Debtor-Creditor Relationships

The federal 2005 Bankruptcy Reform Act modified the so-called “homestead” exemptions utilized under state law in certain states. Generally, these exemptions allowed the debtor to protect equity in their home from creditors.
Which of the following best reflect the effect of the 2005 Bankruptcy Reform Act upon “homestead exemptions”?
I. The debtor must have lived in or had been domiciled in the state for six months.
II. Using federal bankruptcy law to override state law, the maximum amount ever shielded from creditors is $155,675 (excluding equity from a prior sale of a previous principal residence that is located in the same state, was lived in for five years, and was rolled into the subject home's equity).
III. If the debtor was involved in any federal or state securities law violations or certain criminal acts within the past five years, there is no exemption regardless of the residency or domiciliary status of the debtor.

Chapter 11 bankruptcy was revised under the 2005 Bankruptcy Reform Act. Some of the more material changes and additions include:
I. confirmation of a Chapter 11 plan of reorganization does not discharge an individual debtor.
II. the court can no longer use a “cram down” provision.
III. individual debtors must use assets acquired after the petition was filed as necessary in the reorganization plan.
IV. individuals are not allowed to use Chapter 11 and must instead rely upon Chapter 13.
V.

Which of the following is not a required element of a “fraudulent transfer” under the Bankruptcy Code?

Deft, CPA, is an unsecured creditor of Golf Co. for $16,000. Golf has a total of 10 creditors, all of whom are unsecured. Golf has not paid any of the creditors for three months. Under Chapter 11 of the Federal Bankruptcy Code, which of the following statements is ?

Which of the following statements is with respect to the reorganization provisions of Chapter 11 of the Federal Bankruptcy Code?

The filing of an involuntary bankruptcy petition under the Federal Bankruptcy Code:

Under the liquidation provisions of Chapter 7 of the Federal Bankruptcy Code, which of the following statements applies to a person who has voluntarily filed for and received a discharge in bankruptcy?

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:

A party involuntarily petitioned into bankruptcy under Chapter 7 of the Federal Bankruptcy Code who succeeds in having the petition dismissed could recover:

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:

An attorney representing a debtor under Chapter 7 has the following (non-inclusive) obligations under the Bankruptcy Code:
I. The attorney must reasonably attempt to guide the debtor to a reorganization style of bankruptcy (Chapter 11 or 13).
II. The attorney must file an affidavit noting the attorney has informed the debtor/client of the different forms of bankruptcy relief available under the Bankruptcy Code.
III. The attorney must agree to reduced legal rates for Chapter 7 versus Chapter 11 bankruptcy filings.
IV. The attorney must attempt to reasonably verify the accuracy of an individual debtor's supporting schedules (including debts and resources) and bankruptcy petition.

Under the Federal Bankruptcy Code, which of the following rights or powers does a trustee Bankruptcy not have?

Under Chapter 11 of the Federal Bankruptcy Code, which of the following would not be eligible for reorganization?
A. Retail sole proprietorship

Under the liquidation provisions of Chapter 7 of the Federal Bankruptcy Code, a debtor will be denied a discharge Bankruptcy if a debtor:

Which of the following types of debtor are not eligible for relief under Chapter 11 of the Bankruptcy Code?

Which of the following claims will not be discharged Bankruptcy?

Which of the following transfers by a debtor, within 90 days of filing for bankruptcy, could be set aside as a preferential payment?

To file for bankruptcy under Chapter 7 of the Federal Bankruptcy Code, an individual must:

Green owes unsecured creditors: Rice, $5,000; Vick, $3,000; Young, $7,500; and Zinc, $2,750. Green has not paid any creditor since January 1, 20X1. On March 15, 20X1, Green's sole asset, a cabCruiser, was seized by Xeno Marine Co., the holder of a perfected security interest in the boat. On July 1, 20X1, Rice, Vick, and Young petitioned Green into involuntary bankruptcy under Chapter 7 of the Federal Bankruptcy Code. If Green opposes the involuntary petition, the petition will be:

Before a person may file a petition for voluntary bankruptcy under the 2005 Bankruptcy Reform Act, the petitioner must:
I. receive credit counseling from an approved for-profit credit counseling agency.
II. receive credit counseling within 180 days preceding the filing.
III. provide a certificate of receiving a group or individual briefing by an approved credit agency within the last 180 days to the court.

