Deck 35: Bankruptcy

Question 1

Which of the following chapters allows a company to reorganize while its financial affairs are put on a sounder basis?

A) Chapter 7
B) Chapter 11
C) Chapter 12
D) Chapter 13
E) Chapter 15

Answer 1

B

Question 2

In 2005, Congress adopted the Bankruptcy Reform Act, which is the current bankruptcy law.

Answer 2

False

Question 3

A composition is an agreement by creditors to accept less than the full amount of the debt and to discharge the debtor from further liability.

Answer 3

True

Question 4

Bankruptcy trustees are government lawyers appointed by the:

A) US Courts of Appeal.
B) US Solicitor General.
C) US House Committee on the Judiciary.
D) US Circuit Courts.
E) US Attorney General.

Question 5

Chapter 12 of the current bankruptcy act deals with the adjustment of debts of a family farmer or fisherman with regular annual income.

Question 6

If there has been a dismissal of a bankruptcy case, the debtors and creditors have same rights and remedies as they had prior to the case being commenced.

Question 7

Railroads and insurance companies are allowed to voluntarily file a petition of liquidation.

Question 8

Under the Bankruptcy Act, secured creditors get their security interests before anyone else is satisfied.

Question 9

Under Chapter 5, the individual debtor must show evidence that he or she attended an approved nonprofit budget and counseling agency within 180 days before the filing of bankruptcy.

Question 10

Which of the following is true of Chapter 11 of the BAPCPA?

A) It applies only to voluntary bankruptcy proceedings initiated by a company.
B) It applies to anybody who can file Chapter 7, plus railroads.
C) It applies to all debtors except railroads, insurance companies, most banks and credit unions.
D) It addresses the issue of adjustment of debts of a family farmer with regular annual income.
E) It applies only to individuals with debt not exceeding about $1.3 million.

Question 11

If it's a "no asset" bankruptcy, creditors are in effect told by the court to file proof of claim as soon as possible.

Question 12

The court's order determining that the debtor's property be under the control of the bankruptcy court is known as an order of relief.

Question 13

Bankruptcy deals with the seizure of the debtor's assets and their distribution to the debtor's various creditors.

Question 14

Which of the following chapters of the BAPCPA applies to all debtors except railroads, insurance companies, most banks and credit unions, and homestead associations?

A) Chapter 7
B) Chapter 9
C) Chapter 15
D) Chapter 12
E) Chapter 13

Question 15

Liquidation is a means by which a financially troubled company can continue to operate while its financial affairs are put on a sounder basis.

Question 16

The judges of the US Bankruptcy Courts are appointed by the US Courts of Appeal.

Question 17

In bankruptcy, the act of changing the chapter number filed from one to another is known as conversion.

Question 18

All persons eligible for discharge under Chapter 7 proceedings are eligible for Chapter 11 proceedings.

Question 19

If a debtor's Chapter 7 bankruptcy is dismissed, he or she is ineligible to file for bankruptcy under any other chapter.

Question 20

The current bankruptcy law, which was adopted by the U.S. Congress in 2005, is the:

A) Bankruptcy Reform Act.
B) Chandler Act.
C) Bankruptcy Act.
D) Bankruptcy Abuse Prevention and Consumer Protection Act.
E) Bankruptcy and Insolvency Act.

Question 21

Which of the following nonbankruptcy alternatives allows the debtor to transfer some or all of his assets to a trustee who sells the assets and apportions the proceeds in some agreed manner, usually pro rata, to the creditors?

A) Reaffirmation
B) Assignment for the benefit of the creditors
C) Order of relief
D) Exclusive dealing agreement
E) Hypothetical lien creditors

Question 22

In bankruptcy, changing the chapter number filed from one to another is known as:

A) receivership.
B) reaffirmation.
C) recording.
D) conversion.
E) composition.

Question 23

Upon filing the bankruptcy, an automatic injunction that halts actions by creditors to collect debts comes into play. This is known as an):

A) order of relief.
B) reaffirmation.
C) deed of trust.
D) redemption.
E) stay.

Question 24

When does a person become eligible to file for bankruptcy under Chapter 13?

Question 25

Which of the following nonbankruptcy alternatives is an agreement by creditors to accept less than the full amount of the debt and to discharge the debtor from further liability?

A) Conversion
B) Reaffirmation
C) Composition
D) Presentment
E) Receivership

Question 26

Define the terms: a) assignment for the benefit of creditors; b) composition; and c) receivership.

Question 27

Which of the following statements regarding the eligibility required to file for bankruptcy under Chapter 13 is correct?

A) Anyone who has a regular income can file for bankruptcy under Chapter 13.
B) Sole proprietors cannot file for bankruptcy under Chapter 13.
C) The person must have less than $100,000 of unsecured debts.
D) The person must have more than $1,100,000 of secured debts.
E) Filing for bankruptcy under Chapter 13 can be voluntary and involuntary.

Question 28

Which of the following nonbankruptcy alternatives is a court action that places the debtor's property under the control of a custodian so that it can be preserved or distributed for the benefit of all creditors?

A) Composition
B) Conversion
C) Reaffirmation
D) Receivership
E) Presentment

Question 29

Which of the following chapters applies only to municipalities that are insolvent and want to adjust their debts?

A) Chapter 1
B) Chapter 3
C) Chapter 9
D) Chapter 15
E) Chapter 13

Question 30

Which of the following is at the top of the order of priority when the distribution of a debtor's estate takes place during a bankruptcy proceeding?

A) Claims for amounts beyond actual loss
B) Claims for interest at legal rate
C) Secured creditors
D) Claims with priority
E) Unsecured creditors timely filings)

Question 31

Creditors giving credit, or lending money to a debtor, in the period between the filing of an involuntary bankruptcy petition and the entry of the order for relief are known as _____ creditors.

A) stay
B) relief
C) hypothetical lien
D) no-asset
E) gap

Question 32

The court's order determining that the debtor's property is under the control of the bankruptcy court is known as an order of _____.

A) relief
B) stay
C) reaffirmation
D) exoneration
E) subrogation