Question 1

Which of the following is true regarding the effect of an automatic stay on claims of secured creditors in a Chapter 7 proceeding?

Accepted Answer

A)   The stay affects claims of secured creditors in the same way in which it affects claims of unsecured creditors.
B)   Secured creditors with claims of over $5,000 are not affected by the stay.
C)   Secured creditors with claims of over $15,000 are not affected by the stay.
D)   Secured creditors with claims of over $20,000 are not affected by the stay.
E)   The court may exclude secured creditors from the stay if they petition the court to show that they do not have adequate protection under the stay.F) A) and B)
G) A) and C)

Question 2

Which of the following is true regarding who may receive a discharge of debt under Chapter 7 of the bankruptcy code?

Accepted Answer

A)   Individuals, partnerships, and corporations may all receive a discharge.
B)   Partnerships and individuals may receive a discharge, but corporations may not.
C)   Corporations and individuals may receive a discharge, but partnerships may not.
D)   Individuals may receive a discharge, but partnerships and corporations may not.
E)   Corporations may receive a discharge, but individuals and partnerships may not.F) D) and E)
G) A) and E)

Question 3

Which of the following occurs when a debtor turns over all assets to a trustee?

Accepted Answer

A)   Liquidation
B)   Reorganization
C)   Reformation
D)   Acknowledgment
E)   AvoidanceF) B) and E)
G) C) and E)

Question 4

In which of the following did Congress make comprehensive changes to bankruptcy law?

Accepted Answer

A)   The Bankruptcy Trust, Reconciliation, and Remedial Amendments of 2000
B)   The Bankruptcy Fraud Protection Act of 2007
C)   The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
D)   The Bankruptcy Fraud and Consumer Shield Act of 2006
E)   The Insolvency Protection Amendments of 2006F) None of the above
G) A) and C)

Question 5

Which of the following is true regarding the number of creditors who must vote to accept a reorganization plan under a Chapter 11 proceeding?

Accepted Answer

A)   For the plan to be accepted, one-third of the class of unsecured creditors must vote to approve it.
B)   For the plan to be accepted, one-half of the class of secured creditors must vote to approve it.
C)   For the plan to be accepted, two-thirds of the creditors of each class of creditors must vote to approve it.
D)   For the plan to be accepted, three-fourth of the creditors of each class of creditors must vote to approve it.
E)   For the plan to be accepted, one-fourth of the class of unsecured creditors must vote to approve it.F) A) and B)
G) B) and C)

Question 6

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 included only minor changes to bankruptcy law.

Accepted Answer

A) True 
 B)False

Question 7

Denise, who has several credit cards and lots of unsecured debt, cannot make her payments but does not want to file for bankruptcy protection. She knows that you are taking business law and asks you whether she can be forced into Chapter 7 bankruptcy and, if so, under what circumstances. What would you tell her?

Accepted Answer

She should be informed that if she has 1...

Question 8

Which of the following is called straight bankruptcy?

Accepted Answer

A)   Liquidation
B)   Reorganization
C)   Reformation
D)   Acknowledgment
E)   AvoidanceF) B) and E)
G) A) and D)

Question 9

Which of the following was the result in Margaret Kawaauhau v. Paul W. Geiger, the case in the text in which the plaintiff claimed that the defending doctor, who had no malpractice insurance, could not discharge in bankruptcy a judgment for malpractice on the basis that he deliberately chose less effective treatment to cut costs while knowing that he was providing substandard care.

Accepted Answer

A)   That the defendant could not discharge the judgment because he was negligent.
B)   That the defendant could not discharge the judgment because he was reckless.
C)   That as a matter of public policy, the defendant could not discharge the judgment because he failed to carry malpractice insurance.
D)   That the defendant could discharge the judgment because as a matter of public policy, all malpractice judgments may be discharged.
E)   That the defendant could discharge the judgment because he did not intend to cause injury.F) A) and B)
G) A) and D)

Question 10

Which of the following is a meeting of all creditors listed in the Chapter 7 required schedules for liquidation?

Accepted Answer

A)   A debt meeting
B)   A control meeting
C)   A creditors' meeting
D)   An enforcement meeting
E)   A counseling meetingF) D) and E)
G) B) and D)

Question 11

"Friends and Family." Mindy was very close to her family and friends. She also liked to spend and had a large amount of consumer debt for items such as jewelry, clothing, a personal watercraft, and a new car. Mindy was having problems making her credit card payments as they became due. She, however, wanted to make every effort to pay her debts. She had borrowed money from her mother for some jewelry and repaid that loan on January 1st. She repaid a loan to her business partner on May 15th of the same year. On September 1st of that year, she also repaid a loan to Friendly Jewelry Store because she wanted to remain on good terms with the manager. Unfortunately, Mindy was simply unable to continue making payments and on November 1st of that year, she filed a voluntary petition for bankruptcy relief under Chapter 7.
-Which of the following is the most likely result of a claim of preferential payment based on the payment to the jewelry store?

