Question 1

In which of the following circumstances would a bankruptcy NOT be extended from 3 to 5 years?

Accepted Answer

A) The bankrupt failed to disclose that she had travelled to New Zealand for a week on the business of her employer. 
B) The bankrupt failed to attend a creditors' meeting. 
C) The bankrupt refused to sign a document after being lawfully asked to do so by the trustee. 
D) The bankrupt failed to inform the trustee of a change of address. 
A) The bankrupt failed to disclose that she had travelled to New Zealand for a week on the business of her employer. 
B) The bankrupt failed to attend a creditors' meeting. 
C) The bankrupt refused to sign a document after being lawfully asked to do so by the trustee. 
D) The bankrupt failed to inform the trustee of a change of address.

Question 2

A voluntary administration is one option available to debtors seeking an alternative to bankruptcy.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following comes first in the order of payment of debts by the trustee in bankruptcy?

Accepted Answer

A) The bankrupt's child support payments. 
B) The bankrupt's employees' worker's compensation payments. 
C) Administration costs including the trustee's fees. 
D) The bankrupt's employees' wages. 
A) The bankrupt's child support payments. 
B) The bankrupt's employees' worker's compensation payments. 
C) Administration costs including the trustee's fees. 
D) The bankrupt's employees' wages.

Question 4

An act of bankruptcy is in effect a public demonstration of insolvency committed by the debtor in the previous:

Accepted Answer

A) year. 
B) six months. 
C) three months. 
D) month. 
A) year. 
B) six months. 
C) three months. 
D) month.

Question 5

Which of the following is NOT a method of liquidation of an insolvent company?

Accepted Answer

A) Administrator's voluntary winding up. 
B) Creditors voluntary winding up. 
C) Compulsory winding up due to insolvency. 
D) Members voluntary winding up. 
A) Administrator's voluntary winding up. 
B) Creditors voluntary winding up. 
C) Compulsory winding up due to insolvency. 
D) Members voluntary winding up.

Question 6

What are the three main aims of the Bankruptcy Act 1966 (Cth)?

Accepted Answer

Bankruptcy legislation is intended to pr

Question 7

The case of: Morley v Statewide Tobacco Service Ltd (1992)10 ACLC 1233 is authority for the principle that:

Accepted Answer

A) ignorance of the company's position is no excuse. 
B) the test for director's liability under s 588G is objective rather than subjective. 
C) liability for a company's debts is determined by what the director ought to have known rather than what they actually knew. 
D) all of the above. 
A) ignorance of the company's position is no excuse. 
B) the test for director's liability under s 588G is objective rather than subjective. 
C) liability for a company's debts is determined by what the director ought to have known rather than what they actually knew. 
D) all of the above.

Question 8

If a company experiences severe financial difficulties,an administrator:

Accepted Answer

A) May force it into bankruptcy. 
B) May terminate the business. 
C) Cannot dispose of part of the company's property. 
D) Cannot perform the duties of a corporate officer. 
A) May force it into bankruptcy. 
B) May terminate the business. 
C) Cannot dispose of part of the company's property. 
D) Cannot perform the duties of a corporate officer.

Question 9

Which of the following circumstances will NOT result in the annulment of a bankruptcy?

Accepted Answer

A) The acceptance by a meeting of the creditors of a deed of composition or arrangement. 
B) An order of the court. 
C) The death of the bankrupt. 
D) The payment of the bankrupt's debts in full. 
A) The acceptance by a meeting of the creditors of a deed of composition or arrangement. 
B) An order of the court. 
C) The death of the bankrupt. 
D) The payment of the bankrupt's debts in full.

Question 10

Which of the following transactions will be void against the trustee?

Accepted Answer

A) Five years before commencement,the debtor,while solvent,gave property to a relative. 
B) Six months before presentation of the petition,the debtor,while insolvent,sold property for market value in the ordinary course of business. 
C) Seven years before commencement,the debtor sold property at less than market value,with the intention of defeating their creditors. 
D) All of the above. 
A) Five years before commencement,the debtor,while solvent,gave property to a relative. 
B) Six months before presentation of the petition,the debtor,while insolvent,sold property for market value in the ordinary course of business. 
C) Seven years before commencement,the debtor sold property at less than market value,with the intention of defeating their creditors. 
D) All of the above.

Question 11

Who are the most common petitioners in respect to the commencement of bankruptcy proceedings against debtors?

Accepted Answer

The most common petitioner is a creditor

Question 12

Bankruptcy is a remedy of secured creditors.

Accepted Answer

A) True 
 B)False

Question 13

In what circumstances may a director be personally liable for the debts of an insolvent company?

