Question 1

Which is an example of a priority claim?

Accepted Answer

A) alimony 
B) income tax 
C) child support 
D) All of these are correct. 
A) alimony 
B) income tax 
C) child support 
D) All of these are correct.

Question 2

Who is responsible for gathering the bankrupt's assets and dividing them among creditors?

Accepted Answer

A) the executor 
B) the state court 
C) the creditors' committee 
D) the trustee 
A) the executor 
B) the state court 
C) the creditors' committee 
D) the trustee

Question 3

Andy's business is not able to pay its debts,and the prospects for its finances to improve are slim.Andy decides not to continue the business.In this case,Andy should file a voluntary petition for which type of bankruptcy?

Accepted Answer

A) Chapter 7. 
B) Chapter 11. 
C) Chapter 13. 
D) Chapter 12. 
A) Chapter 7. 
B) Chapter 11. 
C) Chapter 13. 
D) Chapter 12.

Question 4

Karen has filed for bankruptcy.Who has the authority to confirm or reject a plan of payment,and what factors will be considered when deciding whether to approve a repayment plan under Chapter 13?

Accepted Answer

The court has the sole authority to conf

Question 5

Under all chapters of the Bankruptcy Code,most of the debtor's assets are distributed to creditors and the debtor has no obligation to share future earnings with creditors.

Accepted Answer

A) True 
 B)False

Question 6

When a debtor no longer has an obligation to pay a debt,that debt has been

Accepted Answer

A) terminated. 
B) revoked. 
C) completed. 
D) discharged. 
A) terminated. 
B) revoked. 
C) completed. 
D) discharged.

Question 7

Ramona has received a discharge in bankruptcy,but wants to reaffirm a debt to her sister.To be valid,the reaffirmation

Accepted Answer

A) will be scrutinized by the court to make sure her sister has not unfairly pressured Ramona. 
B) will be automatically disallowed because allowing Ramona to promise to pay a discharged debt would be contrary to the goals of the bankruptcy proceedings. 
C) will be automatically allowed if Ramona voluntarily chooses to make it. 
D) must clearly disclose that Ramona has the right to rescind at any time since the debt was already discharged. 
A) will be scrutinized by the court to make sure her sister has not unfairly pressured Ramona. 
B) will be automatically disallowed because allowing Ramona to promise to pay a discharged debt would be contrary to the goals of the bankruptcy proceedings. 
C) will be automatically allowed if Ramona voluntarily chooses to make it. 
D) must clearly disclose that Ramona has the right to rescind at any time since the debt was already discharged.

Question 8

Which of the following is a primary goal of the Bankruptcy Code?

Accepted Answer

A) to preserve as much of the debtor's property as possible 
B) to pay off the debtor's creditors as quickly as possible 
C) to secure debt counseling for the debtor 
D) to keep the debtor from falling behind in payments 
A) to preserve as much of the debtor's property as possible 
B) to pay off the debtor's creditors as quickly as possible 
C) to secure debt counseling for the debtor 
D) to keep the debtor from falling behind in payments

Question 9

Forever Yours,Inc.has a secured and perfected security interest in Sally's big-screen TV.On the filing date of Sally's Chapter 7 petition,the balance of the debt owed to Forever Yours is $2,000.The value of the TV is estimated at $1,500.This means that Forever Yours

Accepted Answer

A) is secured for the entire debt,$2,000. 
B) is unsecured for $500,the excess of the debt over the value of the TV. 
C) has a high priority claim of $500.This means that Forever Yours,Inc.will be allowed $500 worth of other unsecured property before other unsecured creditors get anything. 
D) is unsecured for the entire debt. 
A) is secured for the entire debt,$2,000. 
B) is unsecured for $500,the excess of the debt over the value of the TV. 
C) has a high priority claim of $500.This means that Forever Yours,Inc.will be allowed $500 worth of other unsecured property before other unsecured creditors get anything. 
D) is unsecured for the entire debt.