Accepted Answer

A)   The payment was not preferential because it was for a consumer good and was not made within 30 days of the filing of the bankruptcy petition.
B)   The payment is presumed preferential on the basis that it was made within 90 days of the filing of the bankruptcy petition only if the trustee is able to establish that the jewelry store received more through the transfer than the jewelry store would have received through bankruptcy proceedings.
C)   The payment is presumed preferential on the basis that it was made within 90 days of the filing of the bankruptcy petition only if the trustee is able to establish Mindy's insolvency at the time and that the jewelry store received more through the transfer than the jewelry store would have received through bankruptcy proceedings.
D)   Because it was for a consumer good, the payment was not preferential unless the bankruptcy trustee can prove intent to defraud.
E)   The payment was preferential because it was made within 90 days of the filing of the bankruptcy petition.F) A) and B)
G) C) and D)

Question 12

Who calls the creditors' meeting in a Chapter 7 proceeding?

Accepted Answer

A)   The trustee
B)   The interim trustee
C)   The bankruptcy judge
D)   The district court judge
E)   At least three of the creditorsF) A) and E)
G) C) and D)

Question 13

What are the two general goals of bankruptcy laws as set forth in the text?

Accepted Answer

First, bankruptcy laws provide protectio...

Question 14

"Consumer Debt." Mona had not been keeping up with her spending and bought several expensive items. She had numerous credit cards and some unsecured loans. She had a total of 14 creditors. All her debt was consumer debt, and Mona really wished that she had not put all those new clothes on her credit card. Although Mona was struggling, she did not want to file for bankruptcy because she did not want a bad credit score. Three of her credit card companies, however, who had unsecured claims against her totaling $14,500, signed and filed an involuntary bankruptcy petition against her under Chapter 7. Mona is unsure about how to proceed. While she is several months behind on a number of payments, including alimony payments she believes were unfairly awarded to her ex-husband, she does not particularly want to go bankrupt. She believe that the creditors have been unfair in not allowing her additional time in which to pay. On the other hand, she would really like to be rid of her excessive debt and stop collection efforts on the part of her ex-husband.
-Which of the following is true regarding the involuntary petition for bankruptcy filed by some of Mona's creditors?

Accepted Answer

A)   Involuntary petitions are not allowed under Chapter 7.
B)   At least 5 creditors must file in order for an involuntary petition to be accepted; therefore, the involuntary petition will be dismissed in Mona's case.
C)   Only 3 creditors may file an involuntary petition, but their aggregate claims must be $20,100; therefore, the petition will be dismissed in Mona's case.
D)   The petition was properly filed because 3 or more creditors with unsecured claims totaling $14,425 or more signed the petition for involuntary bankruptcy.
E)   The petition was properly filed because only 2 or more creditors with secured or unsecured claims totaling at least $10,500 must sign a petition for involuntary bankruptcy.F) A) and B)
G) C) and D)

Question 15

Which of the following is false regarding bankruptcy proceedings in Spain?

Accepted Answer

A)   In order to be effective, an arrangement representing a proposed settlement between the debtor and creditors must be approved by creditors representing at least 20 percent of the debtor's liabilities and by the judge.
B)   A failure to obtain the necessary approval of a proposed settlement between the debtor and creditors may result in the debtor's liquidation.
C)   Bankruptcy proceedings start with a finding of insolvency.
D)   Insolvency means that the business has failed to meet at least some financial obligations for at least six months.
E)   The bankruptcy filing may be done voluntarily by the debtor company, or it may be done involuntarily by the debtor's creditors in an enforced bankruptcy.F) C) and D)
G) C) and E)

Question 16

Which of the following did the court determine in In re Holsinger, the case in the text in which the debtor requested a waiver of debt-counseling under the Bankruptcy Abuse Prevention and Consumer Protection Act?

Accepted Answer

A)   That imminent foreclosure of real property and resultant eviction qualified as exigent circumstances entitling the debtor to a waiver of the debt-counseling requirement.
B)   That credit-counseling may be waived when the debtor establishes that work obligations prevent attendance at any counseling session within 20 miles.
C)   That credit-counseling may be waived when the debtor establishes that work obligations prevent attendance at any counseling session within 50 miles.
D)   That credit-counseling is in effect optional and may be waived when the debtor establishes that attendance would create a hardship, for example, in regard to family matters.
E)   That even imminent foreclosure of real property does not entitle a debtor to waiver when other requirements in relation to debt counseling remain unsatisfied.F) A) and B)
G) All of the above

Question 17

Which of the following provides for adjustment of debts of family farmers?

