Question 1

In the context of debt recovery proceedings,which of the following is NOT a consideration when establishing a cause of action?

Accepted Answer

A) The balance of legal costs against the amount of the debt. 
B) Evidence of breach of the contract. 
C) The existence of a contract. 
D) Calculation of the loss suffered. 
A) The balance of legal costs against the amount of the debt. 
B) Evidence of breach of the contract. 
C) The existence of a contract. 
D) Calculation of the loss suffered. A

Question 2

A bankrupt must pay administration costs before paying unsecured creditors.

Accepted Answer

A) True 
 B)False  False

Question 3

The court will reject the creditor's petition unless they can prove that in the preceding six months the debtor committed an act of sequestration.

Accepted Answer

A) True 
 B)False  False

Question 4

A bankrupt who fraudulently conceals property with the intent to defraud creditors may be imprisoned for up to three years.

Accepted Answer

A) True 
 B)False

Question 5

If a bankrupt leaves Australia and fails to return,their bankruptcy may be extended for eight years from the date of their departure.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is the correct definition of a 'sequestration order'?

Accepted Answer

A) An order of the court directing a person who owes money to the debtor to pay the money into the court. 
B) An order of the court directing the debtor to pay the debt in specified amounts on specified dates. 
C) An order of the court authorising a court officer to seize the goods of the debtor and sell them. 
D) An order of the court declaring the debtor bankrupt. 
A) An order of the court directing a person who owes money to the debtor to pay the money into the court. 
B) An order of the court directing the debtor to pay the debt in specified amounts on specified dates. 
C) An order of the court authorising a court officer to seize the goods of the debtor and sell them. 
D) An order of the court declaring the debtor bankrupt.

Question 7

Judgment is an order of the court stating that a person is insolvent.

Accepted Answer

A) True 
 B)False

Question 8

A deed under Part X transferring all the debtor's property for the benefit of the creditors is called a deed of gift.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is NOT a step to commence bankruptcy proceedings?

Accepted Answer

A) Creditor serves a bankruptcy notice. 
B) Meeting of creditors. 
C) Creditor files a petition with court. 
D) Debtor commits an act of bankruptcy. 
A) Creditor serves a bankruptcy notice. 
B) Meeting of creditors. 
C) Creditor files a petition with court. 
D) Debtor commits an act of bankruptcy.

Question 10

The date of commencement of a bankruptcy on a creditor's petition is calculated by going back six months from the date of the sequestration order.

Accepted Answer

A) True 
 B)False

Question 11

The court will reject the creditor's petition unless the creditor can prove the debtor owes a minimum of $10,000.

Accepted Answer

A) True 
 B)False

Question 12

In what way is a Part IX arrangement a preferable course of action for a person facing bankruptcy?

Accepted Answer

A Part IX arrangement is a preferable co

Question 13

Arrangements under Part X of the Bankruptcy Act 1966 (Cth):

Accepted Answer

A) are not enforceable by the creditors. 
B) are made under the supervision of the Official Trustee in Bankruptcy. 
C) are made without the intervention of the court. 
D) are made as part of the bankruptcy process. 
A) are not enforceable by the creditors. 
B) are made under the supervision of the Official Trustee in Bankruptcy. 
C) are made without the intervention of the court. 
D) are made as part of the bankruptcy process.

Question 14

On what grounds may an Official Receiver reject a debtor's petition for bankruptcy?

Accepted Answer

A) If the debtor has previously been bankrupt on their own petition at least once in the past five years. 
B) If it appears the debtor will be able to pay their debts. 
C) If the statement of affairs is not properly completed. 
D) All of the above. 
A) If the debtor has previously been bankrupt on their own petition at least once in the past five years. 
B) If it appears the debtor will be able to pay their debts. 
C) If the statement of affairs is not properly completed. 
D) All of the above.

Question 15

An insolvent is a person who is unable to pay debts as and when they fall due out of the debtor's own funds.

Accepted Answer

A) True 
 B)False

Question 16

A 'garnishee order' is:

Accepted Answer

A) an order of the court declaring the debtor bankrupt. 
B) an order of the court authorising a court officer to seize the goods of the debtor and sell them. 
C) an order of the court directing the debtor to pay the debt in specified amounts on specified dates. 
D) an order of the court directing a person who owes money to the debtor to pay the money into the court. 
A) an order of the court declaring the debtor bankrupt. 
B) an order of the court authorising a court officer to seize the goods of the debtor and sell them. 
C) an order of the court directing the debtor to pay the debt in specified amounts on specified dates. 
D) an order of the court directing a person who owes money to the debtor to pay the money into the court.

Question 17

A bankrupt will be automatically discharged:

Accepted Answer

A) five years from the date of commencement. 
B) three years from the date of lodgement of the statement of affairs. 
C) three years from the date of the sequestration order. 
D) five years from the date of examination of the bankrupt. 
A) five years from the date of commencement. 
B) three years from the date of lodgement of the statement of affairs. 
C) three years from the date of the sequestration order. 
D) five years from the date of examination of the bankrupt.

Question 18

A creditor's petition sets the date of commencement of a bankruptcy as:

Accepted Answer

A) the date the creditor's petition is filed with the court. 
B) the date the debtor is notified of the sequestration order. 
C) the date of the earliest act of bankruptcy by the debtor in the six months preceding the date of the creditor's petition. 
D) the date of the latest act of bankruptcy by the debtor in the six months preceding the date of the creditor's petition. 
A) the date the creditor's petition is filed with the court. 
B) the date the debtor is notified of the sequestration order. 
C) the date of the earliest act of bankruptcy by the debtor in the six months preceding the date of the creditor's petition. 
D) the date of the latest act of bankruptcy by the debtor in the six months preceding the date of the creditor's petition.

Question 19

A recovery action cannot be undertaken until a court judgment has been obtained.

Accepted Answer

A) True 
 B)False

Question 20

What are the ways in which a person can become bankrupt?

Accepted Answer

A person can become bankrupt in one of t

Exam 30: Insolvency and Debt Recovery

In the context of debt recovery proceedings,which of the following is NOT a consideration when establishing a cause of action?

A bankrupt must pay administration costs before paying unsecured creditors.

The court will reject the creditor's petition unless they can prove that in the preceding six months the debtor committed an act of sequestration.

A bankrupt who fraudulently conceals property with the intent to defraud creditors may be imprisoned for up to three years.

If a bankrupt leaves Australia and fails to return,their bankruptcy may be extended for eight years from the date of their departure.

Which of the following is the correct definition of a 'sequestration order'?

Judgment is an order of the court stating that a person is insolvent.

A deed under Part X transferring all the debtor's property for the benefit of the creditors is called a deed of gift.

Which of the following is NOT a step to commence bankruptcy proceedings?

The date of commencement of a bankruptcy on a creditor's petition is calculated by going back six months from the date of the sequestration order.

The court will reject the creditor's petition unless the creditor can prove the debtor owes a minimum of $10,000.

In what way is a Part IX arrangement a preferable course of action for a person facing bankruptcy?

Arrangements under Part X of the Bankruptcy Act 1966 (Cth):

On what grounds may an Official Receiver reject a debtor's petition for bankruptcy?

An insolvent is a person who is unable to pay debts as and when they fall due out of the debtor's own funds.

A 'garnishee order' is:

A bankrupt will be automatically discharged:

A creditor's petition sets the date of commencement of a bankruptcy as:

A recovery action cannot be undertaken until a court judgment has been obtained.

What are the ways in which a person can become bankrupt?

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