Level: Basic 2 In 1542, King Henry VIII instituted the practice of incarcerating individuals who were in debt in special facilities called A Debt camps B Debtors' communes C Debtors' pri
Trang 1Chapter 1 Introduction to Bankruptcy
1.1 Multiple Choice Questions 1) Contemporary bankruptcy law as we know it in the U.S is a form of A) Compensation
B) Restitution C) Relief D) Punishment Answer: C Page Ref: 7 Objective: Understand the definition of bankruptcy
Level: Basic 2) In 1542, King Henry VIII instituted the practice of incarcerating individuals who were in debt in special facilities called
A) Debt camps B) Debtors' communes C) Debtors' prisons D) None of these Answer: C Page Ref: 8 Objective: Explain the historical roots of bankruptcy law
Level: Basic
3) The first English bankruptcy law was passed in 1570 in response to A) King Henry VIII's wishes
B) An outcry from the banks C) The overcrowding of debtors' prisons D) The overcrowding of debtors' prisons and public demand Answer: C
Page Ref: 8 Objective: Explain the historical roots of bankruptcy law
Level: Basic
4) The goals for modern bankruptcy law in the U.S include A) A fresh start for the debtor and the efficient administration of bankruptcy proceedings
B) Maximizing the amounts debtors pay to the creditors and the efficient administration of the liquidation process
C) Minimizing the amounts debtors pay to the creditors and the efficient administration of the liquidation process
D) None of these Answer: A Page Ref: 9 Objective: Give examples of the goals of the American bankruptcy system
Level: Basic 5) was the first to formally abolish the debtors' prisons in 1831 with others
Test Bank for Bankruptcy Law and Practice by Luppino
Trang 2A) New Jersey B) Vermont C) Massachusetts D) New York Answer: D Page Ref: 9 Objective: Explain the historical roots of bankruptcy law
Level: Basic
6) While the Constitution went into effect in 1789, it was not until just over
later that Congress passed the first bankruptcy law in 1800
A) Six months B) Twelve years C) Ten years D) None of these Answer: C Page Ref: 9 Objective: Explain the historical roots of bankruptcy law
Level: Basic 7) It is the role and function of the to maintain control over the bankruptcy estate and preserve any of the debtor's available assets for the benefit of the creditors
or other interested parties
A) Bankruptcy judge B) Bankruptcy attorney C) Bankruptcy trustee D) Bankruptcy court Answer: C
Page Ref: 11 Objective: Understand the definition of bankruptcy
Level: Basic
8) An example of how creditors are protected by the Bankruptcy Code is the ability,
in some cases, to literally force an uncooperative debtor into what is known as a(n) A) Forced case
B) Compelled case C) Voluntary bankruptcy D) Involuntary bankruptcy Answer: D
Page Ref: 11 Objective: Give examples of the goals of the American bankruptcy system
Level: Basic
Trang 39) As long as the debtor complies with the Bankruptcy Code, a consists of the debtor either having most of his or her debts "wiped away" or being given the opportunity to reorganize the debt owed in a manner which is much more manageable and realistic given their financial circumstances
A) Set off B) Fresh start C) Debt consolidation D) None of these Answer: B Page Ref: 11 Objective: Give examples of the goals of the American bankruptcy system
Level: Basic 10) There is a common misconception that individuals and businesses that file for bankruptcy are over-extended, money managers who want to get out of paying their debts
A) Responsible B) Irresponsible C) Tired
D) Spendthrift Answer: B Page Ref: 2 Objective: Understand the definition of bankruptcy
Level: Basic
11) Most medical debtors are A) Middle class, have college education, and own their own homes B) Poor, have no college education, and own their own homes C) Wealthy
D) Indigent Answer: A Page Ref: 3 Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic
12) Prior to passage of the U.S Constitution, the governing document of the country was the There was no mention of bankruptcy in this document, so the states were left to establish their own laws regulating the relationships between debtors and creditors
