Question 1

Claims for wages,salaries,or commissions have priority in the payment of unsecured debts over:

Accepted Answer

A)  costs and expenses of the administration of the bankruptcy case. 
B)  claims arising in the ordinary course of business after commencement of the case. 
C)  claims arising for contributions to employee benefit plans. 
D)  all of the above. 
A)  costs and expenses of the administration of the bankruptcy case. 
B)  claims arising in the ordinary course of business after commencement of the case. 
C)  claims arising for contributions to employee benefit plans. 
D)  all of the above.

Question 2

Under the 2005 reforms:

Accepted Answer

A)  it is easier for creditors to show they did not receive a voidable preference. 
B)  nonconsumer debt payments of less than $7,500 are not subject to the voidable preference standards . 
C)  both a.and b. 
D)  none of the above. 
A)  it is easier for creditors to show they did not receive a voidable preference. 
B)  nonconsumer debt payments of less than $7,500 are not subject to the voidable preference standards . 
C)  both a.and b. 
D)  none of the above.

Question 3

Debtor's exemptions are provided under federal law and thus are the same in each state.

Accepted Answer

A) True 
 B)False

Question 4

Peter is employed as a shop electrician for ABC,Inc.Peter has a car being repaired and a home on which he is paying mortgage payments.Peter is contemplating filing for bankruptcy,but he is not sure which type of petition to file.Peter also wonders whether the auto repair costs and the mortgage payments are dischargeable.Which bankruptcy filing is most appropriate for Peter? Are Peter's debts dischargeable?

Accepted Answer

While it could be argued that Peter coul

Question 5

Arthur was involuntarily petitioned into bankruptcy by three of his creditors.When the trustee reviewed Arthur's books and records,the trustee discovered the following transactions: (a)Three weeks before the filing of the petition,Arthur paid cash for $17,000 worth of inventory for his store;and (b)Twelve days before the filing of the petition,Arthur paid $300 in full satisfaction of his store's most recent electric bill.
The trustee is considering attempting to set aside both of these transfers as preferential transfers.Discuss the advisability of the trustee's attempt to set aside these transfers.

Accepted Answer

Neither of these transfers constitutes a

Question 6

Under the Bankruptcy Reform Act,the allowable homestead exemption for debtors was significantly reduced.

Accepted Answer

A) True 
 B)False

Question 7

In a Chapter 11 rehabilitation plan,the debtor:

Accepted Answer

A)  keeps all of the assets (both exempt and nonexempt). 
B)  remains in business. 
C)  makes a settlement that is acceptable to the majority of the creditors. 
D)  all of the above. 
A)  keeps all of the assets (both exempt and nonexempt). 
B)  remains in business. 
C)  makes a settlement that is acceptable to the majority of the creditors. 
D)  all of the above.

Question 8

Which of the following is a correct legal conclusion regarding reorganization bankruptcy?

Accepted Answer

A)  Individuals,partnerships,and corporations in business may be reorganized. 
B)  A plan for reorganization may be filed only by a committee of creditors. 
C)  When a reorganization plan is confirmed by the court,the creditors can revert back to their original position if they are not satisfied with the plan. 
D)  Individuals within a particular class of creditors can be treated differently if they object to the reorganization plan. 
A)  Individuals,partnerships,and corporations in business may be reorganized. 
B)  A plan for reorganization may be filed only by a committee of creditors. 
C)  When a reorganization plan is confirmed by the court,the creditors can revert back to their original position if they are not satisfied with the plan. 
D)  Individuals within a particular class of creditors can be treated differently if they object to the reorganization plan.

Question 9

An involuntary petition in bankruptcy may not be commenced against:

Accepted Answer

A)  a nonprofit corporation. 
B)  an individual. 
C)  a for-profit corporation. 
D)  any of the above. 
A)  a nonprofit corporation. 
B)  an individual. 
C)  a for-profit corporation. 
D)  any of the above.

Question 10

A debtor may recover damages against any creditor who filed a bankruptcy petition in bad faith.

Accepted Answer

A) True 
 B)False

Question 11

A court can dismiss an individual debtor's petition if the debtor does not satisfy the means test.

Accepted Answer

A) True 
 B)False

Question 12

The status of a trustee in a bankruptcy proceeding is best described as the:

Accepted Answer

A)  prosecutor of the debtor. 
B)  successor to the debtor. 
C)  defender of the debtor. 
D)  protector of the debtor. 
A)  prosecutor of the debtor. 
B)  successor to the debtor. 
C)  defender of the debtor. 
D)  protector of the debtor.

Question 13

A reorganization plan may,in certain instances,provide for the rejection of executory contracts or collective bargaining agreements.

