Question 1

To adjust debts and institute a repayment plan that is less expensive and less complicated than other options,Brunch & Lunch Café,a small business,may file a petition in bankruptcy for relief through

Accepted Answer

The answer of To adjust debts and institute a repayment...

Question 2

Ronaldo agrees to pay Simplex Cash Store a debt that is otherwise dischargeable in bankruptcy.This is

Accepted Answer

Ronaldo agreeing to pay a debt that is dischargeable in bankruptcy is known as a reaffirmation.

Question 3

Wilbur files a petition in bankruptcy for relief through an individual's repayment plan.Wilbur is granted a discharge.Debts that will not be discharged include claims for

Accepted Answer

The answer of Wilbur files a petition in bankruptcy for...

Question 4

Current City (CC)is a retail seller of television sets.CC sells Dhani a $5,000 large-screen,high-definition,plasma set on a retail installment security agreement in which he pays $100 down and agrees to pay the balance in equal installments.CC retains a security interest in the set,and perfects that interest by filing a financing statement centrally.Two months later,Dhani is in default on the payments to CC and is involuntarily petitioned into bankruptcy by other creditors.Discuss CC's right to repossess the TV set and whether CC has priority over the trustee in bankruptcy to any proceeds from the disposal of the set.

Accepted Answer

The answer of Current City (CC)is a retail seller of...

Question 5

Swim & Trim Fitness Corporation wants to formulate a plan under which it pays a portion of its debts and is discharged of the remainder while continuing in business.To accomplish this goal,Swim & Trim should file a petition in bankruptcy for relief through

Accepted Answer

Filing for relief through reorganization is the best choice for Swim & Trim Fitness Corporation, as it allows them to pay off a portion of their debts and discharge the remainder, while continuing to operate and hopefully become profitable again. This process involves creating a plan to reorganize the business and payments to creditors, which must be approved by the bankruptcy court. The other choices (liquidation, repayment plan, family-farmer bankruptcy plan) do not provide the same level of flexibility or opportunity for continued operation.

Question 6

Petulia is a debtor.Her employer Quantum Investments,Inc.,her alma mater State University,and TimePay Credit Company are her creditors.For these parties,a petition in bankruptcy for relief through an individual's repayment plan could be filed on Petulia's behalf by Petulia and

Accepted Answer

The answer of Petulia is a debtor.Her employer Quantum Investments,Inc.,her...

Question 7

Tippi believes that she needs to obtain a discharge in bankruptcy through an individual's repayment plan.This proceeding can be initiated by a filing of a petition by

Accepted Answer

In order to obtain a discharge in bankruptcy through an individual's repayment plan, the individual themselves (the debtor) must file a petition for the proceeding.

Question 8

To adjust debt and institute a repayment plan,Charlie-who is not a corporation,a partnership,or a family farmer or fisherman-may file a petition in bankruptcy for relief through

Accepted Answer

Since Charlie is not a corporation, partnership, family farmer, or fisherman, he may file for bankruptcy relief through a repayment plan. This option allows for the adjustment of debts and a structured plan for repayment that is manageable for the debtor. Liquidation and reorganization are not applicable in this scenario. A family-farmer bankruptcy plan is also not relevant since Charlie is not a family farmer.

Question 9

Zeke files a petition in bankruptcy for relief through an individual's repayment plan.Zeke's plan must provide for

Accepted Answer

The answer of Zeke files a petition in bankruptcy for...

Question 10

Brie is a student at Collegiate University.In need of funds to pay for tuition and books,Brie asks Dependable Bank for a short-term loan.The bank agrees to make a loan if Brie will have someone who is financially responsible guarantee the loan payments.Esperanza,a well-known businessperson and a friend of Brie's family,calls the bank and agrees to pay the loan if Brie cannot.Because of Esperanza's reputation,the loan is made.Brie is making the payments,but because of illness she is unable to work for one month.She asks Dependable extend the loan for three months.The bank agrees,raising the interest rate for the extended period.Esperanza is not notified of the extension (and thus does not consent to it).One month later,Brie drops out of school.All attempts to collect the remainder of the loan from Brie fail.Can Dependable assert a claim against Esperanza on the debt

Accepted Answer

The answer of Brie is a student at Collegiate University.In...

Question 11

Checkerboard Pizza,Inc.(CPI),files a petition in bankruptcy for relief through a reorganization.CPI's reorganization plan must contain

Accepted Answer

A reorganization plan must include a provision for adequate means for its execution, which includes specifying how debts will be paid off and how the business will continue to operate. Options A and B are not required in a reorganization plan, and option D is not allowed as all creditors must be treated equally in a bankruptcy case.

Question 12

Reconstruction Building Services receives a discharge in bankruptcy,even though some creditors hold judgments on overdue debts against it and others filed actions to collect on overdue debts before the bankruptcy.Reconstruction's discharge will

Accepted Answer

A discharge in bankruptcy prohibits actions and voids judgments regarding overdue debts, which means that the creditors holding judgments and those who filed actions to collect on overdue debts will not be able to pursue further collection efforts against the debtor. It does not absolve the liability of co-debtors, permit entry into reaffirmation agreements, or allow for reorganization.

Quiz 12: Creditor-Debtor Relations and Bankruptcy