Deck 32: Bankruptcy and Reorganization

Question 1

If a party files a Chapter 7 bankruptcy, the trustee may use all of the parties IRA or SEP to satisfy debts.

Answer 1

False

Question 2

Liquidation may be voluntary, but not involuntary, under Chapter 7

Answer 2

False

Question 3

It is possible to file for Chapter 7 bankruptcy and then immediately file for bankruptcy again three months after the first bankruptcy is complete.

Answer 3

False

Question 4

For a collective bargaining agreement to be rejected under Chapter 11, the debtor must have first presented the proposed changes to the collective bargaining agreement to the employees' representative, and the employees reject the changes without good cause.

Question 5

In a Chapter 11 filing, reorganization may be either voluntary or involuntary.

Question 6

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

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 2006

Question 7

The two general roles of bankruptcy include:

A) protections of banks and protection of those who supply credit.
B) to relieve debtors of all debt and to give financial institutions an opportunity to recoup losses.
C) allowing the IRS to receive outstanding tax liabilities and for debtors to clear the slate with the IRS.
D) providing protection to creditors and provide opportunities to debtors to gain a fresh financial start.
E) to clear state dockets of creditor claims and to help debtors receive a fresh start financially.

Question 8

Before a debtor files for one specific type of relief, the clerk of courts must give the debtor written notice of the other types of relief available.

Question 9

Each state has its own rules and regulations in regards to bankruptcy proceedings.

Question 10

Bankruptcy proceedings begin with a letter sent to the party by certified mail that a legal proceeding will begin against them.

Question 11

A bankruptcy trustee may, at times, take over a debtor's business during a Chapter 7 proceeding.

Question 12

An individual must complete credit counseling from a nonprofit budget and credit counseling agency to avoid having his bankruptcy petition dismissed.

Question 13

After filing a voluntary Chapter 7 bankruptcy petition, assets that a debtor gains are generally not part of the bankruptcy estate unless they fall under an exemption.

Question 14

If a debtor cannot pay their debts in a timely fashion, they are known as

A) problematic debtors
B) insolvent debtors
C) in arrears debtors
D) Foreclosed debtors
E) statutory transactors

Question 15

Under Chapter 7, a debtor must be insolvent to file a voluntary petition for bankruptcy.

Question 16

Legal actions against a debtor can continue after a bankruptcy petition is filed.

Question 17

Which of the following is NOT something a bankruptcy judge can make decisions on?

A) The administration of bankruptcy proceedings
B) What a debtor's assets are
C) How a debtor's assets are to be sold
D) What assets a debtor can keep
E) State law claims.

Question 18

If a debtor fails to appear at the Chapter 7 creditors' meeting, the court may refuse to grant the bankruptcy.

Question 19

Some debts that are dischargeable under Chapter 13 are not dischargeable under Chapter 7.

Question 20

Which of the following was NOT a reason cited for passing the comprehensive changes to bankruptcy law included in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

A) The increased numbers of bankruptcy filings
B) Significant losses associated with bankruptcy filings
C) Making it simper and easier for consumers to file for bankruptcy
D) Loopholes and incentives that allowed and sometimes encouraged opportunistic personal filings and abuse
E) The fact that some bankruptcy debtors were able to repay a significant portion of their debt

Question 21

When liquidation occurs, a debtor turns over all assets to ________

A) the court
B) a bank appointed by the court
C) a trustee
D) a conservator
E) a debtor does not turn over their assets

Question 22

Which of the following chapters recognizes insolvency proceedings pending in a foreign country and relief for foreign debtors?

A) Chapter 7
B) Chapter 9
C) Chapter 11
D) Chapter 14
E) Chapter 15

Question 23

A debtor in a Chapter 7 bankruptcy does not have to be ________, but must be able to show the court that he owes money to someone.

A) insolvent
B) unable to pay
C) employed
D) a homeowner with assets
E) homeless

Question 24

An individual who takes over administration of the debtor's estate is referred to as which of the following?

A) Administrator
B) Aligner
C) Organizer
D) Reformer
E) Trustee

Question 25

The Bankruptcy Code is contained within which of the following titles of the United States Code?

A) Title 9
B) Title 11
C) Title 7
D) Title 15
E) Title 34

Question 26

Neldon must file for bankruptcy. If Neldon files a Chapter ________ that means he must turn over his assets to a trustee who will take over management of Neldon's assets and sell nonexempt assets.

A) 7
B) 9
C) 11
D) 13
E) 15

Question 27

Which of the following is false regarding bankruptcy cases?

