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Exam 32: Bankruptcy and Reorganization

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Question 21

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Which of the following chapters recognizes insolvency proceedings pending in a foreign country and relief for foreign debtors?

A) Chapter 7
B) Chapter 9
C) Chapter 11
D) Chapter 14
E) Chapter 15

F) A) and E)
G) C) and E)

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Question 22

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"Exemptions." Sidney is injured in an automobile accident and cannot work. She cannot pay her bills and files for bankruptcy relief under Chapter 7. Federal exemptions apply, and she lists as exempt $25,000 in equity in her residence; interest in a vehicle of $2,000; interest in jewelry of $400; and retirement funds in her individual retirement account. Her creditors filed an objection to all claimed exemptions except for the home equity claim. -What is the status of the exemptions she claimed in the car and jewelry?

A) Both exemptions will likely be granted because their type and value are within allowable federal exemptions.
B) The exemption claimed for the jewelry will likely be granted; but in order to ascertain the status of the vehicle, further information is needed in regard to whether it is used in business.
C) The exemption claimed for the vehicle will likely be granted, but the exemption claimed for the jewelry will likely be disallowed because no exemption may be claimed for jewelry.
D) The exemption claimed for the vehicle will likely be granted, but the exemption claimed for the jewelry will likely be disallowed because a federal exemption may only be claimed for jewelry consisting of a wedding band worth less than $400.
E) The exemption claimed or the jewelry will likely be allowed, but the exemption claimed for the vehicle will likely be denied because the federal exemption for a vehicle is limited to $1,000.

F) A) and C)
G) None of the above

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Question 23

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One of the requirements before a collective bargaining agreement can be rejected under Chapter 11 is that the debtor has first presented to the employee's representative the proposed changes to the collective bargaining agreement, and the employees reject the changes without good cause.

Which of the following is considered a debtor eligible for Chapter 7 relief in bankruptcy?

In a Chapter 7 proceeding, a bankruptcy trustee may at times take over a debtor's business.

Which of the following is false regarding actions that may be taken while an automatic stay is in effect in a Chapter 7 proceeding?

Which of the following, if any, is a moratorium for almost all creditor litigation against a debtor in a Chapter 7 bankruptcy?

Which of the following is a term used in bankruptcy for debtors who cannot pay their debts in a timely fashion?

Which of the following is an individual who takes over administration of the debtor's estate?

How is a determination made regarding the identity of the trustee in a Chapter 7 proceeding?

Which of the following titles of the United States Code contains the Bankruptcy Code?

Which of the following means that bankruptcy relief is ordered and that the bankruptcy proceedings can continue?

Which of the following is false regarding Chapter 13 of the bankruptcy code?

Assets that a debtor gains after filing a voluntary Chapter 7 bankruptcy petition are generally not part of the bankruptcy estate unless they fall under an exemption.

Under which of the following may a court presume that an individual is abusing the bankruptcy provisions of Chapter 7 when an individual's debt is primarily consumer debt and the individual's income is above the median income in his or her state?

"Exemptions." Sidney is injured in an automobile accident and cannot work. She cannot pay her bills and files for bankruptcy relief under Chapter 7. Federal exemptions apply, and she lists as exempt $25,000 in equity in her residence; interest in a vehicle of $2,000; interest in jewelry of $400; and retirement funds in her individual retirement account. Her creditors filed an objection to all claimed exemptions except for the home equity claim. -What is the status of the exemption she claimed for individual retirement account funds?

"Friends and Family." Mindy was very close to her family and friends. She also liked to spend and had a large amount of consumer debt for items such as jewelry, clothing, a personal watercraft, and a new car. Mindy was having problems making her credit card payments as they became due. She, however, wanted to make every effort to pay her debts. She had borrowed money from her mother for some jewelry and repaid that loan on January 1st. She repaid a loan to her business partner on May 15th of the same year. On September 1st of that year, she also repaid a loan to Friendly Jewelry Store because she wanted to remain on good terms with the manager. Unfortunately, Mindy was simply unable to continue making payments and on November 1st of that year, she filed a voluntary petition for bankruptcy relief under Chapter 7. -Assuming Mindy's mother received more than would have been received through bankruptcy proceedings, which of the following is the most likely result of a claim of preferential payment based upon the payment to the mother?

Set forth the reasons cited for the comprehensive changes to bankruptcy law included in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

"Consumer Debt." Mona had not been keeping up with her spending and bought several expensive items. She had numerous credit cards and some unsecured loans. She had a total of 14 creditors. All her debt was consumer debt, and Mona really wished that she had not put all those new clothes on her credit card. Although Mona was struggling, she did not want to file for bankruptcy because she did not want a bad credit score. Three of her credit card companies, however, who had unsecured claims against her totaling $14,500, signed and filed an involuntary bankruptcy petition against her under Chapter 7. Mona is unsure about how to proceed. While she is several months behind on a number of payments, including alimony payments she believes were unfairly awarded to her ex-husband, she does not particularly want to go bankrupt. She believe that the creditors have been unfair in not allowing her additional time in which to pay. On the other hand, she would really like to be rid of her excessive debt and stop collection efforts on the part of her ex-husband. -If Mona convinces the judge that the creditors have filed the involuntary bankruptcy frivolously, which of the following is true regarding what amounts, if any, the court may force the creditors to pay?

Which of the following are permitted to file under Chapter 11 reorganization?