Question 1

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

Accepted Answer

Chapter 11 allows a company to reorganize while its financial affairs are put on a sounder basis.

Question 2

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

Accepted Answer

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.

Accepted Answer

This is the definition of a composition in regards to debt.

Question 4

Bankruptcy trustees are government lawyers appointed by the:

Accepted Answer

The answer of Bankruptcy trustees are government lawyers appointed by...

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.

Accepted Answer

Chapter 12 of the current bankruptcy act indeed deals with the adjustment of debts of a family farmer or fisherman with regular annual income. This chapter provides a more streamlined and simplified process for these types of debtors to reorganize their finances and repay their debts over time.

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.

Accepted Answer

This is known as a dismissal without prejudice, which means that the case is dismissed but can be refiled in the future, and the parties' rights and remedies are not affected.

Question 7

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

Accepted Answer

The answer of Railroads and insurance companies are allowed to...

Question 8

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

Accepted Answer

This is known as the doctrine of priority, where secured creditors have priority over unsecured creditors in the distribution of assets during bankruptcy proceedings.

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.

Accepted Answer

This statement is true according to the provisions of Chapter 5 of the Bankruptcy Code.

Question 10

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

Accepted Answer

The answer of Which of the following is true of...

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.

Accepted Answer

The answer of If it's a "no asset" bankruptcy, creditors...

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.

Accepted Answer

An order of relief is a court's order that places a debtor's property under the control of the bankruptcy court.

Question 13

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

Accepted Answer

Bankruptcy involves liquidating the debtor's assets and distributing the proceeds to the creditors in order to pay off as much of the debtor's debts as possible.

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?

Accepted Answer

The answer of Which of the following chapters of the...

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.

Accepted Answer

Liquidation refers to the process of selling off a company's assets to pay off its debts and ultimately shutting down the company. It is not meant to help a company continue to operate, but rather to facilitate its closure.

Question 16

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

Accepted Answer

The judges of the US Bankruptcy Courts are appointed by the US Courts of Appeal as per the US Code, Title 28, Section 152.

Question 17

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

Accepted Answer

Conversion refers to changing the chapter number filed in a bankruptcy case from one to another.

Question 18

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

Accepted Answer

Not all persons eligible for discharge under Chapter 7 proceedings are eligible for Chapter 11 proceedings. Chapter 11 is typically reserved for individuals with high levels of debt or businesses that need to restructure their finances.

Question 19

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

Accepted Answer

If a debtor's Chapter 7 bankruptcy is dismissed, he or she may still be eligible to file for bankruptcy under another chapter, such as Chapter 13. However, there may be certain restrictions or limitations in place depending on the circumstances of the dismissal.

Question 20

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

Accepted Answer

The 2005 bankruptcy law is officially known as the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA).

Quiz 35: Bankruptcy