M1 Bankruptcy: Part 1 Flashcards
MCQ-01343
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?
The debtor is relieved of any personal liability to the judgment creditor.
Under Chapter 7, a discharge discharges most debts of a debtor, whether or
not there is a bankruptcy estate from which to pay the debts.
MCQ-01345
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:
9
Chapter 9 is for municipal debt adjustment; a family farmer cannot seek relief under this chapter.
MCQ-10971
A reorganization under Chapter 11 of the federal Bankruptcy Code requires all of the following, except the:
Liquidation of the debtor.
There is no requirement of liquidation in a reorganization.
MCQ-08646
Which of the following types of debtor are not eligible for relief under Chapter 11 of the Bankruptcy Code?
Stockbrokers
Although both individuals and corporations are generally eligible for relief under Chapter 11, stockbrokers are specifically excluded.
MCQ-10977
Under Chapter 11 of the federal Bankruptcy Code, which of the following would not be eligible for reorganization?
Savings and loan corporation
Savings and loan corporations may not participate in Chapter 11 (or Chapter 7) bankruptcy proceedings.
MCQ-01888
Filing a valid petition in bankruptcy acts as an automatic stay of actions to:
- Garnish the debtor’s wages
- Collect alimony from the debtor
Yes; No
The “automatic stay” created upon filing a petition in bankruptcy stops any attempt by creditors to collect through the garnishment of the debtor’s wages. However, the
automatic stay does not stop the collection of alimony.
MCQ-01892
The filing of an involuntary petition in bankruptcy:
Stops the enforcement of a judgment lien against property in the bankruptcy estate.
The filing of a petition in bankruptcy (voluntary or involuntary) stops the enforcement of all judgment liens and collection actions against the debtor (called “automatic stay”).
MCQ-10970
Which of the following conditions, if any, must a debtor meet to file a voluntary bankruptcy petition under Chapter 7 of the federal Bankruptcy Code?
- Insolvency
- Three or more creditors
No; No
A debtor need not be insolvent to file a voluntary petition under Chapter 7. Although the debtor’s income may not exceed certain specified levels, insolvency is not a
requirement. Additionally, there is no requirement of 3 creditors in a voluntary petition. An involuntary petition requires at least 3 creditors to file if the debtor has 12 or more creditors.
MCQ-15637
Which of the following requirements must be met for creditors to file an involuntary bankruptcy petition under Chapter 7 of the federal Bankruptcy Code?
The debtor has not been paying its bona fide debts as they become due.
An involuntary petition for bankruptcy can be filed if a debtor owes more than $18,600 in unsecured debt and is not paying its debts as they become due.
MCQ-08884
Under the federal Bankruptcy Code, an involuntary petition in bankruptcy may not be filed against
which of the following parties?
A farmer
Farmers and nonprofit charities cannot be petitioned involuntarily into bankruptcy.
MCQ-10969
A debtor owes a total of $40,000 to three secured creditors and a total of $100,000 to 15 unsecured creditors. The debtor has not been paying debts as they become due. Which of the following requirements must be met for the debtor’s creditors to file an involuntary bankruptcy petition under Chapter 7 of the federal Bankruptcy Code?
At least three unsecured creditors must join in the petition.
If a debtor is not paying debts as they become due and and has 12 or more unsecured creditors, at least three of the unsecured creditors who together are owed at least
$18,600 must join to bring an involuntary petition
MCQ-10972
Which of the following statements is correct with respect to the reorganization provisions of Chapter 11 of the federal Bankruptcy Code?
The commencement of a bankruptcy case may be voluntary or involuntary.
Under Bankruptcy Code Section 303, creditors may petition a debtor involuntarily into a Chapter 11 bankruptcy reorganization proceeding.
MCQ-15638
A contested involuntary petition in bankruptcy will be dismissed if the debtor:
Is an individual engaged in the business of farming.
An individual engaged in the business of farming cannot be involuntarily petitioned into bankruptcy
MCQ-01348
Under the liquidation provisions of Chapter 7 of the U.S. 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:
Inheritances received by the debtor within 180 days after the filing of the petition.
The estate includes income generated from estate property and property the debtor receives from a bequest, devise, inheritances, property settlement, divorce, or beneficial
interest in life insurance within 180 days after filing of the petition.
MCQ-01350
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:
Municipal bond interest received by the debtor within 180 days after the filing of the petition.
The bankruptcy estate includes property the debtor receives from a bequest, devise, inheritance, property settlement, divorce decree or beneficial interest in a life insurance
policy or death benefit plan within 180 days after the filing of the petition. In addition, the estate includes any income generated by estate property (rents, interest and dividends) after the petition is filed. Earned income after the case commences is generally excluded.