A) The Bankruptcy Rules set forth procedures for bankruptcy cases.
B) Bankruptcy cases are referred to bankruptcy judges, under the authority of the district courts.
C) An appeal of a bankruptcy ruling goes to the district court judge.
D) A jury is not allowed in a bankruptcy proceeding.
E) Bankruptcy cases are filed in federal district courts.

Question 28

The most familiar type of bankruptcy proceedings is known as a liquidation and is also sometimes called

A) freeloading
B) reformer bankruptcy
C) straight bankruptcy
D) easy bankruptcy
E) debt avoidance bankruptcy

Question 29

Which statement is true regarding the type of law that is relevant to bankruptcy claims?

A) Only federal statutory law is relevant.
B) Only state statutory law is relevant.
C) While bankruptcy law is state law, federal law applies to bankruptcy cases in the sense that federal laws regarding debtor's property and creditor claims may apply.
D) While bankruptcy law is federal law, state law applies to bankruptcy cases in the sense that state laws regarding debtor's property and creditor claims may apply.
E) Only federal common law is relevant to bankruptcy claims.

Question 30

If Rafa chooses to reorganize his individual debts, which Chapter of the bankruptcy code would he file?

A) Chapter 7
B) Chapter 13
C) Chapter 11
D) Chapter 14
E) Chapter 15

Question 31

Which of the following is NOT part of the basic set of procedures for bankruptcy cases?

A) The petition for the prompt repayment of secured creditor claims
B) The granting of an automatic stay
C) A determination on whether an order of relief should be granted
D) The creditors meet with the debtor
E) Discharging debts

Question 32

Once the petition for bankruptcy is filed and the automatic stay has been granted, what is the next step in a bankruptcy case?

A) The creation of a payment plan
B) The granting of a permanent plan of action the debtor must take to move forward
C) A determination on whether an order of relief should be granted
D) Ordering a creditor meeting
E) Discharging debts

Question 33

Once a voluntary liquidation proceeding under Chapter 7 is filed, the debtor's prepetition assets form the ________.

A) Corpus
B) Remainder
C) Residual estate
D) Bankruptcy estate
E) Relinquished asset pool

Question 34

To initiate a bankruptcy case, what is the first step?

A) creditors send notice via mail to debtors that they are initiating a suit.
B) The granting of an automatic stay
C) A filing of a petition
D) Creditors meet with the debtor to assess which party has priority in filings
E) Debts are discharged

Question 35

What is the last of the basic steps of a bankruptcy proceeding?

A) The petition for the prompt repayment of secured creditor claims
B) The granting of an automatic stay
C) A determination on whether an order of relief should be granted
D) The creditors meet with the debtor
E) Discharging debts

Question 36

Who most frequently uses Chapter 11 Reorganizations?

A) family farmers
B) governmental entities
C) banks
D) corporate debtors
E) savings and loan companies

Question 37

A ________ involves the sale of a debtor's assets by a trustee and the distribution of the money to creditors.

A) Chapter 7
B) Chapter 9
C) Chapter 11
D) Chapter 13
E) Chapter 15

Question 38

Under a Chapter 7 liquidation proceeding, which of the following would be eligible for this type of bankruptcy?

A) Savings and loan
B) Insurance company
C) Banks
D) Corporations
E) Credit union

Question 39

Which of the following is false regarding provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005?

A) Under the act, an individual may not generally be considered a debtor unless within 180 days prior to filing, the debtor receives credit counseling from a nonprofit budget and credit counseling agency.
B) Under the act, if an individual was a debtor in a bankruptcy case that was dismissed within 180 days of the current case, the individual is generally not eligible to be a debtor under Chapters 7, 11, or 13.
C) Under the act, if a previous bankruptcy was completed rather than dismissed, the individual is generally permitted to file for bankruptcy again.
D) Under the act, if a party completes a Chapter 7 bankruptcy, the party is not permitted to seek a Chapter 7 bankruptcy again for eight years.
E) Under the act, if a party completes a Chapter 7 bankruptcy, the party is not permitted to seek a Chapter 7 bankruptcy again for 180 days.

Question 40

The city of Normandy is in need of need of adjustment of debts to become solvent again, which of the following Chapters provide that opportunity in bankruptcy?

A) Chapter 7
B) Chapter 9
C) Chapter 11
D) Chapter 13
E) Chapter 15

Question 41

Who can attempt to force a debtor into bankruptcy by filing an involuntary petition under Chapter 7?

A) A court
B) An employer
C) Creditors
D) The state
E) Family members owed money

Question 42

Emily's bank is trying to repossess her car after she filed for Chapter 7 bankruptcy. The bank is in error because once Emily files bankruptcy, a(n) ________ is issued.

