Question 1

The 1994 amendments to the Bankruptcy Code require that the U.S. Judicial Conference adjust for inflation the dollar amounts of certain provisions of the Code every:

Accepted Answer

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

Question 2

Stephens, an employee of bankrupt ABC Company, would be able to receive her $2,000 in unpaid wages earned within 90 days before ABC's filing of the bankruptcy petition and $2,000 in contributions to her employee benefit plans, for a total of $4,000 before any money is paid to Ramsdell, a consumer, to compensate him for a deposit paid to the company for goods which were never delivered because of the company's going bankrupt.

Accepted Answer

A) True 
 B)False

Question 3

An assignment for the benefit of creditors requires the creditors' consent

Accepted Answer

A) True 
 B)False

Question 4

A writ of execution is issued after a judgment against the debtor is entered in court.

Accepted Answer

A) True 
 B)False

Question 5

A debtor has the option of using either federal or state exemptions; however, the 2005 Act imposes limits on the use of a state homestead exemption to the extent that the homestead was obtained through fraudulent conversion of nonexempt assets at any time before filing the bankruptcy petition.

Accepted Answer

A) True 
 B)False

Question 6

A Chapter 13 plan of reorganization may include all but which one of the following?

Accepted Answer

A)  Priority debts must be paid in full unless the debtor waives that right. 
B)  The trustee must control future wages. 
C)  Assets must be liquidated. 
D)  The rights of secured and unsecured creditors may be modified. 
A)  Priority debts must be paid in full unless the debtor waives that right. 
B)  The trustee must control future wages. 
C)  Assets must be liquidated. 
D)  The rights of secured and unsecured creditors may be modified.

Question 7

Edward's Excursions Inc. filed for Chapter 7 bankruptcy. It has $80,000 in equity and has the following debts outstanding:
$50,000 to Arthur secured by a boat worth $25,000.
$30,000 to Bradley secured by a truck worth $30,000.
$20,000 to Clarence unsecured.
The month before Edward closed and filed for bankruptcy, his employees earned $4,000 but did not get paid. Edward's owes $4,000 in back taxes. In the process of administering the estate, the trustee paid $5,000 in attorney fees. In what order will these claims be paid?

Accepted Answer

Secured-Arthur gets $25,000 from the boa

Question 8

A debtor who files for bankruptcy can keep up to $1,550 in jewelry and all social security, veteran's, and disability
benefits under the exemptions found in the Bankruptcy Code.

Accepted Answer

A) True 
 B)False

Question 9

Chapter 5 involves liquidation, whereas Chapters 7, 11, 12, and 13 involve reorganization and adjustment of debts.

Accepted Answer

A) True 
 B)False

Question 10

No private employer may terminate the employment of or discriminate with respect to employment against an individual solely because he is or has been a debtor under the Bankruptcy Code.

Accepted Answer

A) True 
 B)False

Question 11

Bankruptcy under Chapter 13 differs from Chapter 11 in that:

Accepted Answer

A)  an individual cannot use Chapter 11. 
B)  a corporation cannot use Chapter 13. 
C)  Chapter 11 cannot be instituted by involuntary petition. 
D)  Chapter 13 requires unsecured debts to be less than $100,000. 
A)  an individual cannot use Chapter 11. 
B)  a corporation cannot use Chapter 13. 
C)  Chapter 11 cannot be instituted by involuntary petition. 
D)  Chapter 13 requires unsecured debts to be less than $100,000.

Question 12

A statutory lien arises solely by force of statute and includes a security interest or judicial lien.

Accepted Answer

A) True 
 B)False

Question 13

A trustee in bankruptcy may avoid which of the following?

Accepted Answer

A)  Fraudulent transfers 
B)  Voidable preferences 
C)  Automatic stays 
D)  Both fraudulent transfers and voidable preferences 
A)  Fraudulent transfers 
B)  Voidable preferences 
C)  Automatic stays 
D)  Both fraudulent transfers and voidable preferences

Question 14

A receiver is a disinterested person who collects and preserves the debtor's assets and income and disposes of them at the direction of the court which appointed the receiver.

