Question 1

Which of the following is true of a Chapter 13 petition?

Accepted Answer

A)  It can be filed by all individual debtors, irrespective of their income. 
B)  The petitioner need not demand an extension or composition. 
C)  To qualify for Chapter 13, the debts must primarily be consumer debt. 
D)  Creditors can file a Chapter 13 petition claiming payment from a debtor. 
A)  It can be filed by all individual debtors, irrespective of their income. 
B)  The petitioner need not demand an extension or composition. 
C)  To qualify for Chapter 13, the debts must primarily be consumer debt. 
D)  Creditors can file a Chapter 13 petition claiming payment from a debtor. C

Question 2

Sam wants to file a petition for bankruptcy. Which of the following is true in this context?

Accepted Answer

A)  Sam need not submit a list of creditors; it is obtained by the court upon investigation. 
B)  Sam's bankruptcy petition cannot be filed electronically. 
C)  Only Sam's attorney can file his bankruptcy petition. 
D)  Sam's attorney is liable for perjury if information filed by Sam is incorrect. 
A)  Sam need not submit a list of creditors; it is obtained by the court upon investigation. 
B)  Sam's bankruptcy petition cannot be filed electronically. 
C)  Only Sam's attorney can file his bankruptcy petition. 
D)  Sam's attorney is liable for perjury if information filed by Sam is incorrect. D

Question 3

The suspension of certain legal actions by creditors against a debtor or the debtor's property is known as a(n) ________.

Accepted Answer

A)  discharge of debt 
B)  composition 
C)  automatic stay 
D)  order for relief 
A)  discharge of debt 
B)  composition 
C)  automatic stay 
D)  order for relief C

Question 4

A(n) ________ provision is a provision whereby the court confirms a plan of reorganization over an objecting class of creditors if certain requirements are met.

Accepted Answer

A)  cram-down 
B)  acceptance 
C)  discharge 
D)  liquidation 
A)  cram-down 
B)  acceptance 
C)  discharge 
D)  liquidation

Question 5

Article I, Section 8, Clause 4 of the U.S. Constitution states that the President has the power to establish uniform laws pertaining to bankruptcies.

Accepted Answer

A) True 
 B)False

Question 6

The bankruptcy judge cannot attend the first meeting of the creditors.

Accepted Answer

A) True 
 B)False

Question 7

A(n) ________ is an agreement entered into by the creditor and the debtor whereby the debtor agrees to pay the creditor for a debt that is dischargeable in bankruptcy.

Accepted Answer

A)  reaffirmation agreement 
B)  order for relief 
C)  discharge agreement 
D)  acceptance agreement 
A)  reaffirmation agreement 
B)  order for relief 
C)  discharge agreement 
D)  acceptance agreement

Question 8

Bankruptcy law is exclusively federal law; there are no state bankruptcy laws.

Accepted Answer

A) True 
 B)False

Question 9

Why is a discharge of debt granted?

Accepted Answer

A)  to divide the bankruptcy estate equally among all creditors 
B)  to relieve the debtor of the responsibility to pay some of or all of the debt 
C)  to divide the bankruptcy estate according to the debt owed to each creditor 
D)  to suspend certain legal actions by creditors against a debtor's property 
A)  to divide the bankruptcy estate equally among all creditors 
B)  to relieve the debtor of the responsibility to pay some of or all of the debt 
C)  to divide the bankruptcy estate according to the debt owed to each creditor 
D)  to suspend certain legal actions by creditors against a debtor's property

Question 10

If the value of the collateral securing a secured loan is less than the secured interest, the secured creditor is an oversecured creditor.

Accepted Answer

A) True 
 B)False

Question 11

A means test is used to determine whether ________.

Accepted Answer

A)  the debtor's median family income is less than the state's median family income 
B)  the debtor's median family income is more than the state's median family income 
C)  the debtor has the capability to pay prepetition debts out of postpetition income 
D)  the debtor would qualify to file for bankruptcy under Chapter 13 
A)  the debtor's median family income is less than the state's median family income 
B)  the debtor's median family income is more than the state's median family income 
C)  the debtor has the capability to pay prepetition debts out of postpetition income 
D)  the debtor would qualify to file for bankruptcy under Chapter 13

Question 12

Which of the following is true of Chapter 7 liquidation?

