Question 1

Pre-judgment attachment permits a creditor to seize the debtor's property:

Accepted Answer

A)  to prevent the debtor from disposing of assets before litigation would result in a judgment for the creditor. 
B)  if the defendant has not paid his debts on time. 
C)  when the defendant has filed for bankruptcy. 
D)  if the defendant cannot be persuaded to come to court. 
A)  to prevent the debtor from disposing of assets before litigation would result in a judgment for the creditor. 
B)  if the defendant has not paid his debts on time. 
C)  when the defendant has filed for bankruptcy. 
D)  if the defendant cannot be persuaded to come to court.

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

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 4

A debt is an obligation to pay money owed by a debtor to a creditor.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Powell has loaned Owen $500, which Owen agreed to repay on January 15, 2019.If Owen files a voluntary petition of bankruptcy on August 1, 2018, Powell has a claim as a creditor.

Accepted Answer

A) True 
 B)False

Question 7

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 8

Which of the following would not be a voidable transfer if made within 90 days of bankruptcy?

Accepted Answer

A)  An exchange for new value. 
B)  A consumer's transfer of property valued at $500. 
C)  A payment made in the ordinary course of business. 
D)  None of the above are voidable transfers. 
A)  An exchange for new value. 
B)  A consumer's transfer of property valued at $500. 
C)  A payment made in the ordinary course of business. 
D)  None of the above are voidable transfers.

Question 9

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 10

Reba files a Chapter 7 petition in bankruptcy.She owns the following property: (1) an automobile valued at $2,800; (2) a homestead valued at $80,000, on which First Bank holds a mortgage of $60,000; (3) personal jewelry valued at $1,100; and (4) monthly disability payments of $1,000.Assuming Reba elects to use the exemptions listed in the Bankruptcy Code, what property may she keep?

Accepted Answer

A)  The disability payments only. 
B)  The disability payments and the homestead only. 
C)  The disability payments plus the automobile, the homestead, and the jewelry. 
D)  Nothing. She must sell all of her assets and have the proceeds distributed to the creditors, and she must turn the disability payments over to the trustee. 
A)  The disability payments only. 
B)  The disability payments and the homestead only. 
C)  The disability payments plus the automobile, the homestead, and the jewelry. 
D)  Nothing. She must sell all of her assets and have the proceeds distributed to the creditors, and she must turn the disability payments over to the trustee.

Question 11

According to the 1994 amendments to the Bankruptcy Act, the U.S.Judicial Conference must adjust for inflation the dollar amounts of the requirements for filing involuntary cases, priorities, and exemptions every seven years.

Accepted Answer

A) True 
 B)False

Question 12

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 13

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 14

A debtor will be denied a Chapter 7 discharge if he or she has received a Chapter 13 discharge within the past six years:

Accepted Answer

A)  unless payments under that Chapter's plan totaled at least 100% of allowed unsecured claims. 
B)  unless payments under Chapter 13 totaled at least 70% of allowed unsecured claims and the plan was the debtor's best effort. 
C)  In all events. 
D)  Both (a) and (b) are alternative exceptions to the six-year rule. 
A)  unless payments under that Chapter's plan totaled at least 100% of allowed unsecured claims. 
B)  unless payments under Chapter 13 totaled at least 70% of allowed unsecured claims and the plan was the debtor's best effort. 
C)  In all events. 
D)  Both (a) and (b) are alternative exceptions to the six-year rule.

Question 15

Margaret has $3,200 cash after selling off her television, sound system, and personal computer.She has debts of $4,800 owing to the following creditors:
Anna - $900
Bob's Shop - $1500
Hyatt's - $2100
Jones - $300
If they all agree to a composition, how much will Hyatt's be able to collect?

Accepted Answer

A)  $2,100. 
B)  $1,400. 
C)  $700. 
D)  $1,050. 
A)  $2,100. 
B)  $1,400. 
C)  $700. 
D)  $1,050.

Question 16

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, Essentials of Business Law and the Legal Environment.
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 17

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

Accepted Answer

A)  7 
B)  11 
C)  13 
D)  All of the above 
A)  7 
B)  11 
C)  13 
D)  All of the above

Question 18

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 19

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 20

Edward's Excursions Inc.filed for Chapter 7 bankruptcy.It has $100,000 of assets 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's closed and filed for bankruptcy, its employees earned $10,000 for which they did not get paid.They also should have been credited with $3,000 for their pension plan.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

Exam 38: Bankruptcypart Ix: Regulation of Business

Pre-judgment attachment permits a creditor to seize the debtor's property:

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

A debt is an obligation to pay money owed by a debtor to a creditor.

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

Powell has loaned Owen $500, which Owen agreed to repay on January 15, 2019.If Owen files a voluntary petition of bankruptcy on August 1, 2018, Powell has a claim as a creditor.

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.

Which of the following would not be a voidable transfer if made within 90 days of bankruptcy?

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:

According to the 1994 amendments to the Bankruptcy Act, the U.S.Judicial Conference must adjust for inflation the dollar amounts of the requirements for filing involuntary cases, priorities, and exemptions every seven years.

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

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

A debtor will be denied a Chapter 7 discharge if he or she has received a Chapter 13 discharge within the past six years:

Margaret has $3,200 cash after selling off her television, sound system, and personal computer.She has debts of $4,800 owing to the following creditors: Anna - $900 Bob's Shop - $1500 Hyatt's - $2100 Jones - $300 If they all agree to a composition, how much will Hyatt's be able to collect?

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

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.

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

Introduction to Law

Business Ethicspart Ii: the Legal Environment of Business

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Negligence and Strict Liabilitypart Iii: Contracts

Introduction to Contracts

Mutual Assent

Conduct Invalidating Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remediespart Iv: Sales

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remediespart V: Negotiable Instruments

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transferspart Vi: Agency

Relationship of Principal and Agent

Relationship With Third Partiespart Vii: Business Associations

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporationspart Viii: Debtor and Creditor Relations

Secured Transactions and Suretyship

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

International Business Lawpart X: Property

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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