A) Articles of Confederation B) Articles of the Union C) Articles of the Colonies D) None of these
Answer: A Page Ref: 9 Objective: Explain the historical roots of bankruptcy law
Level: Basic
Trang 413) Although one of the main goals of bankruptcy is to provide the debtor with a fresh start, the trade-off for participation in the system is the protection and fair treatment of A) Consumers
B) Investors C) Creditors D) Debtors Answer: C Page Ref: 11 Objective: Give examples of the goals of the American bankruptcy system
Level: Basic 14) Prior to the passage of the , the states were left to establish their own laws regulating the relationships between debtors and creditors
A) Articles of Confederation B) Articles of Incorporation C) U.S Constitution
D) U.S Senate Answer: C Page Ref: 9 Objective: Explain the historical roots of bankruptcy law
Level: Basic
15) The first English bankruptcy law was passed in in response to the overcrowding of the debtors' prisons and their increasing unpopularity among the general public
A) 1492 B) 1985 C) 1570 D) 1712 Answer: C Page Ref: 8 Objective: Explain the historical roots of bankruptcy law
Level: Basic 16) Contemporary bankruptcy law as we know it is a form of A) Support
B) Relief C) Restitution D) Restoration Answer: B Page Ref: 8 Objective: Give examples of the goals of the American bankruptcy system
Level: Basic
Trang 517) Court orders for , known in bankruptcy law as domestic support obligations, as well as student loans cannot be discharged in bankruptcy
A) Restitution and relief B) Restoration and revival C) Alimony and child support D) Liens and Lis Pendens Answer: C
Page Ref: 4 Objective: Give examples of the goals of the American bankruptcy system
Level: Basic 18) Noncustodial parents may sometimes be subjected to court-ordered , leaving little money left over for other expenses
A) Wage executions B) Wage impediments C) Wage inhibitors D) Wage garnishments E) None of these Answer: D Page Ref: 8 Objective: Give examples of the goals of the American bankruptcy system
Level: Basic
19) The family is most vulnerable to bankruptcy if one of the spouses loses his or her job
A) Single-income B) Blended C) Two-income D) Modern Answer: C Page Ref: 4 Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic 20) are five times more likely to file for bankruptcy and three times more likely to watch their homes go into foreclosure
A) Men B) Women C) Paralegals D) Lawyers E) Families Answer: E Page Ref: 4 Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic
Trang 61.2 True/False Questions
1) There is a common misconception that individuals and businesses that file for bankruptcy are over-extended, irresponsible money managers who want to get out of paying their debts
Answer: TRUE Page Ref: 2 Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic 2) Bankruptcy is an official, legal declaration of an individual or business's inability
to meet its financial obligations
Answer: TRUE Page Ref: 2 Objective: Understand the definition of bankruptcy
Level: Basic 3) It is a myth that the number one reason couples divorce is because of financial problems
Answer: FALSE Page Ref: 4 Objective: Understand the definition of bankruptcy
Level: Basic 4) Court orders for alimony and child support, known in bankruptcy law as "domestic support obligations," as well as student loans cannot be discharged in bankruptcy
Answer: TRUE Page Ref: 4 Objective: Give examples of the goals of the American bankruptcy system
Level: Basic 5) With regard to double income households, the old saying that "two can live cheaper than one" is not accurate
Answer: TRUE Page Ref: 3 Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic 6) COBRA allows an employee to maintain his or her health insurance for a period of two years after leaving their job
Answer: TRUE Page Ref: 3 Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic
Trang 77) According to "Overspending in America—Statistics and Facts," by The Credit Examiner, December 30, 2012, 25% of Americans are spending more than they earn
Answer: TRUE Page Ref: 5 Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic
8) The word bankruptcy is a combination of two Latin terms, bankus and ruptus,
literally meaning "broken bench."