Accepted Answer

A) True 
 B)False

Question 14

In approximately 50% of all bankruptcies no unsecured creditors receive any payments.

Accepted Answer

A) True 
 B)False

Question 15

The creditors of Sara Delano have petitioned for involuntary bankruptcy proceedings against her.Delano has been consistently late in paying her obligations for the past year.Two months before the petition was filed,a custodian was appointed to protect Delano's property.In her statement contesting the bankruptcy petition,Delano pointed out that she had dealt in good faith and could not be shown to be guilty of any act of misconduct.In addition,she cited her willingness to allow a custodian to be appointed as an indication of her intention to avoid bankruptcy and honor her obligations.Can she prevail?

Accepted Answer

No.The fact that Delano has generally no

Question 16

Which of the following is a preferential transfer?

Accepted Answer

A)  a transaction for present consideration 
B)  a payment in the ordinary course of business 
C)  both a.and b.are preferential transfers 
D)  neither a.nor b.are preferential transfers 
A)  a transaction for present consideration 
B)  a payment in the ordinary course of business 
C)  both a.and b.are preferential transfers 
D)  neither a.nor b.are preferential transfers

Question 17

Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,a discharge is available only once every ten (10)years.

Accepted Answer

A) True 
 B)False

Question 18

In a bankruptcy case,after all creditors have been paid,any balance is turned over to the debtor.

Accepted Answer

A) True 
 B)False

Question 19

By operation of law,the trustee automatically becomes the owner of all of the debtor's property in excess of the property to which the debtor is entitled under exemption laws.

Accepted Answer

A) True 
 B)False

Question 20

A voluntary petition in bankruptcy may be filed by a(n):

Accepted Answer

A)  husband and wife. 
B)  railroad company. 
C)  insurance company. 
D)  all of the above. 
A)  husband and wife. 
B)  railroad company. 
C)  insurance company. 
D)  all of the above.

Exam 35: Bankruptcy

Claims for wages,salaries,or commissions have priority in the payment of unsecured debts over:

Under the 2005 reforms:

Debtor's exemptions are provided under federal law and thus are the same in each state.

Under the Bankruptcy Reform Act,the allowable homestead exemption for debtors was significantly reduced.

In a Chapter 11 rehabilitation plan,the debtor:

Which of the following is a correct legal conclusion regarding reorganization bankruptcy?

An involuntary petition in bankruptcy may not be commenced against:

A debtor may recover damages against any creditor who filed a bankruptcy petition in bad faith.

A court can dismiss an individual debtor's petition if the debtor does not satisfy the means test.

The status of a trustee in a bankruptcy proceeding is best described as the:

A reorganization plan may,in certain instances,provide for the rejection of executory contracts or collective bargaining agreements.

In approximately 50% of all bankruptcies no unsecured creditors receive any payments.

Which of the following is a preferential transfer?

Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,a discharge is available only once every ten (10)years.

In a bankruptcy case,after all creditors have been paid,any balance is turned over to the debtor.

By operation of law,the trustee automatically becomes the owner of all of the debtor's property in excess of the property to which the debtor is entitled under exemption laws.

A voluntary petition in bankruptcy may be filed by a(n):

The Nature and Sources of Law

The Court System and Dispute Resolution

Business Ethics, Social Forces, and the Law

The Constitution As the Foundation of the Legal Environment

Government Regulation of Competition and Prices

Administrative Agencies

The Legal Environment of International Trade

Crimes

Torts

Intellectual Property Rights

Cyberlaw

Nature and Classes of Contracts: Contracting on the Internet

Formation of Contracts: Offer and Acceptance

Capacity and Genuine Assent

Consideration

Legality and Public Policy

Writing, Electronic Forms, and Interpretation of Contracts

Third Persons and Contracts

Discharge of Contracts

Breach of Contract and Remedies

Personal Property and Bailments

Legal Aspects of Supply Chain Management

Nature and Form of Sales

Title and Risk of Loss

Product Liability: Warranties and Torts

Obligations and Performance

Remedies for Breach of Sales Contracts

Kinds of Instruments, parties, and Negotiability

Transfers of Negotiable Instruments and Warranties of Parties

Liability of the Parties Under Negotiable Instruments

Checks and Funds Transfers

Nature of the Debtor-Creditor Relationship

Consumer Protection

Secured Transactions in Personal Property

Insurance

Agency

Third Persons in Agency

Regulation of Employment

Equal Employment Opportunity Law

Types of Business Organizations

Partnerships

LPs, LLCs, and LLPs

Corporate Formation

Shareholder Rights in Corporations

Securities Regulation

Accountants Liability and Malpractice

Management of Corporations

Real Property

Environmental Law and Land Use Controls

Leases

Decedents Estates and Trusts

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