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Exam 15: Creditor Debtor Relations and Bankruptcy

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Question 31

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At the time of the filing of the petition and the time of the filing of the plan, Chapter 13 imposes on the debtor the requirement of

A) goodwill.
B) good faith.
C) substantial means.
D) sufficient credit.

E) None of the above
F) A) and B)

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Question 32

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Most liens have little practical use, because liens generally do not take priority over other claims to the same property.

A) True
B) False

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Question 33

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A small-amount mechanic's lien typically stays on record until the property against which it has been filed is sold when it is paid out of the sale proceeds.

Businesses must be technically insolvent to file for bankruptcy relief.

Anyone obligated to a creditor can declare bankruptcy.

In a Chapter 7 proceeding, the primary effect of a discharge is to void any judgment on a discharged debt and to prohibit any action to collect it.

In a Chapter 7 proceeding if the value of the debtor's estate does not provide sufficient cash to pay all the creditors, it is given back to the debtor.

In a Chapter 11 proceeding, the role of a debtor in possession is similar to that of a trustee in a Chapter 7 proceeding.

Each state permits a debtor in bankruptcy to retain the family home in order to preserve some equity to pay any debts that are discharged.

Because a writ of attachment is a prejudgment remedy, a debtor does not need to be given notice and an opportunity to be heard before the property is seized.

Under Chapter 13, a plan may provide for the payment of all of the debtor's obligations in full.

Baby Day Care, a sole proprietorship, wants to pay as many of its obligations as reasonably possible, and be discharged of the rest. To accomplish this goal, the proprietorship should file a petition in bankruptcy under Chapter 13 for relief through

Under Chapter 13, a repayment plan must provide for

In a Chapter 7 proceeding, at a meeting of creditors, one of the creditors is elected to take over the debtor's assets.

Under the Bankruptcy Code, the means test is used to

Federal law provides a minimal framework to protect debtors from losing all their income in order to pay judgment debts.

Dana operates Energy Inc., a corporation in the fuel-supply business. Dana wants to create a plan under which the firm pays a portion of its debts, is discharged of the remainder, and is allowed to continue in business. Energy should file a petition in bankruptcy for relief through

A debtor who makes false statements under oath may be denied a discharge of his or her debts in the bankruptcy proceeding.

In addition to financial statements, each voluntary petition in bankruptcy must include

A bankruptcy trustee must determine whether the debtor's financial situation warrants relief based on a comparison of the debtor's income with