CFL Bankruptcy & Creditor Rights 2

Question 1

In bankruptcy litigation, a 'lift stay' motion filed by a secured creditor is most likely to succeed when:

Accepted Answer

The debtor has no equity in the collateral and the property is not necessary for reorganization

Answer

The automatic stay has been in place for more than 90 days

Answer

The secured creditor holds a first-priority perfected lien

Answer

The debtor has missed more than two adequate protection payments

Question 2

Under Article 9 of the UCC, a secured creditor must perfect its security interest in most personal property collateral by:

Accepted Answer

Filing a financing statement (UCC-1) in the appropriate state office

Answer

Taking physical possession of the collateral

Answer

Obtaining the debtor's notarized security agreement

Answer

Recording the lien in the county where the debtor operates

Question 3

A Chapter 7 trustee discovers the debtor made a $500,000 transfer to a family member 18 months before the bankruptcy filing for no consideration. The trustee would seek to avoid this transfer under:

Accepted Answer

Section 548 actual fraudulent transfer or state fraudulent transfer law

Answer

Section 547 preference payment rules

Answer

Section 549 unauthorized post-petition transfer rules

Answer

Section 544 strong-arm powers

Question 4

The 'strong-arm' power under Bankruptcy Code Section 544(a) allows the bankruptcy trustee to avoid any transfer that could be avoided by:

Accepted Answer

A hypothetical lien creditor who perfected their lien on the petition date

Answer

Any judgment creditor who filed suit before the bankruptcy

Answer

The debtor's largest unsecured creditor

Answer

A federal tax authority with a tax lien

Question 5

In a bankruptcy avoidance action for preferences, the 'new value' defense under Section 547(c)(4) allows a creditor to offset the preference by:

Accepted Answer

The value of new credit or goods extended to the debtor after the preferential transfer

Answer

The amount the creditor loaned to the debtor in the 90-day period

Answer

Any payment the creditor made to other creditors of the debtor

Answer

The fair market value of collateral released by the creditor

Question 6

Under Bankruptcy Code Section 523(a), which of the following debts is NOT dischargeable in a Chapter 7 individual bankruptcy?

Accepted Answer

Debts arising from fraud or false financial statements

Answer

Credit card debts incurred before the petition date

Answer

Unsecured medical bills

Answer

Personal loan obligations to commercial lenders