Answer: TRUE Page Ref: 2 Objective: Understand the definition of bankruptcy
Level: Basic 9) Statistics compiled by the United States Courts revealed that in 2013, there were approximately 1,256,091 bankruptcies filed in the U.S
Answer: FALSE Page Ref: 2 Objective: Explain the historical roots of bankruptcy law
Level: Basic 10) Filing for bankruptcy usually provides an absolute fresh start for many divorced individuals
Answer: FALSE Page Ref: 4 Objective: Give examples of the goals of the American bankruptcy system
Level: Basic 11) Many homeowners are unaware that special coverage is required for damage caused by some natural disasters
Answer: TRUE Page Ref: 4 Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic 12) Very often, lifestyle expenses are financed with loans and credit cards, which will eventually catch up with the debtor, especially if coupled with a job loss, illness, or other personal tragedy
Answer: TRUE Page Ref: 5 Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic
13) Only about 50% of new small businesses stay in business 15 years or more
Answer: FALSE Page Ref: 6 Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic
Trang 8fraud, uncover hidden assets, and recover fraudulently transferred property
Answer: FALSE Page Ref: 11 Objective: Give examples of the goals of the American bankruptcy system
Level: Basic 15) Creditors are allowed to literally force an uncooperative debtor into what is known as an involuntary bankruptcy
Answer: TRUE Page Ref: 11 Objective: Give examples of the goals of the American bankruptcy system
Level: Basic 1.3 Fill in the Blank Questions
1) It is the role and function of the to maintain control over the bankruptcy estate and preserve any of the debtor's available assets for the benefit of the creditors
or other interested parties
Answer: bankruptcy trustee Page Ref: 11
Objective: Give examples of the goals of the American bankruptcy system
Level: Basic 2) As long as the debtor complies with the Bankruptcy Code, a(n) consists
of the debtor either having most of his or her debts "wiped away" or being given the opportunity to reorganize the debt owed in a manner which is much more manageable and realistic given their financial circumstances
Answer: fresh start Page Ref: 11 Objective: Give examples of the goals of the American bankruptcy system
Level: Basic 3) Prior to passage of the U.S Constitution, the governing document of the country was the There was no mention of bankruptcy in this document, so the states were left to establish their own laws regulating the relationships between debtors and creditors
Answer: Articles of Confederation Page Ref: 9
Objective: Explain the historical roots of bankruptcy law
Level: Basic 4) are short-term, high interest loans made usually to financially strapped individuals who need an infusion of cash for one reason or another between
paychecks
Answer: Payday loans Page Ref: 10
Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic
Trang 9including expenses and maintenance, by contracting to work for a period of years for their sponsors
Answer: indentured servant Page Ref: 8
Objective: Explain the historical roots of bankruptcy law
Level: Basic 6) There is a common that individuals and businesses that file for bankruptcy are over-extended, irresponsible money managers who want to get out of paying their debts
Answer: misconception Page Ref: 2
Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic
7) Despite the best of intentions, a business or individual may decide that filing for bankruptcy is the only viable solution in situations when a(n) , such as excessive income taxes and fines, large lawsuit judgment, or catastrophic illness, takes place
Answer: insolvency event Page Ref: 2
Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic 8) The bankruptcy laws of the United States provide a legal and legitimate vehicle for a(n)
Answer: fresh start Page Ref: 2
Objective: Understand the definition of bankruptcy
Level: Basic
9) According to the American Bar Association, the primary reason for divorce is
Answer: money problems Page Ref: 4
Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic 10) Many homeowners are unaware that is required for damage caused by some natural disasters
Answer: special coverage Page Ref: 4
Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic 11) Some individuals and families have to file for bankruptcy because they live far beyond their , spending much more than they earn
Answer: means Page Ref: 4
Trang 10Level: Basic
12) Unfortunately, many who are eager and excited about starting their own business may sign for the purpose of obtaining financing, commercial space, or business credit cards
Answer: personal guarantees Page Ref: 6
Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic 1.4 Matching Questions Match each term with the appropriate description
A) an individual who paid for his or her passage, including expenses and maintenance, by contracting to work for a period of years for his or her sponsors B) the governing document of the U.S prior to the Constitution
C) Italian word for bankruptcy D) spending more than one earns E) debts wiped away
F) short-term, high-interest loans that help individuals pay regular expenses G) purchased to minimize business owner's loss of assets
H) legal procedure that allows an individual or business debt relief I) a special facility where individuals who were in debt were incarcerated 1) Fresh start
Page Ref: 11 Objective: Understand the definition of bankruptcy
Level: Basic
2) Personal guarantee insurance Page Ref: 7
Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic 3) Bankruptcy Page Ref: 2 Objective: Understand the definition of bankruptcy
Level: Basic
4) Payday loans Page Ref: 10 Objective: Recognize the causes of modern-day bankruptcy filings
Level: Basic 5) Debtors' prisons Page Ref: 8
Objective: Explain the historical roots of bankruptcy law
Level: Basic