Deck 24: Bankruptcy and Reorganization

Question 1

Bankruptcy petitions may be filed by the debtor without the assistance of an attorney or filing service.

Answer 1

True

Question 2

Bankruptcy courts are part of the state court system.

Answer 2

False

Question 3

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has been praised by many businesses,banks,and credit card issuers.

Answer 3

True

Question 4

A United States Trustee is a federal government official who has responsibility for handling and supervising many of the administrative tasks associated with a bankruptcy case.

Question 5

One goal of federal bankruptcy law is to give debtors a "fresh start" by relieving them from legal responsibility for past debts.

Question 6

The United States Congress enacted the original federal Bankruptcy Act in 1978.

Question 7

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 makes it much more difficult for debtors to escape their debts under federal bankruptcy law.

Question 8

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires that before an individual debtor receives a discharge in a Chapter 7 or Chapter 13 bankruptcy,the debtor must attend a personal financial management course approved by the United States Trustee.

Question 9

The founders of the United States thought that the plight of debtors was so important that they included a provision in the U.S.Constitution giving states the authority to establish local bankruptcy laws.

Question 10

The United States Constitution gives the power to enact bankruptcy laws to the federal government.

Question 11

Bankruptcy law is exclusively federal law; there are no state bankruptcy laws.

Question 12

Article II,Section 4,clause 2 of the United States Constitution provides that "The Congress shall have the power...to establish...uniform laws on the subject of bankruptcies throughout the United States."

Question 13

Bankruptcy judges are elected for four-year terms.

Question 14

After a decade of lobbying by bankrupt debtors,the United States Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Question 15

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires an individual filing for bankruptcy to receive pre-petition and post-petition credit counseling.

Question 16

The Bankruptcy Reform Act of 1978 made it easier for debtors to rid themselves of unsecured debt,primarily by filing for Chapter 7 liquidation bankruptcy.

Question 17

The United States Bankruptcy Code is contained in Article II of the United States Code.

Question 18

A debtor must receive pre-petition credit counseling within 180 days prior to filing his or her petition for bankruptcy.

Question 19

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has been criticized as being too "debtor friendly."

Question 20

Bankruptcy courts are part of the federal court system,and one bankruptcy court is attached to each of the ninety-four United States district courts in the country.

Question 21

The dissolution of a marriage is "stayed" by the filing of a voluntary or involuntary bankruptcy petition.

Question 22

A voluntary bankruptcy proceeding is initiated by the creditor or creditors,and forces the debtor into bankruptcy.

Question 23

The bankruptcy estate is created upon the termination of a bankruptcy case.

Question 24

In bankruptcy,the automatic stay would prevent a secured creditor from repossessing any collateral.

Question 25

When a bankruptcy petition is filed,legal actions to recover alimony are "stayed," but child support cases are not.

Question 26

A reaffirmation agreement need not be filed with the bankruptcy court.

Question 27

If the debtor challenges an involuntary petition,a trial is held to determine whether an order for relief should be granted.

Question 28

The filing of a voluntary petition,but not an unchallenged involuntary petition,constitutes an order for relief.

Question 29

Property received from a divorce settlement is never part of a bankruptcy estate.

Question 30

Enforcing judgments obtained against the debtor are "stayed" by the filing of a voluntary or involuntary bankruptcy petition.

Question 31

Chapter 13 bankruptcies can only be filed voluntarily.

Question 32

When the order for relief is granted,all dischargeable debts are erased.

Question 33

If the debtor is represented by an attorney,a reaffirmation agreement involving the debtor need not be approved by the court.

Question 34

Non-judicial collection efforts,such as "self-help" activities like repossessing a car,are "stayed" by the filing of a voluntary or involuntary bankruptcy petition.

Question 35

A debtor and creditor can enter into a reclamation agreement,whereby the debtor agrees to pay the creditor for a debt that is dischargeable in bankruptcy.

Question 36

Legal actions to collect pre-petition debts are not "stayed" by the filing of a voluntary or involuntary bankruptcy petition.

Question 37

The bankruptcy judge attends the meeting of the creditors to maintain order,and assure that proper procedures are followed.

Question 38

In the case of an involuntary petition,the debtor must file the same schedules filed by voluntary petition debtors.

Question 39

A reaffirmation agreement must be entered into before bankruptcy discharge is granted.

Question 40

Attorneys representing debtors in a bankruptcy proceeding are subject to fines and sanctions if the information contained in the bankruptcy petition and schedules is wrong.

Question 41

The monetary amount of federal exemptions is adjusted every five years to reflect changes in the Consumer Price Index.

Question 42

An individual,partnership,or corporation may be a debtor in a Chapter 7 proceeding.

Question 43

Earnings from services performed by an individual debtor are not part of the bankruptcy estate in a Chapter 7 liquidation bankruptcy.

Question 44

A state may pass its own exemption laws and require debtors in that state to follow the state exemptions,without an option to choose the federal exemptions.

Question 45

Chapter 13 is a rehabilitation form of bankruptcy for individuals.

Question 46

A state that enacts its own bankruptcy exemptions may not give debtors the option of choosing between federal and state exemptions.

Question 47

The 2005 Act has made it more difficult for a debtor to qualify for Chapter 7 bankruptcy,primarily due to a new requirement that the debtor must satisfy a "means test."

Question 48

The "means test" may be used to deny relief under Chapter 7.

Question 49

Under the 2005 Act,the court must find substantial abuse of Chapter 7 for the court to disqualify the debtor and deny bankruptcy relief.

Question 50

For a fraudulent transfer to be voided,it must have been made to an insider of the bankruptcy petitioner.

Question 51

A liquidation bankruptcy is also known as straight bankruptcy.

Question 52

Under the 2005 Act,the highest priority of unsecured claims includes attorneys' fees,court costs,and other costs associated with the administration of the bankruptcy estate.

Question 53

The bankruptcy estates includes all the debtor's legal and equitable interests in real,personal,tangible,and intangible property,wherever located,that exist when the petition is filed,and all interests of the debtor and debtor's spouse in community property.

Question 54

In a Chapter 7 bankruptcy proceeding,a secured creditor's only legal recovery option is foreclosure.

Question 55

The "median income test" under the 2005 Act uses national median income statistics as a qualifying measure for Chapter 7 eligibility.

Question 56

A party cannot be petitioned into bankruptcy against that party's will.

Question 57

Federal bankruptcy exemptions include an interest of up to $25,000 in equity in property used as a residence.

Question 58

In terms of the priority of distributing bankruptcy estate assets,federal tax obligations are immediately below that of the expenses of administering the estate.

Question 59

Discharge of unsatisfied debts will be denied if the debtor falsified,destroyed,or concealed records of his or her financial condition.

Question 60

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 gives the bankruptcy court the power to void certain fraudulent transfers of a debtor's property made by the debtor within five (5)years prior to filing a petition for bankruptcy.

Question 61

There is usually no trustee named in a Chapter 11 bankruptcy case.

Question 62

If a secured creditor objects to a debtor payment plan,the court may still confirm the plan under some circumstances.

Question 63

In a Chapter 13 bankruptcy proceeding,the debtor's plan of payment must be filed no later than 120 days after the order for relief.

Question 64

There must be confirmation of a Chapter 11 plan of reorganization by the bankruptcy court for the debtor to be reorganized under Chapter 11.

Question 65

A Chapter 13 bankruptcy may be filed by a sole proprietorship.

Question 66

In certain circumstances,a company in reorganization bankruptcy may reject a collective bargaining agreement with its employees.

Question 67

The debtor has the exclusive right to file a plan of reorganization with the bankruptcy court within the first 150 days after the date of the order for relief.

Question 68

A Chapter 13 plan may not be modified.

Question 69

A trustee is named in a Chapter 13 by the creditors at the meeting of creditors.

Question 70

Under the 2005 Act,in Chapter 13 bankruptcy,if the debtor's monthly income multiplied by 12 exceeds the state's median income for the same-sized family,the plan may not exceed three years.

Question 71

In a Chapter 13,the debtor begins making payments to the trustee within 30 days after the plan has been approved.

Question 72

A Chapter 13 proceeding can be initiated only through the filing of a voluntary petition by a debtor who alleges that he or she is insolvent,and barely able to pay debts when they come due.

Question 73

The debtor-in-possession is empowered to operate the debtor's business during the Chapter 11 bankruptcy proceeding.

Question 74

The majority of Chapter 11 proceedings are filed by corporations that want to reorganize their capital structure by receiving discharge of a portion of their debts.

Question 75

In Chapter 11 bankruptcy,the court will appoint a special union trustee to represent union members and preserve union member rights during the bankruptcy.

Question 76

Alimony and child support are not dischargeable under Chapter 13.

Question 77

The filing of a Chapter 13 petition does not automatically stay collection activities against co-debtors and guarantors of consumer debts.

Question 78

In a Chapter 13 bankruptcy,a "composition" agreement is one in which the payment period for the debtor to repay debts is extended.

Question 79

The debtor in a Chapter 13 bankruptcy proceeding can keep more property than under a Chapter 7 proceeding.

Question 80

In a Chapter 11 bankruptcy case,the debtor usually continues to operate the business as a debtor-in-possession.