Question 1

On the entry of an order for relief in a reorganization case, the creditors generally take over the operation of the debtor's business.

Accepted Answer

A) True 
 B)False

Question 2

Swim & Trim Fitness Corporation wants to formulate a plan under which it pays a portion of its debts and is discharged of the remainder while continuing in business. To accomplish this goal, Swim & Trim should file a petition in bankruptcy for relief through

Accepted Answer

A)  a liquidation. 
B)  a reorganization. 
C)  a repayment plan. 
D)  a family-farmer bankruptcy plan. 
A)  a liquidation. 
B)  a reorganization. 
C)  a repayment plan. 
D)  a family-farmer bankruptcy plan.

Question 3

In most states, debtors may use only federal exemptions to exempt certain property from the bankruptcy.

Accepted Answer

A) True 
 B)False

Question 4

Fact Pattern 30-1A
Stacy sells her all-terrain vehicle (ATV) to her brother Terrill for $1,000. Twelve days later, Stacy files a petition in bankruptcy for relief through a liquidation.
-Refer to Fact Pattern 30-1A. Regarding the sale of the ATV, the trustee may

Accepted Answer

A)  cancel it as a fraudulent transfer. 
B)  cancel it as a voidable preference. 
C)  not cancel it because it is a sale, not a gift. 
D)  not cancel it, but can sue Terrill's estate for the return of the $1,000. 
A)  cancel it as a fraudulent transfer. 
B)  cancel it as a voidable preference. 
C)  not cancel it because it is a sale, not a gift. 
D)  not cancel it, but can sue Terrill's estate for the return of the $1,000.

Question 5

The procedure for filing a family-farmer bankruptcy plan is very similar to the procedure for filing a repayment plan.

Accepted Answer

A) True 
 B)False

Question 6

Fact Pattern 30-1A
Stacy sells her all-terrain vehicle (ATV) to her brother Terrill for $1,000. Twelve days later, Stacy files a petition in bankruptcy for relief through a liquidation.
-Refer to Fact Pattern 30-1A. Terrill dies while riding the ATV. Stacy is Terrill's only heir. With respect to the bankruptcy estate, the inheritance is

Accepted Answer

A)  exempt property. 
B)  part of the estate if Terrill died more than 180 days after Stacy's filing. 
C)  part of the estate if Terrill died within 180 days after Stacy's filing. 
D)  part of the estate if the accident was in some way Stacy's fault. 
A)  exempt property. 
B)  part of the estate if Terrill died more than 180 days after Stacy's filing. 
C)  part of the estate if Terrill died within 180 days after Stacy's filing. 
D)  part of the estate if the accident was in some way Stacy's fault.

Question 7

Teona files a voluntary petition in bankruptcy for relief through a liquidation. Debts that will not be discharged include claims for

Accepted Answer

A)  domestic-support obligations. 
B)  money to be paid for goods not delivered. 
C)  contributions to employee benefit plans. 
D)  long overdue credit-card debt. 
A)  domestic-support obligations. 
B)  money to be paid for goods not delivered. 
C)  contributions to employee benefit plans. 
D)  long overdue credit-card debt.

Question 8

In the distribution of the debtor's estate, secured creditors take priority over unsecured creditors.

Accepted Answer

A) True 
 B)False

Question 9

For individual debtors, the plan in a reorganization case must be completed before discharge will be granted.

Accepted Answer

A) True 
 B)False

Question 10

An involuntary bankruptcy occurs when a debtor's creditors are forced to accept a discharge of the debtor's debts.

Accepted Answer

A) True 
 B)False

Question 11

Job Service, Inc., needs funds to meet its payroll, to make other current operating expenses, and to pay its creditors. Kelly, Job Service's only shareholder, loans the company $10,000 and accepts a promissory note signed on behalf of Job Service by Luna, the firm's accountant. Job Service's financial problems continue, however, and the firm's creditors file an involuntary petition to force it into bankruptcy. Is Kelly entitled to repayment of the loan to Job Service If so, what is the priority of the claim

Accepted Answer

Kelly is entitled to be repaid the amoun

Question 12

The same principles that govern the filing of a liquidation petition apply to reorganization proceedings.

Accepted Answer

A) True 
 B)False

Question 13

Mikhail files a petition in bankruptcy. One of the goals of bankruptcy law with respect to a debtor who has "gotten in over his head" is to

Accepted Answer

A)  encourage the continued use of credit to borrow funds. 
B)  ensure that co-debtors will continue to guarantee loans. 
C)  provide relief and protection. 
D)  shield assets from creditors. 
A)  encourage the continued use of credit to borrow funds. 
B)  ensure that co-debtors will continue to guarantee loans. 
C)  provide relief and protection. 
D)  shield assets from creditors.

Question 14

Kipper files a petition in bankruptcy. Kipper's dischargeable debts include

Accepted Answer

A)  domestic-support obligations. 
B)  student loans unless the lender would suffer undue hardship. 
C)  unpaid state and federal taxes. 
D)  unsecured credit-card debt. 
A)  domestic-support obligations. 
B)  student loans unless the lender would suffer undue hardship. 
C)  unpaid state and federal taxes. 
D)  unsecured credit-card debt.

Question 15

Any "person" may be a debtor in a liquidation proceeding.

