a petition for bankruptcy.Which of the following is true in this context?

According to the 2005 bankruptcy act, when is a debtor granted Chapter 7 relief?

What is liquidation? How does the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 affect the process of liquidation?

A creditor's action of perfecting liens against a debtor's property cannot be stayed.

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 makes it more difficult for debtors to file for bankruptcy and have their unpaid debts discharged.

Which of the following does a Chapter 11 automatic stay provide?

Briefly explain the Chapter 11 plan of reorganization.

Which of the following is true of Chapter 11 of the Bankruptcy Code?

A debtor-in-possession is a debtor who is left in place to operate the business during the reorganization proceeding.

An executory contract refers to a contract or lease that has not been fully performed.

Which of the following bankruptcy methods allows the reorganization of the debtor's financial affairs under the supervision of the bankruptcy court?

What is a homestead exemption?

A(n)________ provision is a provision whereby the court confirms a plan of reorganization over an objecting class of creditors if certain requirements are met.

If the value of the secured interest is lesser than the collateral securing the secured loan, the secured creditor is a(n)________.

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