Question 1

Chapter 7 applies to all debtors, with the exception of railroads, insurance companies, banks, savings and loan associations, homestead associations, and credit unions.

Accepted Answer

A) True 
 B)False

Question 2

A fraudulent transfer made more than one year prior to filing cannot be avoided by the trustee.

Accepted Answer

A) True 
 B)False

Question 3

Millard has an allowed claim of $5,000 against the estate of Tabitha and has a security interest in her art collection in the amount of $3,000 of the $5,000 claim.

Accepted Answer

A)  Millard will recover nothing in the bankruptcy proceeding. 
B)  Millard will recover $5,000 in the bankruptcy proceeding. 
C)  Millard has a secured claim in the amount of $3,000 and an unsecured claim in the amount of $2,000. 
D)  It would be a voidable preference to pay Millard the full $5,000. 
A)  Millard will recover nothing in the bankruptcy proceeding. 
B)  Millard will recover $5,000 in the bankruptcy proceeding. 
C)  Millard has a secured claim in the amount of $3,000 and an unsecured claim in the amount of $2,000. 
D)  It would be a voidable preference to pay Millard the full $5,000.

Question 4

In an assignment for the benefit of creditors, if each creditor is paid a pro rata share of his original obligation, the debtor is then discharged from any further obligation to the creditor.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not one of the three ways that the Bankruptcy Code provides for a debtor under Chapter 11 to exit the bankruptcy case ?

Accepted Answer

A)  conversion to a Chapter 7 liquidation 
B)  attachment of property to debts 
C)  confirmation of a plan of reorganization 
D)  dismissal 
A)  conversion to a Chapter 7 liquidation 
B)  attachment of property to debts 
C)  confirmation of a plan of reorganization 
D)  dismissal

Question 6

The Bankruptcy Code grants to U.S. District Courts:

Accepted Answer

A)  original and exclusive jurisdiction over all bankruptcy cases. 
B)  original, but not exclusive, jurisdiction over civil proceedings arising under bankruptcy cases. 
C)  exclusive jurisdiction over all the debtor's property. 
D)  All of these are under the jurisdiction of the U.S. District Courts. 
A)  original and exclusive jurisdiction over all bankruptcy cases. 
B)  original, but not exclusive, jurisdiction over civil proceedings arising under bankruptcy cases. 
C)  exclusive jurisdiction over all the debtor's property. 
D)  All of these are under the jurisdiction of the U.S. District Courts.

Question 7

A debtor may not convert a Chapter 7 case to a Chapter 11 or 13 case.

Accepted Answer

A) True 
 B)False

Question 8

The various chapters of the Bankruptcy Code are the only options for resolving the conflict between creditor rights and debtor relief.

Accepted Answer

A) True 
 B)False

Question 9

Under Chapter ___________, the bankruptcy estate does not include wages earned after commencement of the case.

Accepted Answer

A)  5 
B)  7 
C)  11 
D)  13 
A)  5 
B)  7 
C)  11 
D)  13

Question 10

In a Chapter 7 proceeding, an unsecured creditor who files a claim with the court after the deadline because he is too busy planning and going on a vacation would be totally unable to collect.

Accepted Answer

A) True 
 B)False

Question 11

An automatic stay would prevent a creditor from creating a lien against the debtor's property.

Accepted Answer

A) True 
 B)False

Question 12

Non-bankruptcy compromises to give debtors relief while protecting the rights of creditors include:

Accepted Answer

A)  compositions. 
B)  non-statutory assignments for the benefit of creditors. 
C)  receiverships under the direction of a court with equity powers. 
D)  All of these. 
A)  compositions. 
B)  non-statutory assignments for the benefit of creditors. 
C)  receiverships under the direction of a court with equity powers. 
D)  All of these.

Question 13

Under Chapter 7, the court will not grant the debtor a discharge if the debtor

Accepted Answer

A)  is not an individual. 
B)  has destroyed, concealed, or failed to keep records. 
C)  has transferred, removed, or concealed any of his property with intent to defraud his creditors within 12 months before the filing of the bankruptcy petition. 
D)  All of these. 
A)  is not an individual. 
B)  has destroyed, concealed, or failed to keep records. 
C)  has transferred, removed, or concealed any of his property with intent to defraud his creditors within 12 months before the filing of the bankruptcy petition. 
D)  All of these.

