Question 1

Insolvency occurs when a debtor:

Accepted Answer

A) is unable to pay his/her debts as they become due. 
B) has a larger number of unsecured creditors than secured creditors. 
C) is unemployed for two consecutive years. 
D) is declared bankrupt by a certified accountant. 
A) is unable to pay his/her debts as they become due. 
B) has a larger number of unsecured creditors than secured creditors. 
C) is unemployed for two consecutive years. 
D) is declared bankrupt by a certified accountant.

Question 2

A Chapter 13 debtor must begin making the installment payments proposed in her plan:

Accepted Answer

A) within 30 days after the plan is filed. 
B) one week after the plan is approved by the creditors. 
C) within 60 days after the plan is approved by the court. 
D) within one week of the formal submission to the trustee. 
A) within 30 days after the plan is filed. 
B) one week after the plan is approved by the creditors. 
C) within 60 days after the plan is approved by the court. 
D) within one week of the formal submission to the trustee.

Question 3

In order to prevent debtors from misusing the provisions of the Bankruptcy Code,the scope of dismissal of a bankruptcy petition has been widened to a broader interpretation of abuse,and not just restricted to substantial abuse.

Accepted Answer

A) True 
 B)False

Question 4

An objection to the discharge of the bankrupt may be filed by:

Accepted Answer

A) the trustee,a creditor,or the U.S.attorney. 
B) the trustee only. 
C) the trustee or creditor only. 
D) the U.S.attorney only. 
A) the trustee,a creditor,or the U.S.attorney. 
B) the trustee only. 
C) the trustee or creditor only. 
D) the U.S.attorney only.

Question 5

Under Chapter 12 of the Bankruptcy Code:

Accepted Answer

A) only farms with an aggregate debt exceeding $5 million are covered. 
B) the debtor must cease to operate the farm. 
C) no trustee is appointed. 
D) the debtor is usually permitted to remain in possession to operate the farm. 
A) only farms with an aggregate debt exceeding $5 million are covered. 
B) the debtor must cease to operate the farm. 
C) no trustee is appointed. 
D) the debtor is usually permitted to remain in possession to operate the farm.

Question 6

An absolute $160,375 homestead cap applies if:

Accepted Answer

A) the debtor's aggregate interest exceeds $1,600 in value in jewelry held primarily for the personal,family,or household use of the debtor. 
B) retirement funds that are in a fund or account are exempt from taxation under the Internal Revenue Code. 
C) the debtor's interest exceeds $160,375 in value in real or personal property. 
D) the bankruptcy court determines that the debtor has been convicted of a felony demonstrating that the filing of the case was abuse of the provisions of the Code. 
A) the debtor's aggregate interest exceeds $1,600 in value in jewelry held primarily for the personal,family,or household use of the debtor. 
B) retirement funds that are in a fund or account are exempt from taxation under the Internal Revenue Code. 
C) the debtor's interest exceeds $160,375 in value in real or personal property. 
D) the bankruptcy court determines that the debtor has been convicted of a felony demonstrating that the filing of the case was abuse of the provisions of the Code.

Question 7

If a dispute falls within a ________ proceeding,the bankruptcy judge can hear and determine the controversy.

Accepted Answer

A) substantive 
B) special 
C) principal 
D) core 
A) substantive 
B) special 
C) principal 
D) core

Question 8

A secured creditor is classified as an unsecured creditor,to the extent of the debt amount that exceeds the value of the collateral held by such secured creditor.

Accepted Answer

A) True 
 B)False

Question 9

Selena pays back a $2,000 loan from her parents within one year before she files her bankruptcy petition.This is an example of:

Accepted Answer

A) anticipatory breach. 
B) a secured transaction. 
C) preferential payment. 
D) a failure of consideration. 
A) anticipatory breach. 
B) a secured transaction. 
C) preferential payment. 
D) a failure of consideration.

