Question 1

Creditors of Northern Hydraulics file an involuntary bankruptcy petition against the company, and the petition is approved. What is true of Northern Hydraulics?

Accepted Answer

A)  Northern Hydraulics has at least $10,425 in debts.
B)  There are at least 12 creditors.
C)  A custodian has automatically been appointed.
D)  It must make all the filings necessary under a voluntary petition.E) B) and D)
F) B) and C) D

Question 2

Alimony and child support obligations are considered priority claims.

Accepted Answer

A) True 
 B)False

Question 3

Chapter 7 bankruptcy petitions may only be filed voluntarily.

Accepted Answer

A) True 
 B)False

Question 4

Andy's business is not able to pay its debts, and the prospects for its finances to improve are slim. Andy decides not to continue the business. In this case, Andy should file a voluntary petition for which type of bankruptcy?

Accepted Answer

A)  Chapter 7.
B)  Chapter 11.
C)  Chapter 13.
D)  Chapter 12.E) A) and B)
F) A) and C)

Question 5

The correct order of payment of claims from the debtor's estate would be

Accepted Answer

A)  secured claims, priority claims, unsecured claims.
B)  secured claims, unsecured claims, priority claims.
C)  priority claims, secured claims, unsecured claims.
D)  priority claims, unsecured claims, secured claims.E) None of the above
F) A) and B)

Question 6

Shoe Sunshine, Inc. filed for bankruptcy protection under Chapter 11 and submitted a plan of reorganization within 120 days after filing for relief. Two of the classes of creditors voted against the plan. However, the bankruptcy judge considered the plan to be feasible, fair, and in the best interests of the creditors; the judge approved it in spite of these creditors' objections. This action by the judge is called a "cramdown."

Accepted Answer

A) True 
 B)False

Question 7

Brad was having financial difficulties and thought bankruptcy might be in his future. He transferred his sports car to his brother with the agreement that if he didn't file for bankruptcy within the next 18 months, his brother would return the car to him. Brad did file for bankruptcy in 10 months. The bankruptcy trustee can bring the car back into Brad's estate for the purpose of providing assets for Brad's creditors.

Accepted Answer

A) True 
 B)False

Question 8

Jun-seo owes $20,000 in unsecured claims to 15 different creditors, and he has generally not been paying debts that are due. Two of Jun-seo's creditors want to force him into bankruptcy by filing an involuntary petition; the other creditors do not agree. Which of the following statements is correct about this situation?

Accepted Answer

A)  An involuntary petition cannot be filed because Jun-seo is not that deeply in debt.
B)  An involuntary petition cannot be filed because not enough creditors want to force Jun-seo into bankruptcy.
C)  An involuntary petition can be filed because Jun-seo is not making his payments in a timely way.
D)  An involuntary petition can be filed because any one of Jun-seo's creditors can force him into bankruptcy.E) B) and D)
F) A) and B)

Question 9

Who operates the business and develops a plan of reorganization in Chapter 11 bankruptcies?

Accepted Answer

A)  the trustee
B)  the debtor in possession
C)  the state courts
D)  the creditors' committeeE) All of the above
F) A) and B)

Question 10

A form stating the name of an unsecured creditor and the amount of the claim against the debtor is called a(n)

Accepted Answer

A)  order for relief.
B)  automatic stay.
C)  proof of claim.
D)  reaffirmation form.E) A) and D)
F) B) and C)

Question 11

Generally, filing bankruptcy stops the collection activity of creditors.

Accepted Answer

A) True 
 B)False

Question 12

When a debtor no longer has an obligation to pay a debt, that debt has been

Accepted Answer

A)  terminated.
B)  revoked.
C)  completed.
D)  discharged.E) A) and B)
F) B) and C)

Question 13

Under all chapters of the Bankruptcy Code, most of the debtor's assets are distributed to creditors and the debtor has no obligation to share future earnings with creditors.

Accepted Answer

A) True 
 B)False

Question 14

What are the three main purposes of the federal Bankruptcy Code?

Accepted Answer

The primary goals of the Bankruptcy Code are:
(1)To preserve as much of the debtor's property as possible.
(2)To divide the debtor's assets fairly between the debtor and creditors and
(3)To divide the debtor's assets fairly among creditors.

Question 15

Debts that cannot be discharged in bankruptcy include all EXCEPT

Accepted Answer

A)  money owed for alimony.
B)  recent income and property taxes.
C)  money owed to utility companies.
D)  money obtained fraudulently.E) A) and D)
F) A) and C)

Question 16

Creditor claims are divided into classes, and the highest class must be satisfied in full before going to the next category.

Accepted Answer

A) True 
 B)False

Question 17

Who is responsible for gathering the bankrupt's assets and dividing them among creditors?

Accepted Answer

A)  the executor
B)  the state court
C)  the creditors' committee
D)  the trusteeE) B) and C)
F) A) and D)

Question 18

Kathleen filed for voluntary bankruptcy, and the automatic stay went into effect. The automatic stay

Accepted Answer

A)  acts to automatically discharge Kathleen's debts.
B)  prohibits creditors from collecting debts against Kathleen that arose before she filed bankruptcy.
C)  stops only secured creditors from taking any act to collect, assess, or recover a claim against Kathleen that arose before she filed bankruptcy.
D)  stops creditors from trying to collect from Kathleen, but it does not stop them from filing lawsuits against her.E) B) and C)
F) A) and B)

Question 19

Karen has filed for bankruptcy. Who has the authority to confirm or reject a plan of payment, and what factors will be considered when deciding whether to approve a repayment plan under Chapter 13?