Question 14

Lowell recently graduated from college with a degree in business administration, but has been unable to find a job. He decided to file a Chapter 7 petition with the Bankruptcy Court. He has the following assets: 
a. $1,200 in equity in a new car which he purchased with a loan from the bank. 
b. $5,000 in equity in his residence, a condominium secured by a mortgage. 
c. $100 a week in unemployment benefits after being laid off from his job as a burgermaker at a local restaurant. 
d. $750 in business administration books including a hardly used copy of Mann and Roberts, Business Law and the Regulation of Business. 
e. a $1,000 retainer for his teeth prescribed by his orthodontist. 
His debts are as follows: 
a. $10,000 in student loans. 
b. $20,000 to the bank for his car, which is secured by the car. 
c. $5,000 in unsecured credit card debts. 
Under federal exemptions, what can he keep? What will each of the creditors receive? Explain.

Accepted Answer

Assets-Lowell can keep up to $23,675 in

Question 15

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 request of the debtor, the trustee, or a holder of an unsecured claim. 
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 request of the debtor, the trustee, or a holder of an unsecured claim.

Question 16

A plan for reorganization under Chapter 11 does not have to meet which of the following requirements to be confirmed by the court?

Accepted Answer

A)  Good faith. 
B)  Feasibility. 
C)  Be accepted by all creditors. 
D)  Cash payments for certain classes of creditors. 
A)  Good faith. 
B)  Feasibility. 
C)  Be accepted by all creditors. 
D)  Cash payments for certain classes of creditors.

Question 17

Creditors entitled to priority are paid before:

Accepted Answer

A)  the debtor's attorney. 
B)  secured creditors. 
C)  unsecured creditors who file their claims on time. 
D)  anyone else. 
A)  the debtor's attorney. 
B)  secured creditors. 
C)  unsecured creditors who file their claims on time. 
D)  anyone else.

Question 18

All of the following are dischargeable in bankruptcy EXCEPT:

Accepted Answer

A)  an unsecured note to a bank. 
B)  a car loan. 
C)  domestic support obligations arising from divorce or separation proceedings. 
D)  a court judgment against the debtor. 
A)  an unsecured note to a bank. 
B)  a car loan. 
C)  domestic support obligations arising from divorce or separation proceedings. 
D)  a court judgment against the debtor.

Question 19

An ordinary contract between the debtor and his creditors whereby the creditors receive pro rata a part of their claims and the debtor is discharged from the balance of the claims is:

Accepted Answer

A)  a non-statutory composition. 
B)  a statutory assignment. 
C)  an equity receivership. 
D)  an automatic stay. 
A)  a non-statutory composition. 
B)  a statutory assignment. 
C)  an equity receivership. 
D)  an automatic stay.

Question 20

Under Chapter 11, a class that is not impaired under a plan is deemed to have accepted the plan.

Accepted Answer

A) True 
 B)False

Exam 38: Bankruptcy

Chapter 7 applies to all debtors, with the exception of railroads, insurance companies, banks, savings and loan associations, homestead associations, and credit unions.

A fraudulent transfer made more than one year prior to filing cannot be avoided by the trustee.

Millard has an allowed claim of $5,000 against the estate of Tabitha and has a security interest in her art collection in the amount of $3,000 of the $5,000 claim.

In an assignment for the benefit of creditors, if each creditor is paid a pro rata share of his original obligation, the debtor is then discharged from any further obligation to the creditor.

Which of the following is not one of the three ways that the Bankruptcy Code provides for a debtor under Chapter 11 to exit the bankruptcy case ?

The Bankruptcy Code grants to U.S. District Courts:

A debtor may not convert a Chapter 7 case to a Chapter 11 or 13 case.

The various chapters of the Bankruptcy Code are the only options for resolving the conflict between creditor rights and debtor relief.

Under Chapter ___________, the bankruptcy estate does not include wages earned after commencement of the case.

In a Chapter 7 proceeding, an unsecured creditor who files a claim with the court after the deadline because he is too busy planning and going on a vacation would be totally unable to collect.

An automatic stay would prevent a creditor from creating a lien against the debtor's property.

Non-bankruptcy compromises to give debtors relief while protecting the rights of creditors include:

Under Chapter 7, the court will not grant the debtor a discharge if the debtor

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

A plan for reorganization under Chapter 11 does not have to meet which of the following requirements to be confirmed by the court?

Creditors entitled to priority are paid before:

All of the following are dischargeable in bankruptcy EXCEPT:

An ordinary contract between the debtor and his creditors whereby the creditors receive pro rata a part of their claims and the debtor is discharged from the balance of the claims is:

Under Chapter 11, a class that is not impaired under a plan is deemed to have accepted the plan.

Introduction to Law

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Civil Dispute Resolution

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Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

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Performance Breach and Discharge

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Introduction to Sales and Leases

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Transfer and Holder in Due Course

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Relationship of Principal and Agent

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Formation and Internal Relations of General Partnerships

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Nature and Formation of Corporations

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Fundamental Changes of Corporations

Secured Transactions and Suretyship

Securities Regulation

Intellectual Property

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Introduction to Property Property Insurance Bailments and Documents of Title

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