Question 1

The Bankruptcy Code is found in _______.

Accepted Answer

The Bankruptcy Code is found in Title 11 of the United States Code.

Question 2

Student loans are an example of secured debt because the debt is attached to the degree received.

Accepted Answer

Student loans are considered unsecured debt because they are not tied to a physical asset that can be repossessed or foreclosed upon if the borrower fails to pay.

Question 3

Important definitions under the Code can be found in Section 101.

Accepted Answer

In the context of U.S. law, particularly the Bankruptcy Code, important definitions are indeed found in Section 101, which serves as a key reference point for terms used throughout the Code.

Question 4

The Milavetz ruling is that:

Accepted Answer

The Milavetz ruling determined that the requirements imposed on debt relief agencies by the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) do not violate the First Amendment, and it clarified that bankruptcy attorneys and law firms qualify as debt relief agencies under the Act.

Question 5

Because law firms compensate paralegals, paralegals are considered petition preparers under Section 101 of the Code.

Accepted Answer

Paralegals working under the supervision of attorneys in law firms are not considered petition preparers under Section 101 of the Bankruptcy Code. Petition preparers are typically non-attorneys who prepare documents for compensation, whereas paralegals are part of the legal team working under attorneys' guidance.

Question 6

Due to legal training, a petition preparer can give legal advice to an assisted person.

Accepted Answer

A petition preparer is not a lawyer and therefore is not legally authorized to give legal advice; their role is limited to typing information into forms.

Question 7

Since alimony isn't required in every case, unlike child support, alimony can be discharged in bankruptcy.

Accepted Answer

Alimony cannot be discharged in bankruptcy. Both alimony and child support are considered domestic support obligations, which are not dischargeable in bankruptcy to ensure that the recipient (often a former spouse or child) continues to receive financial support.

Question 8

If you paid back a debt owed to your cousin Frank, that could be considered a payment made to an insider under the Code.

Accepted Answer

Under bankruptcy law, payments made to insiders (such as relatives) before filing for bankruptcy can be considered preferential and may be subject to clawback by the bankruptcy trustee.

Question 9

A car loan is an example of a voluntary lien, so an involuntary lien cannot be placed on the car.

Accepted Answer

A car loan is indeed an example of a voluntary lien, but an involuntary lien can still be placed on the car for reasons such as unpaid taxes or mechanic's bills, regardless of the existing voluntary lien.

Question 10

Bankruptcy attorneys are required to disclose their fees in a bankruptcy petition.

Accepted Answer

Bankruptcy attorneys must disclose their fees in the bankruptcy petition because the court needs to review and approve these fees to ensure they are reasonable and fair to the debtor.

Question 11

The initial hearing for the debtor is known as the 342 Meeting of Creditors.

Accepted Answer

The answer of The initial hearing for the debtor is...

Question 12

Because oral contracts are valid, an attorney and debtor can agree to the fees, costs, and services to be provided verbally.

Accepted Answer

The answer of Because oral contracts are valid, an attorney...

Question 13

Chapter 11 applies only to businesses.

Accepted Answer

Chapter 11 bankruptcy can be filed by individuals as well as businesses, allowing for reorganization of debts.

Question 14

A bankruptcy attorney must provide to the client written notice as well as a description of the different chapters available to consumers.

Accepted Answer

Section 527 of the Bankruptcy Code requires a bankruptcy attorney to provide a written notice to the client that explains the different types of bankruptcy chapters available. This is part of the attorney's obligations to ensure the client is well-informed about their options.

Question 15

Law firms are debt relief agencies.

Accepted Answer

Law firms can be considered debt relief agencies if they provide bankruptcy assistance or advice to individuals, as defined under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Question 16

A debt relief agency is defined in ______ of the Bankruptcy Code.

Accepted Answer

The definition of a debt relief agency is found in §101 of the Bankruptcy Code.

Question 17

Because of Albert's arrest for a DUI crash, he lost his job and his house to foreclosure. Albert qualifies for Chapter 7 because he hasn't earned any income over the last eight months. Albert wants to include all his credit card debt and $5,500 in damages to the vehicle he crashed into. Albert should be advised:

Accepted Answer

The answer of Because of Albert's arrest for a DUI...

Question 18

The financial management class certificate should be filed within:

Accepted Answer

The correct answer is D) Within sixty days of the first scheduled 341 Meeting of Creditors. This is because the Bankruptcy Code requires the debtor to complete a financial management course and file the certificate of completion with the court within this timeframe as a condition for receiving a discharge.

Question 19

What are the different Chapters available under the Code for bankruptcy?

Accepted Answer

The answer of What are the different Chapters available under...

Question 20

Why should you not answer a potential client's questions over the phone or in person?

Accepted Answer

The answer of Why should you not answer a potential...

Quiz 2: Overview of the Bankruptcy Code