Accepted Answer

A)   Chapter 6
B)   Chapter 8
C)   Chapter 10
D)   Chapter 12
E)   Chapter 20F) B) and D)
G) A) and E)

Question 18

"Consumer Debt." Mona had not been keeping up with her spending and bought several expensive items. She had numerous credit cards and some unsecured loans. She had a total of 14 creditors. All her debt was consumer debt, and Mona really wished that she had not put all those new clothes on her credit card. Although Mona was struggling, she did not want to file for bankruptcy because she did not want a bad credit score. Three of her credit card companies, however, who had unsecured claims against her totaling $14,500, signed and filed an involuntary bankruptcy petition against her under Chapter 7. Mona is unsure about how to proceed. While she is several months behind on a number of payments, including alimony payments she believes were unfairly awarded to her ex-husband, she does not particularly want to go bankrupt. She believe that the creditors have been unfair in not allowing her additional time in which to pay. On the other hand, she would really like to be rid of her excessive debt and stop collection efforts on the part of her ex-husband.
-Assuming that Mona does not object to the bankruptcy proceeding, what is the next step that should occur?

Accepted Answer

A)   The court should appoint a temporary trustee.
B)   The court should appoint a trustee.
C)   The court should enter an order of relief.
D)   The court should hold a creditor's meeting.
E)   The court should determine if any claims have priority.F) A) and E)
G) None of the above

Question 19

Under Chapter 7, liquidation may be voluntary but not involuntary.

Accepted Answer

A) True 
 B)False

Question 20

"Exemptions." Sidney is injured in an automobile accident and cannot work. She cannot pay her bills and files for bankruptcy relief under Chapter 7. Federal exemptions apply, and she lists as exempt $25,000 in equity in her residence; interest in a vehicle of $2,000; interest in jewelry of $400; and retirement funds in her individual retirement account. Her creditors filed an objection to all claimed exemptions except for the home equity claim.
-Once the petition is filed, which of the following forms Sidney's bankruptcy estate?

Accepted Answer

A)   All her prepetition assets.
B)   The exempt assets only.
C)   The nonexempt assets only.
D)   The personal goods only.
E)   The real estate only.F) A) and B)
G) A) and C)

Exam 32: Bankruptcy and Reorganization

Correct Answer
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Who calls the creditors' meeting in a Chapter 7 proceeding?

Correct Answer
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Correct Answer
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The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 included only minor changes to bankruptcy law.

Correct Answer
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Which of the following did the court determine in In re Holsinger, the case in the text in which the debtor requested a waiver of debt-counseling under the Bankruptcy Abuse Prevention and Consumer Protection Act?

Correct Answer
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Which of the following is true regarding the number of creditors who must vote to accept a reorganization plan under a Chapter 11 proceeding?

Correct Answer
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Which of the following is a meeting of all creditors listed in the Chapter 7 required schedules for liquidation?

Correct Answer
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Which of the following is true regarding the effect of an automatic stay on claims of secured creditors in a Chapter 7 proceeding?

Correct Answer
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Which of the following provides for adjustment of debts of family farmers?

Correct Answer
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Which of the following is false regarding bankruptcy proceedings in Spain?

Correct Answer
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In which of the following did Congress make comprehensive changes to bankruptcy law?

Correct Answer
verified

Correct Answer
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What are the two general goals of bankruptcy laws as set forth in the text?

Correct Answer
verified
First, bankruptcy laws provide protectio...
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Which of the following is called straight bankruptcy?

Correct Answer
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Under Chapter 7, liquidation may be voluntary but not involuntary.

Correct Answer
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Correct Answer
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She should be informed that if she has 1...
View Answer

Correct Answer
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Which of the following occurs when a debtor turns over all assets to a trustee?

Correct Answer
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Correct Answer
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Which of the following is true regarding who may receive a discharge of debt under Chapter 7 of the bankruptcy code?

Correct Answer
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Exam 32: Bankruptcy and Reorganization

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Who calls the creditors' meeting in a Chapter 7 proceeding?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 included only minor changes to bankruptcy law.

Correct AnswerverifiedShow Answer

Which of the following did the court determine in In re Holsinger, the case in the text in which the debtor requested a waiver of debt-counseling under the Bankruptcy Abuse Prevention and Consumer Protection Act?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the number of creditors who must vote to accept a reorganization plan under a Chapter 11 proceeding?

Correct AnswerverifiedShow Answer

Which of the following is a meeting of all creditors listed in the Chapter 7 required schedules for liquidation?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the effect of an automatic stay on claims of secured creditors in a Chapter 7 proceeding?

Correct AnswerverifiedShow Answer

Which of the following provides for adjustment of debts of family farmers?

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Which of the following is false regarding bankruptcy proceedings in Spain?

Correct AnswerverifiedShow Answer

In which of the following did Congress make comprehensive changes to bankruptcy law?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What are the two general goals of bankruptcy laws as set forth in the text?

Correct AnswerverifiedFirst, bankruptcy laws provide protectio...View AnswerShow Answer

Which of the following is called straight bankruptcy?

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Under Chapter 7, liquidation may be voluntary but not involuntary.

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Correct AnswerverifiedShe should be informed that if she has 1...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Which of the following occurs when a debtor turns over all assets to a trustee?

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Correct AnswerverifiedShow Answer

Which of the following is true regarding who may receive a discharge of debt under Chapter 7 of the bankruptcy code?

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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First, bankruptcy laws provide protectio...
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Correct Answer
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Correct Answer
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She should be informed that if she has 1...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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