Question 1

A complaint is a document filed with a bankruptcy court that starts a bankruptcy proceeding.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following federal acts substantially amended the federal bankruptcy law in 2005?

Accepted Answer

A)  Bankruptcy Reform Act of 1978 
B)  Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 
C)  the Nelson Act 
D)  the Chandler Act 
A)  Bankruptcy Reform Act of 1978 
B)  Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 
C)  the Nelson Act 
D)  the Chandler Act

Question 3

Under Chapter 13, a debtor retains more property than is exempt under Chapter 7 liquidation.

Accepted Answer

A) True 
 B)False

Question 4

Liquidation is also called straight bankruptcy.

Accepted Answer

A) True 
 B)False

Question 5

Briefly explain the Chapter 11 plan of reorganization.

Accepted Answer

The debtor has the exclusive right to fi

Question 6

________ is a form of bankruptcy in which the debtor's nonexempt property is sold for cash, the cash is distributed to the creditors, and any unpaid debts are discharged.

Accepted Answer

A)  Abusive filing 
B)  Dissolution of debt 
C)  Liquidation 
D)  Reorganization 
A)  Abusive filing 
B)  Dissolution of debt 
C)  Liquidation 
D)  Reorganization

Question 7

Bankruptcy proceedings are carried out at special U.S. Bankruptcy Courts created by the Congress.

Accepted Answer

A) True 
 B)False

Question 8

The median income test is a bankruptcy rule that states that if a debtor's median family income is at or below the state's median family income for a family the same size as the debtor's family, the debtor can receive Chapter 7 relief.

Accepted Answer

A) True 
 B)False

Question 9

Bankruptcy is primarily a state law.

Accepted Answer

A) True 
 B)False

Question 10

The bankruptcy courts are part of the federal court system.

Accepted Answer

A) True 
 B)False

Question 11

An automatic stay refers to the suspension of certain legal actions by creditors against a debtor or the debtor's property.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)  an undersecured creditor 
B)  an oversecured creditor 
C)  in default 
D)  exempt from Chapter 7 bankruptcy 
A)  an undersecured creditor 
B)  an oversecured creditor 
C)  in default 
D)  exempt from Chapter 7 bankruptcy

Question 13

There are separate state and federal bankruptcy laws.

Accepted Answer

A) True 
 B)False

Question 14

A bankruptcy trustee is a legal representative of a creditor's claim to an estate.

Accepted Answer

A) True 
 B)False

Question 15

What is an executory contract?

Accepted Answer

A)  a contract that cannot be discharged under Chapter 13 
B)  a contract that the debtor is obliged to perform despite filing for bankruptcy 
C)  an agreement between several creditors and a single debtor, dividing the debtor's property 
D)  a contract that has not been fully performed 
A)  a contract that cannot be discharged under Chapter 13 
B)  a contract that the debtor is obliged to perform despite filing for bankruptcy 
C)  an agreement between several creditors and a single debtor, dividing the debtor's property 
D)  a contract that has not been fully performed

Question 16

Which of the following does a Chapter 11 automatic stay provide?

Accepted Answer

A)  automatic discharge of secured debts 
B)  suspension of certain legal actions against the debtor 
C)  creditors' foreclosure on assets given as collateral for loans 
D)  automatic discharge of unsecured debts 
A)  automatic discharge of secured debts 
B)  suspension of certain legal actions against the debtor 
C)  creditors' foreclosure on assets given as collateral for loans 
D)  automatic discharge of unsecured debts

Question 17

What is liquidation? How does the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 affect the process of liquidation?

Accepted Answer

In liquidation, the debtor is permitted

Question 18

Which of the following is true of a debtor's bankruptcy estate?

Accepted Answer

A)  Only intangible personal property constitutes the bankruptcy estate. 
B)  No property solely owned by the debtor is exempted from the bankruptcy estate. 
C)  Creditors are allowed to claim exempt property. 
D)  Government benefits and compensations are exempted from the bankruptcy estate. 
A)  Only intangible personal property constitutes the bankruptcy estate. 
B)  No property solely owned by the debtor is exempted from the bankruptcy estate. 
C)  Creditors are allowed to claim exempt property. 
D)  Government benefits and compensations are exempted from the bankruptcy estate.

Question 19

Which of the following would be part of the bankruptcy estate of a debtor?

Accepted Answer

A)  interest in jewelry worth $1,000 
B)  unmatured life insurance policy owned by the debtor 
C)  interests in wrongful death benefits 
D)  interest of $3,500 in a motor vehicle 
A)  interest in jewelry worth $1,000 
B)  unmatured life insurance policy owned by the debtor 
C)  interests in wrongful death benefits 
D)  interest of $3,500 in a motor vehicle

Question 20

If a person's debts are subject to a Chapter 7 discharge, what does it mean?

Accepted Answer

A)  that he or she needs to repay only unsecured debts 
B)  that he or she needs to repay only secured debts 
C)  that he or she needs to pay his prepetition debts with his postpetition income 
D)  that he or she need not repay the debt 
A)  that he or she needs to repay only unsecured debts 
B)  that he or she needs to repay only secured debts 
C)  that he or she needs to pay his prepetition debts with his postpetition income 
D)  that he or she need not repay the debt

Exam 28: Bankruptcy and Reorganization

A complaint is a document filed with a bankruptcy court that starts a bankruptcy proceeding.

Which of the following federal acts substantially amended the federal bankruptcy law in 2005?

Under Chapter 13, a debtor retains more property than is exempt under Chapter 7 liquidation.

Liquidation is also called straight bankruptcy.

Briefly explain the Chapter 11 plan of reorganization.

________ is a form of bankruptcy in which the debtor's nonexempt property is sold for cash, the cash is distributed to the creditors, and any unpaid debts are discharged.

Bankruptcy proceedings are carried out at special U.S. Bankruptcy Courts created by the Congress.

The median income test is a bankruptcy rule that states that if a debtor's median family income is at or below the state's median family income for a family the same size as the debtor's family, the debtor can receive Chapter 7 relief.

Bankruptcy is primarily a state law.

The bankruptcy courts are part of the federal court system.

An automatic stay refers to the suspension of certain legal actions by creditors against a debtor or the debtor's property.

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

There are separate state and federal bankruptcy laws.

A bankruptcy trustee is a legal representative of a creditor's claim to an estate.

What is an executory contract?

Which of the following does a Chapter 11 automatic stay provide?

What is liquidation? How does the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 affect the process of liquidation?

Which of the following is true of a debtor's bankruptcy estate?

Which of the following would be part of the bankruptcy estate of a debtor?

If a person's debts are subject to a Chapter 7 discharge, what does it mean?

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