A) stop order
B) automatic stay
C) dismissal of debt
D) discharge
E) stay of relief

Question 43

Garland files a Chapter 7 bankruptcy. A(n) ________ is required of all the creditors to schedule a liquidation.

A) logistics meeting
B) operational meeting
C) creditors' meeting
D) enforcement meeting
E) due diligence meeting

Question 44

Which of the following means that bankruptcy relief is ordered and that the bankruptcy proceedings can continue?

A) An order of relief
B) A stay enforcement order
C) An approval order
D) A liquidation order
E) A documentation order

Question 45

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

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.

Question 46

Which of the following does NOT fall under an exception to the automatic stay?

A) The debtor was a debtor in a bankruptcy case dismissed within a year of the current bankruptcy case filing.
B) Legal actions to determine paternity or collect child support.
C) Legal actions to collect alimony payments.
D) Secured creditors who do not have adequate protection under the stay.
E) Creditors who are involved in repossession proceedings.

Question 47

For how many days prior to the filing of a Chapter 7 bankruptcy petition is a debtor assumed insolvent?

A) 120
B) 60
C) 90
D) 45
E) 30

Question 48

Which of the following is false regarding rights of a trustee in a Chapter 7 bankruptcy?

A) The trustee takes possession of the debtor's property and has it appraised.
B) If someone else holds the debtor's property, the trustee has the power to require the person to return that properly.
C) The trustee examines the debtor's records but may not even temporarily take over the debtor's business.
D) The trustee can initiate collection actions but must also defend against creditor actions.
E) The trustee separates the exempt property from the nonexempt property and sells the nonexempt property.

Question 49

Which of the following is false regarding bankruptcy proceedings?

A) Some type of payment plan is created and approved, usually by the creditors and the court.
B) Debts remaining after the plan is carried out are usually discharged.
C) Bankruptcy proceedings start with a finding of insolvency.
D) All bankruptcy cases begin with a filing of petition for bankruptcy.
E) The court determines whether an order of relief should be granted.

Question 50

A payment made by an insolvent debtor that gives preferential treatment to one creditor over another is called which of the following?

A) An unfair payment
B) An unequal payment
C) A preferential payment
D) An unendorsed payment
E) An unapproved payment

Question 51

A discharge is an order written by a federal bankruptcy judge that states the debtor:

A) is immune from creditor actions to collect a debt.
B) is in the process of starting a bankruptcy proceeding.
C) is unable to be sued.
D) cannot be sued in state court.
E) is able to discharge monies to creditors.

Question 52

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

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

Question 53

Which of the following tests might a court use to determine whether or not to dismiss a debtor's bankruptcy petition?

A) The means test
B) The assets test
C) The median test
D) The liquidation test
E) The bankruptcy test

Question 54

The creditors get to select what in a Chapter 7 bankruptcy proceeding?

A) The judge.
B) The bank that will liquidate the assets.
C) The trustee.
D) The debtor's timeframe to pay off the debts owed.
E) The jury that will hear the case.

Question 55

A moratorium for almost all creditor litigation against a debtor in a Chapter 7 bankruptcy is referred to as which of the following?

A) A stop order
B) An automatic stay
C) A semi-automatic dismissal
D) A semi-discharge
E) There is no such moratorium in a Chapter 7 proceeding

Question 56

If an automatic stay is in effect in a Chapter 7 proceeding, which of the following statements is NOT accurate?

A) Creditors cannot attempt to repossess property during bankruptcy proceedings.
B) A creditor who received a judgment against a debtor prior to the bankruptcy filing may not act to enforce the judgment.
C) Legal actions to collect child support payments are subject to the stay.
D) 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.
E) If the debtor was a debtor in a bankruptcy case that was dismissed within a year of the current bankruptcy case filing, the stay automatically terminates 30 days after the current filing.

Question 57

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

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.

Question 58

If a creditor knowingly continues to engage in legal action against a debtor once the debtor has received an automatic stay, which of the following are not included in the remedies the debtor may receive

A) Attorney's fees
B) Damages
C) Costs
D) Punitive damages
E) Specific performance

Question 59

What happens when an order of relief is granted?

A) The creditor gets relief from the automatic stay
B) The debtor is relieved of all obligations to repay debts
C) The bankruptcy can continue
D) The bankruptcy is dismissed
E) The debtor gets protection from collection efforts

Question 60

Garland files for Chapter 7 bankruptcy and an automatic stay has been issued. The court has granted an order of relief. A creditor's meeting is scheduled but Garland does not attend. At this point what is the court's option?

