Test Your Bankruptcy Knowledge! Trivia Quiz

A debtor is someone who owes money to a creditor. This means that they have borrowed money or received goods or services on credit and have not yet paid back the amount owed. The term "debtor" is commonly used in financial and legal contexts to refer to individuals or businesses who have outstanding debts that need to be repaid.

A trustee is a person who is appointed by the court to manage and administer a trust or a case. In this context, once a case has been filed, the court may assign a trustee to oversee the proceedings and ensure that everything is handled properly. The trustee acts as a representative of the court and is responsible for managing the case in accordance with the law.

People file for bankruptcy to clear their debt, as it provides them with a legal process to eliminate or reduce their financial obligations. Bankruptcy also helps individuals facing lawsuits, as it can halt legal actions and potentially discharge any resulting debts. Repossession and foreclosure, which involve the seizure of assets due to unpaid debts, can also be addressed through bankruptcy, offering individuals the opportunity to regain control over their assets and financial situation.

In a bankruptcy, all assets need to be disclosed, which means that everything owned by the individual or entity filing for bankruptcy must be listed and made known to the court. This includes both tangible assets such as property, vehicles, and personal belongings, as well as intangible assets like bank accounts, investments, and intellectual property. By disclosing all assets, the court can accurately assess the financial situation of the debtor and determine how to fairly distribute the assets among creditors.

The given answer is true because the question is asking to pick the true statement from the options provided. Since there is no other information given in the question, we can assume that the options listed are all parts of a petition. Therefore, the statement "Parts of petition" is true.

In a bankruptcy, all debts need to be disclosed. This includes any outstanding loans, credit card debts, medical bills, mortgages, and any other financial obligations that the individual or business may have. By disclosing all debts, the bankruptcy process can accurately assess the individual's financial situation and determine the appropriate course of action for debt relief or repayment.

Unpaid Child Support Debt can cause someone to be in contempt of court because child support orders are legally binding and failure to comply with them can be considered a violation of a court order. Contempt of court occurs when someone willfully disobeys a court order, and not paying child support can be seen as a deliberate disregard for the court's decision. As a result, the court may hold the individual in contempt, which can lead to penalties such as fines, wage garnishment, or even imprisonment.

Chapter 7 bankruptcy is a type that typically lasts for 4-5 months. This form of bankruptcy involves liquidating the debtor's assets to pay off their debts. It is designed for individuals or businesses who are unable to repay their debts and want a fresh start. The process involves filing a petition, attending a meeting of creditors, and having a trustee sell non-exempt assets. After the process is completed, the debtor is relieved of most of their debts.

The correct answer is chapter 7 or ch 7. This suggests that chapter 7 is below medium income. However, without further context or information, it is difficult to determine what exactly is meant by "medium income" or how chapter 7 relates to it.

When your bankruptcy is complete, the court discharges your debts. This means that the court legally eliminates your obligation to repay the debts that were included in the bankruptcy. The discharge is a final step in the bankruptcy process and provides you with a fresh start financially, allowing you to move forward without the burden of the discharged debts.

The statement is false because IRS debt cannot be dissolved by Chapter 7 bankruptcy. Chapter 7 bankruptcy can discharge many types of debts, but certain debts like taxes owed to the IRS are not dischargeable.

Arrear payments refer to the payments that are overdue or unpaid. In the context of a payment plan, including arrear payments means that these unpaid amounts will be included in the plan and will need to be paid off over time. Therefore, the correct answer is true, indicating that arrear payments do get included in the payment plan.

In Chapter 13 bankruptcy, the plan makes payments to the trustee. The trustee is responsible for overseeing the case and ensuring that the debtor's creditors are paid according to the terms of the bankruptcy plan. The trustee acts as an intermediary between the debtor and the creditors, collecting the payments from the debtor and distributing them to the creditors. By making payments to the trustee, the debtor fulfills their obligations under the bankruptcy plan and works towards resolving their debts.

