Question

Link negligently ran his car into John, causing $50,000 in injuries. Link was intoxicated at the time of the accident. Can Link discharge this debt in bankruptcy?

No, because Link breached a fiduciary duty.

No, such claims are not dischargeable in bankruptcy.

Yes, as long as he didn't intend to hit John's car.

Yes, claims based on negligence are dischargeable.

Liquidation is a form of bankruptcy in which the debtor's exempt property is auctioned.

True

False

Creditor claims are divided into classes and the highest class must be satisfied in full before going to the next category.

True

False

Ramona has received a discharge in bankruptcy, but wants to reaffirm a debt to her sister. To be valid, the reaffirmation

will be scrutinized by the court to make sure her sister has not unfairly pressured Ramona.

will be automatically disallowed because allowing Ramona to promise to pay a discharged debt would be contrary to the goals of the bankruptcy proceedings.

will be automatically allowed if Ramona voluntarily chooses to make it.

must clearly disclose that Ramona has the right to rescind at any time since the debt was already discharged.

Generally, the 341 "Meeting of Creditors" is a misnomer.  

True

False

An adversary proceeding is a lawsuit in a bankruptcy case.

True

False

Answer 1

a) Option B - No, such claims are not dischargeable in bankruptcy.

Link was driving while in intoxicates state which means he was under the influence of alcohol and he injured John as he ran his car into him. The damages are required to pay by Link to John even if he is in the bankruptcy protection.
Link has harmed the other person, and he was completely negligent as he was intoxicated. The law does not allow such claims to be dischargeable in the bankruptcy. Any such allowance will be unfair towards the victim or injured person and it will incentivize people under bankruptcy to be negligent.

b) False

The exempt property is the property such as house in which the person is living and other items which are necessary to a person or family to continue living or to earn income for livelihood. The exempt property is not allowed to be liquidated or auctioned off by the law.

c) Option A - will be scrutinized by the court to make sure her sister has not unfairly pressured Ramona

The bankruptcy protection allows to break the contract the person is discharged from his debts. However, the person in the bankruptcy protection can reaffirm a debt voluntarily to keep his assets but he will have to confirm before the court that reaffirming the debt is voluntary and it will stress his already weak financial condition.

d) True

The 341 is referred as the meeting of creditors in which they can ask questions about assets, bankruptcy and other related questions about financial situation of the debtor. However, creditors mostly choose not to attend such meetings so it is a misnomer.

e) True

An adversary proceeding has the same meaning as a lawsuit filed in the court. The process is legal whereby the lawsuit is filed against the person or the group of person.