1. In a Chapter 7 proceeding if there is not enough money to pay all the creditors, it is given back to the debtor.

A) True B) False

2. In a Chapter 7 proceeding, the primary effect of a discharge is to set aside any prior judgment on a discharged debt and to prohibit any action to collect it.

A) True B) False

3. Bankruptcy relief is provided under state law.

A) True B) False

4. Ava files a petition in bankruptcy under Chapter 7. Brian takes control over her property and reduces it to money for distribution. Brian most likely is

A) a secured creditor. B) a bankruptcy court judge. C) a bankruptcy trustee. D) a debtor who filed jointly for bankruptcy under a single petition.

5. Businesses must be insolvent to file for bankruptcy relief.

A) True B) False

6. An individual debtor is not entitled to exempt any property from a Chapter 7 proceeding.

A) True B) False

7. A bankruptcy trustee must determine whether the debtor's financial situation warrants relief based on a comparison of the debtor's income with

A) the profit of the debtor's creditors. B) the income of other families in the same state. C) the wealth available to the debtor's peers. D) the debtor's expenses.

8. Dana operates Energy Inc., a corporation in the fuel-supply business. Dana wants to create a plan under which the firm pays a portion of its debts, is discharged of the remainder, and is allowed to continue in business. Energy should file a petition in bankruptcy for relief through

A) a liquidation. B) a reorganization. C) a repayment plan. D) an adjustment of debts.

9. Under Chapter 11, a plan to conserve and administer the debtor's assets must be submitted for acceptance and confirmation to

A) the creditors only. B) the court only. C) the creditors and the court. D) the debtor only.

10. Only the debtor may file a plan under Chapter 13.

A) True B) False

11. One of the Bankruptcy Code's main goals is to ensure preferential treatment of certain creditors who are competing for a debtor's assets.

A) True B) False

12. Chapter 7 of the Bankruptcy Code provides for

A) the adjustment of debts of individualsnot businesses. B) liquidation proceedings. C) the reorganization of the obligations of the debtor. D) the adjustment of debts of businessesnot individuals.

13. In a Chapter 7 proceeding, all debts that cannot be paid by the bankruptcy estate will be discharged by the court.

A) True B) False

14. Under Chapter 7, at a meeting of creditors, one of the creditors is elected to take over the debtor's assets.

A) True B) False

15. In a Chapter 11 proceeding, a debtor corporation and its creditors agree on a plan under which the corporation pays a portion of its debt.

A) True B) False

16. To qualify under Chapter 7, a debtor must complete a means test to determine whether the debtor has been living within his or her means.

A) True B) False

17. Under Chapter 13, a plan must provide for the payment of all of the debtor's obligations in full.

A) True B) False

18. Under Chapter 11, a business debtor's obligations most likely to remain and not be discharged include

A) taxes accruing within the last three years. B) debt accrued in the last three years for supplies. C) debt owed for a conference the business held. D) debt on a fleet of vehicles.

19. Baby Day Care, a sole proprietorship, has $150,000 in debt and wants to pay as many of its obligations as reasonably possible. It wishes to be discharged of any remaining debt it cannot pay. To accomplish this goal, the proprietorship should file a petition in bankruptcy under Chapter 13 for relief through

A) a liquidation. B) a reorganization. C) a repayment plan. D) an automatic stay.

20. In a Chapter 13 bankruptcy, debtors retain most of their assets and agree to payments on their debts, most of which are discharged within three years.

A) True B) False