Question 1

Which of the following statements concerning reaffirmation agreements is true?

Accepted Answer

A)  Reaffirmation agreements are unlawful under the Bankruptcy Act. 
B)  Reaffirmation agreements must be made before a discharge in bankruptcy is granted. 
C)  A debtor cannot voluntarily pay any dischargeable obligation without entering into a reaffirmation agreement. 
D)  Reaffirmation agreements cannot be rescinded prior to discharge or within 60 days after filing with the court. 
A)  Reaffirmation agreements are unlawful under the Bankruptcy Act. 
B)  Reaffirmation agreements must be made before a discharge in bankruptcy is granted. 
C)  A debtor cannot voluntarily pay any dischargeable obligation without entering into a reaffirmation agreement. 
D)  Reaffirmation agreements cannot be rescinded prior to discharge or within 60 days after filing with the court.

Question 2

A liquidation proceeding, traditionally called straight bankruptcy, is brought under Chapter 11 of the Bankruptcy Code.

Accepted Answer

A) True 
 B)False

Question 3

A petition for Chapter 13 proceedings can be initiated by the:

Accepted Answer

A)  voluntary petition of a debtor. 
B)  involuntary petition of creditors. 
C)  trustee. 
D)  secured creditors. 
A)  voluntary petition of a debtor. 
B)  involuntary petition of creditors. 
C)  trustee. 
D)  secured creditors.

Question 4

Under Chapter 13 of the Bankruptcy Act, debtors:

Accepted Answer

A)  can be free of all debts that are not dischargeable under Chapter 7. 
B)  cannot retain more property than is exempt from bankruptcy under state law. 
C)  are free from garnishment of their property by creditors. 
D)  can pay a lesser percentage of debts owed to the creditors than in straight bankruptcy proceedings. 
A)  can be free of all debts that are not dischargeable under Chapter 7. 
B)  cannot retain more property than is exempt from bankruptcy under state law. 
C)  are free from garnishment of their property by creditors. 
D)  can pay a lesser percentage of debts owed to the creditors than in straight bankruptcy proceedings.

Question 5

Involuntary petitions in straight bankruptcy can be filed against:

Accepted Answer

A)  banking corporations and credit unions. 
B)  savings and loan associations. 
C)  a debtor engaged in business. 
D)  a nonprofit organization. 
A)  banking corporations and credit unions. 
B)  savings and loan associations. 
C)  a debtor engaged in business. 
D)  a nonprofit organization.

Question 6

Bill filed a petition for bankruptcy under Chapter 7 of the Bankruptcy Act. Bill listed, among others, the following debts: a debt to the National Bank for $10,000 secured by his 1980 truck, which is valued at $3,500; an unsecured debt to his friend, Francis; a $500 debt to the IRS for 1989 federal income taxes; and a $500 student loan to the university which was due one year ago. In this scenario, _____.

Accepted Answer

A)  the $500 debt to the IRS is a nondischargeable debt 
B)  Francis can claim the debt without filing a proof of claim 
C)  the $500 student loan to the university is a dischargeable debt 
D)  the bank can receive preferential payment because the debt owed to it is the highest 
A)  the $500 debt to the IRS is a nondischargeable debt 
B)  Francis can claim the debt without filing a proof of claim 
C)  the $500 student loan to the university is a dischargeable debt 
D)  the bank can receive preferential payment because the debt owed to it is the highest

Question 7

Chapter 11 of the Bankruptcy Code deals with _____.

Accepted Answer

A)  liquidations 
B)  consumer debt adjustments 
C)  reorganizations 
D)  fishing operations 
A)  liquidations 
B)  consumer debt adjustments 
C)  reorganizations 
D)  fishing operations

Question 8

Which of the following statements is true of claims made by creditors?

Accepted Answer

A)  A trustee receives only some of the defenses that a bankrupt person enjoys against claims. 
B)  If the debtor's property is subject to a secured claim of a creditor, that creditor has the first claim to it. 
C)  If a claim is provable, a creditor can participate in the distribution of the assets of the bankruptcy estate. 
D)  Both secured and unsecured creditors are required to file proofs of claims. 
A)  A trustee receives only some of the defenses that a bankrupt person enjoys against claims. 
B)  If the debtor's property is subject to a secured claim of a creditor, that creditor has the first claim to it. 
C)  If a claim is provable, a creditor can participate in the distribution of the assets of the bankruptcy estate. 
D)  Both secured and unsecured creditors are required to file proofs of claims.

Question 9

Which of the following statements is true of Chapter 11 of the Bankruptcy Code?

Accepted Answer

A)  It provides a proceeding whereby the debtor's financial affairs can be liquidated rather than reorganized. 
B)  Unlike Chapter 13, in Chapter 11 cases, the debt is predominately nonconsumer debt. 
C)  Petitions for Chapter 11 cases cannot be filed voluntarily by the debtor. 
D)  The reorganization plan is essentially a contract between a debtor and its trustees. 
A)  It provides a proceeding whereby the debtor's financial affairs can be liquidated rather than reorganized. 
B)  Unlike Chapter 13, in Chapter 11 cases, the debt is predominately nonconsumer debt. 
C)  Petitions for Chapter 11 cases cannot be filed voluntarily by the debtor. 
D)  The reorganization plan is essentially a contract between a debtor and its trustees.

