LAW 3 Study Practice Test.

LAW 3 Study Practice Test. Bankruptcy and Insolvency Act (BIA) - correct answer Applies to all except banks, insurance, trust, railways, agriculture companies When is someone insolvent - correct answer A person is insolvent when their debts exceed their assets or meet their liabilities as they come due What are the two methods to entering into bankruptcy - correct answer Assignment by the debtor (voluntarily) or an application by creditor (involuntarily) Bankruptcy creditor proposal rule - correct answer 2/3 of creditors in each class must vote for bankruptcy Bankruptcy discharge - correct answer Debtors are usually only discharged when they pay all their debts unless personal bankrupt then within nine months Bankruptcy jurisdiction - correct answer Must be filed in the debtors jurisdiction Officials involved in bankruptcy - correct answer Superintendent, trustee, bankruptcy court, registrar, inspector Process of bankruptcy - correct answer 1) Petition 2) Protection 3) Trustee 4) Creditor Priority For voluntarily debtor it must have a minimum of $1000 debts, same with involuntarily debtor. Debtor must give assets to trustee Exempt property from bankruptcy - correct answer Tools of trade up to 11.3K All clothing 1 vehicle needed for work up to 6.6K Principal residence if debtor's equity is less than 10K Food and fuel Household furniture and appliances up to 13.15K Certain farm equipment up to 29K Pension benefits, RRSP, and insurance A set wage to be kept Entitlement upon bankruptcy - correct answer Secured creditor has collateral Unsecured creditor is entitled to unpaid wages up to 6 months, taxes, rent, support payment Complication in enforcing security - correct answer A solution to indifference in valuation is selling it in the market, which will be the price. For example, the creditor's car is valuing it at 200k while the trustee is valuing it at 220K. To solve this problem it will be sold in the market to solve the valuation