Part A: "True or False"
Question 1: Under Section 704 of the Code, the Trustee's basic duties are to litigate, liquidate, administrate and investigate.
Question 2: The Official Creditor's Committee in Chapter 11 normally consists of among the twenty largest unsecured creditors.
Question 3: A debtor-in-possession is the equivalent of a trustee for most purposes.
Question 4: A corporate debtor in Chapter 7 does not receive a discharge.
Question 5: A creditor can request that the Bankruptcy Court order the trustee to examine the acts and conduct of the debtor to determine if grounds exist to deny the debtor a discharge.
Question 6: A debt arising from a marital property settlement agreement is always dischargeable.
Question 7: To be considered non-dischargeable, the burden is on the creditor to file an adversary complaint when the debt was obtained through a fraudulent representation, through fraud while the debtor was serving in a fiduciary capacity, through embezzlement or larceny, or as the result of willful and malicious injury.
Question 8: If the debtor purchases $750 worth of holiday gifts in November on her visa card and then files for bankruptcy on January 1 of the following year, that debt is presumed no dischargeable.
Question 9: An individual debtor may not receive a discharge until they complete a post petition financial management course.
Question 10: Under Section 546 of the Code, certain creditors may be allowed to perfect liens in property of the estate after a petition is filed.
Question 11: A statutory lien may never be avoided in bankruptcy.
Question 12: A provision in an agreement forfeiting the debtor's interest in property upon becoming insolvent is generally enforceable.
Question 13: For a preferential transfer to occur, among other things, there must be a transfer of property of the debtor for or on account of an antecedent debt.
Question 14: Transfers made to satisfy domestic support obligations during the 90 day period immediately preceding the bankruptcy filing are avoidable as preferences.
Question 15: For purposes of preferential transfers, the debtor is presumed solvent for the 90 day period immediately preceding the bankruptcy filing.
Question 16: A bankruptcy trustee may sell or use property of the estate, which is not cash collateral, in the ordinary course of business without court approval.
Question 17: In all cases (7, 11 and 13) a debtor or trustee must make the decision to assume or reject any executory contract within 60 days after the case is commenced.
Question 18: An executory contract is one where some performance remains to be rendered on all sides.
Question 19: In a case, no specific amount of time is specified within which a debtor-in-possession/trustee must assume or reject an unexpired lease of residential real property or executory contract.
Question 20: An individual consumer bankruptcy debtor may not assume a lease of personal property if the trustee does not do so.
Question 21: An unsecured claim is one that arises after the filing of a bankruptcy petition.
Question 22: There are normally no priorities among administrative claimants.
Question 23: Unsecured claims of individuals up to $2,775.00, arising from the deposit of money before the commencement of the case for personal, family or household use are treated as general unsecured claims for all purposes.
Question 24: A gap period claim is a claim incurred during that period of time between the filing of an involuntary petition and prior to the entry of an order for relief.
Question 25: The maximum length of time for a plan, with Court approval is 6 years.
Question 26: A plan may provide for the payment of principal and interest payments under a long term loan even after the lapse of 5 years from the date the plan is approved, when the due date of the loan falls after completion of the plan.
Question 27: A plan may be used to cure defaults on a mortgage while the debtor maintains regular monthly mortgage payments outside of the plan.
Question 28: The debtor does not have to begin making payments to the trustee until his/her plan is confirmed by the court.
Question 29: All postpetition domestic support obligations must have been paid and all postpetition tax returns filed before plan can be confirmed.
Question 30: If the debtor-in-possession files a plan of reorganization within 120 days of the filing of a petition, the debtor-in-possession will have an additional 60 days to obtain creditor acceptance before any other party may propose a plan of reorganization.
Question 31: An unimpaired class of claims in a Chapter 11 plan is presumed to have accepted the plan of reorganization.
Question 32: A disclosure statement accompanying a Chapter 11 plan of reorganization should include, among other things, at least a summary of the plan's important terms.
Question 33: If an impaired class of claims does not vote to accept a proposed Chapter 11 plan, it cannot be confirmed.
Question 34: Any individual may file a case under Chapter 12 of the Bankruptcy Code.
Part B: "Multiple Choices"
Question 35: In a case the debtor-in-possession:
a. is authorized to continue to operate the debtor's business without court approval.
b. must cease all operations at the time the petition is filed.
c. must surrender all property to the trustee when the petition is filed.
d. need not close existing business bank accounts and open new ones.
Question 36: In a case:
a. The interim trustee can be removed in favor of another trustee by vote of the creditors at the meeting of creditors.
b. The interim trustee will become the trustee if the Bankruptcy Court has appointed him or her as trustee.
c. The debtor-in-possession is trustee.
d. The U.S. Trustee will be the trustee in all cases.
Question 37: Among the Trustee's duties are:
a. Accounting for all property received.
b. Disbursing money.
c. Filing a final report and accounting.
d. All of the above.
Question 38: All of the items in choices "a"-"c" are specifically contained in Code Section 704, which specifies the trustee's duties. Choice "d" is therefore the correct answer.
a. For a limited period of time with court approval.
b. When the case is converted to a Chapter 13.
c. Will never operate a debtor's business.
d. Until the case is closed.
Question 39: A "contested matter" is:
a. an opposed motion that is treated like an adversary proceeding. b. an unopposed noticed motion. c. an adversary proceeding initiated by filing a Summons and Complaint. d. None of the above.