A) The meeting must be rescheduled.
B) The trustee will allocate the debtor's assets.
C) The court will send a sheriff to bring Garland to the meeting.
D) The court may refuse to grant Garland's bankruptcy.
E) Garland will be held in contempt of court and find not less than $5,000.

Question 61

In Margaret Kawaauhau v. Paul W. Geiger, the text case 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 resulted in which of the following?

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.

Question 62

[Consumer Debt] Isabel had not been keeping up with her spending and bought several expensive items. Between numerous credit cards and some unsecured loans, she had a total of 14 creditors. All her debt was consumer debt, and Isabel really wished that she had not put all those new clothes on her credit card. Although Isabel was struggling, she did not want to file for bankruptcy because she did not want a bad credit score. However, three of her credit card companies signed and filed an involuntary bankruptcy petition against her under Chapter 7. Isabel 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 believes 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 claims of Isabel's ex-husband for alimony?

A) Any efforts to collect on the past due alimony are stayed by the bankruptcy proceeding, and the claim for alimony is subject to discharge.
B) Any effort to collect on the past due alimony are stayed by the bankruptcy proceeding, but alimony payments are nondischargeable.
C) Efforts to collect on past due alimony payments accrued prior to the filing of the bankruptcy petition are stayed, but efforts to collect on alimony payments accruing after the filing of the bankruptcy petition are not stayed; and alimony payments are nondischargeable.
D) Efforts to collect on past due alimony payments accrued only after the filing of the bankruptcy petition are stayed, but efforts to collect on alimony payments accrued before the filing of the bankruptcy petition are not stayed; and alimony payments are nondischargeable.
E) Legal action to collect alimony is not subject to an automatic stay, and alimony payments are nondischargeable.

Question 63

Which of the following is NOT required for a reaffirmation of debt?

A) The reaffirmation agreement is made after the debt is discharged
B) The reaffirmation agreement is made before the debt is discharged
C) The debtor must be able to cancel the agreement
D) The agreement must contain explicit information regarding the time period in which the debtor can cancel the agreement.
E) The agreement should contain a statement notifying the creditor that the law does not require the agreement.

Question 64

[Exemptions] Liane 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 Liane 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.
What is the status of the exemptions Liane claimed on the car and jewelry?

A) Both exemptions will likely be granted because their type and value are within allowable federal exemptions.
B) The exemption claimed for the jewelry will likely be granted; but in order to ascertain the status of the vehicle, further information is needed in regard to whether it is used in business.
C) The exemption claimed for the vehicle will likely be granted, but the exemption claimed for the jewelry will likely be disallowed because no exemption may be claimed for jewelry.
D) The exemption claimed for the vehicle will likely be granted, but the exemption claimed for the jewelry will likely be disallowed because a federal exemption may only be claimed for jewelry consisting of a wedding band worth less than $400.
E) The exemption claimed or the jewelry will likely be allowed, but the exemption claimed for the vehicle will likely be denied because the federal exemption for a vehicle is limited to $1,000.

Question 65

A reaffirmation agreement is when the debtor agrees to pay a debt even though it could be ________

A) settled
B) discharged
C) sold to another creditor
D) affirmed
E) claimed by another creditor

Question 66

What is the maximum period of a Chapter 13 repayment plan that does not require special court approval?

A) One year
B) Two years.
C) Three years.
D) Four years.
E) No limit.

Question 67

[Consumer Debt] Isabel had not been keeping up with her spending and bought several expensive items. Between numerous credit cards and some unsecured loans, she had a total of 14 creditors. All her debt was consumer debt, and Isabel really wished that she had not put all those new clothes on her credit card. Although Isabel was struggling, she did not want to file for bankruptcy because she did not want a bad credit score. However, three of her credit card companies signed and filed an involuntary bankruptcy petition against her under Chapter 7. Isabel 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 believes 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 Isabel does not object to the bankruptcy proceeding, what is the next step that should occur?

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.

Question 68

[Exemptions] Liane 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 Liane 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 Liane's bankruptcy estate?

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.

Question 69

[Consumer Debt] Isabel had not been keeping up with her spending and bought several expensive items. Between numerous credit cards and some unsecured loans, she had a total of 14 creditors. All her debt was consumer debt, and Isabel really wished that she had not put all those new clothes on her credit card. Although Isabel was struggling, she did not want to file for bankruptcy because she did not want a bad credit score. However, three of her credit card companies signed and filed an involuntary bankruptcy petition against her under Chapter 7. Isabel 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 believes 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 Isabel's creditors?

