Question 1

Gina's creditors attempt to force her into bankruptcy proceedings. The creditors will be unsuccessful if Gina

Accepted Answer

A)   owns a business with ten or more employees.
B)   is a farmer.
C)   is also a creditor.
D)   refuses to comply.E) A) and B)
F) All of the above

Question 2

Under the Bankruptcy Code, the means test is used to

Accepted Answer

A)   keep higher-income people from abusing the bankruptcy process.
B)   force more people to file for Chapter 7 bankruptcy.
C)   determine the validity of a statement or claim by any party in interest.
D)   prioritize the claims of the creditors in an involuntary proceeding.E) None of the above
F) C) and D)

Question 3

In a Chapter 13 proceeding, the debtor retains possession of his or her assets.

Accepted Answer

A) True 
 B)False

Question 4

Any debtor who is eligible for bankruptcy relief under Chapter 7 is eligible under Chapter 11.

Accepted Answer

A) True 
 B)False

Question 5

In a Chapter 11 proceeding, for an individual debtor, the court may order discharge at any time after the plan is confirmed.

Accepted Answer

A) True 
 B)False

Question 6

If a debtor's income falls below the median income in the area in which the debtor lives, bankruptcy abuse will be presumed.

Accepted Answer

A) True 
 B)False

Question 7

Under any chapter of the Bankruptcy Code, failing to file the necessary documents with the debtor's petition for relief can result in

Accepted Answer

A)   an automatic stay.
B)   the discharge of the debtor's obligations.
C)   the dismissal of the petition.
D)   the distribution of the debtor's assets to his or her creditors.E) A) and B)
F) All of the above

Question 8

Baby Day Care, a sole proprietorship, wants to pay as many of its obligations as reasonably possible, and be discharged of the rest. To accomplish this goal, the proprietorship should file a petition in bankruptcy under Chapter 13 for relief through

Accepted Answer

A)   a liquidation.
B)   a reorganization.
C)   a repayment plan.
D)   an adjustment plan.E) B) and C)
F) A) and B)

Question 9

A voluntary petition in bankruptcy must include

Accepted Answer

A)   proof of each creditor's claim.
B)   a list of the debtor's creditors and the amount of the debt owed to each.
C)   all of the choices.
D)   a statement indicating that the debtor understands basic economics.E) C) and D)
F) B) and D) B

Question 10

An involuntary bankruptcy occurs when a debtor

Accepted Answer

A)   files forms designated for the purpose.
B)   is unable to pay his or her debts as they come due.
C)   is forced into bankruptcy proceedings by his or her creditors.
D)   has debts that exceed the fair market value of his or her assets.E) B) and C)
F) A) and D)

Question 11

In a Chapter 7 proceeding, unsecured creditors' claims are subordinate to the claims of secured creditors.

Accepted Answer

A) True 
 B)False

Question 12

Under Chapter 7, once the proceeds of the bankruptcy estate have been distributed, the debtor's remaining debts

Accepted Answer

A)   are discharged.
B)   paid by the court.
C)   renewed without legal action as obligations of the debtor.
D)   subject to legal actions to recover any unpaid amounts.E) A) and C)
F) None of the above

Question 13

Under Chapter 13, after the completion of all payments under the plan, the court will grant a discharge of

Accepted Answer

A)   only the debts provided for by the plan.
B)   only the obligations not provided for by the plan.
C)   all claims, whether or not provided for by the plan.
D)   all obligations that remain unsatisfied.E) A) and B)
F) C) and D)

Question 14

In a Chapter 7 proceeding, the primary effect of a discharge is to void any judgment on a discharged debt and to prohibit any action to collect it.