Question 10

The correct order of payment of claims from the debtor's estate would be

Accepted Answer

A) secured claims,priority claims,unsecured claims. 
B) secured claims,unsecured claims,priority claims. 
C) priority claims,secured claims,unsecured claims. 
D) priority claims,unsecured claims,secured claims. 
A) secured claims,priority claims,unsecured claims. 
B) secured claims,unsecured claims,priority claims. 
C) priority claims,secured claims,unsecured claims. 
D) priority claims,unsecured claims,secured claims.

Question 11

Bankruptcy is regulated by federal law.

Accepted Answer

A) True 
 B)False

Question 12

Chapter 7 bankruptcy petitions may only be filed voluntarily.

Accepted Answer

A) True 
 B)False

Question 13

Creditors of Northern Hydraulics file an involuntary bankruptcy petition against the company,and the petition is approved.What is true of Northern Hydraulics?

Accepted Answer

A) Northern Hydraulics has at least $10,425 in debts. 
B) There are at least 12 creditors. 
C) A custodian has automatically been appointed. 
D) It must make all the filings necessary under a voluntary petition. 
A) Northern Hydraulics has at least $10,425 in debts. 
B) There are at least 12 creditors. 
C) A custodian has automatically been appointed. 
D) It must make all the filings necessary under a voluntary petition.

Question 14

Kathleen filed for voluntary bankruptcy,and the automatic stay went into effect.The automatic stay

Accepted Answer

A) acts to automatically discharge Kathleen's debts. 
B) prohibits creditors from collecting debts against Kathleen that arose before she filed bankruptcy. 
C) stops only secured creditors from taking any act to collect,assess,or recover a claim against Kathleen that arose before she filed bankruptcy. 
D) stops creditors from trying to collect from Kathleen,but it does not stop them from filing lawsuits against her. 
A) acts to automatically discharge Kathleen's debts. 
B) prohibits creditors from collecting debts against Kathleen that arose before she filed bankruptcy. 
C) stops only secured creditors from taking any act to collect,assess,or recover a claim against Kathleen that arose before she filed bankruptcy. 
D) stops creditors from trying to collect from Kathleen,but it does not stop them from filing lawsuits against her.

Question 15

Mark and Cynthia work for Bryson Supply Co.If the company files for Chapter 7 bankruptcy before paying their last month of wages and benefits,will they be able to recover anything from the company?

Accepted Answer

One goal of the Bankruptcy Code is to en

Question 16

Who operates the business and develops a plan of reorganization in Chapter 11 bankruptcies?

Accepted Answer

A) the trustee 
B) the debtor in possession 
C) the state courts 
D) the creditors' committee 
A) the trustee 
B) the debtor in possession 
C) the state courts 
D) the creditors' committee

Question 17

Jun-seo owes $20,000 in unsecured claims to 15 different creditors,and he has generally not been paying debts that are due.Two of Jun-seo's creditors want to force him into bankruptcy by filing an involuntary petition;the other creditors do not agree.Which of the following statements is correct about this situation?

Accepted Answer

A) An involuntary petition cannot be filed because Jun-seo is not that deeply in debt. 
B) An involuntary petition cannot be filed because not enough creditors want to force Jun-seo into bankruptcy. 
C) An involuntary petition can be filed because Jun-seo is not making his payments in a timely way. 
D) An involuntary petition can be filed because any one of Jun-seo's creditors can force him into bankruptcy. 
A) An involuntary petition cannot be filed because Jun-seo is not that deeply in debt. 
B) An involuntary petition cannot be filed because not enough creditors want to force Jun-seo into bankruptcy. 
C) An involuntary petition can be filed because Jun-seo is not making his payments in a timely way. 
D) An involuntary petition can be filed because any one of Jun-seo's creditors can force him into bankruptcy.

Question 18

Under what circumstances might the court reject a debtor's Chapter 13 plan?

