Question 1

Jaxine, whose debts are primarily consumer debts, files for Chapter 7 bankruptcy. Discuss the grounds for which the court might dismiss her case.

Accepted Answer

A court may dismiss a Chapter 7 case for

Question 2

A trustee in bankruptcy under Chapter 7 may sell the property of the debtor's estate.

Accepted Answer

A) True 
 B)False

Question 3

Fritz is seriously considering bankruptcy, because he has a large number of outstanding debts, the principal ones of which are as follows: (1) he owes his ex-wife $25,000 in back alimony and child support; (2) he owes $20,000 in guaranteed student loans; (3) he has a lawsuit pending against him in which his ex-girlfriend is asking for $50,000 in damages (the suit is based upon the intentional tort of battery and arises from an incident in which Fritz got mad at his girlfriend and hit her); and (4) he owes the First Bank $20,000 for a loan secured by his new sports car. Should Fritz file for bankruptcy?

Accepted Answer

Unless Fritz has other large debts, he s

Question 4

Which of the following are NOT duties of a trustee under Chapter 7?

Accepted Answer

A)  To use, sell, or lease property of the estate. 
B)  To employ attorneys, accountants, appraisers, or auctioneers and assume or reject any executory contract or unexpired lease of the debtor. 
C)  To rehabilitate the accounts of the debtor. 
D)  To deposit or invest money of the estate 
A)  To use, sell, or lease property of the estate. 
B)  To employ attorneys, accountants, appraisers, or auctioneers and assume or reject any executory contract or unexpired lease of the debtor. 
C)  To rehabilitate the accounts of the debtor. 
D)  To deposit or invest money of the estate

Question 5

The bankruptcy definition of "insolvency" is a financial condition such that the sum of one's debts exceeds the sum of all one's property at fair valuation.

Accepted Answer

A) True 
 B)False

Question 6

Chapter 3 of the Bankruptcy Code contains provisions dealing with the commencement of a case in bankruptcy.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is NOT true of United States trustees:

Accepted Answer

A)  are government officials appointed by the U.S. Attorney General. 
B)  have administrative responsibilities in bankruptcy cases in almost all of the districts. 
C)  select bankruptcy trustees. 
D)  are the same as bankruptcy trustees. 
A)  are government officials appointed by the U.S. Attorney General. 
B)  have administrative responsibilities in bankruptcy cases in almost all of the districts. 
C)  select bankruptcy trustees. 
D)  are the same as bankruptcy trustees.

Question 8

In a Chapter 11 or 13 proceeding, the bankruptcy estate of an individual includes wages earned after commencement of the proceeding.

Accepted Answer

A) True 
 B)False

Question 9

The doctrine of subordination of claims might result in two unsecured creditors getting unequal proportions of their debts paid.

Accepted Answer

A) True 
 B)False

Question 10

The Bankruptcy Code exempts specified property of an individual debtor from bankruptcy. What are some of these exemptions?

Accepted Answer

Specified property would include the fol

Question 11

Individual debtors must receive credit counseling before filing a bankruptcy petition under most circumstances.

Accepted Answer

A) True 
 B)False

Question 12

Confirmation of a plan for reorganization under Chapter 13 may be given only if:

Accepted Answer

A)  the plan complies with applicable law and is given in good faith. 
B)  the plan provides for payments longer than three years. 
C)  the debtor remains in possession of the estate. 
D)  all of the creditors agree to accept it. 
A)  the plan complies with applicable law and is given in good faith. 
B)  the plan provides for payments longer than three years. 
C)  the debtor remains in possession of the estate. 
D)  all of the creditors agree to accept it.

Question 13

In liquidation cases the creditors look to the debtor's property at the commencement of the bankruptcy proceeding.

Accepted Answer

A) True 
 B)False

Question 14

In March, Margaret made a loan to Pete for $10,000. Three months later, she began to hear rumors about Pete's failing financial condition. When in July, Pete asked her to loan him an additional $2,000 to buy inventory, Margaret required a security interest in the inventory and also demanded that Pete secure the first loan with his personal automobile. In September, Pete filed bankruptcy. Will these security interests stand up?

Accepted Answer

A)  Yes, if they are properly filed. 
B)  Yes, since they are for antecedent debts. 
C)  No, both will be voidable preferences. 
D)  No, the security interest in the automobile would be a voidable preference. 
A)  Yes, if they are properly filed. 
B)  Yes, since they are for antecedent debts. 
C)  No, both will be voidable preferences. 
D)  No, the security interest in the automobile would be a voidable preference.

Question 15

Any person who may be a debtor under Chapter 7, except a stockbroker or a commodity broker but including railroads, may be a debtor under Chapter 11.

Accepted Answer

A) True 
 B)False

Question 16

The 1994 amendments allow the creditors to elect a trustee in a Chapter 11 proceeding if the court orders the appointment of a trustee for cause.

Accepted Answer

A) True 
 B)False

Question 17

While certain debts of an individual are not dischargeable under Chapters 7, 11, and 12, all debts are dischargeable under Chapter 13's "hardship discharge" provisions.

Accepted Answer

A) True 
 B)False

Exam 38: Bankruptcy

Jaxine, whose debts are primarily consumer debts, files for Chapter 7 bankruptcy. Discuss the grounds for which the court might dismiss her case.

A trustee in bankruptcy under Chapter 7 may sell the property of the debtor's estate.

Which of the following are NOT duties of a trustee under Chapter 7?

The bankruptcy definition of "insolvency" is a financial condition such that the sum of one's debts exceeds the sum of all one's property at fair valuation.

Chapter 3 of the Bankruptcy Code contains provisions dealing with the commencement of a case in bankruptcy.

Which of the following is NOT true of United States trustees:

In a Chapter 11 or 13 proceeding, the bankruptcy estate of an individual includes wages earned after commencement of the proceeding.

The doctrine of subordination of claims might result in two unsecured creditors getting unequal proportions of their debts paid.

The Bankruptcy Code exempts specified property of an individual debtor from bankruptcy. What are some of these exemptions?

Individual debtors must receive credit counseling before filing a bankruptcy petition under most circumstances.

Confirmation of a plan for reorganization under Chapter 13 may be given only if:

In liquidation cases the creditors look to the debtor's property at the commencement of the bankruptcy proceeding.

Any person who may be a debtor under Chapter 7, except a stockbroker or a commodity broker but including railroads, may be a debtor under Chapter 11.

The 1994 amendments allow the creditors to elect a trustee in a Chapter 11 proceeding if the court orders the appointment of a trustee for cause.

While certain debts of an individual are not dischargeable under Chapters 7, 11, and 12, all debts are dischargeable under Chapter 13's "hardship discharge" provisions.

Introduction to Law

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