Reba Files a Chapter 7 Petition in Bankruptcy

question 6

Multiple Choice

Reba files a Chapter 7 petition in bankruptcy. She owns the following property: (1) an automobile valued at $2,800; (2) a homestead valued at $80,000, on which First Bank holds a mortgage of $60,000; (3) personal jewelry valued at $1,100; and (4) monthly disability payments of $1,000. Assuming Reba elects to use the exemptions listed in the Bankruptcy Code, what property may she keep?

• A) The disability payments only.
• B) The disability payments and the homestead only.
• C) The disability payments plus the automobile, the homestead, and the jewelry.
• D) Nothing. She must sell all of her assets and have the proceeds distributed to the creditors, and she must turn the disability payments over to the trustee.

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