CA Certified Specialist — Bankruptcy Law

Debtor files a Chapter 7 petition. The means test under 11 U.S.C. §707(b)(2) compares the debtor's current monthly income to which benchmark?

• AThe federal poverty guidelines
• BThe state median family income for a household of the debtor's size
• CThe debtor's pre-petition income from the prior 12 months
• DThe IRS national standards for living expenses

A California debtor wishes to claim the federal bankruptcy exemptions under 11 U.S.C. §522(d). May the debtor do so?

• AYes, debtors always have a federal/state election
• BNo, California has opted out under §522(b)(2) and debtors must use California state exemp…
• CYes, but only if the debtor has lived in California less than 730 days
• DOnly with court approval after a noticed hearing

The §362 automatic stay arises at what moment?

• AWhen the bankruptcy schedules are filed
• BWhen the §341 meeting is held
• CAutomatically upon the filing of the bankruptcy petition
• DWhen the court enters an order confirming the stay

A Chapter 13 plan is for what maximum duration under §1322(d)?

• AThree years
• BFive years
• CSeven years
• DTen years

A creditor receives a $10,000 payment on an unsecured antecedent debt 60 days before the debtor's Chapter 7 filing. The debtor was insolvent at the time. The creditor would have received only $4,000 in a hypothetical Chapter 7 liquidation absent the transfer. The trustee may recover up to what amount as a §547 preference?

• A$0 because the creditor was acting in good faith
• B$4,000
• C$6,000 (the amount above what the creditor would have received in Ch. 7)
• D$10,000

Under California CCP §704.730, the homestead exemption amount in 2026 is approximately what range, depending on the county median home sale price?

• A$75,000 fixed for all debtors
• B$175,000 to $600,000 indexed for inflation
• CApproximately $350,000 to $700,000, tied to county median home price
• DUnlimited equity in the principal residence

Which of the following is NOT a ground for denial of discharge under §727(a)?

• ATransferring or concealing property within one year before filing with intent to hinder c…
• BFailing to keep adequate financial records
• CObtaining a discharge in a Chapter 7 case filed within the past 8 years
• DOwing a non-dischargeable student loan debt

In a Chapter 11 case, the 'absolute priority rule' generally requires that:

• AAll creditors must vote in favor of the plan
• BSenior classes must be paid in full before junior classes receive or retain anything unde…
• CAdministrative expenses must be paid before secured claims
• DEquity holders must receive at least 10% of post-confirmation equity

What is 'property of the estate' under §541(a)?

• AOnly property listed in the debtor's schedules
• BAll legal and equitable interests of the debtor in property as of the commencement of the…
• COnly non-exempt property of the debtor
• DOnly property in the debtor's physical possession at filing

A creditor learns of a debtor's Chapter 7 filing but proceeds with a state court garnishment, attaching $5,000 of the debtor's wages. The garnishment is a willful violation of the automatic stay. Under §362(k)(1), the debtor is entitled to:

• AOnly the return of the $5,000
• BActual damages including the return of property, costs, attorneys' fees, and in appropria…
• COnly attorneys' fees, not punitive damages
• DTreble damages but no attorneys' fees

To be eligible for Chapter 13 relief under §109(e) (as adjusted), the individual debtor must have noncontingent, liquidated debts (combined secured and unsecured) below approximately what amount?

• A$394,725 secured / $1,184,200 unsecured (separate caps)
• BA combined debt limit of approximately $2.75 million (no separate secured/unsecured cap)
• C$465,275 unsecured only
• DNo debt limit

Which of the following debts is generally non-dischargeable under §523(a) even in a Chapter 7 case where the debtor receives a §727 discharge?

• ACredit-card debt from ordinary consumer purchases
• BDomestic support obligations
• CUnsecured medical debt
• DPersonal loans from friends or family

In a Chapter 11 case, the debtor in possession (DIP) generally has the rights and powers of:

• AA trustee under Chapter 7
• BA bankruptcy judge
• CA Chapter 11 trustee, except for the right to compensation as a trustee
• DA receiver appointed by state court

A debtor transferred $50,000 to her brother for no consideration 18 months before filing Chapter 7. The trustee seeks to avoid the transfer under §548. What is the §548 lookback period?

• A90 days
• BOne year
• CTwo years
• DSix years

Which of the following is an exception to the automatic stay under §362(b)?

• AA civil tort lawsuit for money damages
• BContinuation of a criminal prosecution against the debtor
• CForeclosure of a deed of trust on the debtor's residence
• DCollection of an unsecured credit card debt

Under §1325(b)(2), the 'disposable income' of a Chapter 13 debtor for plan-funding purposes generally means:

• AAll current monthly income
• BCurrent monthly income less amounts reasonably necessary for support and operating a busi…
• CSchedule I income less Schedule J expenses
• DGross income less federal income tax

A Chapter 13 debtor owns a car purchased 24 months before filing, securing a purchase-money loan. May the debtor 'cram down' the secured claim to the car's fair market value?

