Question

1: Which of the following is a debt that is non-dischargeable unless the debtor can prove undue hardship?

a: Claims for federal, state, and local taxes within two years of the petition filing.

b: Student loan debts.

c: Debts incurred for luxury items within 90 days of the petition.

d: Alimony, maintenance, and child support.

2:   What is the main difference between Chapters 7 and 11?

a: The order for relief.

b: The automatic stay.

c: The continued operation of a business.

d: The manner in which the bankruptcy petition is filed.

3: Which of the following is not typically part of a security agreement?

a: Description of the collateral.

b: Obligations of the debtor.

c: Remedies available to the creditor.

d: Instructions on perfection.

Answer 1

Answer 1 : B: Student loan debts.

Explanation : Non-dischargeable debts are the debts that one cannot avoid or discharge through the bankruptcy process as this debt is borrowed to repay it later.

Answer 2 : C: The continued operation of a business.

Explanation : In the chapter 7 bankruptcy the owner of the corporation has to dissolve the company in order to par creditors while in chapter 11 company gets opportunity to reorganize it.

Answer 3 : C. Remedies available to the creditor.

Explanation : Security agreement involves the perfection instructions, obligations of the debtors, description of collateral while the rights of the creditors are mentioned and not the remedies available to the creditor.