Question 40: The automatic stay goes into effect when:
a. The debtor appears at the meeting of creditors.
b. Following a notice and a hearing.
c. When the petition is filed.
d. When a motion for relief from stay is filed.
Question 41: The following is not subject to the automatic stay.
a. Criminal action.
b. Action to collect a judgment.
c. Mailing past due notices to the debtor.
d. A non-judicial foreclosure sale.
Question 42: The automatic stay remains in effect as to property of the estate until:
a. The case is closed.
b. The case is dismissed.
c. In the Chapter 7 of an individual, until the debtor receives a discharge, except in certain serial filing situations.
d. All of the above.
Question 43: A debtor opposing a relief from stay motion may be able to provide adequate protection of a secured creditor's interest by showing:
a. That the value of the creditor's collateral is substantially more than the creditor is owed.
b. That the value of the creditor's collateral is worth substantially less than what the creditor is owed.
c. That the bankruptcy petition is filed.
d. All of the above.
Question 44: A form of "adequate protection" of a secured creditor's interest in collateral can be:
a. Cash payments.
b. Additional collateral.
c. Replacement collateral.
d. All of the above.
Question 45: Which of the following is not true?
a. A Chapter 7 debtor's postpetition wages are not property of the estate.
b. The automatic stay applies to the enforcement of alimony or support obligations.
c. Exemptions do not apply to the collection of alimony or support obligations.
d. A nondebtor spouse may object to the dischargeability of obligations arising from marital property settlement agreements.
Question 46: A debtor may be denied a discharge for any of the following reasons except:
a. Failing to file all tax returns
b. Failing to attend a Financial Management course
c. Filing 2 or more bankruptcy cases in the last year
d. Having received a Chapter 7 discharge 6 years ago
Question 47: Property of the estate in case does not include:
a. The principal assets of a valid "spendthrift" trust.
b. Wages earned by a debtor after the filing of a petition.
c. All of the above.
d. None of the above.
Question 48: Property of the estate includes:
a. Property held by the debtor for a third person.
b. Property in which the debtor has any legal or equitable interest.
c. Wages of a Chapter 7 debtor.
d. None of the above.
Question 49: The policy behind the trustee's "avoiding powers" is:
a. To give the debtor the right to favor one creditor over another.
b. To keep bankruptcy filings down.
c. To give the debtor maximum benefit of exemptions.
d. To provide the most equitable distribution to creditors of a debtor's assets.
Question 50: A preferential transfer may be defensible if:
a. The creditor has received more than it otherwise would have received had the transfer not been made.
b. The transfer of the debtor's property to the creditor is made in the ordinary course of business of the debtor and the creditor, according to ordinary business terms.
c. The creditor offsets its debt.
d. The creditor transfers to a third party the property of the debtor given to the creditor.
Question 51: A fraudulent conveyance that a trustee may set aside includes a transfer of property of the debtor:
a. For or on account of an antecedent debt.
b. A contemporaneous exchange of property of the debtor for new value given by the creditor.
c. That renders the debtor insolvent and is a transfer for less than reasonably equivalent value.
d. None of the above.
Question 52: In order to assume an unexpired lease, the trustee or debtor-in-possession must:
a. Cure all defaults.
b. Assign the lease.
c. All of the above.
d. None of the above.
Question 53: The purpose of abandonment is to:
a. Eliminate burdensome property of inconsequential value to the estate.
b. Give the debtor its exempt property.
c. Provide adequate protection to a secured creditor.
d. Allow the debtor a discharge.
Question 54: A proof of claim:
a. Creates a presumption that a claim is valid.
b. Is filed with the trustee.
c. Is always needed for secured claims.
d. Is always requested of creditors in a chapter 7 case.
Question 55: When a debtor intends to retain a secured motor vehicle in a Chapter 13 case, the vehicle's value is most commonly determined by:
a. The liquidation value of the vehicle;
b. The replacement value of the vehicle;
c. The low blue book value of the vehicle;
d. The Court after a valuation hearing.
Question 56: In property of the estate includes:
a. Pre-petition exempt property.
b. Post-Petition earnings of the debtor.
c. None of the above.
d. All of the above.
Question 57: In a plan:
a. All secured claims are put into one class.
b. Secured creditors may not be impaired.
c. All claims that are substantially similar should be placed in the same class.
d. All unsecured claims must be placed in one class.
Question 58: A mandatory requirement for confirmation of a Chapter 11 plan is:
a. That the plan is feasible.
b. That the debtor retain property.
c. There be no new management for the debtor-in-possession.
d. a. There be only new management for the debtor-in-possession.
Question 59: Which of the following are not core proceedings?
a. A complaint objecting to dischargeability of a debt.
b. A motion for relief from the automatic stay.
c. A non-exempt personal injury claim.
d. An objection to a debtor's claim of exemptions.
Part C: " Short Answers"
Question 60: What is the standard for a consumer debtor to obtain discharge of a student loan on the grounds of "undue hardship"?
Question 61: Describe the resources to use in researching a bankruptcy issue.
Question 62: One of your goals in preparing a bankruptcy petition, schedules etc is to make matters as easy for the Trustee as possible. What should you prepare in an asset case prefiling and postfiling?