Accepted Answer

A) True 
 B)False

Question 15

A bankruptcy trustee is accountable for

Accepted Answer

A)   administering the debtor's estate.
B)   exempting certain property from the bankruptcy.
C)   operating a debtor's business to obtain maximum profit for the creditors.
D)   commencing actions against the debtor to recover creditors' claims.E) B) and C)
F) All of the above

Question 16

At the time of the filing of the petition and the time of the filing of the plan, Chapter 13 imposes on the debtor the requirement of

Accepted Answer

A)   goodwill.
B)   good faith.
C)   substantial means.
D)   sufficient credit.E) C) and D)
F) A) and B)

Question 17

Under Chapter 7, creditors are paid in a certain order of priority. The highest-priority class comprises claims for

Accepted Answer

A)   debts related to motor vehicles, household goods, and trade tools.
B)   domestic support.
C)   the debtor's equity in his or her residence.
D)   student loans.E) All of the above
F) A) and B)

Question 18

In a Chapter 11 proceeding, the role of a debtor in possession is similar to that of a trustee in a Chapter 7 proceeding.

Accepted Answer

A) True 
 B)False

Question 19

Voluntary petitions may be filed to initiate Chapter 7 or Chapter 11, but not Chapter 13, bankruptcies.

Accepted Answer

A) True 
 B)False  False

Question 20

Under Chapter 7 and Chapter 11

Accepted Answer

A)   all of the choices.
B)   petitions can be filed voluntarily or involuntarily.
C)   the same principles govern the entry of the order for relief.
D)   the automatic stay provision applies.E) A) and D)
F) B) and D) A

Exam 26: Bankruptcy

Gina's creditors attempt to force her into bankruptcy proceedings. The creditors will be unsuccessful if Gina

Correct AnswerverifiedShow Answer

Under the Bankruptcy Code, the means test is used to

Correct AnswerverifiedShow Answer

In a Chapter 13 proceeding, the debtor retains possession of his or her assets.

Correct AnswerverifiedShow Answer

Any debtor who is eligible for bankruptcy relief under Chapter 7 is eligible under Chapter 11.

Correct AnswerverifiedShow Answer

In a Chapter 11 proceeding, for an individual debtor, the court may order discharge at any time after the plan is confirmed.

Correct AnswerverifiedShow Answer

If a debtor's income falls below the median income in the area in which the debtor lives, bankruptcy abuse will be presumed.

Correct AnswerverifiedShow Answer

Under any chapter of the Bankruptcy Code, failing to file the necessary documents with the debtor's petition for relief can result in

Correct AnswerverifiedShow Answer

Baby Day Care, a sole proprietorship, wants to pay as many of its obligations as reasonably possible, and be discharged of the rest. To accomplish this goal, the proprietorship should file a petition in bankruptcy under Chapter 13 for relief through

Correct AnswerverifiedShow Answer

A voluntary petition in bankruptcy must include

Correct AnswerverifiedB

An involuntary bankruptcy occurs when a debtor

Correct AnswerverifiedShow Answer

In a Chapter 7 proceeding, unsecured creditors' claims are subordinate to the claims of secured creditors.

Correct AnswerverifiedShow Answer

Under Chapter 7, once the proceeds of the bankruptcy estate have been distributed, the debtor's remaining debts

Correct AnswerverifiedShow Answer

Under Chapter 13, after the completion of all payments under the plan, the court will grant a discharge of

Correct AnswerverifiedShow Answer

In a Chapter 7 proceeding, the primary effect of a discharge is to void any judgment on a discharged debt and to prohibit any action to collect it.

Correct AnswerverifiedShow Answer

A bankruptcy trustee is accountable for

Correct AnswerverifiedShow Answer

At the time of the filing of the petition and the time of the filing of the plan, Chapter 13 imposes on the debtor the requirement of

Correct AnswerverifiedShow Answer

Under Chapter 7, creditors are paid in a certain order of priority. The highest-priority class comprises claims for

Correct AnswerverifiedShow Answer

In a Chapter 11 proceeding, the role of a debtor in possession is similar to that of a trustee in a Chapter 7 proceeding.

Correct AnswerverifiedShow Answer

Voluntary petitions may be filed to initiate Chapter 7 or Chapter 11, but not Chapter 13, bankruptcies.

Correct AnswerverifiedFalse

Under Chapter 7 and Chapter 11

Correct AnswerverifiedA

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B

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A