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 Isabel'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 Isabel's case.
D) The petition was properly filed because 3 or more creditors with unsecured claims signed the petition for involuntary bankruptcy.
E) The petition was properly filed because only 2 or more creditors with secured or unsecured claims must sign a petition for involuntary bankruptcy.

Question 70

Which of the following are permitted to file under Chapter 11 reorganization?

A) Stockbrokers
B) Commodities brokers
C) Banks
D) Savings and loan companies
E) Corporate debtors

Question 71

Juanita agrees to repay debt to Broderick even though Juanita is filing for bankruptcy and could have the debt discharged. What type of agreement will Juanita and Broderick make?

A) A settlement
B) A reaffirmation agreement
C) An acknowledgement agreement
D) An accord and compromise
E) An affirmance

Question 72

Which of the following is false regarding Chapter 12 of the bankruptcy code?

A) A family farmer under Chapter 12 must have regular annual income.
B) The family farmer's gross income must be at least 50 percent farm-dependent.
C) At least 50 percent of the family farmer's debt must be farm-related.
D) The debt must be under a certain debt cap.
E) Congress modeled Chapter 12 after Chapter 7 relief.

Question 73

Why is repayment under Chapter 13 distinct from other types of relief?

A) Because Chapter 13 is the only type of relief available to debtors who are not insolvent.
B) Because debts are discharged in Chapter 13 but not in other Chapters of bankruptcy.
C) Because repayment plans are usually simpler and less expensive than Chapter 11 plans.
D) Because repayment is voluntary only. A debtor cannot be forced into a repayment plan.
E) Because Chapter 13 is an option only for municipalities, not individuals and businesses.

Question 74

Which of the following is required to file Chapter 12 bankruptcy?

A) At least half of the debt must be farm related?
B) At least 90 percent of the debt must be farm related
C) Total debt must be under $1 million
D) The farmer must be 100 percent insolvent.
E) The farmer must be completely unable to pay any money towards creditors

Question 75

Which of the following is false regarding nondischargeable debts under a Chapter 7 bankruptcy filing?

A) Nondischargeable debts include claims of willful or malicious conduct by the debtor that caused injury to another person or property.
B) Nondischargeable debts include specific student loans, unless payment of the loans imposes undue hardship on the debtor.
C) Nondischargeable debts include debts not discharged in previous bankruptcies.
D) Nondischargeable debts include judgments against a debtor for claims resulting from the debtor's drinking and driving.
E) Nondischargeable debts include claims for back taxes or government fines within four years of filing for bankruptcy.

Question 76

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

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.

Question 77

Which of the following is false regarding Chapter 13 of the bankruptcy code?

A) Chapter 13 permits individuals with regular income to pay their debts to creditors in installment plans under the supervision of the court.
B) Any debtor who files under Chapter 13 could also have filed under Chapter 11.
C) Chapter 13 repayment plans are usually simpler and less expensive than Chapter 11 plans.
D) By statute Chapter 13 plans last between 36 and 60 months.
E) Individuals, partnerships, and corporations may file for a Chapter 13 repayment plan.

Question 78

[Consumer Debt] Isabel had not been keeping up with her spending and bought several expensive items. Between numerous credit cards and some unsecured loans, she had a total of 14 creditors. All her debt was consumer debt, and Isabel really wished that she had not put all those new clothes on her credit card. Although Isabel was struggling, she did not want to file for bankruptcy because she did not want a bad credit score. However, three of her credit card companies signed and filed an involuntary bankruptcy petition against her under Chapter 7. Isabel 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 believes 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.
If Isabel convinces the judge that the creditors have filed the involuntary bankruptcy frivolously, which of the following is true regarding what amounts, if any, the court may force the creditors to pay?

A) The court may award attorney costs, fees of the debtor, and punitive damages.
B) The court may award attorney costs and fees of the debtor, but not punitive damages.
C) The court may award fees of the debtor, but not attorney costs or punitive damages.
D) The court may award punitive damages, but not attorney costs or fees of the debtor.
E) The judge may dismiss the involuntary bankruptcy petition, but no other relief is available.

Question 79

Galloway Family Farms has been in business for over 70 years. It has fallen on hard times however. If the Galloway Family Farms wanted to adjust their debts, under what Chapter would they file?

A) 7
B) 8
C) 9
D) 11
E) 12

Question 80

Which of the following is NOT true of a Chapter 13 repayment plan?

A) Creditors do not vote to approve a chapter 13 repayment plan.
B) If the court approves of the repayment plan, it is accepted.
C) The plan must provide for full payment of all claims.
D) The plan is not required to provide for full payment of all claims.
E) The plan is required to treat all same-class creditors equally.