Question 1

A proof of claim is a document required to be filed by a creditor that states the amount of his or her claim against the debtor.

Accepted Answer

A proof of claim is indeed a document required to be filed by a creditor that states the amount of his or her claim against the debtor.

Question 2

The Bankruptcy Reform Act of 1978 made it easier for debtors to file for bankruptcy and have their unpaid debts discharged.

Accepted Answer

The Bankruptcy Reform Act of 1978 did make it easier for debtors to file for bankruptcy and have their unpaid debts discharged, by introducing Chapter 13 bankruptcy, which allowed for a repayment plan instead of liquidation of assets under Chapter 7 bankruptcy.

Question 3

All creditors must file a proof of interest before a bankruptcy proceeding.

Accepted Answer

Creditors must file a proof of claim, not a proof of interest, in bankruptcy proceedings to assert their right to receive a distribution from the bankruptcy estate. A proof of interest is typically filed by equity security holders, not creditors.

Question 4

An order of relief occurs upon the filing of either a voluntary petition or an unchallenged involuntary petition.

Accepted Answer

An order of relief automatically occurs upon the filing of a voluntary petition or an unchallenged involuntary petition in bankruptcy.

Question 5

A voluntary petition is a petition filed by a creditor that states that the debtor has paid his debts.

Accepted Answer

A voluntary petition is actually a petition filed by the debtor (not a creditor) to initiate bankruptcy proceedings. It is filed when the debtor realizes they cannot pay their debts and need the protection of bankruptcy laws.

Question 6

A bankruptcy trustee is a legal representative of a creditor's claim to an estate.

Accepted Answer

A bankruptcy trustee is a legal representative of the bankruptcy estate, not a creditor's claim to the estate. Their role is to manage and distribute the assets of the estate to creditors according to the bankruptcy laws.

Question 7

A creditor's action of perfecting liens against a debtor's property cannot be stayed.

Accepted Answer

The automatic stay provision of the Bankruptcy Code (typically found in Section 362) can halt the process of perfecting liens against a debtor's property once a bankruptcy petition is filed, preventing creditors from taking certain actions.

Question 8

An automatic stay refers to the suspension of certain legal actions by creditors against a debtor or the debtor's property.

Accepted Answer

An automatic stay is a legal provision under the US Bankruptcy Code that stops creditors from taking certain actions against a debtor or their property. The automatic stay comes into effect immediately upon the filing of a bankruptcy petition and remains in place until the bankruptcy case is resolved, dismissed, or lifted by the court.

Question 9

The bankruptcy judge cannot attend the first meeting of the creditors.

Accepted Answer

The answer of The bankruptcy judge cannot attend the first...

Question 10

A U.S.Trustee is a federal government official who has responsibility for handling and supervising many of the administrative tasks associated with a bankruptcy case.

Accepted Answer

The U.S. Trustee is a federal government official who is responsible for managing and supervising many of the administrative tasks associated with a bankruptcy case, including appointing and supervising trustees, monitoring and auditing bankruptcy cases, and overseeing creditors' committees.

Question 11

A debtor filing for bankruptcy who is represented by an attorney need not be investigated or verified.

Accepted Answer

All bankruptcy cases, regardless of whether the debtor is represented by an attorney, are subject to investigation and verification.

Question 12

There are separate state and federal bankruptcy laws.

Accepted Answer

Bankruptcy laws in the United States are federal laws governed by the U.S. Bankruptcy Code, which applies uniformly across all states. States cannot enact their own bankruptcy laws.

Question 13

In a meeting of the creditors, the bankruptcy judge questions the debtor.

Accepted Answer

In a bankruptcy case, it is typically the bankruptcy trustee, not the judge, who questions the debtor during meetings such as the 341 meeting (meeting of creditors). The judge's role is more to oversee the legal proceedings and make rulings on legal matters, not to directly question the debtor in such meetings.

Question 14

The 2005 act requires an attorney certification whereby an attorney who represents a client in bankruptcy must certify the accuracy of the information contained in the bankruptcy petition.

Accepted Answer

The 2005 act does indeed require an attorney certification for accuracy of information in a bankruptcy petition.

Question 15

The Bankruptcy Act of 2005 requires that before an individual debtor receives a discharge in a Chapter 7 or Chapter 13 bankruptcy, the debtor must attend a personal financial management course approved by the U.S.Trustee.

Accepted Answer

The statement correctly describes a requirement of the Bankruptcy Act of 2005.

Question 16

A complaint is a document filed with a bankruptcy court that starts a bankruptcy proceeding.

Accepted Answer

A complaint is a document filed in a court to initiate a lawsuit, not specifically a bankruptcy proceeding. A bankruptcy proceeding is typically started by filing a petition, not a complaint, with the bankruptcy court.

Question 17

Bankruptcy proceedings are carried out at special U.S.Bankruptcy Courts created by the Congress.

Accepted Answer

Bankruptcy proceedings are indeed carried out at special U.S. Bankruptcy Courts that were created by Congress. These courts are separate from other judicial branches and focus specifically on bankruptcy cases.

Question 18

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is considered creditor-friendly.

Accepted Answer

The answer of Bankruptcy Abuse Prevention and Consumer Protection Act...

Question 19

A secured creditor whose claim exceeds the value of the collateral may submit a proof of claim and become an unsecured claimant as to the difference.

Accepted Answer

This statement is true. If a secured creditor's claim exceeds the value of the collateral, they can submit a proof of claim for the difference and become an unsecured claimant for that amount.

Question 20

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 makes it more difficult for debtors to file for bankruptcy and have their unpaid debts discharged.

Accepted Answer

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 does indeed make it more difficult for debtors to file for bankruptcy and have their unpaid debts discharged. This law introduced means tests to determine a debtor's eligibility for different types of bankruptcy, mandated credit counseling before filing, and added new restrictions on the timing and frequency of bankruptcy filings.

Quiz 28: Bankruptcy and Reorganization