Bankruptcy Trustees: Role and Responsibilities in Bankruptcy Administration

Question 1

Which of the following is a primary responsibility of a Chapter 11 bankruptcy trustee?

Accepted Answer

Overseeing the debtor's reorganization plan

Answer

Distributing the debtor's assets to creditors

Answer

Filing lawsuits against the debtor's creditors

Answer

Distributing tax refunds to the debtor

Question 2

What is the primary purpose of a Chapter 11 bankruptcy?

Accepted Answer

To reorganize the debtor's finances and debts

Answer

To liquidate assets and distribute proceeds to creditors

Answer

To discharge all debts owed by the debtor

Answer

To protect the debtor from foreclosure and repossession

Question 3

Which of the following is NOT a power granted to a bankruptcy trustee?

Accepted Answer

To grant a discharge to the debtor

Answer

To investigate potential fraud

Answer

To seize and sell the debtor's property

Answer

To modify secured claims

Question 4

Which of the following is NOT a benefit of filing for bankruptcy?

Accepted Answer

Improving credit scores

Answer

Stopping creditor collection actions

Answer

Eliminating certain debts

Answer

Protecting exempt property

Question 5

In Chapter 7 bankruptcy, what is the trustee's main duty?

Accepted Answer

Distribute assets to creditors

Answer

Reorganize the debtor's debts

Answer

Represent the debtor in court

Question 6

Which of the following is NOT a primary duty of a bankruptcy trustee?

Accepted Answer

Representing the interests of the debtor in court

Answer

Collecting and distributing assets to creditors

Answer

Investigating the debtor's financial affairs

Question 7

In a Chapter 7 bankruptcy, what is the primary responsibility of the bankruptcy trustee?

Accepted Answer

To liquidate the debtor's assets and distribute the proceeds to creditors

Answer

To assist the debtor in developing and implementing a reorganization plan

Answer

To represent the debtor in legal proceedings

Answer

To provide financial counseling to the debtor

Question 8

Who is responsible for appointing the bankruptcy trustee?

Accepted Answer

The bankruptcy judge

Answer

The debtor

Answer

The creditors

Answer

The bankruptcy administrator

Question 9

To be eligible to serve as a bankruptcy trustee, an individual must meet certain qualifications. Which of the following is NOT a requirement?

Accepted Answer

Having a graduate degree in law

Answer

Being a member of the bar in good standing

Answer

Passing a specialized certification exam

Answer

Having experience in bankruptcy law

Question 10

What is the primary duty of the trustee regarding the debtor's assets?

Accepted Answer

To manage and preserve the assets during the bankruptcy proceedings

Answer

To gather and inventory the assets

Answer

To sell the assets and distribute the proceeds to creditors

Answer

To determine the value of the assets and file a report with the court

Question 11

What is the primary goal of a Chapter 13 bankruptcy plan?

Accepted Answer

To reorganize the debtor's debts and provide for repayment over time

Answer

To liquidate the debtor's assets and distribute the proceeds to creditors

Answer

To dismiss the debtor's debts in full

Answer

To freeze the debtor's creditors' claims

Question 12

What is the significance of the means test in bankruptcy proceedings?

Accepted Answer

It determines whether a debtor is eligible to file for Chapter 7 bankruptcy

Answer

It establishes the amount of debt that a debtor can discharge

Answer

It assesses the debtor's ability to repay debts

Answer

It sets the filing fee for bankruptcy

Question 13

Which of the following most accurately describes the primary responsibility of a Chapter 7 bankruptcy trustee?

Accepted Answer

Liquidating the debtor's nonexempt assets and distributing the proceeds to creditors in accordance with the Bankruptcy Code.

Answer

Ensuring that the debtor's debts are discharged in an orderly and timely manner.

Answer

Negotiating a repayment plan with creditors on behalf of the debtor.

Question 14

Under the Bankruptcy Code, which type of trustee is appointed by the United States Trustee to oversee the administration of a Chapter 11 case?

Accepted Answer

Chapter 11 Trustee

Answer

Statutory Trustee

Answer

Private Trustee

Answer

Interim Trustee

Question 15

In which circumstance would a bankruptcy trustee be authorized to operate the debtor's business?

Accepted Answer

When the continued operation of the business is necessary to preserve its value as an asset for creditors or to prevent irreparable harm to the estate.

Answer

When the trustee believes it is in the best interests of the estate.

Answer

When the debtor requests it and the creditors agree.

Question 16

What is the primary purpose of a creditors' meeting in a bankruptcy case?

Accepted Answer

To provide creditors with information about the debtor's financial condition, the proposed plan (if any), and the opportunity to question the debtor and other parties in interest.

Answer

To elect a creditors' committee.

Answer

To vote on a reorganization plan.

Question 17

Which of the following is a potential benefit of bankruptcy for debtors?

Accepted Answer

Discharge of eligible debts, providing a fresh financial start.

Answer

Improved employment opportunities.

Answer

Increased credit score.