On June 5, 20X1, Gold rented equipment under a 4-year lease. On March 8, 20X2, Gold was petitioned involuntarily into bankruptcy under the Federal Bankruptcy Code's liquidation provisions. A trustee was appointed. The fair market value of the equipment exceeds the balance of the lease payments due. The trustee:

By signing a reaffirmation agreement on April 15, 20X1, a debtor agreed to pay certain debts that would be discharged Bankruptcy. On June 20, 20X1, the debtor's attorney filed the reaffirmation agreement and an affidavit with the court indicating that the debtor understood the consequences of the reaffirmation agreement. The debtor obtained a discharge on August 25, 20X1. The reaffirmation agreement would be enforceable only if it was:

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?

On May 1, Year 5, two months after becoming insolvent, Quick Corp., an appliance wholesaler, filed a voluntary petition for bankruptcy under the provisions of Chapter 7 of the Federal Bankruptcy Code. On October 15, Year 4, Quick’s board of directors had authorized and paid Erly $50,000 to repay Erly’s April 1, Year 4, loan to the corporation. Erly is a sibling of Quick’s president. On March 15, Year 5, Quick paid Kray $100,000 for inven¬tory delivered that day.
Quick’s payment to Kray would:

White, who owned a small business that operated as a sole proprietorship, filed for bankruptcy on October 1, 20X1. Among his creditors was his sole employee, who was owed $3,000 for wages earned within the previous two months ($1,500 each month). In this case, the employee is:

Under the 2005 Bankruptcy Reform Act, the clerk of the bankruptcy court must provide a consumer-debtor with which of the following materials or services?

Strong Corp. filed a voluntary petition Bankruptcy under the reorganization provisions of Chapter 11 of the Federal Bankruptcy Code. A reorganization plan was filed and agreed to by all necessary parties. The court confirmed the plan, and a final decree was entered.
Which of the following statements best describes the effect of the entry of the court's final decree?

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?
I. Insolvency
II. Three or more creditors
III. Pre-petition credit counseling

There are items that cannot be taken control of by the bankruptcy trustee. These items are often known as exempt property. The 2005 Bankruptcy Reform Act tightened up the exemption of “household goods and furnishings” by specifically excluding which of the following from the “household goods and furnishings” term?
I. Works of art, such as paintings and sculptures
II. Antiques in the home valued over $650
III. Wedding rings
IV. Lawn mowers, tractors, and similar yard items

A reorganization under Chapter 11 of the Federal Bankruptcy Code requires all of the following, except the:

A voluntary petition for bankruptcy relief may be dismissed by the court if the debtor:
I. fails to provide necessary documents within the specified time period.
II. was convicted of a drug trafficking offense or a violent crime and the victim files a motion to dismiss the petition.
III. has income over the average median family income of the state where the petition is filed.
IV. fails to pay post-petition child support or alimony payments.

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:

In general, which of the following debts will be discharged under the voluntary liquidation provisions of Chapter 7 of the Federal Bankruptcy Code?

Which of the following statements is concerning the voluntary filing of a petition Bankruptcy?

On May 1, Year 5, two months after becoming insolvent, Quick Corp., an appliance wholesaler, filed a voluntary petition for bankruptcy under the provisions of Chapter 7 of the Federal Bankruptcy Code. On October 15, Year 4, Quick’s board of directors had authorized and paid Erly $50,000 to repay Erly’s April 1, Year 4, loan to the corporation. Erly is a sibling of Quick’s president. On March 15, Year 5, Quick paid Kray $100,000 for inven¬tory delivered that day.
Which of the following is not relevant in determining whether the repayment of Erly’s loan is a voidable preferential transfer?

On May 1, Year 5, two months after becoming insolvent, Quick Corp., an appliance wholesaler, filed a voluntary petition for bankruptcy under the provisions of Chapter 7 of the Federal Bankruptcy Code. On October 15, Year 4, Quick’s board of directors had authorized and paid Erly $50,000 to repay Erly’s April 1, Year 4, loan to the corporation. Erly is a sibling of Quick’s president. On March 15, Year 5, Quick paid Kray $100,000 for inven¬tory delivered that day.
Which of the following is not relevant in determining whether the repayment of Erly’s loan is a voidable preferential transfer?

