Deck 11: Schedules AB: Personal Property and C: Exemptions

Question 1

Wedding rings are exempt in Chapter 7 cases.

A) Depends on the value of the wedding rings.
B) Depends on whether the wedding rings are family heirlooms.
C) All jewelry of a highly personal nature is exempt.
D) The wedding ring is exempt, if it's a joint filing. If a single filing or the debtor is divorced and/or separated, then the wedding ring is not exempt.

Answer 1

Depends on the value of the wedding rings.

Question 2

Because of public policy reasons and to avoid an expense for the county and/or state, cemetery lots are exempt in Chapter 7 bankruptcy.

A) True.
B) False.
C) Depends on the age of the debtor(s).
D) Cemetery lots are only exempt in Chapter 13.

Answer 2

False.

Question 3

Can a homeowner association initiate foreclosure proceedings?

A) Yes.
B) No.
C) Only if the mortgage holder already started foreclosure proceedings. At that point, the HOA can add itself to the lawsuit.
D) An HOA cannot initiate a foreclosure action if a tenant resides in the property.

Answer 3

Yes.

Question 4

A car lease is listed on Schedule A/B and the equity is exempted on Schedule

A) True.
B) False.
C) Leases are listed on Schedule G
D) Leases are listed on Schedule D

Question 5

Cary has her license suspended due to an outstanding judgment from a personal injury case. Will filing for bankruptcy result in Cary reinstating her driver's license?

A) No, because the judgment was already entered.
B) Yes, because debts related to personal injury cases are dischargeable in bankruptcy.
C) No, because debt related to personal injury cases are not dischargeable in bankruptcy.
D) Yes, because having a driver's license is a right.

Question 6

A HELOC loan can be eliminated with Chapter 7.

A) True, just like all junior liens.
B) False, unless the property is being surrendered.
C) True, if the loan is for less than $10,000.
D) A HELOC can only be eliminated with a Chapter 11 bankruptcy.

Question 7

Because a cemetery plot prevents an expense to the city in funeral services to a resident, cemetery plots are exempt property.

A) Depends on city budgets regarding services provided.
B) Depends on the age of the debtor and the value of the cemetery plot.
C) Cemetery plots are automatically exempt because it's not real estate and has no resale value.
D) Cemetery plots are not exempt because it's considered real estate.

Question 8

Due to a job loss, Gail filed for bankruptcy. At the 341 Meeting of Creditors, there seemed to be no issues, and her attorney told her to expect the Order of Discharge in a few months, that everything was okay. One hundred seventy-eight days later, Gail received a check for $10,000 from a life insurance company. Unbeknownst to her, her long-lost aunt passed away and had her listed as a beneficiary on a life insurance policy. Is the trustee entitled to the funds?

A) Yes, because the funds from a life insurance policy or an inheritance are part of the bankruptcy estate from the date of filing up to six months.
B) No, because Gail had no way of knowing that her aunt had passed away or was going to pass away.
C) No, because Gail received the funds after the bankruptcy petition was filed.
D) No, because life insurance policies are exempt, and it's impossible to determine when someone will pass away.

Question 9

Ten years earlier, as a graduation gift, Tom received a $500 certificate of deposit. Now, the amount in the cd has increased to over $3,000. Is the cd protected in bankruptcy?

A) All cd's and retirement accounts are protected, especially if it's given as a gift.
B) The cd is protected because it was opened more than ten years ago, also known as the 10-year rule.
C) The cd is protected because it's still below the exemption limits.
D) Cd's are held by financial institutions and are required to be listed in the schedules. Whether or not the cd is protected depends on the assets that make up the bankruptcy estate.

Question 10

John owns a small fencing company. He doesn't have a warehouse to store materials and his equipment is several years old and of little value. Since John is filing for Chapter 7 and his business is a separate corporation with no debt, he doesn't have to list his business in the schedules.

Question 11

John has filed for Chapter 7 bankruptcy. He listed the following secured debts: His Ford truck worth $13,200 with an outstanding loan of $10,000, and his wife's car that is worth $8,500 and has an outstanding loan of $9,400. John's wife did not file for bankruptcy, but he is on the promissory note. John also transferred his 2006 Ford F150 with 217,000 miles to his son. Applying the exemption amounts in your state, what would you advise John.

Question 12

Bobby's 341 Meeting of Creditors for his Chapter 7 bankruptcy is scheduled for the end of this month. However, ten days ago, Bobby received the proceeds as the beneficiary of a life insurance policy. His uncle, who he hadn't spoken to in years, died unexpectedly. Bobby didn't even know about the life insurance policy until he was called by the agent that sold his uncle the policy. Can Bobby now wipe out all his debt with the bankruptcy and keep the funds?

Question 13

What options does Bobby have moving forward?

Question 14

Mary, the debtor emailed you her Bankruptcy Intake. In reviewing the intake, you notice she listed the value of her bedroom furniture at $6,000. What steps should you take?