Answer

Tax relief.

Question 18

What is the primary objective of Chapter 13 bankruptcy?

Accepted Answer

To allow debtors to propose and implement a plan to repay their debts over a period of time, typically 3 to 5 years.

Answer

To restructure the debtor's debts into a more manageable form.

Answer

To liquidate the debtor's assets and distribute the proceeds to creditors.

Question 19

What is **NOT** a primary duty of a bankruptcy trustee?

Accepted Answer

Representing the interests of the debtor

Answer

Gathering and liquidating the debtor's assets

Answer

Distributing proceeds to creditors

Answer

Examining the debtor's financial affairs

Question 20

What is the **primary** goal of a Chapter 7 bankruptcy trustee?

Accepted Answer

Liquidate the debtor's non-exempt assets and distribute the proceeds to creditors

Answer

Oversee the debtor's reorganization and ensure compliance with the plan

Answer

Help the debtor manage their debts and regain financial stability

Question 21

Which of the following is a **legal** requirement to serve as a bankruptcy trustee?

Accepted Answer

Being a member of the Bar in good standing in the district where the case is filed

Answer

Serving as a bankruptcy trustee for at least five years

Answer

Passing a certification exam administered by the U.S. Department of Justice

Answer

Having a degree in accounting or finance

Question 22

What is the **primary** role of the U.S. Trustee in bankruptcy cases?

Accepted Answer

Supervise the administration of cases and ensure compliance with the Bankruptcy Code

Answer

Represent the interests of creditors

Answer

Appoint bankruptcy trustees

Question 23

What is the **key difference** between a Chapter 11 and a Chapter 13 bankruptcy filing?

Accepted Answer

Chapter 11 allows for reorganization, while Chapter 13 involves a repayment plan

Answer

Chapter 11 is for liquidation, while Chapter 13 is for reorganization

Answer

Chapter 11 is for individuals, while Chapter 13 is for businesses

Question 24

What is the role of the creditors' committee in a bankruptcy case?

Accepted Answer

Represent the interests of unsecured creditors and negotiate with the debtor and trustee

Answer

Assist the bankruptcy trustee in the administration of the case

Answer

Determine the amount of the debtor's assets that will be liquidated

Question 25

What is the **primary** legal effect of the automatic stay in bankruptcy?

Accepted Answer

It prevents creditors from taking collection actions against the debtor

Answer

It allows the debtor to discharge all of their debts immediately

Answer

It creates a legal presumption of insolvency

Question 26

Which of the following is NOT a duty of a Chapter 7 bankruptcy trustee?

Accepted Answer

Appointing the debtor's attorney

Answer

Distributing proceeds to creditors

Answer

Liquidating the debtor's assets

Question 27

Who has the authority to appoint a bankruptcy trustee in a Chapter 13 case?

Accepted Answer

The United States Trustee

Answer

The bankruptcy judge

Answer

The debtor

Answer

The creditors' committee

Question 28

What is the primary function of a bankruptcy trustee in a Chapter 11 case?

Accepted Answer

To facilitate the debtor's reorganization

Answer

To liquidate the debtor's assets

Answer

To supervise the debtor's financial affairs

Answer

To distribute proceeds to creditors

Question 29

What is the role of the creditors' committee in the appointment of a bankruptcy trustee?

Accepted Answer

To make recommendations to the United States Trustee

Answer

To appoint the trustee directly

Answer

To object to the appointment of a trustee

Question 30

Which of the following statements about the compensation of bankruptcy trustees is true?

Accepted Answer

Trustees are typically compensated based on a percentage of the assets they distribute.

Answer

Trustees receive no compensation for their services.

Answer

Trustees are paid a fixed salary by the bankruptcy court.

Question 31

What is the purpose of the trustee's avoidance powers?

Accepted Answer

To recover assets for the benefit of creditors

Answer

To prevent the debtor from discharging their debts

Answer

To punish the debtor for financial mismanagement

Answer

To terminate all of the debtor's contracts

Question 32

What is the purpose of a "motion to dismiss" a bankruptcy case?

Accepted Answer

To request the bankruptcy court to dismiss the case for cause.

Answer

To modify the terms of the debtor's reorganization plan.

Answer

To convert the case from one chapter to another.

Question 33

**Primary Responsibility of a Chapter 7 Bankruptcy Trustee**

What is the primary responsibility of a Chapter 7 bankruptcy trustee?

Accepted Answer

Liquidate the debtor's nonexempt assets and distribute them to creditors

Answer

Manage the debtor's ongoing business operations

Answer

Provide legal counsel to the debtor

Question 34

**Duties of a Chapter 11 Bankruptcy Trustee**

Which of the following is **NOT** a duty of a Chapter 11 bankruptcy trustee?

Accepted Answer

Filing a plan of reorganization

Answer

Collecting and distributing assets

Answer

Negotiating with creditors

Answer

Monitoring the debtor's compliance with the confirmed plan

Question 35

**Role of the United States Trustee**

What is the primary role of the United States Trustee in bankruptcy cases?

