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.

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.

Chapter 3 of the Bankruptcy Code deals with:

Monica's husband is an accountant who keeps the books for her business. When it goes bankrupt, will Monica's husband's claim for services be allowed by the bankruptcy courts?

A trustee under a Chapter 11 or 13 proceeding performs the same duties as a Chapter 7 trustee.

Rebecca, 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 may avoid which of the following?

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

Under Chapter ___________, certain debts of individuals are not dischargeable despite the debtor's good faith.

The debtor has an absolute right to have his bankruptcy case dismissed, whether the case is under Chapter 7, 11, or 13.

A private employer:

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.

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?

Which of the following claims will be paid first from the debtor's estate under Chapter 7?

An involuntary petition for bankruptcy can be filed against a:

The 2005 Act establishes a means test which determines a creditor's eligibility for a priority claim.

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.

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

John's brother, Phil, loaned him $10,000 to start his business. John didn't do too well and planned to file for bankruptcy. In May, he gave Phil his car worth $8,000 to satisfy the debt. John filed his petition in November. After liquidation, if the car were included in his assets, every unsecured debtor would have received 85% of the debt owing to him. Will this be a voidable preference?

If the debtor contests the involuntary petition for bankruptcy, the court must enter an order for relief against the debtor.