Test bank for bankruptcy law and practice by luppino

Test Bank for Bankruptcy Law and Practice by Luppino Chapter 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: 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: 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: 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: 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 eventually following its lead Full file at https://TestbankDirect.eu/Test-Bank-for-Bankruptcy-Law-and-Practice-by-Luppino A) New Jersey B) Vermont C) Massachusetts D) New York Answer: D Page Ref: 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: 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 Full file at https://TestbankDirect.eu/Test-Bank-for-Bankruptcy-Law-and-Practice-by-Luppino 9) 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: 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: 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: Objective: Explain the historical roots of bankruptcy law Level: Basic Full file at https://TestbankDirect.eu/Test-Bank-for-Bankruptcy-Law-and-Practice-by-Luppino 13) 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: 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: 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: Objective: Give examples of the goals of the American bankruptcy system Level: Basic Full file at https://TestbankDirect.eu/Test-Bank-for-Bankruptcy-Law-and-Practice-by-Luppino 17) 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: 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: 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: 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: Objective: Recognize the causes of modern-day bankruptcy filings Level: Basic Full file at https://TestbankDirect.eu/Test-Bank-for-Bankruptcy-Law-and-Practice-by-Luppino 1.2 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: 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: 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: 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: 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: 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: Objective: Recognize the causes of modern-day bankruptcy filings Level: Basic Full file at https://TestbankDirect.eu/Test-Bank-for-Bankruptcy-Law-and-Practice-by-Luppino 7) 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: 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: 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: 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: 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: 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: 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: Objective: Recognize the causes of modern-day bankruptcy filings Level: Basic 14) Bankruptcy attorneys have the authority to take control of the assets, investigate Full file at https://TestbankDirect.eu/Test-Bank-for-Bankruptcy-Law-and-Practice-by-Luppino fraud, 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: 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 5) A(n) is an individual who paid for his or her passage to the U.S., Full file at https://TestbankDirect.eu/Test-Bank-for-Bankruptcy-Law-and-Practice-by-Luppino including expenses and maintenance, by contracting to work for a period of years for their sponsors Answer: indentured servant Page Ref: 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: 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: 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: 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: 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: 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: Objective: Recognize the causes of modern-day bankruptcy filings Full file at https://TestbankDirect.eu/Test-Bank-for-Bankruptcy-Law-and-Practice-by-Luppino Level: 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: 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: Objective: Recognize the causes of modern-day bankruptcy filings Level: Basic 3) Bankruptcy Page Ref: 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: Objective: Explain the historical roots of bankruptcy law Level: Basic Full file at https://TestbankDirect.eu/Test-Bank-for-Bankruptcy-Law-and-Practice-by-Luppino 6) Indentured servant Page Ref: Objective: Explain the historical roots of bankruptcy law Level: Basic Full file at https://TestbankDirect.eu/Test-Bank-for-Bankruptcy-Law-and-Practice-by-Luppino 7) Articles of Confederation Page Ref: Objective: Explain the historical roots of bankruptcy law Level: Basic 8) Living beyond one's means Page Ref: Objective: Recognize the causes of modern-day bankruptcy filings Level: Basic 9) Banca rotta Page Ref: Objective: Understand the definition of bankruptcy Level: Basic Answers: 1) E 2) G 3) H 4) F 5) I 6) A 7) B 8) D 9) C 1.5 Essay Questions 1) Describe the concept of modern day debt prisons Answer: The student should emphasize, that, while debtors' prisons were abolished in 1833, over the course of history, creditors have come to rely on the court system to compel payments from debtors Debtors face criminal penalties such as incarceration for contempt, fines, fees, and costs associated with debt collection Page Ref: Objective: Explain the historical roots of bankruptcy law Level: Intermediate 2) How does the bankruptcy code ensure the efficient administration of bankruptcy proceedings? Answer: Bankruptcy law has established procedures for filing the bankruptcy action and provides a venue for interested parties to settle their grievances regarding the debtor's insolvency in an organized, civilized manner Page Ref: 11 Objective: Give examples of the goals of the American bankruptcy system Level: Intermediate 3) How does the bankruptcy code provide for the fair treatment of creditors? Answer: The bankruptcy code accomplishes this by authorizing the bankruptcy court's supervision and administration of the bankruptcy case as well as providing creditors with the opportunity to participate in the process Creditors are also afforded fair treatment in the settlement and distribution of the debtor's assets and are protected when debtors with sufficient income are required to pay their debts instead of having them totally discharged Page Ref: 11 Objective: Give examples of the goals of the American bankruptcy system Level: Intermediate Full file at https://TestbankDirect.eu/Test-Bank-for-Bankruptcy-Law-and-Practice-by-Luppino 1.6 Critical Thinking Questions 1) Discuss the most prevalent reasons individuals file for bankruptcy Answer: Student should discuss loss of employment, divorce, death of a spouse, natural disasters, living beyond one's means, poor money management, and economic conditions Page Ref: Objective: Recognize the causes of modern-day bankruptcy filings Level: Intermediate 2) What is meant by "preserving the bankruptcy estate?" Answer: The bankruptcy trustee maintains control over the bankruptcy estate and preserves any of the debtor's available assets for the benefit of the creditors or other interested parties Bankruptcy trustees have the authority to take control of the assets, investigate fraud, uncover hidden assets, and recover property that was transferred fraudulently Page Ref: 11 Objective: Understand the definition of bankruptcy Level: Intermediate Full file at https://TestbankDirect.eu/Test-Bank-for-Bankruptcy-Law-and-Practice-by-Luppino ... the American bankruptcy system Level: Basic Full file at https://TestbankDirect.eu /Test- Bank- for- Bankruptcy- Law- and- Practice- by- Luppino 17) Court orders for , known in bankruptcy law as domestic... historical roots of bankruptcy law Level: Basic Full file at https://TestbankDirect.eu /Test- Bank- for- Bankruptcy- Law- and- Practice- by- Luppino 13) Although one of the main goals of bankruptcy is to... modern-day bankruptcy filings Level: Basic Full file at https://TestbankDirect.eu /Test- Bank- for- Bankruptcy- Law- and- Practice- by- Luppino 7) According to "Overspending in America—Statistics and Facts," by