Accepted Answer

A) The director reasonably expected that the company was solvent. 
B) The director was entirely ignorant of the operations of the insolvent company. 
C) The director reasonably relied on information from another that the company was solvent. 
D) The director did not take part in the management of the company due to illness. 
A) The director reasonably expected that the company was solvent. 
B) The director was entirely ignorant of the operations of the insolvent company. 
C) The director reasonably relied on information from another that the company was solvent. 
D) The director did not take part in the management of the company due to illness.

Question 14

Which of the following is NOT a consequence of a sequestration order?

Accepted Answer

A) The bankrupt must disclose the fact of their bankruptcy before obtaining credit above a specified amount. 
B) The bankrupt can no longer be a director of a company. 
C) Secured creditors are no longer able to deal with the security. 
D) All of the property of the bankrupt immediately vests in the trustee for the benefit of creditors. 
A) The bankrupt must disclose the fact of their bankruptcy before obtaining credit above a specified amount. 
B) The bankrupt can no longer be a director of a company. 
C) Secured creditors are no longer able to deal with the security. 
D) All of the property of the bankrupt immediately vests in the trustee for the benefit of creditors.

Question 15

Property available for distribution to the creditors includes all property owned by the bankrupt at the date of commencement,or acquired after that date and at any time up to discharge.

Accepted Answer

A) True 
 B)False

Question 16

Part X agreements are private arrangements without official involvement or scrutiny.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following persons is entitled to lodge an objection to the automatic discharge of the bankrupt?

Accepted Answer

A) The trustee in bankruptcy. 
B) The bankrupt's unsecured creditors. 
C) The bankrupt. 
D) The bankrupt's secured creditors. 
A) The trustee in bankruptcy. 
B) The bankrupt's unsecured creditors. 
C) The bankrupt. 
D) The bankrupt's secured creditors.

Question 18

What kind of property is available to the trustee for the benefit of creditors?

Accepted Answer

A) Contributions to an eligible superannuation plan. 
B) Property used as security for a debt. 
C) Property seized by a creditor under a writ of execution within 6 months of the bankruptcy. 
D) Damages or compensation for injury. 
A) Contributions to an eligible superannuation plan. 
B) Property used as security for a debt. 
C) Property seized by a creditor under a writ of execution within 6 months of the bankruptcy. 
D) Damages or compensation for injury.

Question 19

Which of the following is the correct definition of an 'instalment order'?

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 20

Discharge absolves a bankrupt of any financial obligation to pay a secured creditor who has not surrendered their security.

Accepted Answer

A) True 
 B)False

Exam 30: Insolvency and Debt Recovery

In which of the following circumstances would a bankruptcy NOT be extended from 3 to 5 years?

A voluntary administration is one option available to debtors seeking an alternative to bankruptcy.

Which of the following comes first in the order of payment of debts by the trustee in bankruptcy?

An act of bankruptcy is in effect a public demonstration of insolvency committed by the debtor in the previous:

Which of the following is NOT a method of liquidation of an insolvent company?

What are the three main aims of the Bankruptcy Act 1966 (Cth)?

The case of: Morley v Statewide Tobacco Service Ltd (1992)10 ACLC 1233 is authority for the principle that:

If a company experiences severe financial difficulties,an administrator:

Which of the following circumstances will NOT result in the annulment of a bankruptcy?

Which of the following transactions will be void against the trustee?

Who are the most common petitioners in respect to the commencement of bankruptcy proceedings against debtors?

Bankruptcy is a remedy of secured creditors.

In what circumstances may a director be personally liable for the debts of an insolvent company?

Which of the following is NOT a consequence of a sequestration order?

Property available for distribution to the creditors includes all property owned by the bankrupt at the date of commencement,or acquired after that date and at any time up to discharge.

Part X agreements are private arrangements without official involvement or scrutiny.

Which of the following persons is entitled to lodge an objection to the automatic discharge of the bankrupt?

What kind of property is available to the trustee for the benefit of creditors?

Which of the following is the correct definition of an 'instalment order'?

Discharge absolves a bankrupt of any financial obligation to pay a secured creditor who has not surrendered their security.

Legal Foundations

Legal Systems

How Law Is Made: Precedentstatute Law

Civil Liability: the Law of Torts and Negligence

Applications of Negligence to Business

Introduction to Contracts

Agreement Between the Parties

Intention to Create Legal Relations

Consideration

Capacity of the Parties

Genuine Consent

Is the Contract Legal

Terms of the Contract

Rights and Liabilities of the Parties,discharge and Remedies

Remedies in Contract

Statutory Consumer Guarantees and the Australian Consumer Law

General and Specific Consumer Protections Under the Acl

Introduction to Companies and Incorporated Associations

Agency

Partnerships

Choosing a Business Entity

Other Business-Related Torts

Insurance

Sale of Goodsbusiness to Business

Property and Mortgages

Intellectual Property

Ethics and Business Practice

Criminal Law in a Business Context

Competition Law

The Work Environment and the Employment Relationship

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