Preview Questions Bankruptcy Lawyer | Role Specific Skill

Question 1: What is the purpose of the "best interests of creditors" test in Chapter 11, and how should a Bankruptcy Lawyer apply it?

Which action should you take?

Choose only one option

To focus only on the debtor's interests and disregard creditors' concerns

To ensure that creditors receive at least as much as they would in a Chapter 7 liquidation, and to advocate for a fair distribution

To automatically accept any proposed plan without considering creditor interests

To minimize creditors' recovery to expedite the case

Question 2: How should a Bankruptcy Lawyer navigate the issue of "post-petition financing" in Chapter 11?

Which action should you take?

Choose only one option

By avoiding any post-petition financing in favor of liquidating the assets

By accepting any form of financing without court approval to keep the business running

By ensuring the financing is approved by the court and that it meets the debtor's reorganization needs while protecting creditors' interests

By negotiating for higher interest rates to benefit the debtor's future operations

Question 3: When representing a debtor in an insolvency proceeding, how do you handle the issue of fraudulent conveyances made prior to the filing?

Which action should you take?

Choose only one option

By accepting the fraudulent conveyances and proceeding with the insolvency.

By allowing the debtor to keep fraudulent transfers without investigation.

By ignoring prior transfers and focusing only on the current financial situation.

By identifying and challenging fraudulent transfers through litigation or settlement, ensuring compliance with insolvency laws.

Question 4: In insolvency cases, how should a Bankruptcy Lawyer handle claims made by creditors who assert that a debtor has engaged in preferential treatment?

Which action should you take?

Choose only one option

By agreeing to a settlement with creditors on the preference issue without further legal analysis

By accepting all preference claims without examination

By investigating the transactions and defending or challenging the preference claims based on the timing and nature of the transfers

By ignoring preference claims unless they are explicitly raised by the court

Question 5: In a Chapter 7 bankruptcy, which of the following debts is automatically excluded from discharge?

Which action should you take?

Choose only one option

Medical debt

Personal loans

Business debts

Debts incurred through fraud

Question 6: How should a Bankruptcy Lawyer handle the issue of setoff rights for creditors in bankruptcy proceedings?

Which action should you take?

Choose only one option

By ensuring that the creditor's setoff rights are preserved under the Bankruptcy Code, while considering the effect on the debtor's estate

By disregarding setoff rights and focusing only on repayment terms

By challenging the creditor's right to setoff without assessing the circumstances

By assuming the debtor will automatically apply setoff rights without consultation