Exam 28: Bankruptcy and Reorganization

The United States Trustee may perform many of the tasks that the bankruptcy judge had previously performed.

One of the goals of federal bankruptcy law is to give debtors a chance at a fresh start financially.

The effect of an automatic stay is to suspend certain legal actions by creditors against the debtor or the debtor's property.

A debtor is not afforded an automatic stay in a Chapter 11 bankruptcy.

Sole proprietorships may file for Chapter 13 bankruptcy.

The debtor's bankruptcy estate is limited to tangible items.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 makes it easier for debtors to escape from their debts under federal bankruptcy law.

Which of the following debts are usually dischargeable in bankruptcy?

Under the 2005 Act,a debtor may be given only a partial fresh start as he or she may have to pay more of his or her pre-petition bankruptcy debts out of post-petition earnings.

Debtors under a Chapter 11 bankruptcy may not accept executory contracts and unexpired leases.

Amounts owed to a pension plan are dischargeable in bankruptcy.

Which of the following need not appear as part of a voluntary bankruptcy petition?

In a Chapter 7 bankruptcy,a trustee must be appointed.

A homestead exemption refers to the equity in a debtor's home that he or she is allowed to retain.

In a Chapter 11 bankruptcy,the creditors committee is usually composed of:

The bankruptcy judge may attend the first meeting of creditors.

If a business goes into a reorganization bankruptcy and has a contract with its employees to pay certain wages,that business:

What is the most important difference when a business uses Chapter 11 rather than Chapter 7 in a bankruptcy?

Perfect Enterprises filed a Chapter 7 bankruptcy petition.The trustee on the estate has performed all the work,and the trustee is now ready to distribute the assets of the estate.The only asset in the estate is cash of $144,000.The following are all the validly filed claims against the estate.How much would each creditor receive? Trustee's fee $10,000 Attorney fees assisting trustee $6,000 Accountant fees assisting trustee $4,000 Unpaid wages of 5 employees of $1,200 each for month prior to filing of petition $6,000 Federal tax obligations (specified in 11 U.S.C. Section 350) $12,000 Unsecured creditors: Johnson $20,000 Smith $30,000 Jones $30,000 Secured creditors: Brown $80,000 (Brown's collateral was sold for $70,000,and is part of the $144,000 mentioned above,thus Brown has received no payment yet.) How much will each creditor receive in the distribution?

Matt is planning to file for bankruptcy.He wants to keep some of his property,so he gives certain jewelry to his parents,with the understanding that they will return it later.Also,Matt sells his car,worth $5,000,to his girlfriend for $100.These transfers are: