Test your knowledge

Choose wisely. There is only one correct answer to each question.

Keep studying!

Review your answers below to learn more.

Which of the following is true about Chapter 13 bankruptcy?

The information required for the bankruptcy petition is less extensive than for a Chapter 7 bankruptcy.

This form of bankruptcy involves working out a payment plan to creditors.

Secured debts can be discharged more easily than in Chapter 7 bankruptcy.

This form of bankruptcy involves working out a payment plan to creditors. The other options are false.

The Bankruptcy Code allows an individual debtor to protect ________.

His or her home

$10,000 worth of cash or other assets, to be chosen by the debtor

A certain relatively modest amount of property from the claims of creditors

A certain relatively modest amount of property from the claims of creditors. Certain property is exempt under federal law or under the laws of the debtor's home state.

Which of the following is true regarding preparing a budget to avoid bankruptcy?

As a necessity of life, your food cost should be the last area to look for possible cuts.

Paying credit card debt should be a higher priority than making secured loan payments.

Making secured loan payments should be a higher priority than paying credit card debt.

Making secured loan payments should be a higher priority than paying credit card debt. You will have more flexibility in paying credit card debt than secured debt, which includes your mortgage and car payments.

Which of the following need not accompany a Chapter 7 bankruptcy petition?

A workable repayment plan subject to the trustee's approval

A detailed list of the debtor's monthly living expenses

A certificate of credit counseling

All the above

A workable repayment plan subject to the trustee's approval. While repayment plans are possible, Chapter 7 does not require a repayment plan.

Which of the following is true regarding bankruptcy?

It is a set of federal laws designed to make the collection of lawful debts more efficient and less burdensome to creditors.

It is a set of federal laws designed to provide a fresh start to individual or business debtors facing more debt than they want to pay.

Both of the above are true.

None of the above are true.

None of the above are true. Bankruptcy is designed to help provide a fresh start to debtors facing more debt than they can afford to pay.