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Bankruptcy

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ggg R7 Quiz on Bankruptcy, created by harpratap_singh on 09/06/2015.
harpratap_singh
Quiz by harpratap_singh, updated more than 1 year ago
harpratap_singh
Created by harpratap_singh over 9 years ago
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Resource summary

Question 1

Question
Under Chapter 7 of the federal Bankruptcy Code, what effect does a bankruptcy discharge have on a judgment creditor when there is no bankruptcy estate?
Answer
  • The debtor is relieved of any personal liability to the judgment creditor.
  • .The judgment creditor retains a statutory lien against the debtor.
  • The debtor is required to pay a liquidated amount to vacate the judgment.
  • .The judgment creditor's claim is nondischargeable.

Question 2

Question
A family farmer with regular annual income may file a voluntary petition for bankruptcy under any of the following Chapters of the federal Bankruptcy Code, except:
Answer
  • .11
  • .9
  • 7
  • 13

Question 3

Question
Under the liquidation provisions of Chapter 7 of the federal Bankruptcy Code, certain property acquired by the debtor after the filing of the petition becomes part of the bankruptcy estate. An example of such property is:
Answer
  • .Social Security payments received by the debtor within 180 days after the filing of the petition.
  • Child support payments received by the debtor within one year after the filing of the petition.x
  • Child support payments received by the debtor within one year after the filing of the petition. c.Wages earned by the debtor within one year after the filing of the petition.
  • Inheritances received by the debtor within 180 days after the filing of the petition.

Question 4

Question
Under the liquidation provisions of Chapter 7 of the federal Bankruptcy Code, certain property acquired by the debtor after the filing of the petition becomes part of the bankruptcy estate. An example of such property is:
Answer
  • .Social Security payments received by the debtor within 180 days after the filing of the petition.
  • Alimony received by the debtor within one year after the filing of the petition.
  • Municipal bond interest received by the debtor within 180 days after the filing of the petition.
  • .Gifts received by the debtor within one year after the filing of the petition.

Question 5

Question
Strong Corp. filed a voluntary petition in bankruptcy under the reorganization provisions of Chapter 11 of the Federal Bankruptcy Code. A reorganization plan was filed and agreed to by all necessary parties. The court confirmed the plan and a final decree was entered. Which of the following statements best describes the effect of the entry of the court's final decree?
Answer
  • Strong Corp. will be discharged from all its debts and liabilities that arose before the date of confirmation of the plan.
  • .Strong Corp. will be discharged only from the debts owed creditors who agreed to the reorganization plan.
  • Strong Corp. will be discharged from all its debts and liabilities.
  • Strong Corp. will be discharged from all its debts and liabilities that arose before the confirmation of the plan, except as otherwise provided in the plan, the order of confirmation, or the Bankruptcy Code.

Question 6

Question
Deft, CPA, is an unsecured creditor of Golf Co. for $16,000. Golf has a total of 10 creditors, all of whom are unsecured. Golf has not paid any of the creditors for three months. Under Chapter 11 of the Federal Bankruptcy Code, which of the following statements is correct?
Answer
  • .Three unsecured creditors must join in the involuntary petition in bankruptcy.
  • .Golf may not be petitioned involuntarily into bankruptcy under the provisions of Chapter 11.
  • Deft may file an involuntary petition in bankruptcy against Golf.
  • Golf may not be petitioned involuntarily into bankruptcy because there are less than 12 unsecured creditors.

Question 7

Question
Which of the following claims will not be discharged in bankruptcy?
Answer
  • A claim brought by a secured creditor that remains unsatisfied after the sale of the collateral.
  • .A claim that arises out of the debtor's breach of a contract.
  • .A claim that arises from alimony or maintenance.
  • .A claim brought by a judgment creditor whose judgment resulted from the debtor's negligent operation of a motor vehicle.

Question 8

Question
Under the liquidation provisions of Chapter 7 of the Federal Bankruptcy Code, which of the following statements applies to a person who has voluntarily filed for and received a discharge in bankruptcy?
Answer
  • .The person must surrender for distribution to the creditors amounts received as an inheritance, if the receipt occurs within 180 days after filing the bankruptcy petition.
  • The person can obtain another voluntary discharge in bankruptcy under Chapter 7 after three years have elapsed from the date of the prior filing.
  • The person is precluded from owning or operating a similar business for two years
  • .The person will be discharged from all debts.

Question 9

Question
Under the reorganization provisions of Chapter 11 of the Federal Bankruptcy Code, after a reorganization plan is confirmed, and a final decree closing the proceedings entered, which of the following events usually occurs?
Answer
  • A trustee will continue to operate the debtor's business.
  • A reorganized corporate debtor will be discharged from all debts except as otherwise provided in the plan and applicable law.
  • A reorganized corporate debtor will be liquidated.
  • A reorganized individual debtor will not be allowed to continue in the same business.