Question 10

Describe the creditor actions that are automatically held in abeyance when the debtor files a bankruptcy petition.

Accepted Answer

The creditor actions held in abeyance in

Question 11

The bankruptcy estate is composed of all the debtor's legal and equitable interests in property, including certain community property.

Accepted Answer

A) True 
 B)False

Question 12

When is a debtor allowed to void liens on his properties? What type of liens can be voided on this basis?

Accepted Answer

The debtor is permitted to void certain

Question 13

Under the Bankruptcy Code, exemptions are only available to _____.

Accepted Answer

A)  corporations 
B)  loan associations 
C)  individual debtors 
D)  nonprofit organizations 
A)  corporations 
B)  loan associations 
C)  individual debtors 
D)  nonprofit organizations

Question 14

Under Chapter 11 of the Bankruptcy Act, a reorganization plan:

Accepted Answer

A)  must set forth how each creditor will be satisfied. 
B)  need not state which claims are impaired or adversely affected by the plan. 
C)  need not treat all creditors in a given class the same. 
D)  must give creditors and trustees shares in the corporation in exchange for the debt owed to them. 
A)  must set forth how each creditor will be satisfied. 
B)  need not state which claims are impaired or adversely affected by the plan. 
C)  need not treat all creditors in a given class the same. 
D)  must give creditors and trustees shares in the corporation in exchange for the debt owed to them.

Question 15

Which of the following payments is considered preferential?

Accepted Answer

A)  Payments made in the ordinary course of business 
B)  Payment of monthly utility bills 
C)  Payment made by an insolvent debtor within 250 days of the filing of the bankruptcy petition 
D)  Payment to a creditor giving him a greater percentage of a preexisting debt than other similar creditors 
A)  Payments made in the ordinary course of business 
B)  Payment of monthly utility bills 
C)  Payment made by an insolvent debtor within 250 days of the filing of the bankruptcy petition 
D)  Payment to a creditor giving him a greater percentage of a preexisting debt than other similar creditors

Question 16

Only secured creditors are required to file proofs of claims; unsecured creditors do not have to do so.

Accepted Answer

A) True 
 B)False

Question 17

The filing of a bankruptcy petition operates as an automatic stay of various forms of creditor actions against a debtor or his property.

Accepted Answer

A) True 
 B)False

Question 18

Debts due as a tax or fine to the United States or any state or local unit of government are nondischargeable in bankruptcy.

Accepted Answer

A) True 
 B)False

Question 19

Chapter 7 permits compositions of debts and/or extensions of time to pay debts out of the debtor's future earnings.

Accepted Answer

A) True 
 B)False

Question 20

A reorganization plan under Chapter 11 of the Bankruptcy Code is essentially a:

Accepted Answer

A)  supervised attempt by the state to solve a debtor's financial problems. 
B)  contract between a debtor and its creditors. 
C)  contract filed voluntarily by the creditors. 
D)  contract between a debtor and its trustees. 
A)  supervised attempt by the state to solve a debtor's financial problems. 
B)  contract between a debtor and its creditors. 
C)  contract filed voluntarily by the creditors. 
D)  contract between a debtor and its trustees.

Exam 44: Bankruptcy

Which of the following statements concerning reaffirmation agreements is true?

A liquidation proceeding, traditionally called straight bankruptcy, is brought under Chapter 11 of the Bankruptcy Code.

A petition for Chapter 13 proceedings can be initiated by the:

Under Chapter 13 of the Bankruptcy Act, debtors:

Involuntary petitions in straight bankruptcy can be filed against:

Chapter 11 of the Bankruptcy Code deals with _____.

Which of the following statements is true of claims made by creditors?

Which of the following statements is true of Chapter 11 of the Bankruptcy Code?

Describe the creditor actions that are automatically held in abeyance when the debtor files a bankruptcy petition.

The bankruptcy estate is composed of all the debtor's legal and equitable interests in property, including certain community property.

When is a debtor allowed to void liens on his properties? What type of liens can be voided on this basis?

Under the Bankruptcy Code, exemptions are only available to _____.

Under Chapter 11 of the Bankruptcy Act, a reorganization plan:

Which of the following payments is considered preferential?

Only secured creditors are required to file proofs of claims; unsecured creditors do not have to do so.

The filing of a bankruptcy petition operates as an automatic stay of various forms of creditor actions against a debtor or his property.

Debts due as a tax or fine to the United States or any state or local unit of government are nondischargeable in bankruptcy.

Chapter 7 permits compositions of debts and/or extensions of time to pay debts out of the debtor's future earnings.

A reorganization plan under Chapter 11 of the Bankruptcy Code is essentially a:

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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