Question 1

Which of the following statements is true of the Bankruptcy Code?

Accepted Answer

A)  It is a provision of the Uniform Commercial Code. 
B)  It is a federal law. 
C)  It is a state law. 
D)  It is both, a federal law as well as a state law. 
A)  It is a provision of the Uniform Commercial Code. 
B)  It is a federal law. 
C)  It is a state law. 
D)  It is both, a federal law as well as a state law. B

Question 2

List some types of debts that are not affected by the discharge of a bankrupt debtor.

Accepted Answer

Students' answers may vary. The following debts are not affected by the discharge of a bankruptcy: 1) Those that are due as a tax or fine to the United States or any state or local unit of government, 2) those that result from liabilities for obtaining money by false pretenses or false representations, 3) those that arise out of a debtor's purchase of more than $675 in luxury goods or services on credit from a single creditor within 90 days of filing a petition (presumed to be nondischargeable), 4) those that are cash advances in excess of $950 obtained by use of a credit card or a revolving line of credit at a credit union and obtained within 70 days of filing a bankruptcy petition (presumed to be nondischargeable), 5) those that were not scheduled in time for proof and allowance because the creditor holding the debt did not have notification of the proceeding even though the debtor was aware that he owed money to that creditor, 6) those that were created by the debtor's larceny or embezzlement or by the debtor's fraud while acting in a fiduciary capacity, 7) those that are for domestic support obligation, unless excepting them from discharge would impose an undue hardship on the debtor's dependents, 8) those that are due for willful or malicious injury to a person or his property, 9) those that are educational loans, 10) those that are judgments arising out of a debtor's operation of a motor vehicle while legally intoxicated, 11) those that are debts incurred to pay a tax to the United States that would not be dischargeable, or 12) those that are property settlements arising from divorce or separation proceedings that are not covered by the support provisions that are priority claims.

Question 3

Federal exemptions in bankruptcy include the debtor's interest, not to exceed $3,775 in value, in one motor vehicle.

Accepted Answer

A) True 
 B)False  True

Question 4

Who are the different unsecured creditors who receive distributions of a debtor's estate?

Accepted Answer

Unsecured creditors include (1) those cr

Question 5

Debts due for willful or malicious injury to a person or his property are generally dischargeable in bankruptcy.

Accepted Answer

A) True 
 B)False

Question 6

When a debtor files a bankruptcy petition, the creditor may be relieved from an automatic stay on his actions against the debtor if:

Accepted Answer

A)  the creditor can show that the bankruptcy petition does not give adequate protection to the debtor. 
B)  the debtor files a plan of reorganization that has a reasonable chance of being confirmed. 
C)  his actions are aimed at obtaining possession of the debtor's property. 
D)  the creditor can show that the stay jeopardizes his interest in certain property. 
A)  the creditor can show that the bankruptcy petition does not give adequate protection to the debtor. 
B)  the debtor files a plan of reorganization that has a reasonable chance of being confirmed. 
C)  his actions are aimed at obtaining possession of the debtor's property. 
D)  the creditor can show that the stay jeopardizes his interest in certain property.

Question 7

A major purpose of the Bankruptcy Code is to:

Accepted Answer

A)  ensure that the debtor can pick and choose between creditors. 
B)  protect honest debtors against the demands for payment by creditors. 
C)  ensure that a debtor can never be discharged of the debts he owes to the creditors. 
D)  protect creditors from debtors who try to extend the given time to pay their debt. 
A)  ensure that the debtor can pick and choose between creditors. 
B)  protect honest debtors against the demands for payment by creditors. 
C)  ensure that a debtor can never be discharged of the debts he owes to the creditors. 
D)  protect creditors from debtors who try to extend the given time to pay their debt.

Question 8

Which of the following statements is true of bankruptcy judges?

Accepted Answer

A)  If a dispute falls within a core proceeding, the bankruptcy judge can hear and determine the controversy. 
B)  If a dispute is not a core proceeding but involves a state law claim, then the bankruptcy judge can act as the district court judge. 
C)  They are considered to be units of local circuit courts. 
D)  They are considered to be units of the court of appeals. 
A)  If a dispute falls within a core proceeding, the bankruptcy judge can hear and determine the controversy. 
B)  If a dispute is not a core proceeding but involves a state law claim, then the bankruptcy judge can act as the district court judge. 
C)  They are considered to be units of local circuit courts. 
D)  They are considered to be units of the court of appeals.

Question 9

Domestic support obligations are generally nondischargeable in bankruptcy.

Accepted Answer

A) True 
 B)False

Question 10

Six months before filing for bankruptcy, Shirley sold her new car to her brother for $100 so that her creditors could not claim it. The market value of the car was $8,000 at the time of the sale. Under these circumstances, the transfer is _____.

Accepted Answer

A)  voidable by the trustee because Shirley did not receive fair consideration for this transfer 
B)  not voidable by the trustee because the transfer occurred 6 months before Shirley filed her bankruptcy petition 
C)  not voidable because the transfer occurred between two relatives 
D)  voidable by the creditors because it was done with intent to defraud the creditors 
A)  voidable by the trustee because Shirley did not receive fair consideration for this transfer 
B)  not voidable by the trustee because the transfer occurred 6 months before Shirley filed her bankruptcy petition 
C)  not voidable because the transfer occurred between two relatives 
D)  voidable by the creditors because it was done with intent to defraud the creditors

Question 11

People who file voluntary petitions:

Accepted Answer

A)  must be insolvent. 
B)  must be able to allege that they have debts. 
C)  seek to have the debtors' assets distributed among the trustees. 
D)  must have 12 or more creditors. 
A)  must be insolvent. 
B)  must be able to allege that they have debts. 
C)  seek to have the debtors' assets distributed among the trustees. 
D)  must have 12 or more creditors.