Accepted Answer

A) The plan requires future earnings to pay off debts. 
B) The plan promises to pay all secured and priority claims. 
C) The plan anticipates paying the unsecured creditors less than what they would get under Chapter 7. 
D) The plan treats all unsecured classes equally. 
A) The plan requires future earnings to pay off debts. 
B) The plan promises to pay all secured and priority claims. 
C) The plan anticipates paying the unsecured creditors less than what they would get under Chapter 7. 
D) The plan treats all unsecured classes equally.

Question 19

Agnes plans to file for bankruptcy under Chapter 7.One month prior to filing,Agnes gives Joe's Filling Station $700 to apply to her gas bill.Joe has been so kind to let her charge the gas she needed for her car over the past year.The bankruptcy trustee appointed to the case

Accepted Answer

A) can cancel the payment to Joe as a fraudulent transfer. 
B) cannot cancel the payment to Joe because it is payment for an existing debt. 
C) cannot cancel the payment to Joe because he is not an insider. 
D) can cancel the payment to Joe as a voidable preference. 
A) can cancel the payment to Joe as a fraudulent transfer. 
B) cannot cancel the payment to Joe because it is payment for an existing debt. 
C) cannot cancel the payment to Joe because he is not an insider. 
D) can cancel the payment to Joe as a voidable preference.

Question 20

In Chapter 11 bankruptcy,only the debtor may propose plans of reorganization.

Accepted Answer

A) True 
 B)False

Exam 36: Bankruptcy

Which is an example of a priority claim?

Who is responsible for gathering the bankrupt's assets and dividing them among creditors?

Andy's business is not able to pay its debts,and the prospects for its finances to improve are slim.Andy decides not to continue the business.In this case,Andy should file a voluntary petition for which type of bankruptcy?

Karen has filed for bankruptcy.Who has the authority to confirm or reject a plan of payment,and what factors will be considered when deciding whether to approve a repayment plan under Chapter 13?

Under all chapters of the Bankruptcy Code,most of the debtor's assets are distributed to creditors and the debtor has no obligation to share future earnings with creditors.

When a debtor no longer has an obligation to pay a debt,that debt has been

Ramona has received a discharge in bankruptcy,but wants to reaffirm a debt to her sister.To be valid,the reaffirmation

Which of the following is a primary goal of the Bankruptcy Code?

Forever Yours,Inc.has a secured and perfected security interest in Sally's big-screen TV.On the filing date of Sally's Chapter 7 petition,the balance of the debt owed to Forever Yours is $2,000.The value of the TV is estimated at $1,500.This means that Forever Yours

The correct order of payment of claims from the debtor's estate would be

Bankruptcy is regulated by federal law.

Chapter 7 bankruptcy petitions may only be filed voluntarily.

Creditors of Northern Hydraulics file an involuntary bankruptcy petition against the company,and the petition is approved.What is true of Northern Hydraulics?

Kathleen filed for voluntary bankruptcy,and the automatic stay went into effect.The automatic stay

Mark and Cynthia work for Bryson Supply Co.If the company files for Chapter 7 bankruptcy before paying their last month of wages and benefits,will they be able to recover anything from the company?

Who operates the business and develops a plan of reorganization in Chapter 11 bankruptcies?

Under what circumstances might the court reject a debtor's Chapter 13 plan?

Agnes plans to file for bankruptcy under Chapter 7.One month prior to filing,Agnes gives Joe's Filling Station $700 to apply to her gas bill.Joe has been so kind to let her charge the gas she needed for her car over the past year.The bankruptcy trustee appointed to the case

In Chapter 11 bankruptcy,only the debtor may propose plans of reorganization.

Introduction to Law

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International Law

Common Law, Statutory Law, and Administrative Law

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Dispute Resolution

Crime

Intentional Torts and Business Torts

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Introduction to Contracts

Agreement: Offers and Acceptances

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Voidable Contracts: Capacity and Consent

Written Contracts

Third Parties

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Introduction to Sales

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Creating a Negotiable Instrument

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Accountants Liability

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Starting a Business: Llcs and Other Options

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