Introduction to the Bankruptcy Laws Self-Quiz










The holders of the common stock of a company are sometimes said to have a residual position in the overall financial structure to the business. This is because they:
Choice 1 have first priority on assets in insolvency.
Choice 2 are entitled to dividends not available to other shareholders.
Choice 3 are the last to receive payment for their investments.
Choice 4 None of the above
Cindy borrowed money from Lance in order to purchase a new tennis racket. In this relationship, Cindy is referred to as the _________ and Lance is referred to as the _______.
Choice 1 debtor / creditor
Choice 2 borrower / lender
Choice 3 obligor / obligee
Choice 4 All of the above are correct.
The ultimate goal of the bankruptcy laws is to:
Choice 1 give companies a way to go out of business and liquidate their assets fairly.
Choice 2 keep lenders in the market and borrowers borrowing.
Choice 3 give structure to the process whereby an individual goes broke.
Choice 4 provide a means for creditors to organize their legal actions against those who fail to pay for their debt obligations.
Bobby has decided that he wants to become a bankruptcy lawyer. Where will he discover the bulk of the bankruptcy law exists?
Choice 1 On the State level in individual state bankruptcy codes.
Choice 2 On the Federal level in the IRC.
Choice 3 On the State level in a uniform system of IRCs.
Choice 4 On the Federal level in the Bankruptcy Code.
Tess is in serious financial trouble. She has some assets left but does not expect to be able to get her finances back together anytime soon. Additionally, she has certain loans – such as some student loans – that she is worried about. She decides to file for bankruptcy protection. What is the most likely form of bankruptcy for her to file?
Choice 1 Chapter 7.
Choice 2 Chapter 11.
Choice 3 Chapter 13.
Choice 4 Chapter 15.

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