Question 12

In terms of Chapter 7 liquidation proceedings, explain what is meant by an involuntary petition.

Accepted Answer

An involuntary petition is a petition fi

Question 13

A straight bankruptcy is brought under Chapter _____ of the Bankruptcy Code.

Accepted Answer

A)  7 
B)  11 
C)  13 
D)  15 
A)  7 
B)  11 
C)  13 
D)  15

Question 14

If there are fewer than twelve (12) creditors, an involuntary petition must be signed by at least three (3) creditors.

Accepted Answer

A) True 
 B)False

Question 15

The court orders relief to a creditor only if:

Accepted Answer

A)  the debtor is generally not paying his or her debts as they become due. 
B)  a custodian is not appointed or does not take possession of the debtor's property. 
C)  the debtor is not involved in a case to establish paternity. 
D)  the creditor wants to enforce a lien against the debtor's property. 
A)  the debtor is generally not paying his or her debts as they become due. 
B)  a custodian is not appointed or does not take possession of the debtor's property. 
C)  the debtor is not involved in a case to establish paternity. 
D)  the creditor wants to enforce a lien against the debtor's property.

Question 16

The ten (10) classes of priority claims recognized by the Bankruptcy Code are paid before secured creditors realize on their collateral.

Accepted Answer

A) True 
 B)False

Question 17

In 1986, Chapter _____ of the Bankruptcy Code was added to target the financial problems of the family farm.

Accepted Answer

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

Question 18

Federal exemptions in bankruptcy include the debtor's interest, not to exceed $123,675 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence.

Accepted Answer

A) True 
 B)False

Question 19

A bankrupt person's estate is administered by the _____.

Accepted Answer

A)  creditors 
B)  creditors' committee 
C)  trustee 
D)  bankruptcy court 
A)  creditors 
B)  creditors' committee 
C)  trustee 
D)  bankruptcy court

Question 20

Which of the following statements is true of Chapter 13 of the Bankruptcy Code?

Accepted Answer

A)  It encourages extensions of credit. 
B)  It does not help debtors to overcome their financial difficulties. 
C)  It reduces the amount of time allowed to repay debts. 
D)  It permits reductions of debts. 
A)  It encourages extensions of credit. 
B)  It does not help debtors to overcome their financial difficulties. 
C)  It reduces the amount of time allowed to repay debts. 
D)  It permits reductions of debts.

Exam 44: Bankruptcy

Which of the following statements is true of the Bankruptcy Code?

List some types of debts that are not affected by the discharge of a bankrupt debtor.

Federal exemptions in bankruptcy include the debtor's interest, not to exceed $3,775 in value, in one motor vehicle.

Who are the different unsecured creditors who receive distributions of a debtor's estate?

Debts due for willful or malicious injury to a person or his property are generally dischargeable in bankruptcy.

When a debtor files a bankruptcy petition, the creditor may be relieved from an automatic stay on his actions against the debtor if:

A major purpose of the Bankruptcy Code is to:

Which of the following statements is true of bankruptcy judges?

Domestic support obligations are generally nondischargeable in bankruptcy.

Six months before filing for bankruptcy, Shirley sold her new car to her brother for $100 so that her creditors could not claim it. The market value of the car was $8,000 at the time of the sale. Under these circumstances, the transfer is _____.

People who file voluntary petitions:

In terms of Chapter 7 liquidation proceedings, explain what is meant by an involuntary petition.

A straight bankruptcy is brought under Chapter _____ of the Bankruptcy Code.

If there are fewer than twelve (12) creditors, an involuntary petition must be signed by at least three (3) creditors.

The court orders relief to a creditor only if:

The ten (10) classes of priority claims recognized by the Bankruptcy Code are paid before secured creditors realize on their collateral.

In 1986, Chapter _____ of the Bankruptcy Code was added to target the financial problems of the family farm.

Federal exemptions in bankruptcy include the debtor's interest, not to exceed $123,675 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence.

A bankrupt person's estate is administered by the _____.

Which of the following statements is true of Chapter 13 of the Bankruptcy Code?

Law, Legal Reasoning, and the Legal Profession

Dispute Settlement

Business Ethics and Corporate Social Responsibility

Business and the Constitution

Crimes

Intentional Torts

Negligence and Strict Liability

Licensing and Intellectual Property

The Nature and Origins of Contracts

Creating a Contract: Offers

Creating a Contract: Acceptances

Consideration

Capacity to Contract

Voluntary Consent

Illegality

The Form and Meaning of Contracts

Third Parties Contract Rights

Performance and Remedies

Formation and Terms of Sales Contracts

Warranties and Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

The Agency Relationship-Creation, Duties, and Termination

Liability of Principals and Agents to Third Parties

Employment Laws

Which Form of Business Organization

Partnerships

Formation and Termination of Corporations

Management of the Corporate Business

Financing the Corporation and the Role of the Shareholders

Securities Regulation

Legal Liability of Accountants

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Fund Transfers

Introduction to Security

Security Interests in Personal Property

The Antitrust Laws

Consumer Protection Laws

Environmental Regulation

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