Accepted Answer

A) True 
 B)False

Question 16

Ronaldo agrees to pay Simplex Cash Store a debt that is otherwise dischargeable in bankruptcy. This is

Accepted Answer

A)  a reaffirmation. 
B)  a liquidation. 
C)  a reorganization. 
D)  a petition. 
A)  a reaffirmation. 
B)  a liquidation. 
C)  a reorganization. 
D)  a petition.

Question 17

Bernice files a petition in bankruptcy. The initial proceeding on this petition will be in

Accepted Answer

A)  a federal bankruptcy court. 
B)  a state bankruptcy court. 
C)  the highest court in the state in which Bernice is located. 
D)  the United States Supreme Court. 
A)  a federal bankruptcy court. 
B)  a state bankruptcy court. 
C)  the highest court in the state in which Bernice is located. 
D)  the United States Supreme Court.

Question 18

Mia's voluntary petition for bankruptcy is found to be proper. The order for relief is effective as soon as

Accepted Answer

A)  Mia files the petition. 
B)  Mia posts a bond to cover the costs of the proceedings. 
C)  Mia's creditors agree to the terms. 
D)  the trustee collects and distributes the property of Mia's estate. 
A)  Mia files the petition. 
B)  Mia posts a bond to cover the costs of the proceedings. 
C)  Mia's creditors agree to the terms. 
D)  the trustee collects and distributes the property of Mia's estate.

Question 19

Current City (CC) is a retail seller of television sets. CC sells Dhani a $5,000 large-screen, high-definition, plasma set on a retail installment security agreement in which he pays $100 down and agrees to pay the balance in equal installments. CC retains a security interest in the set, and perfects that interest by filing a financing statement centrally. Two months later, Dhani is in default on the payments to CC and is involuntarily petitioned into bankruptcy by other creditors. Discuss CC's right to repossess the TV set and whether CC has priority over the trustee in bankruptcy to any proceeds from the disposal of the set.

Accepted Answer

CC will not be able to repossess the set

Question 20

To falsify information on official bankruptcy schedules is a crime.

Accepted Answer

A) True 
 B)False

Exam 30: Bankruptcy Law

On the entry of an order for relief in a reorganization case, the creditors generally take over the operation of the debtor's business.

Swim & Trim Fitness Corporation wants to formulate a plan under which it pays a portion of its debts and is discharged of the remainder while continuing in business. To accomplish this goal, Swim & Trim should file a petition in bankruptcy for relief through

In most states, debtors may use only federal exemptions to exempt certain property from the bankruptcy.

Fact Pattern 30-1A Stacy sells her all-terrain vehicle (ATV) to her brother Terrill for $1,000. Twelve days later, Stacy files a petition in bankruptcy for relief through a liquidation. -Refer to Fact Pattern 30-1A. Regarding the sale of the ATV, the trustee may

The procedure for filing a family-farmer bankruptcy plan is very similar to the procedure for filing a repayment plan.

Teona files a voluntary petition in bankruptcy for relief through a liquidation. Debts that will not be discharged include claims for

In the distribution of the debtor's estate, secured creditors take priority over unsecured creditors.

For individual debtors, the plan in a reorganization case must be completed before discharge will be granted.

An involuntary bankruptcy occurs when a debtor's creditors are forced to accept a discharge of the debtor's debts.

The same principles that govern the filing of a liquidation petition apply to reorganization proceedings.

Mikhail files a petition in bankruptcy. One of the goals of bankruptcy law with respect to a debtor who has "gotten in over his head" is to

Kipper files a petition in bankruptcy. Kipper's dischargeable debts include

Any "person" may be a debtor in a liquidation proceeding.

Ronaldo agrees to pay Simplex Cash Store a debt that is otherwise dischargeable in bankruptcy. This is

Bernice files a petition in bankruptcy. The initial proceeding on this petition will be in

Mia's voluntary petition for bankruptcy is found to be proper. The order for relief is effective as soon as

To falsify information on official bankruptcy schedules is a crime.

Introduction to Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Constitutional Authority to Regulate Business

Ethics and Business Decision Making

Intentional Torts and Privacy

Negligence and Strict Liability

Intellectual Property and Internet Law

Criminal Law and Cyber Crime

Nature and Terminology

Agreement in Traditional and E-Contracts

Consideration

Capacity and Legality

Mistakes, Fraud, and Voluntary Consent

The Statute of Frauds

Third Party Rights

Performance and Discharge

Breach of Contract and Remedies

The Formation of Sales and Lease Contracts

Title, Risk, and Insurable Interest

Performance Breach of Sales Lease Contracts

Warranties and Product Liability

International Law in a Global Economy

The Function Creation of Negotiable Instruments

Transferability and Holder in Due Course

Liability, Defenses, and Discharge

Checks and Banking in the Digital Age

Creditors Rights and Remedies

Secured Transactions

Mortgages Foreclosures After the Recession

Agency Formation and Duties

Agency Liability and Termination

Employment, Immigration, and Labor Law

Employment Discrimination

Sole Proprietorships and Franchises

Partnerships and Limited Liability Partnerships

Limited Liability Companies Special Business Forms

Corporate Formation and Financing

Corporate Directors, Officers, Shareholders

Corporate Merger, Consolidation, Termination

Securities Law Corporate Governance

Law for Small Business

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

Professional Liaility and Accountability

Personal Property and Bailments

Real Property Landlord-Tenant Relationships

Insurance

Wills and Trusts

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