Question 1

Because of automated bankruptcy software, a debtor is no longer required to sign a separate declaration that's filed with the court.

Accepted Answer

Automated bankruptcy software eliminates the need for a separate declaration to be signed and filed with the court.

Question 2

As the paralegal working for ABC Law Firm, you are required to include Official Form 109- the bankruptcy preparer's notice when filing the petition.

Accepted Answer

False

Question 3

Kenny's car is worth $11,000, but he owes $13,424 to Car Lenders, Inc. Kenny is keeping the car, but since it has negative equity, there's no need to list the asset nor exempt it on Schedule

Accepted Answer

Even though Kenny's car has negative equity, he still needs to list it as an asset on his bankruptcy schedules. All assets and liabilities must be disclosed in bankruptcy filings, regardless of their equity status.

Question 4

The debtor's intent form requires that the debtor chooses to:

Accepted Answer

The debtor's intent form allows for multiple options regarding how they wish to handle their debts and assets. They can choose to surrender the asset, retain the asset and reaffirm the debt, or avoid the lien, among other options. Therefore, all the choices listed are correct actions a debtor can intend to take.

Question 5

As a negotiating tool to reduce her mortgage balance, Mary should choose to avoid the lien in her Chapter 7 petition.

Accepted Answer

Under §522 of the Bankruptcy Code, a debtor cannot avoid a voluntary lien like a mortgage on their residence in a Chapter 7 bankruptcy. Voluntary liens, such as mortgages, are entered into by agreement and are not subject to avoidance in the same manner as some judicial liens or nonpossessory, nonpurchase-money security interests in household goods and personal effects.

Question 6

What is negative equity?

Accepted Answer

The answer of What is negative equity?...

Question 7

Give an example of negative equity.

Accepted Answer

The answer of Give an example of negative equity....

Question 8

Fred is filing for bankruptcy and owes $2,500 on his vehicle. He is considering redeeming it. What does that mean?

Accepted Answer

The answer of Fred is filing for bankruptcy and owes...

Quiz 10: Assets and Liabilities