Question 10

Question
The filing of an involuntary bankruptcy petition under the Federal Bankruptcy Code:
Answer
  • Stops the debtor from incurring new debts.
  • Terminates all security interests in property in the bankruptcy estate.
  • Stops the enforcement of judgment liens against property in the bankruptcy estate.
  • Terminates liens on exempt property.

Question 11

Question
Which of the following requirements must be met for creditors to file an involuntary bankruptcy petition under Chapter 7 of the Federal Bankruptcy Code?
Answer
  • a.There must not be more than 12 creditors.
  • b.The debtor has not been paying its bona fide debts as they become due.
  • c.The debtor must owe one creditor more than $5,000.
  • d.At least one fully secured creditor must join in the petition.

Question 12

Question
Which of the following transfers by a debtor, within ninety days of filing for bankruptcy, could be set aside as a preferential payment?
Answer
  • a.Borrowing money from a bank secured by giving a mortgage on business property.
  • b.Paying a business utility bill.
  • c.Making a gift to charity.
  • d.Prepaying an installment loan on inventory.

Question 13

Question
Robin Corp. incurred substantial operating losses for the past three years. Unable to meet its current obligations, Robin filed a petition for reorganization under Chapter 11 of the Federal Bankruptcy Code. Which of the following statements is correct?
Answer
  • A creditors' committee, if appointed, will consist of unsecured creditors.
  • .The reorganization plan may only be filed by Robin.
  • .The creditors' committee must select a trustee to manage Robin's affairs.
  • Robin may continue in business only with the approval of a trustee.

Question 14

Question
A reorganization under Chapter 11 of the Federal Bankruptcy Code requires all of the following, except the:
Answer
  • Confirmation of the reorganization plan by the court.
  • .The filing of a reorganization plan.
  • Opportunity for each class of claims to accept the reorganization plan.
  • Liquidation of the debtor.

Question 15

Question
Which of the following statements is correct with respect to the reorganization provisions of Chapter 11 of the Federal Bankruptcy Code?
Answer
  • A reorganization plan may be filed by a creditor anytime after the petition date.
  • The debtor must be insolvent if the bankruptcy petition was filed voluntarily.
  • A trustee must always be appointed.
  • The commencement of a bankruptcy case may be voluntary or involuntary.

Question 16

Question
Which of the following types of claims would be paid first in the distribution of a bankruptcy estate under the liquidation provisions of Chapter 7 of the Federal Bankruptcy Code if the petition was filed July 15, Year 3?
Answer
  • Employee wages due April 30, Year 3.
  • Inventory purchased and delivered August 1, Year 3.
  • Federal tax lien filed June 30, Year 3.
  • A secured debt properly perfected on March 20, Year 3.

Question 17

Question
Under the federal Bankruptcy Code, which of the following rights or powers does a trustee in bankruptcy not have?
Answer
  • The right to use any grounds available to the debtor to obtain the return of the debtor's property.
  • The power to require persons holding the debtor's property at the time the bankruptcy petition is filed to deliver the property to the trustee.
  • The power to prevail against a creditor with an unperfected security interest.
  • The right to avoid any statutory liens against the debtor's property that were effective before the filing of the bankruptcy petition.

Question 18

Question
On April 1, Roe borrowed $100,000 from Jet to pay Roe's business expenses. On June 15, Roe gave Jet a signed security agreement and financing statement covering Roe's inventory. Jet immediately filed the financing statement. On July 1, Roe filed for bankruptcy. Under the federal Bankruptcy Code, can Roe's trustee in bankruptcy set aside Jet's security interest in Roe's inventory?
Answer
  • No, because the security interest was perfected before Roe filed for bankruptcy.
  • Yes, because Roe giving the security interest to Jet created a voidable preference.
  • No, because the loan proceeds were used for Roe's business.
  • Yes, because a security agreement may only cover goods actually purchased with the borrowed funds.

Question 19

Question
Which of the following statements is not true under Chapter 15 of the United States Bankruptcy Code?
Answer
  • Discrimination against foreign interests is never allowed.
  • A foreign representative may participate in other U.S. bankruptcy cases pending against the represented debtor
  • U.S. courts have an affirmative duty to cooperate with foreign courts.
  • A foreign representative may operate the debtor's business in the U.S.

Question 20

Question
Which of the following requirements must be met for creditors to file an involuntary bankruptcy petition under Chapter 7 of the Federal Bankruptcy Code?
Answer
  • There must not be more than 12 creditors.
  • The debtor has not been paying its bona fide debts as they become due.
  • The debtor must owe one creditor more than $5,000.
  • At least one fully secured creditor must join in the petition

Question 21

Question
Karen sells her one-year-old sports car to her mother for $100. The next week, Karen files for bankruptcy under Chapter 7. Regarding the sale of the car, the trustee may:
Answer
  • Not cancel it because it is a sale, not a gift.
  • Cancel it as a voidable preference.
  • Not cancel it, but can sue Karen's mother for return of the $100.
  • Cancel it as a fraudulent transfer.
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