Deck 10: The Involuntary Bankruptcy: Chapter 7 or Chapter 11

Question 1

If a debtor has fewer than 12 creditors, at least ______ eligible creditor(s) must file an involuntary petition.

Answer 1

1

Question 2

Once an Order for Relief is entered, the case progresses like a case initiated voluntarily by a debtor.

Answer 2

True

Question 3

Briefly contrast the difference between a Chapter 7 voluntary case and a Chapter 7 involuntary case.

Answer 3

The only difference between a voluntary and an involuntary Chapter 7 case is the manner in which the case is initiated. Once an order for relief is entered, there is no difference.

Question 4

A creditor may not file an involuntary petition against a debtor if the creditor's claim is the subject of a bona fide dispute as to liability or amount.

Question 5

After an involuntary petition is filed, no other creditors may join in the filing of the petition.

Question 6

Why would an unsecured creditor want to file an involuntary petition against a debtor?

Question 7

It always takes at least three creditors to put a debtor into bankruptcy involuntarily.

Question 8

What is an order for relief in an involuntary case?

Question 9

A trustee may be appointed before an order for relief is entered.

Question 10

A creditor with a partially unsecured claim may file an involuntary petition against a debtor.

Question 11

Upon the filing of an involuntary petition, the clerk issues a summons and the involuntary petition and summons are served upon the debtor.

Question 12

If a debtor has 12 or more creditors, at least ______ eligible creditor(s) must file an involuntary petition.

Question 13

An involuntary petition may not be filed against a farmer, a family farmer, or a corporation that is not a moneyed, business, or commercial corporation.

Question 14

The creditor(s) initiating an involuntary bankruptcy must file an involuntary petition that conforms substantially to Official Form No. 5, along with the filing fee.

Question 15

An involuntary petition may be filed against a farmer.

Question 16

A creditor whose collateral is worth less than the amount of its claim may be eligible to file an involuntary petition against a debtor.

Question 17

An involuntary petition may be filed against a debtor under Chapters ______ of the Bankruptcy Code.

Question 18

A creditor may file an involuntary petition against an eligible debtor only under Chapters 7, 11, or 12.

Question 19

Under what circumstances may a bankruptcy court enter an order for relief against any debtor against whom an involuntary petition is filed?

Question 20

The debtor must file a disclosure of attorney's compensation statement, a list of creditors, schedules, and a statement of financial affairs within 15 days after entry of the order for relief in an involuntary case.

Question 21

Explain whether it matters whether the claim of a creditor who files an involuntary petition against a debtor is noncontingent and undisputed.