Bankruptcy cases are filed in federal courts. This is because bankruptcy is a federal law and falls under the jurisdiction of the federal court system. State courts do not have the authority to handle bankruptcy cases. Therefore, individuals or businesses seeking to file for bankruptcy must do so in a federal court.

When you file for bankruptcy in the middle of a foreclosure auction, an automatic stay is put in place. This means that all collection activities, including the foreclosure auction, must immediately stop. The automatic stay provides a temporary relief for the debtor, giving them a chance to reorganize their finances and potentially save their property from foreclosure. It gives the debtor some breathing room and halts any further actions by creditors, allowing them to work out a repayment plan or negotiate with their creditors.

In Chapter 13 bankruptcy, secured debts are indeed paid off. This type of bankruptcy allows individuals to create a repayment plan to pay off their debts over a period of three to five years. Secured debts are those that are backed by collateral, such as a mortgage or a car loan. By filing for Chapter 13 bankruptcy, individuals can keep their assets while making affordable payments towards their secured debts. Therefore, the statement that secured debts are paid off in Chapter 13 is true.

A creditor is a person or entity to whom a debtor owes money. This can include individuals, such as people to whom the debtor owes personal loans or child support, as well as companies, such as mortgage companies and credit card companies. Therefore, the correct answer is "all of the above" as it encompasses all the mentioned options.

When filing for bankruptcy, it is necessary to file taxes because the bankruptcy court requires the individual to provide their tax returns as part of the bankruptcy process. This is done to assess the individual's financial situation accurately and determine the appropriate course of action for their debts. Therefore, the statement "Taxes need to be filed to file a bankruptcy" is true.

The correct answer is Business, Farmers, and Consumers. This answer correctly identifies the three types of bankruptcy: business bankruptcy, which applies to companies and corporations; farmers bankruptcy, which is specific to agricultural businesses; and consumer bankruptcy, which applies to individuals. Each type of bankruptcy has its own set of rules and regulations, tailored to the specific circumstances of the debtor.

To be sanctioned means to be fined or to receive fines. Sanctions are penalties imposed as a punishment for a violation or wrongdoing. Being fined or receiving fines is a common form of sanctioning, where individuals or organizations are required to pay a specified amount of money as a consequence for their actions.

The correct answer is "secured, unsecured, and priority." Secured debt refers to loans that are backed by collateral, such as a mortgage or a car loan. Unsecured debt, on the other hand, does not require collateral and includes credit card debt or medical bills. Priority debt is a type of debt that is given priority over other debts in terms of repayment, such as child support or tax debt.

The correct answer is the US trustee. The US trustee is responsible for overseeing the trustees. They ensure that the trustees are carrying out their duties properly and in accordance with the law. The US trustee also provides guidance and support to the trustees, ensuring that they are fulfilling their fiduciary responsibilities and acting in the best interests of the beneficiaries.

Priority debts are debts that are given higher importance and must be paid off before other debts in the event of bankruptcy. These debts include things like child support, alimony, certain taxes, and government fines. Bankruptcy does not clear priority debts; instead, they are typically not dischargeable and must still be paid off even after filing for bankruptcy. Therefore, the correct answer is False.

Chapter 7 of a bankruptcy code typically involves the liquidation process. This means that the assets of a debtor are sold off to repay their outstanding debts. Liquidation allows for a fair distribution of the debtor's assets among their creditors. It is often used when the debtor is unable to meet their financial obligations and needs to have their debts resolved through the sale of their assets.

The answer is False because the question implies that it was harder to do bankruptcy court before 2005, but the statement is not supported by any evidence or context. Without any additional information, it is not possible to determine whether it was actually harder or not. Therefore, the answer is False as there is insufficient information to support the claim.

Creditors do not have a specific timeframe to stop a bankruptcy. The answer provided in the question is incorrect. The process of bankruptcy involves legal proceedings and requires court approval. Creditors can take various actions during the bankruptcy process, such as filing claims or negotiating with the debtor, but they do not have a set time limit to stop the bankruptcy. The correct answer is that there is no specific time limit for creditors to stop a bankruptcy.