Accepted Answer

A)  The debtor is not permitted to keep any of his or her assets. 
B)  The 2005 bankruptcy act has eased the process of applying for a Chapter 7 bankruptcy. 
C)  The debtor's future income cannot be reached to pay the discharged debt. 
D)  Petitioning for Chapter 7 liquidation does not permit the debtor to petition for bankruptcy under any other chapter. 
A)  The debtor is not permitted to keep any of his or her assets. 
B)  The 2005 bankruptcy act has eased the process of applying for a Chapter 7 bankruptcy. 
C)  The debtor's future income cannot be reached to pay the discharged debt. 
D)  Petitioning for Chapter 7 liquidation does not permit the debtor to petition for bankruptcy under any other chapter.

Question 13

Exempt property may not be retained by a debtor who files for bankruptcy.

Accepted Answer

A) True 
 B)False

Question 14

A voluntary petition is a petition filed by a creditor that states that the debtor has paid his debts.

Accepted Answer

A) True 
 B)False

Question 15

Paulo Dessario is the owner of Paulo's Pizzeria, which has not been doing well in the last year. He files for bankruptcy under Chapter 13. Which of the following is true of Chapter 13?

Accepted Answer

A)  Paulo must terminate all his business operations in the United States. 
B)  If the pizzeria is not exempt from the Chapter 13 estate, Paulo must close it. 
C)  Paulo is allowed to continue operating the pizzeria, whether or not it is exempt. 
D)  Paulo can only operate the pizzeria but cannot remain in possession of it. 
A)  Paulo must terminate all his business operations in the United States. 
B)  If the pizzeria is not exempt from the Chapter 13 estate, Paulo must close it. 
C)  Paulo is allowed to continue operating the pizzeria, whether or not it is exempt. 
D)  Paulo can only operate the pizzeria but cannot remain in possession of it.

Question 16

A(n) ________ provides for the reduction of a debtor's debts.

Accepted Answer

A)  extension 
B)  liquidation 
C)  limitation 
D)  composition 
A)  extension 
B)  liquidation 
C)  limitation 
D)  composition

Question 17

A secured creditor whose claim exceeds the value of the collateral may submit a proof of claim and become an unsecured claimant as to the difference.

Accepted Answer

A) True 
 B)False

Question 18

The 2005 act requires an attorney certification whereby an attorney who represents a client in bankruptcy must certify the accuracy of the information contained in the bankruptcy petition.

Accepted Answer

A) True 
 B)False

Question 19

The Bankruptcy Reform Act of 1978 made it easier for debtors to file for bankruptcy and have their unpaid debts discharged.

Accepted Answer

A) True 
 B)False

Question 20

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires that before an individual debtor receives a discharge in a Chapter 7 or Chapter 13 bankruptcy, the debtor must attend a personal financial management course approved by the U.S. Trustee.

Accepted Answer

A) True 
 B)False

Exam 28: Bankruptcy and Reorganization

Which of the following is true of a Chapter 13 petition?

Sam wants to file a petition for bankruptcy. Which of the following is true in this context?

The suspension of certain legal actions by creditors against a debtor or the debtor's property is known as a(n) ________.

A(n) ________ provision is a provision whereby the court confirms a plan of reorganization over an objecting class of creditors if certain requirements are met.

Article I, Section 8, Clause 4 of the U.S. Constitution states that the President has the power to establish uniform laws pertaining to bankruptcies.

The bankruptcy judge cannot attend the first meeting of the creditors.

A(n) ________ is an agreement entered into by the creditor and the debtor whereby the debtor agrees to pay the creditor for a debt that is dischargeable in bankruptcy.

Bankruptcy law is exclusively federal law; there are no state bankruptcy laws.

Why is a discharge of debt granted?

If the value of the collateral securing a secured loan is less than the secured interest, the secured creditor is an oversecured creditor.

A means test is used to determine whether ________.

Which of the following is true of Chapter 7 liquidation?

Exempt property may not be retained by a debtor who files for bankruptcy.

A voluntary petition is a petition filed by a creditor that states that the debtor has paid his debts.

Paulo Dessario is the owner of Paulo's Pizzeria, which has not been doing well in the last year. He files for bankruptcy under Chapter 13. Which of the following is true of Chapter 13?

A(n) ________ provides for the reduction of a debtor's debts.

A secured creditor whose claim exceeds the value of the collateral may submit a proof of claim and become an unsecured claimant as to the difference.

The 2005 act requires an attorney certification whereby an attorney who represents a client in bankruptcy must certify the accuracy of the information contained in the bankruptcy petition.

The Bankruptcy Reform Act of 1978 made it easier for debtors to file for bankruptcy and have their unpaid debts discharged.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires that before an individual debtor receives a discharge in a Chapter 7 or Chapter 13 bankruptcy, the debtor must attend a personal financial management course approved by the U.S. Trustee.

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