Accepted Answer

A) True 
 B)False

Question 15

A composition of creditors is a bankruptcy form of relief under Chapter 13 of the Bankruptcy Code.

Accepted Answer

A) True 
 B)False

Question 16

Once a Chapter 13 plan has been confirmed, it may:

Accepted Answer

A)  be modified at the debtor's request but only if the trustee agrees. 
B)  be modified only if all unsecured creditors agree. 
C)  not be modified. 
D)  be modified at the debtor's request. 
A)  be modified at the debtor's request but only if the trustee agrees. 
B)  be modified only if all unsecured creditors agree. 
C)  not be modified. 
D)  be modified at the debtor's request.

Question 17

All but which one of the following is a purpose of bankruptcy legislation?

Accepted Answer

A)  To preserve existing business relations 
B)  To punish recalcitrant debtors 
C)  To fairly divide the assets among creditors 
D)  To allow rehabilitation of debtors 
A)  To preserve existing business relations 
B)  To punish recalcitrant debtors 
C)  To fairly divide the assets among creditors 
D)  To allow rehabilitation of debtors

Question 18

Chapter 12 of the Bankruptcy Code applies to individuals or couples engaged in farming if 50 percent of their gross income is from farming and aggregate debts do not exceed $1 million.

Accepted Answer

A) True 
 B)False

Question 19

Which chapter of the Bankruptcy Code allows for the adjustment of debts of an individual with regular income?

Accepted Answer

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

Question 20

An involuntary petition in bankruptcy:

Accepted Answer

A)  eliminates the operation of an automatic stay. 
B)  may only be filed under Chapter 7 or 11. 
C)  must be filed by the trustee. 
D)  eliminates the need for the court to order a discharge. 
A)  eliminates the operation of an automatic stay. 
B)  may only be filed under Chapter 7 or 11. 
C)  must be filed by the trustee. 
D)  eliminates the need for the court to order a discharge.

Exam 38: Bankruptcy

The 1994 amendments to the Bankruptcy Code require that the U.S. Judicial Conference adjust for inflation the dollar amounts of certain provisions of the Code every:

An assignment for the benefit of creditors requires the creditors' consent

A writ of execution is issued after a judgment against the debtor is entered in court.

A debtor has the option of using either federal or state exemptions; however, the 2005 Act imposes limits on the use of a state homestead exemption to the extent that the homestead was obtained through fraudulent conversion of nonexempt assets at any time before filing the bankruptcy petition.

A Chapter 13 plan of reorganization may include all but which one of the following?

A debtor who files for bankruptcy can keep up to $1,550 in jewelry and all social security, veteran's, and disability benefits under the exemptions found in the Bankruptcy Code.

Chapter 5 involves liquidation, whereas Chapters 7, 11, 12, and 13 involve reorganization and adjustment of debts.

No private employer may terminate the employment of or discriminate with respect to employment against an individual solely because he is or has been a debtor under the Bankruptcy Code.

Bankruptcy under Chapter 13 differs from Chapter 11 in that:

A statutory lien arises solely by force of statute and includes a security interest or judicial lien.

A trustee in bankruptcy may avoid which of the following?

A receiver is a disinterested person who collects and preserves the debtor's assets and income and disposes of them at the direction of the court which appointed the receiver.

A composition of creditors is a bankruptcy form of relief under Chapter 13 of the Bankruptcy Code.

Once a Chapter 13 plan has been confirmed, it may:

All but which one of the following is a purpose of bankruptcy legislation?

Chapter 12 of the Bankruptcy Code applies to individuals or couples engaged in farming if 50 percent of their gross income is from farming and aggregate debts do not exceed $1 million.

Which chapter of the Bankruptcy Code allows for the adjustment of debts of an individual with regular income?

An involuntary petition in bankruptcy:

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