If the creditor doesn't stop the garnishment, sanctions may be imposed. Sanctions are penalties or punishments imposed by a court or authority for non-compliance with a legal requirement. In this context, if the creditor continues the garnishment despite being required to stop, they may face sanctions such as fines or other legal consequences.

A Chapter 12 bankruptcy is a specific type of bankruptcy that is designed for family farmers or fishermen. It allows them to reorganize their debts and create a plan to repay creditors over time. This type of bankruptcy provides a way for these individuals to continue operating their businesses while also addressing their financial difficulties. Therefore, the correct answer, "reorganize," accurately describes what a Chapter 12 bankruptcy does.

In a Chapter 7 bankruptcy, unsecured debts are the debts that can be cleared. Unsecured debts are those that are not backed by any collateral or asset, such as credit card debts, medical bills, personal loans, and certain types of taxes. This means that the debtor is not obligated to repay these debts and they can be discharged through the bankruptcy process. On the other hand, secured debts, such as mortgages and car loans, are not typically discharged in Chapter 7 bankruptcy and the debtor may still be responsible for repaying them.

Chapter 13 of the bankruptcy code allows individuals with regular income to create a plan to repay all or part of their debts over a period of time. This chapter is commonly used for individuals who have a steady income but are unable to pay their debts in full. Since taxes and child support are ongoing obligations that are typically paid over time, it makes sense that they would be included in a payment plan under Chapter 13 bankruptcy.

The statement is false because in a Chapter 7 bankruptcy, the debtor's non-exempt assets are typically liquidated to pay off creditors. If the debtor has equity in their house, it is considered an asset and may be sold to satisfy the debts. The specific amount of equity that can be exempted varies by state, but it is generally not as high as $30,000. Therefore, if your equity is high, a Chapter 7 bankruptcy may not allow you to keep your house.

If you do not complete all the steps involved in a bankruptcy, the bankruptcy case will be dismissed. This means that the court will terminate the bankruptcy proceedings and you will not receive the benefits and protections that come with bankruptcy. Dismissal can occur for various reasons, such as failure to provide required documentation, non-compliance with court orders, or failure to attend required meetings. It is important to follow all the necessary steps and fulfill the requirements to successfully complete a bankruptcy.

Unsecured debts refer to financial obligations that are not backed by any collateral. In other words, if a borrower fails to repay these debts, the lender cannot seize any specific asset as repayment. Medical bills and credit card debts are examples of unsecured debts. This means that if a person fails to pay their medical bills or credit card debts, the healthcare provider or credit card company cannot claim any particular item or property to recover the owed amount.

Chapter 13 refers to a specific type of bankruptcy filing for individuals. It is not intended to last for a period of 10 years. In fact, Chapter 13 bankruptcy typically lasts for a period of 3 to 5 years, during which the debtor is required to make regular payments towards their debts. Therefore, the statement that Chapter 13 can last up to 10 years is incorrect.

Chapter 13 bankruptcy is a debt repayment plan that typically lasts for 3 to 5 years. During this time, the debtor makes regular payments to a bankruptcy trustee, who then distributes the funds to creditors. The duration of the repayment plan depends on the debtor's income, expenses, and the amount of debt they have. It allows individuals to catch up on missed mortgage or car payments and repay a portion of their debts. Therefore, it takes 3 to 5 years to complete a chapter 13 bankruptcy plan.

Chapter 7 and Chapter 13 are the two types of bankruptcy. Chapter 7 bankruptcy, also known as liquidation bankruptcy, involves the sale of a debtor's non-exempt assets to repay creditors. It is typically used by individuals with limited income and significant debt. On the other hand, Chapter 13 bankruptcy, also known as reorganization bankruptcy, allows debtors to create a repayment plan to pay off their debts over a period of three to five years. This type of bankruptcy is commonly used by individuals with a regular income who want to keep their assets while repaying their debts.

When a person stops their own bankruptcy, it is called withdrawal. This means that the person has decided to halt the process of declaring bankruptcy and has chosen not to proceed with it.