Accepted Answer

The bankruptcy court has the sole author...

Question 20

Chapter 7 bankruptcy is also known as

Accepted Answer

A)  reorganization.
B)  reaffirmation.
C)  voluntary bankruptcy.
D)  straight bankruptcy.E) C) and D)
F) B) and D) D

Exam 22: Bankruptcy

Creditors of Northern Hydraulics file an involuntary bankruptcy petition against the company, and the petition is approved. What is true of Northern Hydraulics?

Correct Answer
verified
D

Alimony and child support obligations are considered priority claims.

Correct Answer
verified

Chapter 7 bankruptcy petitions may only be filed voluntarily.

Correct Answer
verified

Andy's business is not able to pay its debts, and the prospects for its finances to improve are slim. Andy decides not to continue the business. In this case, Andy should file a voluntary petition for which type of bankruptcy?

Correct Answer
verified

The correct order of payment of claims from the debtor's estate would be

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Who operates the business and develops a plan of reorganization in Chapter 11 bankruptcies?

Correct Answer
verified

A form stating the name of an unsecured creditor and the amount of the claim against the debtor is called a(n)

Correct Answer
verified

Generally, filing bankruptcy stops the collection activity of creditors.

Correct Answer
verified

When a debtor no longer has an obligation to pay a debt, that debt has been

Correct Answer
verified

Under all chapters of the Bankruptcy Code, most of the debtor's assets are distributed to creditors and the debtor has no obligation to share future earnings with creditors.

Correct Answer
verified

What are the three main purposes of the federal Bankruptcy Code?

Correct Answer
verified
The primary goals of the Bankruptcy Code are: (1)To preserve as much of the debtor's property as possible. (2)To divide the debtor's assets fairly between the debtor and creditors and (3)To divide the debtor's assets fairly among creditors.

Debts that cannot be discharged in bankruptcy include all EXCEPT

Correct Answer
verified

Creditor claims are divided into classes, and the highest class must be satisfied in full before going to the next category.

Correct Answer
verified

Who is responsible for gathering the bankrupt's assets and dividing them among creditors?

Correct Answer
verified

Kathleen filed for voluntary bankruptcy, and the automatic stay went into effect. The automatic stay

Correct Answer
verified

Karen has filed for bankruptcy. Who has the authority to confirm or reject a plan of payment, and what factors will be considered when deciding whether to approve a repayment plan under Chapter 13?

Correct Answer
verified
The bankruptcy court has the sole author...
View Answer

Chapter 7 bankruptcy is also known as

Correct Answer
verified
D

Exam 22: Bankruptcy

Creditors of Northern Hydraulics file an involuntary bankruptcy petition against the company, and the petition is approved. What is true of Northern Hydraulics?

Correct AnswerverifiedD

Alimony and child support obligations are considered priority claims.

Correct AnswerverifiedShow Answer

Chapter 7 bankruptcy petitions may only be filed voluntarily.

Correct AnswerverifiedShow Answer

Andy's business is not able to pay its debts, and the prospects for its finances to improve are slim. Andy decides not to continue the business. In this case, Andy should file a voluntary petition for which type of bankruptcy?

Correct AnswerverifiedShow Answer

The correct order of payment of claims from the debtor's estate would be

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Who operates the business and develops a plan of reorganization in Chapter 11 bankruptcies?

Correct AnswerverifiedShow Answer

A form stating the name of an unsecured creditor and the amount of the claim against the debtor is called a(n)

Correct AnswerverifiedShow Answer

Generally, filing bankruptcy stops the collection activity of creditors.

Correct AnswerverifiedShow Answer

When a debtor no longer has an obligation to pay a debt, that debt has been

Correct AnswerverifiedShow Answer

Under all chapters of the Bankruptcy Code, most of the debtor's assets are distributed to creditors and the debtor has no obligation to share future earnings with creditors.

Correct AnswerverifiedShow Answer

What are the three main purposes of the federal Bankruptcy Code?

Correct AnswerverifiedThe primary goals of the Bankruptcy Code are: (1)To preserve as much of the debtor's property as possible. (2)To divide the debtor's assets fairly between the debtor and creditors and (3)To divide the debtor's assets fairly among creditors.

Debts that cannot be discharged in bankruptcy include all EXCEPT

Correct AnswerverifiedShow Answer

Creditor claims are divided into classes, and the highest class must be satisfied in full before going to the next category.

Correct AnswerverifiedShow Answer

Who is responsible for gathering the bankrupt's assets and dividing them among creditors?

Correct AnswerverifiedShow Answer

Kathleen filed for voluntary bankruptcy, and the automatic stay went into effect. The automatic stay

Correct AnswerverifiedShow Answer

Karen has filed for bankruptcy. Who has the authority to confirm or reject a plan of payment, and what factors will be considered when deciding whether to approve a repayment plan under Chapter 13?

Correct AnswerverifiedThe bankruptcy court has the sole author...View AnswerShow Answer

Chapter 7 bankruptcy is also known as

Correct AnswerverifiedD

Correct Answer
verified
D

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified
The primary goals of the Bankruptcy Code are: (1)To preserve as much of the debtor's property as possible. (2)To divide the debtor's assets fairly between the debtor and creditors and (3)To divide the debtor's assets fairly among creditors.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The bankruptcy court has the sole author...
View Answer

Correct Answer
verified
D