• AYes, freely under §506(a)
• BNo, because §1325(a) ('hanging paragraph') prohibits cramdown of purchase-money security…
• COnly with the lender's consent
• DOnly if the debtor is below the state median income

A creditor seeks relief from the automatic stay to foreclose on the debtor's underwater rental property. Under §362(d)(2), the creditor must show:

• AThe debtor has no equity in the property AND the property is not necessary to an effectiv…
• BBad faith by the debtor
• CThe debtor is current on tax payments
• DOnly that the debtor has no equity

Under FRBP 7001, which of the following matters MUST be brought as an adversary proceeding?

• AA motion to extend the deadline to file schedules
• BA proceeding to determine the dischargeability of a debt under §523(a)(2), (4), or (6)
• CA motion to value collateral under §506(a)
• DAn objection to a proof of claim

A debtor elects California's CCP §703.140(b) (System 2) exemptions instead of §704. Under §703.140(b)(5), the 'wildcard' exemption available for any property is approximately:

• A$0 — there is no wildcard in System 2
• BApproximately $1,800
• CApproximately $33,650 plus any unused homestead amount
• DUnlimited

A Chapter 7 trustee may abandon property of the estate under §554 if the property is:

• ASubject to a non-debtor's lien
• BBurdensome to the estate or of inconsequential value and benefit to the estate
• CLocated outside the United States
• DNecessary to the debtor's fresh start

A debtor's plan of reorganization is being voted on. A class of impaired unsecured creditors votes against the plan. Under §1126(c), a class is deemed to have ACCEPTED a plan if:

• AA majority of the creditors voting accept, regardless of dollar amount
• BTwo-thirds in amount AND more than one-half in number of those creditors actually voting…
• CAll members of the class accept
• DThe bankruptcy judge finds the plan fair

A debtor files Chapter 7. Six months after filing, the debtor receives a substantial inheritance from a deceased relative. Under §541(a)(5)(A), is the inheritance property of the estate?

• ANo, because it was received after the petition date
• BYes, because §541(a)(5)(A) brings into the estate property the debtor becomes entitled to…
• CYes, but only the debtor's pro-rata share
• DNo, inheritances are always excluded under §541(b)

Which of the following is required for confirmation of a Chapter 11 plan under §1129(a)?

• AAcceptance by every class of claims and interests
• BEach class either accepts the plan OR is unimpaired by it (with absolute priority cramdow…
• CApproval by the Office of the U.S. Trustee
• DUnanimous consent of secured creditors

A creditor sues the debtor for fraud. Before judgment, the debtor files Chapter 7. The creditor wants the debt declared non-dischargeable under §523(a)(2)(A). What is the deadline to file the complaint?

• AWithin 30 days after the §341 meeting
• B60 days after the first date set for the §341 meeting (FRBP 4007(c))
• CBefore discharge is entered
• DAnytime within one year

Under §547(c)(2), the 'ordinary course of business' defense to a preference action requires the creditor to show that the transfer was:

• AMade under economic distress
• BIn the ordinary course of business or financial affairs of the debtor and creditor, OR ma…
• CLess than $7,575 in a consumer case
• DAuthorized in writing by the debtor

A creditor wishes to be paid for goods or services provided to the debtor during the Chapter 11 case. The claim is generally entitled to:

• ATreatment as a pre-petition unsecured claim
• B§503(b)(1) administrative expense priority
• C§507(a)(7) priority
• DSubordination under §510

The Chapter 13 plan must satisfy the 'best interests of creditors' test under §1325(a)(4). This test requires:

• ACreditors receive at least what they would receive in a hypothetical Chapter 11 reorganiz…
• BCreditors receive, on the effective date, at least the present value of what they would r…
• CAll creditors are paid in full
• DThe plan be approved by 67% of creditors

In a §544(b) strong-arm action, the trustee:

• AHas the rights of a hypothetical judicial-lien creditor as of the petition date
• BSteps into the shoes of an actual unsecured creditor with an allowable §502 claim and ass…
• CHas the rights of a hypothetical bona-fide purchaser of real property
• DBoth options 1 and 3 simultaneously

A debtor and her spouse own a home as community property in California, with $400,000 of equity. The debtor (sole signer on the mortgage) files Chapter 7 individually; the spouse does not file. The community property is:

• AProperty of the estate under §541(a)(2) only as to the debtor's half
• BProperty of the estate in its entirety under §541(a)(2) — both spouses' interests
• CNot property of the estate because the non-filing spouse did not consent
• DExcluded from the estate under §522

A Chapter 11 disclosure statement under §1125(b) must contain:

• AWhatever the debtor in possession deems appropriate
• BAdequate information of a kind, and in sufficient detail, that would enable a hypothetica…
• CAudited financial statements only
• DThe same disclosures required by SEC Form S-1

A Chapter 7 trustee discovers the debtor failed to disclose a $150,000 bank account. After timely objection, the court denies discharge under §727(a)(4) (false oath). The debt the debtor owes individual creditors is:

• ADischarged anyway because §523 governs
• BNot discharged because the §727 denial wipes out the entire discharge
• CDischarged but the debtor is barred from Chapter 13 for 4 years
• DSubject to renewed collection only with court permission