This statement is false. In Chapter 13 bankruptcy, arrears (unpaid child support or car payments) are not paid ahead of time. Instead, a repayment plan is created to pay off the arrears over a period of time, typically three to five years. The debtor is required to make regular monthly payments to the bankruptcy trustee, who then distributes the funds to creditors according to the plan. The purpose of Chapter 13 bankruptcy is to provide the debtor with a structured repayment plan to catch up on overdue payments, not to pay them ahead of time.

The means test calculates the type of income known as gross income. This refers to the total income earned before any deductions or expenses are taken into account. It includes all sources of income such as wages, salaries, bonuses, rental income, and investment income. Gross income is an important factor in determining eligibility for certain benefits or programs, as it provides a comprehensive view of an individual's overall income.

Secured debts are those that are backed by collateral, which means that if the borrower fails to repay the debt, the lender has the right to seize and sell the collateral to recover the amount owed. In this case, both a car and a house can be considered secured debts because they are typically financed through loans where the vehicle or property itself serves as collateral.

Disposable income refers to the amount of money that an individual or household has available to spend or save after taxes and other necessary expenses have been deducted. In the context of the question, it can be understood that the income being referred to is the amount that is available to be used for paying back an unsecured debt.

After a person files bankruptcy, they are required to attend a 341 meeting. This meeting, also known as the meeting of creditors, is a mandatory proceeding where the debtor must appear and answer questions under oath about their financial affairs. It provides an opportunity for the trustee and creditors to gather information and assess the debtor's financial situation. The purpose of the 341 meeting is to ensure transparency and facilitate the bankruptcy process.

The given correct answer is "306 dollars". This answer indicates the cost to file as $306. The repetition of "306" and "dollars" is likely a formatting error or a mistake. The correct cost to file is $306, as stated in the answer.

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Priority debts are the financial obligations that hold a higher level of importance and must be paid off before other debts. Taxes, school loans, and support payments are considered priority debts because they have legal implications and consequences if not paid. Failure to pay taxes can result in penalties or legal actions, while unpaid school loans can lead to wage garnishment or a damaged credit score. Support payments, such as child or spousal support, are also prioritized to ensure the well-being and financial stability of dependents.

In Chapter 7 bankruptcy, the sale of a house can be caused by having too much equity. When someone files for Chapter 7 bankruptcy, their assets are liquidated to pay off their debts. If a house has a significant amount of equity, it can be sold to generate funds that can be used to repay creditors. This is because the excess equity would not be exempted and protected under bankruptcy laws, making it necessary to sell the house to satisfy the debts.

In Chapter 7 bankruptcy, the amount of equity you need to keep your home depends on the exemption laws of your state. Exemption laws allow you to protect a certain amount of equity in your home from being taken by creditors. The answer, 21.5k or 21500, likely represents the amount of equity that can be protected in this scenario. It is important to consult with a bankruptcy attorney to understand the specific exemption laws in your state and determine the amount of equity you can keep in Chapter 7 bankruptcy.

Creditors typically have a period of 3 to 4 months to file proof of claim. This time frame allows creditors to submit documentation and evidence supporting their claim for any outstanding debts owed to them. Filing proof of claim within this designated period ensures that creditors have a fair opportunity to participate in the bankruptcy proceedings and potentially receive payment for their claims.

At the 341 meetings, the trustee and attorney meet to discuss the bankruptcy case. This meeting is also known as the meeting of creditors, where the trustee reviews the debtor's financial situation and verifies the accuracy of the bankruptcy filing. The trustee may ask questions regarding the debtor's assets, liabilities, income, and expenses. The attorney represents the debtor and assists in answering any questions that may arise during the meeting. The purpose of this meeting is to ensure transparency and gather information for the bankruptcy process.

The cost of a credit counseling course can range from $15 to $50. This indicates that there is a variation in the pricing of these courses, with some being more affordable at $15 and others being slightly more expensive at $50. The exact price may depend on factors such as the provider of the course and the specific content and resources included in the course.