Exam 16: Creditors Rights and Bankruptcy

Donna goes through an involuntary bankruptcy proceeding. An involuntary bankruptcy occurs when

Gem Jewelers files a voluntary petition for bankruptcy. In listing its assets, Gem intentionally does not include certain valuable stones. After Gem is granted a discharge, Hasty Catering, one of Gem's unsecured creditors whose claims were discharged, learns of the fraud. Hasty can

Quotient Financial Corporation is a secured party with a security interest in property owned by Retail Sales Company. Perfection of this security interest may not protect Quotient Financial against the claim of

Jill believes that she should file a plan for a Chapter 13 discharge in bankruptcy. A court will confirm her bankruptcy plan if it provides for all of the following except

Patty files a petition in bankruptcy. At the moment of filing

An employee can be discharged under federal law due to a garnishment order.

A bankruptcy estate consists of all the debtor's interests in property currently held, wherever located.

Wild River Tours Corporation wants to formulate a plan under which it pays a portion of its debts and is discharged of the remainder while continuing in business. To accomplish this goal, Wild River should file a petition in bankruptcy for relief through

Cassie files a voluntary petition in bankruptcy for relief through a liquidation. Among her debts that will not be discharged are claims

A means test determines a debtor's eligibility to file for bankruptcy under Chapter 7.

Attachment gives a creditor an enforceable security interest in collateral.

Creditors hold judgments on overdue debts against AAA Auto Repair when the debtor receives a discharge in bankruptcy. AAA's discharge will

Frances borrows $1,000 from Garden State Bank, using her recreational vehicle (RV) motor home, which she purchased at Hugo's RV Sales & Service, as collateral. To perfect its security interest, the bank must file its financing statement with

In the distribution of the debtor's estate, unsecured creditors take priority over secured creditors.

Milos files a petition in bankruptcy. His dischargeable debts include

Dean files a bankruptcy petition under Chapter 7. If this use of Chapter 7 is found to constitute substantial abuse, the most likely consequence is

A surety can use any defenses available to the principal debtor to avoid liability on the debt.

Loni delivers her Mazda to be repaired at Nile's Body Shop. Loni agrees to pay cash. Nile performs, but Loni does not pay. Nile tells Loni that he will keep the car until she pays. This is

Current City (CC) is a retail seller of television sets. CC sells Dhani a $3,000 large-screen, high-definition, LED set on a retail installment security agreement in which he pays $100 down and agrees to pay the balance in equal installments. CC retains a security interest in the set, and perfects that interest by filing a financing statement centrally. Two months later, Dhani is in default on the payments to CC and is involuntarily petitioned into bankruptcy by other creditors. Discuss CC's right to repossess the TV set.

The length of the payment plan under a Chapter 13 plan can be three to five years, depending on the debtor's family income.