Subchapter V of Chapter 11 (Small Business Reorganization Act of 2019) is available to:

• AAny business debtor
• BA small business debtor engaged in commercial or business activities with aggregate nonco…
• COnly single-asset real-estate cases
• DIndividual debtors only

A creditor receives a $5,000 payment 30 days before the debtor files Chapter 7. Three weeks later (still before the filing), the creditor ships $5,000 worth of inventory to the debtor on open account. The creditor asserts the 'new value' defense under §547(c)(4). The trustee can avoid:

• AThe full $5,000 payment
• B$0 — the new value fully offsets the preference
• CAn amount equal to the preferential payment minus any new value that remains unpaid at th…
• D$5,000 plus interest

In a Chapter 13 case, the debtor's post-petition earnings from services performed are:

• AExcluded from the estate
• BProperty of the estate under §1306(a)(2), supplementing the §541 estate
• CProperty of the trustee personally
• DProperty of the debtor's pre-petition creditors only

A Chapter 7 debtor wants to retain her car (with a $15,000 secured loan) by paying the lender the car's $10,000 fair market value in a single lump sum. This option is called:

• AReaffirmation
• BRedemption under §722
• CCramdown
• DSurrender

Under §523(a)(8), student loans are non-dischargeable except where:

• AThe debtor is over age 65
• BExcepting the debt would impose an 'undue hardship' on the debtor and dependents
• CThe debt is more than 10 years old
• DThe loan was for a school that has since closed

A debtor files a Chapter 13 petition. The §362 stay protects property of the estate. Under §1301, the co-debtor stay additionally protects:

• AAny non-filing co-signer on any debt
• BA consumer debt co-debtor (an individual liable on or who secured a consumer debt of the…
• CAll guarantors regardless of the debt type
• DNo one beyond the debtor

Under §522(f)(1)(A), a debtor may avoid which type of lien to the extent it impairs an exemption?

• AA consensual mortgage on a primary residence
• BA judicial lien (other than a lien securing a domestic support obligation)
• CA purchase-money security interest
• DA statutory tax lien

A Chapter 11 single-asset real estate (SARE) debtor wants to delay the §362(d)(3) deadline to either file a plan with a reasonable possibility of confirmation OR start making monthly stay-protection payments. The default deadline is:

• A30 days after the petition
• B90 days after the petition (or 30 days after the case is designated SARE, if later)
• C6 months after the petition
• DOne year after the petition

A Chapter 7 individual debtor's discharge under §727 generally discharges:

• AAll pre-petition debts of the debtor
• BAll pre-petition debts of the debtor that are not excepted from discharge by §523, §727,…
• COnly unsecured debts
• DDebts up to $50,000

A debtor filed Chapter 7 four years ago and received a discharge. The debtor now files a second Chapter 7 case. Under §727(a)(8), the debtor:

• AMay receive a discharge in the new case
• BMay not receive a discharge in the new case because §727(a)(8) bars a Chapter 7 discharge…
• CMay receive a discharge with court approval
• DMay convert the case to Chapter 13

A creditor with a judicial lien on the debtor's California home of $50,000 seeks to enforce after the Chapter 7 case is closed. The home was valued at $400,000 with a $300,000 first deed of trust; the debtor's CCP §704.730 homestead exemption was $349,720. The debtor's exemption is impaired by:

• A$0 — the equity exceeds the exemption
• BCalculate per §522(f)(2)(A): (judicial lien $50,000) + (other liens $300,000) + (exemptio…
• CHalf of the lien is avoidable
• DThe lien is not avoidable post-discharge

In a contested matter under FRBP 9014 (e.g., a motion for relief from stay), which procedural feature distinguishes it from an adversary proceeding under FRBP 7001?

• AA contested matter is initiated by motion, not by complaint and summons
• BA contested matter does not allow discovery
• CA contested matter cannot be appealed
• DA contested matter does not require notice

Under §502(b)(6), a landlord's claim for damages from rejection of an unexpired lease of real property is capped at:

• ANo cap — the landlord may claim the full remaining lease term
• BThe rent reserved by the lease for the greater of one year, or 15% (not to exceed 3 years…
• CSix months of rent
• DTwo years of rent

In a §548 actual fraudulent transfer claim, the trustee must prove the debtor made the transfer with:

• AReasonably equivalent value while insolvent
• BActual intent to hinder, delay, or defraud any creditor
• CConstructive fraud only
• DNegligence in transferring estate property

A Chapter 11 debtor seeks to use cash collateral (e.g., bank-account funds securing a lender's lien). Under §363(c)(2), the debtor may use cash collateral only with:

• ACourt approval after notice and hearing under §363(e), with adequate protection of the se…
• BUnilateral debtor decision
• CBank approval only
• DNo restrictions

Which of the following exemptions is UNIQUE to California's §704 system (NOT available in §703)?

• AA wildcard exemption
• BAn exemption for tools of the trade
• CLarger homestead amounts based on county median home price and the inability to use a wil…
• DHealth-aid exemptions