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Which of the following requirements must be met for creditors to file an involuntary bankruptcy petition under Chapter 7 of the federal Bankruptcy Code?
The primary requirement for a petition of involuntary bankruptcy is that creditors must demonstrate that a debtor has defaulted on repayments of debts. Involuntary petitions must be filed only by creditors who are owed, individually or in the aggregate, at least $16,750 in unsecured, undisputed debt. If there are fewer than 12 creditors, the aggregate threshold of unsecured debt is $16,750; if there are more than 12, at least three who are owed $16,750 in the aggregate must join the petition.
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A reorganization under Chapter 11 of the federal Bankruptcy Code requires all of the following except the:
The primary feature of reorganization under Chapter 11 is to create a plan between the debtor and creditors which best satisfies all parties involved. Liquidation does not occur, and the debtors maintains control of the debtor’s assets.
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Which of the following statements is correct with respect to the reorganization provisions of Chapter 11 of the federal Bankruptcy Code?
Under Chapter 11, a debtor may file voluntarily, or its creditors may file an involuntary petition. Under a voluntary petition, the debtor need not be insolvent, though individuals must pass income tests to determine eligibility. Chapter 11 does not usually involve a trustee, and the debtor has an exclusive right to file a plan in the first 120 days after filing a petition.
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A debtor who filed voluntarily and received a discharge in bankruptcy under the provisions of Ch 7 of the Federal Bankruptcy Code:
An inheritance received within 180 days after the filing of the petition must be surrendered for distribution to the creditors.
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Of the following assets, which would be included in a debtor’s bankruptcy estate in a liquidation proceeding?
Proceeds from life insurance, inheritance or divorce settlement received within 180 days after the filing of the petition are included in the estate.
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Stephen Industries has a few claims pending against a client filing for Chapter 7 Bankruptcy. They are an unsecured claim of $1,300 that was not timely filed as well as a claim on $75,000 principal and accrued interest on a mortgage loan secured by real property. What dollar amount would Stephen receive from these claims?
Stephen would likely only receive the claim for $75,000 as this claim is secured, whereas the unsecured claim was not timely filed. Only additional money left over would be paid.
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A debtor who filed voluntarily and received a discharge in bankruptcy under the provisions of Chapter 7 of the federal Bankruptcy Code:
Several items in a debtor’s personal property may be included in the property of the estate if received within 180 days of filing: property received as part of inheritance, divorce, or insurance, as well as income generated from estate property.
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Which of the following assets would be included in a debtor’s bankruptcy estate in a liquidation proceeding?
Several items in a debtor’s personal property may be included in the property of the estate if received within 180 days of filing: property received as part of inheritance, divorce, or insurance, as well as income generated from estate property.
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Sharon sells her two-year-old convertible to her father for $200. The next week, Sharon files for bankruptcy under Chapter 7. Regarding the sale of the car, the trustee may:
Fraudulent transfers occur when someone intentionally transfers property ownership in an attempt to reduce or limit the assets subject to distribution to creditors. In this case, since the value of the convertible would far exceed the amount of cash received in the exchange and was made to a close family member, the transfer would be regarded as an attempt to limit creditors’ access to the car in the distributable property at settlement.
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Per the liquidation provisions of Ch 7 of the US 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:
The estate includes income generated from estate property and property the debtor receives from a bequest, devise, inheritances, property settlement, divorce, or beneficial interest in life insurance within 180 after filing the petition.
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Of the following requirements, which must be met for creditors to file an involuntary bankruptcy petition under Ch 7 of the Federal Bankruptcy Code?
An involuntary petition for bankruptcy can be filed if a debtor owes more than $16,750 in unsecured debt and is not paying its debts as they become due.
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Per the provisions of Chapter 7 of the US Federal Bankruptcy Code, if the debtor _______ he or she will be denied a discharge in bankruptcy.
Per the provisions of Chapter 7 Bankruptcy law, the debtor will be denied a discharge from the bankruptcy if they cannot or refuse to explain a loss of their assets.
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Brown cosigned Royal's $50,000 note to State Bank. If Royal is later adjudicated mentally incompetent, what would be Brown's liability on the note?
Any contract made by a party legally deemed incompetent is voidable, and a voided contract would release the liability of all parties involved.
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Which of the following rights does a surety have?
I. Right to compel the creditor to collect from the principal debtor
II. Right to compel the creditor to proceed against the principal debtor’s collateral
As a rule, a surety generally has no rights to compel the creditor to collect from the principal debtor. Such rights are only available to a guarantor of collectability, who is liable only if the creditor has exhausted all other legal remedies.
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Which of the following events will release a noncompensated surety from liability?
A non-compensated (or gratuitous) surety is bound to the contract if he or she makes a promise to act as a surety prior to consideration changing hands from the creditor to the debtor. A gratuitous surety is released from liability only in a change of the original contract.
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Per the Federal Fair Debt Collection Practices Act, which of the following would a collection service using improper debt collection practices be subject to?
The FDCPA gives parties injured by unfair collection practices the right to sue for damages. It does not provide for any of the other answers given.
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Of the following defenses, which would a surety be able to assert successfully to limit the surety’s liability to a creditor?
A surety may raise his or her own contract defenses to limit his or her liability, thus the surety’s own incapacity is a defense to the surety promise.
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Of the following rights and liabilities, which does a surety have?
A surety does not have the rights listed, as the surety acts to back up the debts of another party. Thus, the surety would have the liability on debt they agreed to backstop.
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