Deck 21: Bankruptcy

Question 1

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires that a debtor who wishes to file under any chapter of the bankruptcy law must,unless exempt,receive individual or group credit counseling from an approved,not-for-profit,individual or group budget or credit counseling agency by telephone or online.

Answer 1

True

Question 2

Under Chapter 7 bankruptcy the trustee collects the debtor's exempt property,sells it and dispenses the proceeds to the creditors in a fair manner.

Answer 2

False

Question 3

An individual or business that owes money is said to be a creditor.

Answer 3

False

Question 4

The means test uses a complex formula that measures an individual's income relative to the median income of the people in the state where he or she resides.

Question 5

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 does not allow the bankruptcy court to disallow a petition for a Chapter 7 bankruptcy if the individual filing for bankruptcy earns an income that is too high to meet the standards of the means test.

Question 6

Two types of actions by the debtor are prohibited under bankruptcy law: preferential payment and fraudulent transfer.

Question 7

Priority debts are deemed to be sufficiently important that they do not have to be paid in full.

Question 8

Under the provisions of Chapter 13 of the federal bankruptcy law,the debtor retains his or her property,but agrees to pay back all or a portion of his or her debts on an interest free
basis over a period spanning from three to five years.

Question 9

A contract that is entered into by the debtor that includes a preferential payment is void.

Question 10

Bankruptcy law provides that no debts survive the bankruptcy.

Question 11

Chapter 15 provides a framework for bankruptcy cases in which foreign countries are involved.

Question 12

Under Chapter 11 major decisions must be approved by management.

Question 13

Bankruptcy is the legal state that occurs when a debtor is insolvent,is in default,and is unable to fulfill his or her obligations to pay back his or her creditors.

Question 14

Bankruptcy law is divided in clauses.

Question 15

Insolvency often leads to default.

Question 16

The most common type of bankruptcy filed by individuals and businesses is Chapter 7.

Question 17

Bankruptcy filings can be made for the sole purpose of defrauding creditors.

Question 18

A secured debt is a loan for which a specific asset is used as collateral,or pledged.

Question 19

The purpose of Chapter 9 is to provide a municipality with a debt repayment plan,rather than to require the liquidation of municipal assets.

Question 20

A voluntary filing occurs when the debtor himself or herself files a bankruptcy petition.

Question 21

Identify and define the two types of bankruptcy filings.

Question 22

Chapter 13 bankruptcy is sometimes referred to as a ______________________:

A) reorganization bankruptcy.
B) realignment bankruptcy.
C) recharging bankruptcy.
D) revision bankruptcy.

Question 23

A debtor is an individual or business who:

A) owes money.
B) counts money.
C) loans money
D) likes money.

Question 24

Chapter 11 Bankruptcy is mostly used by_____________:

A) partnerships.
B) sole proprietorships.
C) individuals.
D) corporations.

Question 25

Examples of debts discharged under Chapter 7 bankruptcy are the following EXCEPT:

A) credit card bills
B) medical bills.
C) lawsuit judgments
D) student loans.

Question 26

The purpose of Chapter 15 bankruptcy is to promote _______________between U.S.courts and those of foreign countries in bankruptcy cases.

A) collaboration.
B) competition.
C) creativity.
D) cooperation.

Question 27

Under the provisions of Chapter 13 of the federal bankruptcy law,the debtor retains his or her property but agrees to pay back all or a portion of his or her debts on an interest free basis over a period spanning from ____________ years.

A) one to three.
B) two to four.
C) three to five.
D) five to ten.

Question 28

Insolvency occurs when:

A) assets equal liabilities.
B) liabilities exceed assets.
C) assets exceed liabilities.
D) there are no assets.

Question 29

To be eligible for a Chapter 12 bankruptcy,a debtor cannot owe more than_____________:

A) $1,000,000.
B) $1,500,000.
C) $1,750,000.
D) $2,000,000.

Question 30

Under Chapter 13 examples of priority debts include all of the following EXCEPT:

A) certain tax obligations.
B) alimony and child support.
C) wages owed to employees.
D) automobile loans.

Question 31

A record of bankruptcy may remain on one's record for up to:

A) 3 years.
B) 5 years.
C) 7 years.
D) 10 years.

Question 32

Under Chapter 9 bankruptcy municipality is defined as the following type of entity EXCEPT:

A) a political subdivision
B) a public agency
C) an instrumentality of a state
D) a private agency

Question 33

In addition to the means test,the Bankruptcy Abuse Prevention and Consumer Protection Act requires that a debtor who wishes to file under any chapter of the bankruptcy law must,unless exempt,receive individual or group credit counseling from an approved,not-for-profit,individual or group budget or credit counseling agency.The debtor must obtain a certificate from this agency outlining the assistance in budgeting that the debtor received.The counseling must be performed by telephone or online within _________ prior to the bankruptcy filing.

A) 30 days.
B) 90 days.
C) 180 days.
D) 360 days.

Question 34

The Bankruptcy Abuse Prevention and Consumer Protection Act allows the bankruptcy court to disallow a petition for a Chapter 7 bankruptcy if the individual filing for bankruptcy earns an income that is __________________to meet the standards of the means test.

A) too high.
B) too low.
C) equal.
D) not existing.

Question 35

To be eligible for a Chapter 12 bankruptcy,at least ____________of the debtor's income must come from his or her farming or fishing activities.

A) 100 %.
B) 80%.
C) 50%.
D) 25%.

Question 36

In general a debtor may not file for Chapter 7 bankruptcy if he or she had received a bankruptcy discharge in the last_________________:

A) one to three years.
B) three to five years.
C) six to eight years.
D) eight to ten years.

Question 37

A(n)______________ filing occurs when creditors pressure the debtor to file:

A) involuntary.
B) voluntary.
C) free.
D) concurrent.

Question 38

Under Chapter 7 of the bankruptcy law examples of exempt property under federal law include the following EXCEPT:

A) one motor vehicle.
B) appliances.
C) trade tools.
D) vacation home.

Question 39

Under Chapter 13,certain debts are considered to be priority debts.Priority debts are deemed to be _________________that they must be paid in full.

A) necessary.
B) sufficiently important.
C) exempt.
D) nonexempt.

Question 40

Define and give examples of secured debts.

Question 41

Discuss the two types of actions that are prohibited under Chapter 7 of the bankruptcy law.

Question 42

Define and give examples of secured debts.