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118. A mechanic's lien applies only to "mechanical" work, such as car repairs or plumbing work on a house.
a. True
b. False
119. A mechanic's lien is also called an artisan's lien.
a. True
b. False
120. In Summers Group v. Tempe Mechanical, Summers (Rexel) sold electrical materials used in a construction
project that went into bankruptcy. In the litigation to determine where various claimants stood in their efforts to
collect, the appears court held that all lien holders would be treated on "equal ground."
a. True
b. False
121. An artisan's (possessory) lien attaches to personal property.
a. True
b. False
122. If a customer does not pay for work done to personal property, a creditor may force the sale of the property to
satisfy the debt.
a. True
b. False
123. If a debtor is likely to dispose of property subject to a lien during a lawsuit, a creditor may obtain an attachment lien
to protect itself.
a. True
b. False
124. If a customer does not pay a judgment entered against her by a court, the party that won the judgment may seek a
writ of exoneration.
a. True
b. False
125. If a creditor is successful in a legal action against a debtor, the court will award the creditor a judgment lien.
a. True
b. False
126. The law governing bankruptcy is federal statutory law.
a. True
b. False
127. More than one million people file for bankruptcy each year.
a. True
b. False
128. The most common bankruptcy proceeding is known as adjustment of debt.
a. True
b. False
129. Before filing for bankruptcy, a person must go through credit counseling.
a. True
b. False
130. If a person files for bankruptcy, they must take a class on debtor education.
a. True
b. False
131. People who have above average income are more likely to use Chapter 13 bankruptcy rather than Chapter 7.
a. True
b. False
132. The higher the income of a bankrupt, the more likely the debts will be discharged by Chapter 7 bankruptcy rather
than by debt repayment over time.
a. True
b. False
133. Chapter 13 bankruptcy proceedings are used mainly by businesses.
a. True
b. False
134. Just as with a Chapter 7 bankruptcy, the debt of a Chapter 13 bankrupt are discharged.
a. True
b. False
135. In Chapter 13 bankruptcy, there is a confirmation plan worked out by the trustee.
a. True
b. False
136. Bankruptcy in Chapter 13 is usually to be completed in five years.
a. True
b. False
137. Bankruptcy in Chapter 13 is usually to be completed in seven years.
a. True
b. False
138. Bankruptcy proceedings may be voluntary or involuntary.
a. True
b. False
139. In an involuntary bankruptcy, the trustee files the petition for bankruptcy.
a. True
b. False
140. Chapter 13 bankruptcy largely involved debt rescheduling.
a. True
b. False
141. In In re Darby the appeals court held that a person bankrupt under Chapter 13 is entitled to have cable television
service so long as they make payments in advance.
a. True
b. False
142. In In re Darby the appeals court held that a person bankrupt under Chapter 13 is entitled to have cable television
service because it is classified as a "utility."
a. True
b. False
143. In In re Darby the appeals court held that a person bankrupt under Chapter 13 is not entitled to have cable
television service even if payment can be promised in advance.
a. True
b. False
144. A debtor filing for Chapter 7 bankruptcy must provide a list of all immediate family members because persons such
as spouses may be liable for the bankrupt person's debts.
a. True
b. False
145. The creditor is responsible for liquidating all of the debtor's exempt property in bankruptcy proceedings.
a. True
b. False
146. The debts owed to secured creditors have the greatest protection in bankruptcy proceedings.
a. True
b. False
147. In the priority of classes of creditors, taxes owed to the government come before any other payments.
a. True
b. False
148. The role of the trustee is to minimize the amount of the debtor's assets available for distribution to creditors.
a. True
b. False
149. In a bankruptcy proceeding all creditors must be paid an equal share of the assets available, according to the
amount of debt owed.
a. True
b. False
150. The creditors with the highest priority in bankruptcy proceedings are the secured creditors.
a. True
b. False
151. After secured creditors are paid, all other creditors share the proceeds of the debtor's estate equally.
a. True
b. False
152. The final stage of bankruptcy is the dissolution stage.
a. True
b. False
153. Once a bankruptcy is finished, bankrupts are relieved of paying all debts.
a. True
b. False
154. A bankruptcy is a matter of credit history record for ten years.
a. True
b. False
155. A person who files bankruptcy may not file again for another eight years.
a. True
b. False
156. Bankruptcy rules in most countries now follow the U.N. Bankruptcy Convention.
a. True
b. False
157. There is a model United Nations bankruptcy law.
a. True
b. False
158. Even though a person is declared bankrupt, he or she will still have to pay child support, if they have a legal
obligation to do so.
a. True
b. False
159. Even though a person is declared bankrupt, he or she will still have to pay back student loans; they are usually not
eliminated.
a. True
b. False
160. Under Chapter 11 proceedings, businesses are forced to sell all company assets to pay outstanding debts.
a. True
b. False
161. Under a Chapter 11 reorganization, the debtor acts as a trustee.
a. True
b. False
162. Most companies that file Chapter 11 bankruptcies are billion dollar or larger firms.
a. True
b. False
163. Under a Chapter 11 bankruptcy, further actions by creditors against the debtor are permitted, so long as the court is
notified.
a. True
b. False
164. Under a Chapter 11 bankruptcy, a creditors' committee of the debtor's largest creditors is formed to supervise
reorganization.
a. True
b. False
165. The purpose of a Chapter 11 bankruptcy is to distribute all of the debtor's assets as efficiently as possible.
a. True
b. False
166. In Matter of Kmart Corp. the appeals court held that Kmart could make payments to preferred vendors, rather
than others with better claims, as part of a rational Chapter 11 strategy to remain in business.
a. True
b. False
167. In Matter of Kmart Corp. the appeals court held that the bankruptcy trustee was wrong to allow Kmart to make
payments to preferred vendors, rather than others with better claims, as part of a Chapter 11 strategy to remain in
business.
a. True
b. False
168. In Matter of Kmart Corp. the appeals court held that the bankruptcy trustee was empowered to use his best
business judgment in deciding which creditors were to be paid first as he attempted to salvage Kmart operations.
a. True
b. False
169. In Summers Group v. Tempe Mechanical, Summers (Rexel) sold electrical materials used in a construction
project that went into bankruptcy. In the litigation to determine where various claimants stood in their efforts to
collect, the appears court held that because Summers was the first lienholder to file a claim, it stood first to
collect.
a. True
b. False
