FiCEP Bankruptcy and Insolvency 4

Question 1

Which type of property is generally protected from liquidation in a Chapter 7 bankruptcy through federal or state exemptions?

Accepted Answer

Equity in a primary residence (homestead exemption)

Answer

The homestead exemption protects a specified amount of equity in a debtor's primary residence from being liquidated in Chapter 7.

Question 2

What is the 'means test' in the context of Chapter 7 bankruptcy?

Accepted Answer

A calculation comparing income to state median to determine eligibility

Answer

The means test compares the debtor's average monthly income to the state median income to determine whether Chapter 7 is available or if Chapter 13 is required.

Question 3

Under the Bankruptcy Code, which of the following debts is NON-dischargeable in a Chapter 7 case?

Accepted Answer

Domestic support obligations (child support/alimony)

Answer

Domestic support obligations such as child support and alimony are explicitly non-dischargeable under 11 U.S.C. § 523.

Question 4

What is a 'reaffirmation agreement' in bankruptcy?

Accepted Answer

A debtor's voluntary agreement to remain personally liable on a specific debt

Answer

A reaffirmation agreement is a voluntary contract where the debtor agrees to remain personally liable for a debt that would otherwise be discharged.

Question 5

In a Chapter 13 repayment plan, how long is the maximum repayment period allowed by law?

Accepted Answer

5 years

Answer

Chapter 13 repayment plans may not exceed 5 years (60 months) under the Bankruptcy Code.

FiCEP - Financial Counseling Certification Program Practice Test

FiCEP - Financial Counseling Certification Program Practice Test

FiCEP Bankruptcy and Insolvency 4