R6 M2 - Bankruptcy: Part II

Question 1

What debts will be discharged under the voluntary liquidation provisions of the Bankruptcy Code?

Answer 1

Bankruptcy discharges most of pre-petition debts

• Debts that a person or company incurs before filing for bankruptcy.

Question 2

What debts will not be discharged under the voluntary liquidation provision of the Bankruptcy Code?

Answer 2

Non discharge debts include debts incurred by:

• Crime
• Fines
• Penalties
• Alimony/ Child Support
• Student loans.

Question 3

What is the order of distribution in an involuntarily bankruptcy

Answer 3

Question 4

Question 5

In general, which of the following debts will be discharged under the voluntary liquidation provisions of the Bankruptcy Code?

I. A debt arising before the filing of the bankruptcy petition due to the debtor’s negligence.

II. Income taxes due from filing a fraudulent return 7 years prior to filing the bankruptcy petition.

A.	I only.

B.	II only.

C.	Both I and II.

D.	Neither I nor II.

Answer 5

Choice “A” is correct. Bankruptcy discharges most of pre-petition debts. Nondischargeable debts include certain taxes, debts incurred by fraud, unscheduled debts, debts arising from crimes, fines and penalties, alimony/child support debts, and student loans.

Question 6

What are the six nondischargeable debts when filing for bankruptcy?

Answer 6

“WAFTED”

Willful and malicious injury
Alimony
Fraud
Taxes
Educational loans
Debt undisclosed in the bankruptcy petition