NALA Bankruptcy Law

Question 1

Under the U.S. Bankruptcy Code, what is the 'automatic stay'?

Accepted Answer

An injunction that immediately halts most collection actions, lawsuits, and foreclosures against the debtor upon filing.

Answer

A court order requiring the debtor to stay in a specific state during proceedings.

Answer

A mandatory waiting period before a debtor can file for bankruptcy again.

Answer

A freeze on the debtor's right to hire legal counsel.

Question 2

A client with primarily consumer debts wants to eliminate unsecured debts entirely through bankruptcy. Which chapter of the Bankruptcy Code is MOST appropriate?

Accepted Answer

Chapter 7 — Liquidation

Answer

Chapter 11 — Reorganization

Answer

Chapter 12 — Family Farmer/Fisherman

Answer

Chapter 9 — Municipality

Question 3

Which test must individual debtors pass to be eligible to file Chapter 7 bankruptcy under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005?

Accepted Answer

The Means Test

Answer

The Credit Score Test

Answer

The Net Worth Test

Answer

The Asset Liquidation Threshold Test

Question 4

Under Chapter 13 bankruptcy, how long may a debtor's repayment plan last?

Accepted Answer

3 to 5 years

Answer

6 months to 1 year

Answer

7 to 10 years

Answer

There is no time limit — it continues until all debts are paid in full.

Question 5

In a bankruptcy case, which party is appointed to administer the debtor's estate, liquidate non-exempt assets, and distribute proceeds to creditors in a Chapter 7 case?

Accepted Answer

The Chapter 7 trustee

Answer

The bankruptcy judge

Answer

The U.S. Trustee

Answer

The debtor-in-possession

Question 6

Which of the following debts is generally NON-DISCHARGEABLE in a Chapter 7 bankruptcy?

Accepted Answer

Student loans (absent undue hardship)

Answer

Credit card debt

Answer

Medical bills

Answer

Utility bills