CHAPTER 40—BANKRUPTCY Key
1. Jake, a businessman, filed for bankruptcy and was declared insolvent by the courts. He owed $15,000 each to
two creditors and $5,000 each to two others. The courts also decreed that he should sell his house worth
$30,000, to pay his debts. Which of the following is legally permissible in this scenario?
2. Under the Bankruptcy code, bankruptcy is applicable to:
3. Which of the following is true of bankruptcy petitions?
4. Which of the following best describes cram down?
5. Under Chapter 7 of the Bankruptcy Code, which of the following is classified as a special circumstance to
file for bankruptcy?
6. Which of the following is prohibited 90 days prior to filing a bankruptcy petition?
7. Which of the following is legally permissible after a debtor is discharged from his debt?
8. Which of following debts can be avoided by bankruptcy?
9. Any person who has a property in the United States can be a debtor under the Bankruptcy Code.
10. A husband and wife cannot file a bankruptcy petition jointly.
11. A court will enter an order for relief on the filing of an involuntary bankruptcy petition if the debtor does not
pay debts as they become due.
12. Bankruptcy law uses different procedures in liquidating the estate under a voluntary bankruptcy proceeding
and an involuntary one.
13. Before debtors may file for bankruptcy, they must complete a 45-minute credit counseling session in the six
months prior to filing.
14. Under Chapter 11, the Bankruptcy Code provides a special rehabilitation system designed for businesses so
that they may be reorganized rather than liquidated.
15. A cram down can be imposed even if dissenting unsecured creditors are not paid in full.
16. Property such as household effects is exempt from seizure for the payment of debts.
17. Unsecured claims are those for which creditors have no lien on specific assets.
18. Claims for alimony and child support can be avoided by bankruptcy.
19. Debts due on a judgment for intentional injury to others cannot be avoided by bankruptcy.
20. State the debts that cannot be avoided by bankruptcy.