Under the reorganization provisions of Chapter 11 of the Federal Bankruptcy Code, after a reorganization plan is confirmed and a final decree closing the proceedings entered, which of the following events usually occurs?

RobCorp. incurred substantial operating losses for the past three years. Unable to meet its current obligations, Robin filed a petition for reorganization under Chapter 11 of the Federal Bankruptcy Code. Which of the following statements is ?

On April 1, Roe borrowed $100,000 from Jet to pay Roe's business expenses. On June 15, Roe gave Jet a signed security agreement and financing statement covering Roe's inventory. Jet immediately filed the financing statement. On July 1, Roe filed for bankruptcy. Under the Federal Bankruptcy Code, can Roe's trustee Bankruptcy set aside Jet's security interest in Roe's inventory?

Which of the following types of claims would be paid first in the distribution of a bankruptcy estate under the liquidation provisions of Chapter 7 of the Federal Bankruptcy Code if the petition was filed July 15, 20X1?

In his bankruptcy petition, Minton listed (among others) the following creditors: the Internal Revenue Service for back taxes from the previous year, First Bank for an unsecured loan used to purchase household furniture, Dr. Richard Jones for medical services rendered within the previous year, and Alice Minton for unpaid alimony for the previous year. Of the four creditors listed, which would be given the highest priority A bankruptcy proceeding?

Which of the following acts by a debtor could result A bankruptcy court revoking the debtor's discharge?
I. Failure to list one creditor
II. Failure to ly answer material questions on the bankruptcy petition

Under the 2005 Bankruptcy Reform Act, certaChanges were made to Chapter 7 of the Bankruptcy Code. Consider the following items and determine which are applicable to Chapter 7 bankruptcy:
I. Consumer debts for more than $650 for luxury goods or services provided within 90 days of the order of relief may be discharged.
II. Cash advances totaling more than $925 from a credit card obtained within 70 days of the order may not be discharged, subject to a rebuttable presumption.
III. An unsecured claim is now allowed for death resulting from the operation of a motor vehicle while the debtor was under drug or alcohol influence.
IV. Penalties resulting from federal election law penalties remain dischargeable.

On February 28, Master, Inc., had total assets with a fair market value of $1,200,000 and total liabilities of $990,000. On January 15, Master made a monthly installment note payment to Acme Distributors Corp., a creditor holding a properly perfected security interest in equipment having a fair market value greater than the balance due on the note. On March 15, Master voluntarily filed a petition Bankruptcy under the liquidation provisions of Chapter 7 of the Federal Bankruptcy Code. One year later, the equipment was sold for less than the balance due on the note to Acme. Master’s payment to Acme could:

Creditors of Walters filed an involuntary petition of bankruptcy on May 15, 20XX. After all nonexempt property was sold and secured creditors paid, there remained $6,000 to pay other creditors. Walters' other creditors consisted of the following: trustee ($4,000), attorney for the petitioner ($4,000), accountant for the estate ($2,000), and other general creditors ($10,000).
Under the federal system of priorities, what is the amount that will be received by the accountant for the estate?

Flax, a sole proprietor, has been petitioned involuntarily into bankruptcy under the Federal Bankruptcy Code’s liquidation provisions. Simon & Co., CPAs, has been appointed trustee of the bankruptcy estate. If Simon also wishes to act as the tax return preparer for the estate, which of the following statements is ?

Chapter 13 bankruptcy was revised under the 2005 Bankruptcy Reform Act. Some of the more material changes and additions include:
I. the repayment period cannot exceed five years; the time period is based on the family income as computed.
II. the confirmation of the plan must result A hearing no sooner than 20 days or more than 45 days after the meeting with the creditors.
III. when considering disposable income of the debtor, the Bankruptcy Code excludes up to 15% of the debtor's gross income for charitable contributions.
IV. when considering disposable income of the debtor, reasonable costs of health insurance for the debtor and the debtor's family may be considered.

Hall, CPA, is an unsecured creditor of Tree Co. for $16,000. Tree has a total of 10 creditors, all of whom are unsecured. Tree has not paid any of the creditors for three months. Under Chapter 11 of the Federal Bankruptcy Code, which of the following statements is ?

In

Douglas filed a voluntary bankruptcy on November 1, 20XX. For over a year prior to that time, Douglas had been considered insolvent in the bankruptcy sense. Which of the following would be considered a “preference” payment under bankruptcy law?