Question 1

The automatic stay in a straight bankruptcy proceeding generally does not apply to:

Accepted Answer

A)  actions taken by unsecured creditors 
B)  actions taken by secured creditors 
C)  actions to collect alimony or child support 
D)  actions to repossess collateral 
E)  C and D only 
A)  actions taken by unsecured creditors 
B)  actions taken by secured creditors 
C)  actions to collect alimony or child support 
D)  actions to repossess collateral 
E)  C and D only

Question 2

The debtor in a Chapter 13 proceeding can keep more property than under a Chapter 7 proceeding.

Accepted Answer

A) True 
 B)False

Question 3

What is the primary purpose of federal bankruptcy law?

Accepted Answer

A)  to protect creditors 
B)  to treat all creditors equally 
C)  to preserve business relationships 
D)  to discharge the debtor from burdensome debts by giving him a fresh start 
A)  to protect creditors 
B)  to treat all creditors equally 
C)  to preserve business relationships 
D)  to discharge the debtor from burdensome debts by giving him a fresh start

Question 4

Freddie has gone crazy with the use of his credit cards over the past several years.He would get a cash advance on one card to pay off another.He now owes a total of $80,000,all of it on credit cards,and has $40,000 equity in his house and other assets of $13,000.Assuming Freddie has a steady job paying $20,000,Freddie can:

Accepted Answer

A)  not file for a consumer debt adjustment because his debts exceed his assets 
B)  not file for a consumer debt adjustment because it would take an unreasonably long time to pay off his debts based on his current salary 
C)  keep the equity in his home if he reaches a composition or extension agreement 
D)  file for a consumer debt adjustment only if he relinquishes the equity in his house 
E)  file for a Chapter 7 bankruptcy only 
A)  not file for a consumer debt adjustment because his debts exceed his assets 
B)  not file for a consumer debt adjustment because it would take an unreasonably long time to pay off his debts based on his current salary 
C)  keep the equity in his home if he reaches a composition or extension agreement 
D)  file for a consumer debt adjustment only if he relinquishes the equity in his house 
E)  file for a Chapter 7 bankruptcy only

Question 5

In addition to federal bankruptcy laws,there are individual state bankruptcy laws as well.

Accepted Answer

A) True 
 B)False

Question 6

The means test refers to an easy way to determine whether the debtor has the means to pay pre-petition debts.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is the correct sequence of priorities,from highest to lowest,of the claims listed below? 1.Unsecured creditors.
2)Fees and expenses of administering the estate.
3)Specified tax obligations.
4)Unsecured wages up to $2,000 earned within the appropriate time period.

Accepted Answer

A)  1,2,3,4 
B)  2,3,4,1 
C)  2,4,3,1 
D)  2,4,1,3 
E)  3,2,4,1 
A)  1,2,3,4 
B)  2,3,4,1 
C)  2,4,3,1 
D)  2,4,1,3 
E)  3,2,4,1

Question 8

An involuntary petition for bankruptcy is filed by a creditor,or creditors,and places the debtor into bankruptcy.

Accepted Answer

A) True 
 B)False

Question 9

Personal property that is subject to an unexpired lease and is not exempt must be surrendered by the debtor,redeemed by paying the secured lien in full or the debtor must assume the unexpired lease.

Accepted Answer

A) True 
 B)False

Question 10

In a bankruptcy,the representative of the bankrupt estate is known as the:

Accepted Answer

A)  supervisor 
B)  adjutant 
C)  arbitrator 
D)  trustee 
A)  supervisor 
B)  adjutant 
C)  arbitrator 
D)  trustee

Question 11

What is an exemption under the bankruptcy laws?

Accepted Answer

A)  a debt that does not need to be paid 
B)  a debt that is not forgiven 
C)  an asset that is not required to be used toward satisfaction of debts 
D)  an administrative expense that does not need to be paid 
E)  a law with which one need not comply 
A)  a debt that does not need to be paid 
B)  a debt that is not forgiven 
C)  an asset that is not required to be used toward satisfaction of debts 
D)  an administrative expense that does not need to be paid 
E)  a law with which one need not comply

Question 12

Unsecured creditors must confirm a Chapter 13 plan.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is true about the discharge of debts in bankruptcy?

Accepted Answer

A)  Claims that the debtor has not listed on her schedule of debts are not discharged. 
B)  No tax claims are discharged. 
C)  All fines and penalties payable to the government are discharged. 
D)  Debts caused by the debtor's use of poor business judgment are not discharged. 
E)  All cash advances obtained by the debtor on a revolving line of credit prior to the filing of the bankruptcy petition are discharged. 
A)  Claims that the debtor has not listed on her schedule of debts are not discharged. 
B)  No tax claims are discharged. 
C)  All fines and penalties payable to the government are discharged. 
D)  Debts caused by the debtor's use of poor business judgment are not discharged. 
E)  All cash advances obtained by the debtor on a revolving line of credit prior to the filing of the bankruptcy petition are discharged.

Question 14

Mary borrowed $50,000 in student loans to become a doctor.Her parents cosigned the loans.Now,the loans have become due,and Mary wants to discharge them in bankruptcy.Which of the following statements best describes Mary's possible recourse?

Accepted Answer

A)  Student loans cannot be discharged unless Mary proves "undue hardship." 
B)  Student loans cannot be discharged within 5 years unless Mary proves "undue hardship." 
C)  Even though Mary must wait to discharge her debt,her parents can discharge their obligation immediately. 
A)  Student loans cannot be discharged unless Mary proves "undue hardship." 
B)  Student loans cannot be discharged within 5 years unless Mary proves "undue hardship." 
C)  Even though Mary must wait to discharge her debt,her parents can discharge their obligation immediately.

Exam 28: Bankruptcy and Reorganization

The automatic stay in a straight bankruptcy proceeding generally does not apply to:

The debtor in a Chapter 13 proceeding can keep more property than under a Chapter 7 proceeding.

What is the primary purpose of federal bankruptcy law?

In addition to federal bankruptcy laws,there are individual state bankruptcy laws as well.

The means test refers to an easy way to determine whether the debtor has the means to pay pre-petition debts.

Which of the following is the correct sequence of priorities,from highest to lowest,of the claims listed below? 1.Unsecured creditors. 2)Fees and expenses of administering the estate. 3)Specified tax obligations. 4)Unsecured wages up to $2,000 earned within the appropriate time period.

An involuntary petition for bankruptcy is filed by a creditor,or creditors,and places the debtor into bankruptcy.

Personal property that is subject to an unexpired lease and is not exempt must be surrendered by the debtor,redeemed by paying the secured lien in full or the debtor must assume the unexpired lease.

In a bankruptcy,the representative of the bankrupt estate is known as the:

What is an exemption under the bankruptcy laws?

Unsecured creditors must confirm a Chapter 13 plan.

Which of the following is true about the discharge of debts in bankruptcy?

Mary borrowed $50,000 in student loans to become a doctor.Her parents cosigned the loans.Now,the loans have become due,and Mary wants to discharge them in bankruptcy.Which of the following statements best describes Mary's possible recourse?

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