Question 10

In Krieger v.Educational Credit Management Corporation,the case in the text,the court held that:

Accepted Answer

A) Krieger was not entitled to have her student loans discharged because she failed to make a good faith effort to repay the loans. 
B) Krieger was not entitled to have her student loans discharged because she failed to show that her circumstances were likely to persist for a significant portion of the repayment period. 
C) Krieger was entitled to have her student loans discharged because repayment would constitute an undue hardship. 
D) Krieger was entitled to have her student loans discharged because she made the minimum payments on her loan for 25 years under an income-based repayment plan. 
A) Krieger was not entitled to have her student loans discharged because she failed to make a good faith effort to repay the loans. 
B) Krieger was not entitled to have her student loans discharged because she failed to show that her circumstances were likely to persist for a significant portion of the repayment period. 
C) Krieger was entitled to have her student loans discharged because repayment would constitute an undue hardship. 
D) Krieger was entitled to have her student loans discharged because she made the minimum payments on her loan for 25 years under an income-based repayment plan.

Question 11

Which of the following terms is used to describe a person whose liabilities exceed his or her assets?

Accepted Answer

A) Bankrupt 
B) Forfeiture 
C) Indebt 
D) Renounce 
A) Bankrupt 
B) Forfeiture 
C) Indebt 
D) Renounce

Question 12

The debtor is permitted to void ________ liens against exempt properties that impair her exemptions.

Accepted Answer

A) medical 
B) tax 
C) attorney 
D) judicial 
A) medical 
B) tax 
C) attorney 
D) judicial

Question 13

Under special circumstances,a court can order the debtor to become a party to the reaffirmation agreement.

Accepted Answer

A) True 
 B)False

Question 14

Which Chapter of the Bankruptcy Code can provide some financial discipline to a debtor as well as an opportunity to get his financial affairs back in good shape?

Accepted Answer

A) Chapter 12 
B) Chapter 13 
C) Chapter 15 
D) Chapter 7 
A) Chapter 12 
B) Chapter 13 
C) Chapter 15 
D) Chapter 7

Question 15

Dave,who is in financial trouble,has ten creditors.An involuntary bankruptcy petition against Dave requires that three of these creditors sign the petition.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements about the distribution of the debtor's estate is false?

Accepted Answer

A) The priority claims are paid after secured creditors realize on their collateral. 
B) Each class must be paid in full before the next class is entitled to receive anything. 
C) Payments are made to the 10 priority classes,in order,to the extent there are funds available. 
D) To the extent there are insufficient funds to satisfy all the creditors within a class,each class member receives an equal share of his claim. 
A) The priority claims are paid after secured creditors realize on their collateral. 
B) Each class must be paid in full before the next class is entitled to receive anything. 
C) Payments are made to the 10 priority classes,in order,to the extent there are funds available. 
D) To the extent there are insufficient funds to satisfy all the creditors within a class,each class member receives an equal share of his claim.

Question 17

If a petition for bankruptcy is filed by a health care business:

Accepted Answer

A) the creditors bear the financial responsibility for the disposal of patient records where there are insufficient funds to continue to store them. 
B) the trustee is instructed to transfer patients in a health care business that is in the process of being closed to an appropriate health care business. 
C) the necessary costs of closing a health care business is borne by the adjudicating court. 
D) the automatic stay provisions apply to actions by the Secretary of Health and Human Services to exclude the debtor from participating in federal health care programs. 
A) the creditors bear the financial responsibility for the disposal of patient records where there are insufficient funds to continue to store them. 
B) the trustee is instructed to transfer patients in a health care business that is in the process of being closed to an appropriate health care business. 
C) the necessary costs of closing a health care business is borne by the adjudicating court. 
D) the automatic stay provisions apply to actions by the Secretary of Health and Human Services to exclude the debtor from participating in federal health care programs.

Question 18

Which of the following would be eligible for a discharge in bankruptcy?

