Understanding Chapter 7 Liquidation

Imagine Nora is considering filing for Chapter 7 bankruptcy. What is the primary purpose of this type of bankruptcy?

• To increase Nora's credit score

• To liquidate Nora's assets and distribute the proceeds to her creditors

• To consolidate Nora's debts into a single payment

• To reorganize a business's debt structure

Abigail is studying law and is curious to know how often federal bankruptcy exemptions are adjusted. Can you help her?

• Every five years

• Every three years

• Every two years

• Every year

Samuel is considering filing for bankruptcy due to overwhelming debt. Which type of bankruptcy is known for allowing liquidation of assets?

• Chapter 9

• Chapter 11

• Chapter 13

• Chapter 7

Before filing for Chapter 7 bankruptcy, what is required from James, a debtor?

• Completion of a financial management course

• Credit counseling within 180 days prior to filing

• Approval from all creditors

• A court hearing

Imagine Hannah is considering filing for Chapter 7 bankruptcy. What does the 'means test' determine in her case?

• The legal fees associated with her filing

• The number of creditors involved in her case

• The total amount of debt to be discharged for her

• Her eligibility based on income and expenses

Imagine Oliver has filed for Chapter 7 bankruptcy. Which entity becomes the temporary legal owner of Oliver's property after the filing?

• The federal government

• Oliver's next of kin

• The state government

• The bankruptcy estate

Imagine Elijah has filed for Chapter 7 bankruptcy. What role does the trustee play in this scenario?

• To negotiate with creditors

• To distribute assets to creditors

• To provide legal advice to Elijah

• To loan money to cover debts

William is considering filing for Chapter 7 bankruptcy. Which of the following is NOT a benefit of filing for Chapter 7 bankruptcy?

• Automatic stay on collections

• Liquidation of non-exempt assets

• Discharge of unsecured debts

• Improvement of credit score immediately

David is considering filing for Chapter 7 bankruptcy and is discussing the limitations with his attorney. Which statement is true about the limitations on filing for Chapter 7?

• All debts are eligible for discharge under Chapter 7

• There is no time limit between filings

• A debtor must wait at least 8 years between Chapter 7 filings

• Only individuals can file for Chapter 7

Imagine Ethan is filing for federal bankruptcy. What is the 'wild card' exemption that could benefit him?

• It automatically discharges all personal debts

• It protects all income sources from creditors

• It exempts additional cash or property not covered by other categories

• It allows unlimited exemptions for personal property