ACP ACP Bankruptcy Law & Procedures 1 — Questions and Answers
Question 1: Which Chapter of the Bankruptcy Code provides for reorganization of a business?
- Chapter 7
- Chapter 11 (Correct answer)
- Chapter 13
- Chapter 15
Correct answer: Chapter 11
Chapter 11 of the Bankruptcy Code allows businesses to reorganize their debts while continuing operations.
Question 2: What is the 'automatic stay' in bankruptcy?
- A pause in all collection actions against the debtor (Correct answer)
- A delay in filing bankruptcy
- A stay of execution in criminal cases
- A suspension of alimony payments
Correct answer: A pause in all collection actions against the debtor
The automatic stay under 11 U.S.C. § 362 immediately halts most collection actions, lawsuits, and foreclosures against the debtor upon filing.
Question 3: Which official form is used to file a voluntary bankruptcy petition for an individual?
- Form B-101 (Correct answer)
- Form B-201
- Form B-301
- Form B-401
Correct answer: Form B-101
Official Form B-101 (Voluntary Petition for Individuals) is the form an individual debtor uses to initiate a bankruptcy case.
Question 4: What is a 'proof of claim' in bankruptcy?
- A document filed by a creditor asserting the amount owed (Correct answer)
- A court order confirming the debtor's assets
- A list of the debtor's creditors
- A motion to lift the automatic stay
Correct answer: A document filed by a creditor asserting the amount owed
A proof of claim is a written statement filed by a creditor stating the amount and basis of the debt owed by the debtor.
Question 5: What is the means test in Chapter 7 bankruptcy?
- A calculation to determine if a debtor qualifies for Chapter 7 relief (Correct answer)
- A test to value the debtor's assets
- A method to calculate creditor priorities
- A formula for computing non-exempt property
Correct answer: A calculation to determine if a debtor qualifies for Chapter 7 relief
The means test compares the debtor's income to the state median income to determine eligibility for Chapter 7 liquidation bankruptcy.
Question 6: What is a reaffirmation agreement in bankruptcy?
- An agreement to remain personally liable on a dischargeable debt (Correct answer)
- An agreement to surrender collateral to the trustee
- A new loan taken out during the bankruptcy case
- A creditor's waiver of a claim against the estate
Correct answer: An agreement to remain personally liable on a dischargeable debt
A reaffirmation agreement allows a debtor to remain personally liable for a debt that would otherwise be discharged in bankruptcy.
ACP ACP Bankruptcy Law & Procedures 1
Which Chapter of the Bankruptcy Code provides for reorganization of a business?