Bus Law II Final: CH 28

Bankruptcy law is exclusively federal law; there are no state bankruptcy laws.

A. True

B. False

A. True

Bankruptcy petitions cannot be filed by the debtor without the assistance of an attorney or filing service.

A. True

B. False

B. False

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has been criticized as being too "creditor-friendly."

A. True

B. False

A. True

A complaint is a document filed with a bankruptcy court that starts a bankruptcy proceeding.

A. True

B. False

B. False

The 2005 act requires an attorney certification whereby an attorney who represents a client in bankruptcy must certify the accuracy of the information contained in the bankruptcy petition.

A. True

B. False

A. True

An order for relief occurs upon the filing of either a voluntary petition or an unchallenged involuntary petition.

A. True

B. False

A. True

A secured creditor whose claim exceeds the value of the collateral may submit a proof of claim and become an unsecured claimant as to the difference.

A. True

B. False

A. True

An automatic stay refers to the suspension of certain legal actions by creditors against a debtor or the debtor's property.

A. True

B. False

A. True

A creditor's action of perfecting liens against a debtor's property cannot be stayed.

A. True

B. False

B. False

Unscheduled claims are not dischargeable in bankruptcy.

A. True

B. False

A. True

Which of the following federal acts substantially amended the federal bankruptcy law in 2005?

A. Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

B. Bankruptcy Reform Act of 1978

C. the Chandler Act

D. the Nelson Act

A. Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

Which of the following is true of the meeting of the creditors?

A. A meeting of the creditors is called before the court grants an order for relief.

B. In the first meeting of the creditors, a debtor is questioned by a jury constituted for the purpose.

C. The bankruptcy judge cannot attend the meeting of the creditors.

D. Questions regarding the debtor's possible concealment of assets are not permitted during the meeting of the creditors.

C. The bankruptcy judge cannot attend the meeting of the creditors.

The suspension of certain legal actions by creditors against a debtor or the debtor's property is known as a(n) ________.

A. discharge of debt

B. automatic stay

C. order for relief

D. composition

B. automatic stay

Why is a discharge of debt granted?

A. to divide the bankruptcy estate equally among all creditors

B. to relieve the debtor of the responsibility to pay some of or all of the debt

C. to divide the bankruptcy estate according to the debt owed to each creditor

D. to suspend certain legal actions by creditors against a debtor's property

B. to relieve the debtor of the responsibility to pay some of or all of the debt

A(n) ________ is an agreement entered into by the creditor and the debtor whereby the debtor agrees to pay the creditor for a debt that is dischargeable in bankruptcy.

A. order for relief

B. acceptance agreement

C. reaffirmation agreement

D. discharge agreement

C. reaffirmation agreement

Which of the following would be part of the bankruptcy estate of a debtor?

A. interest in jewelry worth $1,000

B. unmatured life insurance policy owned by the debtor

C. interest of $3,500 in a motor vehicle

D. interests in wrongful death benefits

C. interest of $3,500 in a motor vehicle

What is a homestead exemption?

A. all of the debtor's assets converted to cash

B. remainder of the debtor's interest in commercial property that is returned to him after fulfilling creditors' claims

C. investment in realty that a debtor must forfeit

D. equity in a home that a debtor is permitted to retain

D. equity in a home that a debtor is permitted to retain

Which of the following is true of Chapter 7 liquidation?

A. The debtor's future income cannot be reached to pay the discharged debt.

B. The 2005 bankruptcy act has eased the process of applying for a Chapter 7 bankruptcy.

C. The debtor is not permitted to keep any of his or her assets.

D. Petitioning for Chapter 7 liquidation does not permit the debtor to petition for bankruptcy under any other chapter.

A. The debtor's future income cannot be reached to pay the discharged debt.

The ________ is a bankruptcy rule that applies to a debtor who has a median family income that exceeds the state's median family income for families the same size as the debtor's family.

A. Chapter 13 discharge

B. Chapter 13 plan of payment

C. median income test

D. means test

D. means test

If the value of the secured interest is less than the value of the collateral securing a loan, the secured creditor is ________.

A. in default

B. an undersecured creditor

C. an oversecured creditor

D. exempt from Chapter 7 bankruptcy

C. an oversecured creditor

If a person's debts are subject to a Chapter 7 discharge, what does it mean?

A. that he or she need not repay the debt

B. that he or she needs to pay his prepetition debts with his postpetition income

C. that he or she needs to repay only secured debts

D. that he or she needs to repay only unsecured debts

A. that he or she need not repay the debt

Which of the following is true of a Chapter 13 petition?

A. To qualify for Chapter 13, the debts must primarily be consumer debt.

B. It can be filed by all individual debtors, irrespective of their income.

C. Creditors can file a Chapter 13 petition claiming payment from a debtor.

D. The petitioner need not demand an extension or composition.

A. To qualify for Chapter 13, the debts must primarily be consumer debt.

What is an executory contract?

A. a contract that cannot be discharged under Chapter 13

B. a contract that has not been fully performed

C. a contract that the debtor is obliged to perform despite filing for bankruptcy

D. an agreement between several creditors and a single debtor, dividing the debtor's property

B. a contract that has not been fully performed

Which of the following is a feature of a Chapter 11 plan of reorganization?

A. a proposed new capital structure for a debtor to assume when it emerges from Chapter 11 bankruptcy

B. division of the bankruptcy estate according to the debt to be paid to each creditor

C. an equilateral division of the Chapter 11 estate among all creditors

D. discharge of a debtor's unsecured debts and payment of secured debts

A. a proposed new capital structure for a debtor to assume when it emerges from Chapter 11 bankruptcy

A(n) ________ provision is a provision whereby the court confirms a plan of reorganization over an objecting class of creditors if certain requirements are met.

A. acceptance

B. discharge

C. cram-down

D. liquidation

C. cram-down