Financial consequences of bankruptcy Quiz
Explore the financial impacts & legal aspects of bankruptcy with this quiz covering assets, debts, chapters, and more.
#1
Which of the following is a consequence of bankruptcy?
Debts are erased and no longer need to be repaid
Credit score improves immediately
Assets are sold to repay creditors
Interest rates on loans increase
#2
What is the main purpose of bankruptcy laws?
To punish individuals for financial mismanagement
To provide relief to debtors and a fair distribution of assets to creditors
To encourage reckless spending
To eliminate all debts without consequences
#3
What happens to a bankrupt individual's assets?
They are seized and sold to pay off debts
They are protected and cannot be touched
They are transferred to government ownership
They are returned to the individual after bankruptcy is declared
#4
Which type of bankruptcy involves the liquidation of assets to repay debts?
Chapter 7 bankruptcy
Chapter 11 bankruptcy
Chapter 13 bankruptcy
Chapter 9 bankruptcy
#5
How long does a bankruptcy typically stay on a credit report in the United States?
5 years
7 years
10 years
Indefinitely
#6
Which bankruptcy chapter is typically used for reorganization of businesses?
Chapter 7 bankruptcy
Chapter 11 bankruptcy
Chapter 13 bankruptcy
Chapter 9 bankruptcy
#7
What is the role of a bankruptcy trustee?
To represent the debtor in court proceedings
To review and administer the bankruptcy estate
To provide financial assistance to the debtor
To negotiate with creditors on behalf of the debtor
#8
What is an example of a non-dischargeable debt in bankruptcy?
Credit card debt
Medical bills
Student loans (in most cases)
Personal loans
#9
What is the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 involves liquidation of assets, while Chapter 13 involves a repayment plan
Chapter 13 involves liquidation of assets, while Chapter 7 involves a repayment plan
There is no difference between Chapter 7 and Chapter 13 bankruptcy
Chapter 7 is only for individuals, while Chapter 13 is only for businesses
#10
Which debts are typically not dischargeable in bankruptcy?
Credit card debts
Medical bills
Student loans (in most cases)
Mortgage debts
#11
What is a bankruptcy discharge injunction?
An order preventing creditors from attempting to collect discharged debts
An order to discharge all debts without exception
An order to seize debtor's assets for liquidation
An order for debtor to attend credit counseling
#12
Which chapter of bankruptcy is primarily for municipalities?
Chapter 7 bankruptcy
Chapter 9 bankruptcy
Chapter 11 bankruptcy
Chapter 13 bankruptcy
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