Accepted Answer

A) Sole proprietor 
B) LLC 
C) Corporation 
D) Partnership 
A) Sole proprietor 
B) LLC 
C) Corporation 
D) Partnership

Question 19

According to the 2005 revisions of the Bankruptcy Code:

Accepted Answer

A) any eviction proceedings in which the landlord obtained a judgment of possession prior to the filing of the bankruptcy petition can be continued. 
B) any eviction proceedings in which the landlord obtained a judgment of abandonment prior to the filing of the bankruptcy petition can be continued. 
C) any eviction proceedings in which the landlord obtained a judgment of defeasance prior to the filing of the bankruptcy petition can be continued. 
D) any eviction proceedings in which the landlord obtained a judgment of vicarious liability prior to the filing of the bankruptcy petition can be continued. 
A) any eviction proceedings in which the landlord obtained a judgment of possession prior to the filing of the bankruptcy petition can be continued. 
B) any eviction proceedings in which the landlord obtained a judgment of abandonment prior to the filing of the bankruptcy petition can be continued. 
C) any eviction proceedings in which the landlord obtained a judgment of defeasance prior to the filing of the bankruptcy petition can be continued. 
D) any eviction proceedings in which the landlord obtained a judgment of vicarious liability prior to the filing of the bankruptcy petition can be continued.

Question 20

Which of the following statements about Chapter 7 liquidations is true?

Accepted Answer

A) The debtor must disclose all of the property she owns and surrender this bankruptcy estate to the bankruptcy trustee. 
B) The trustee takes all of the debtor's property and administers,liquidates,and distributes it. 
C) Only individuals can file under Chapter 7. 
D) If the bankrupt person follows all court orders,she is usually given a discharge,regardless of whether she was honest in her business transactions or not. 
A) The debtor must disclose all of the property she owns and surrender this bankruptcy estate to the bankruptcy trustee. 
B) The trustee takes all of the debtor's property and administers,liquidates,and distributes it. 
C) Only individuals can file under Chapter 7. 
D) If the bankrupt person follows all court orders,she is usually given a discharge,regardless of whether she was honest in her business transactions or not.

Exam 30: Bankruptcy

Insolvency occurs when a debtor:

A Chapter 13 debtor must begin making the installment payments proposed in her plan:

In order to prevent debtors from misusing the provisions of the Bankruptcy Code,the scope of dismissal of a bankruptcy petition has been widened to a broader interpretation of abuse,and not just restricted to substantial abuse.

An objection to the discharge of the bankrupt may be filed by:

Under Chapter 12 of the Bankruptcy Code:

An absolute $160,375 homestead cap applies if:

If a dispute falls within a ________ proceeding,the bankruptcy judge can hear and determine the controversy.

A secured creditor is classified as an unsecured creditor,to the extent of the debt amount that exceeds the value of the collateral held by such secured creditor.

Selena pays back a $2,000 loan from her parents within one year before she files her bankruptcy petition.This is an example of:

In Krieger v.Educational Credit Management Corporation,the case in the text,the court held that:

Which of the following terms is used to describe a person whose liabilities exceed his or her assets?

The debtor is permitted to void ________ liens against exempt properties that impair her exemptions.

Under special circumstances,a court can order the debtor to become a party to the reaffirmation agreement.

Which Chapter of the Bankruptcy Code can provide some financial discipline to a debtor as well as an opportunity to get his financial affairs back in good shape?

Dave,who is in financial trouble,has ten creditors.An involuntary bankruptcy petition against Dave requires that three of these creditors sign the petition.

Which of the following statements about the distribution of the debtor's estate is false?

If a petition for bankruptcy is filed by a health care business:

Which of the following would be eligible for a discharge in bankruptcy?

According to the 2005 revisions of the Bankruptcy Code:

Which of the following statements about Chapter 7 liquidations is true?

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Formation and Terms of Sales Contracts

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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