Question 1

Concealing assets from a bankruptcy court is a crime.

Accepted Answer

Concealing assets from a bankruptcy court is considered bankruptcy fraud, which is a federal crime punished with fines and imprisonment. It is important for individuals going through bankruptcy to be honest and transparent about their assets and income to avoid legal consequences.

Question 2

Ronald's debt to Greg is past due.Ronald obtains a judgment against Greg to collect the debt, but Greg will not pay.Ronald requests a writ of execution.The property that is seized under the writ of execution must be

Accepted Answer

The answer of Ronald's debt to Greg is past due.Ronald...

Question 3

An order for relief in a bankruptcy proceeding amounts to a discharge of the debts of the party petitioning for bankruptcy protection.

Accepted Answer

The answer of An order for relief in a bankruptcy...

Question 4

Portia owes Bon $500 on their contract, but refuses to pay.To collect, Bon files a mechanic's lien, under which security for the debt is represented by

Accepted Answer

A mechanic's lien is typically used by contractors or construction workers to secure payment for work done on a property. In this case, Bon would file a mechanic's lien against Portia's real estate, since the debt owed is related to a contract for work done on the property. The lien would give Bon the right to foreclose on the property if the debt is not paid. Personal property or the contract itself would not provide adequate security for the debt.

Question 5

A court awards a judgment to Alice, who is the creditor, against Ada, who is the debtor.After the judgment, Alice requests a court order to seize Ada's property to ensure that the judgment will be collectible.This is

Accepted Answer

A writ of execution is a court order that allows a creditor to seize the debtor's property to satisfy a judgment. A judicial lien is a type of lien placed on a debtor's property by a court order, but it does not involve the seizure of property. A writ of attachment is a court order that allows a creditor to seize a debtor's property before a judgment is even entered. Choice D is incorrect because obtaining a court order to seize a debtor's property is not a violation of most state laws, as long as the creditor follows the proper legal procedures.

Question 6

A husband and wife may file a joint petition for bankruptcy.

Accepted Answer

Husband and wife can file a joint petition for bankruptcy under Chapter 7 or Chapter 13 of the bankruptcy code.

Question 7

A discharge will be denied to a debtor who received a discharge within eight years of filing the current petition.

Accepted Answer

This is true according to section 727(a)(8) of the Bankruptcy Code. A debtor cannot receive a discharge if they received one within eight years of filing the current petition.

Question 8

Bankruptcy proceedings are held in federal courts.

Accepted Answer

Bankruptcy is handled exclusively by federal courts, as it is a matter of federal law. State courts do not have jurisdiction over bankruptcy cases.

Question 9

In order of priority, the claims of all unsecured creditors in a class must be satisfied before any remaining amounts can be distributed to the next class.

Accepted Answer

This is a basic principle of bankruptcy and insolvency law. All unsecured creditors in a given class must be treated equally in terms of the distribution of assets from the debtor. Once all claims in that class have been satisfied, any remaining amounts can then be distributed to the next class of creditors. This ensures a fair distribution of assets and maximizes the chances that all creditors will receive at least some of what they are owed.

Question 10

A student loan is discharged under Chapter 13 unless the creditor can show "undue hardship."

Accepted Answer

The answer of A student loan is discharged under Chapter...

Question 11

On entry of the order for relief in a Chapter 11 proceeding, the debtor generally continues to operate the business as a debtor in possession.

Accepted Answer

When a Chapter 11 bankruptcy is filed, the debtor typically remains in control of the business and operates as a “debtor in possession.” The debtor continues to manage the day-to-day operations of the business while under the supervision and oversight of the bankruptcy court.

Question 12

Some student loans are dischargeable in a Chapter 7 bankruptcy.

Accepted Answer

While most student loans cannot be discharged in a Chapter 7 bankruptcy, there are certain circumstances where they can be, such as if the borrower can prove undue hardship.

Question 13

Michael contracts with Jill to fix the brakes on her Honda Civic.Jill leaves her car with Michael, but refuses to pay when the work is done.Michael refuses to return the car until she pays.Michael's lien on Jill's car will end

Accepted Answer

The answer of Michael contracts with Jill to fix the...

Question 14

In most states, state law determines the amount of a debtor's property that is exempt from distribution on bankruptcy.

Accepted Answer

State law varies in the exemptions allowed for bankruptcy, with each state having its own set of exemptions.

Question 15

Once a discharge is granted, it may not be revoked, even if, for example, a debtor concealed property to defraud a creditor.

Accepted Answer

The answer of Once a discharge is granted, it may...

Question 16

Friendly Credit Corporation (FCC)believes that Gary may dispose of the assets that FCC expects to receive as payment for Gary's debt before FCC can obtain a judgment.FCC may ask a court to issue a writ of

Accepted Answer

A writ of attachment would allow FCC to seize and take possession of Gary's assets before he has a chance to dispose of them, therefore protecting FCC's ability to collect on the debt.

Question 17

Before filing for bankruptcy, a consumer-debtor must receive credit counseling.

Accepted Answer

The answer of Before filing for bankruptcy, a consumer-debtor must...

Question 18

Child-support debts will be suspended by a bankruptcy filing.

Accepted Answer

Child-support debts cannot be discharged or suspended through a bankruptcy filing. They are considered priority debts and must be paid in full by the debtor.

Question 19

The filing of a petition for bankruptcy will automatically stay most legal actions against the debtor.

Accepted Answer

When a petition for bankruptcy is filed, an automatic stay goes into effect that prohibits most legal actions against the debtor, including collection efforts by creditors.

Question 20

A trustee has the power to set aside a sale of the debtor's property.

Accepted Answer

A trustee has the power to set aside a sale of the debtor's property if it was conducted improperly or without proper notice. This is done to protect the interests of the bankruptcy estate and ensure that all creditors are treated fairly.

Quiz 17: Creditors Rights and Bankruptcy