Accepted Answer

To oversee the administration of bankruptcy cases and appoint trustees when necessary

Answer

To provide legal advice to debtors

Answer

To represent the interests of creditors

Question 36

**Purpose of a Creditors' Committee**

What is the purpose of a creditors' committee in a bankruptcy case?

Accepted Answer

To represent the interests of creditors and negotiate with the debtor or the debtor's representative

Answer

To conduct an independent investigation into the debtor's financial affairs

Answer

To advise the bankruptcy judge on legal matters

Question 37

**Effect of a Discharge in Bankruptcy**

What is the primary legal effect of a discharge in bankruptcy?

Accepted Answer

It releases the debtor from personal liability for dischargeable debts

Answer

It prevents creditors from taking any further legal action against the debtor

Answer

It cancels all of the debtor's debts

Question 38

**Purpose of a Stay in Bankruptcy**

What is the primary purpose of the automatic stay in bankruptcy proceedings?

Accepted Answer

To prevent creditors from taking action against the debtor during the bankruptcy process

Answer

To give the debtor time to negotiate a plan of reorganization

Answer

To allow the debtor to sell assets and pay off debts

Question 39

**Qualifications to be Appointed as a Bankruptcy Trustee**

Which of the following is **NOT** a qualification to be appointed as a bankruptcy trustee?

Accepted Answer

Being a close relative of the debtor

Answer

Being a licensed attorney in good standing

Answer

Having experience in financial management

Answer

Being certified by the United States Trustee

Question 40

**Difference Between Chapter 13 and Chapter 7 Bankruptcy**

What is the fundamental difference between Chapter 13 and Chapter 7 bankruptcy?

Accepted Answer

Chapter 13 is a reorganization bankruptcy, while Chapter 7 is a liquidation bankruptcy

Answer

Chapter 13 allows the debtor to keep all of their property, while Chapter 7 requires the debtor to liquidate all of their property

Answer

Chapter 13 is more expensive than Chapter 7

Question 41

What is the primary responsibility of a Chapter 7 bankruptcy trustee?

Accepted Answer

To liquidate the debtor's non-exempt assets and distribute the proceeds to creditors.

Answer

To negotiate a reorganization plan with the debtor and creditors.

Answer

To oversee the debtor's financial affairs during the bankruptcy process.

Question 42

Which of these powers is granted to bankruptcy trustees under the Bankruptcy Code?

Accepted Answer

To avoid fraudulent transfers of property.

Answer

To issue arrest warrants.

Answer

To grant immunity to witnesses.

Question 43

What is the primary purpose of a meeting of creditors held by a bankruptcy trustee?

Accepted Answer

To examine the debtor under oath, review the debtor's financial affairs, and potentially elect a creditors' committee.

Answer

To vote on a reorganization plan.

Question 44

Which of the following is a key duty of a bankruptcy trustee?

Accepted Answer

To file regular reports with the bankruptcy court.

Answer

To provide legal advice to the debtor.

Answer

To represent the debtor in court.

Answer

To determine the debtor's eligibility for bankruptcy.

Question 45

What is the role of a Chapter 11 bankruptcy trustee?

Accepted Answer

To oversee the debtor's reorganization process and ensure compliance with the Bankruptcy Code.

Answer

To liquidate the debtor's assets.

Answer

To act as a mediator between the debtor and creditors.

Question 46

What was the primary goal of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005?

Accepted Answer

To make it more difficult for individuals to file for bankruptcy.

Answer

To streamline the bankruptcy process.

Answer

To increase the amount of debt that debtors can discharge.

Question 47

Which of the following is a crucial requirement for a debtor to receive a discharge of their debts in bankruptcy?

Accepted Answer

The debtor must not have committed any acts of fraud.

Answer

The debtor must have been in bankruptcy for at least 5 years.

Answer

The debtor must have paid all of their debts in full.

Question 48

Which of the following is NOT a duty of a Chapter 13 bankruptcy trustee?

Accepted Answer

Sell the debtor's non-exempt property

Answer

Monitor the debtor's compliance with the plan

Answer

Distribute payments to creditors

Answer

File periodic reports with the court

Question 49

What is the difference between a panel trustee and a private trustee?

Accepted Answer

Panel trustees are appointed by the bankruptcy court and receive compensation from the government, while private trustees are retained by the creditors and compensated based on their agreement with the creditors

Answer

Panel trustees are more experienced than private trustees

Question 50

Which of the following is NOT a power granted to bankruptcy trustees?

Accepted Answer

The power to arrest debtors

Answer

The power to seize property

Answer

The power to subpoena documents

Answer

The power to examine witnesses

Question 51

What is the future of bankruptcy trusteeship?

Accepted Answer

It is likely to become increasingly important, as bankruptcy laws become more complex and the number of bankruptcy filings continues to rise

Answer

It is likely to be replaced by automated systems