A surety cannot assert the principal debtor's bankruptcy as a defense to avoid liability on the debtor's obligation.
True
Suha performs a contract with Tyler to add a second story addition to Tyler's house, but Tyler does not pay. In most states, Suha can create a lien and place it on Tyler's property by filing:
a written notice of lien.
A legal process used by a creditor to collect a debt by seizing property of the debtor (such as wages) that is being held by a third party (such as the debtor's employer) is referred to as:
a garnishment.
A mortgage contract must be in writing to be enforceable.
True
Personal possessions are not usually included in state exemption statutes.
False
Some states limit the use of state homestead exemptions to those debtors with families.
True
Garnishment can:
be a post-judgment remedy.
b.require a hearing before a court.
c.be a prejudgment remedy.
d.All of these choices.**** this is answer
If a mortgagee (lender) chooses to foreclose, the mortgagee must comply with state statutes governing foreclosures.
True
Household furniture can be exempted personal property.
True
In a suretyship contract:
a third party agrees to become primarily liable for another's debt.
Beta Software Corporation is a new company that needs to borrow money to meet its payroll. Carl, president and owner of Beta, asks First National Bank to loan Beta the funds. If First National insists that Carl sign the loan application, making himself pe
a surety only.
A mortgagee (lender) has the right to seek a judicial sale of the mortgaged property on the mortgagor's default.
True
A suretyship contract:
makes the surety primarily responsible for the debtor's obligation.
b.in some states, to be enforceable, does not necessarily need to be in writing.
c.does not necessitate exhaustion of all legal remedies against the principal debtor before holding the su
Vehicles for transportation are usually included in state exemption statutes.
True
Jay is a surety for Karen's loan from Little Bank. Jay's right to be repaid by Karen after having paid her debt is the right of contribution.
False
Nanci purchased a home and signed a 25-year mortgage contract with Home Lender Bank. The mortgage contract requires Nanci to pay Home Lender Bank an additional 5% of the principal if she pays the mortgage amount in full during the first 3 years of the loa
a prepayment penalty clause.
Jarod started a music promotion business right out of college, but when the recession hit, could not make it work, and so plans to file for bankruptcy. He has a family home with $10,000 equity. What would you tell him about the equity in his home?
The $10,000 equity is most likely exempt as part of the homestead exemption.
Characteristics of a mortgage include all of the following except:
it may be oral.
Samuel and Rebecca divorced, and the court ordered that Samuel pay a certain sum in child support each month to Rebecca for the support of their son, Nathan. Samuel fell behind in his payments. In order to ensure that money would be coming in regularly to
a garnishment.
Jaquita operated a solely-owned pet store for many years. With the slow economy, however, she was required to close the store and declare bankruptcy. Which of the following items would be exempt from execution or attachment in bankruptcy?
Her family home
Stanley's debt to Town Bank is past due. Town Bank obtains a judgment against Stanley to collect the debt, but he refuses to pay. Town Bank asks the court to order Stanley's employer to pay a portion of his paycheck to the bank. This is a request for:
an order of garnishment.
Michael contracts with Jill to fix the brakes on her Honda Civic. Jill leaves her car with Michael, but refuses to pay when the work is done. Michael refuses to return the car to Jill until she pays for the brake work. This is:
an artisan's lien.
David had a 25-year mortgage contract with Lenders Bank. He failed to make the mortgage payments. In every state, which of the following rights does David have prior to the foreclosure sale?
Equitable right of redemption
A court awards a judgment to Loan Collection Agency, who is the creditor, against Margret, who is the debtor. After the judgment, the creditor requests a court order to seize Margret's property to ensure that the judgment will be collectible. This is:
a writ of execution
A court's order, issued after a judgment has been entered against a debtor, directing the sheriff to seize and sell any of the debtor's nonexempt real or personal property is:
a writ of execution.
Jarod started a music promotion business right out of college, but when the recession hit, could not make it work, and so plans to file for bankruptcy. He is concerned that he will have to sell everything he owns, including his dog, Buster. If you were ad
Clothing
b.Household furniture
c.Pets
d.All of these choices*** this is right
Equipment that a debtor uses in a business or trade can be exempted personal property.
True
Antonio purchased a modular home from Mobile Services Corporation (MSC). When Antonio failed to pay the purchase price of the home, MSC obtained a lien against the modular home. Antonio then filed bankruptcy and asserted the homestead exemption. Would the
Yes, as long as it was a family home.
Unlike a mechanic's lien, an artisan's lien is:
possessory.
David had a 25-year mortgage contract with Lenders Bank. He failed to make the mortgage payments. Which of the following options has Lender Bank chosen to avoid foreclosure if Lender postpones part or all of the payments on the loan for a limited time?
Forbearance
Jarod started a music promotion business right out of college, but when the recession hit, could not make it work, and so plans to file for bankruptcy. He has found a job that requires that he commute to work 15 miles every day. What would you tell him ab
The motorcycle is exempt as part of the personal property exemption.
A homestead exemption allows a debtor to pay a fixed debt for an amount less than was actually owed.
False
Jaquita operated a solely-owned pet store for many years. With the slow economy, however, she was required to close the store and declare bankruptcy. Which of the following items would be exempt from execution or attachment in bankruptcy?
Her pets
In every state, debtors are permitted to either retain their family home or keep up to a specified dollar amount of the value of the home under:
a.the homestead exemption.
The right of reimbursement:
entitles the surety to the expenses incurred on behalf of the suretyship arrangement.
Jaquita operated a solely-owned pet store for many years. With the slow economy, however, she was required to close the store and declare bankruptcy. Which of the following items would be exempt from execution or attachment in bankruptcy?
Her household furniture
b.Her clothing and family pictures
c.Her livestock
d.All of these choices** this is correct
Which of the following are methods of avoiding foreclosure?
Forbearance
b.Workout agreement
c.Short sale
d.All of these choices** this is correct
Nanci purchased a home and signed a 25-year mortgage contract with Home Lender Bank. Which of the following are provisions that might be included in the mortgage contract?
A prepayment penalty clause
b.Provisions related to maintenance of the property
c.A statement obligating the buyer to maintain homeowners' insurance on the property
d.All of these choices** this is correct
Clothing and personal possessions, such as family pictures or a religious text, can be exempted homestead property.
False
Jay is a surety for Karen's loan from Little Bank. Little Bank released Karen from the loan and did not notify Jay. Jay is now also released from the loan.
True
A guaranty relationship is created when:
a third person promises to pay a debt owed by another in the event the debtor does not pay.
Beta Software Corporation is a new company that needs to borrow money to meet its payroll. Carl, president and owner of Beta, asks First National Bank to loan Beta the funds. If First National insists that Carl sign the loan application, making himself pe
a guarantor only.
Portia owes Bon $500 on their roof repair contract, but refuses to pay. To collect, Bon files a mechanic's lien. Under a mechanic's lien, security for the debt is represented by:
Portia's real estate.
Jordan is a surety for Kelly's loan from Lenders Credit Corporation. When the loan comes due, Kelly tries to pay Lenders Credit, but the creditor rejects the payment. Jordan is:
released from any obligation on the debt.
A creditor with an artisan's lien on property can sell the property to satisfy the debt.
true
Garnishment:
of wages does not allow an employer to dismiss an employee because her or his wages are being garnished.
Beta Software Corporation is a new company that needs to borrow money to meet its payroll. Carl, president and owner of Beta, asks First National Bank to loan Beta the funds. Carl is the only salaried employee of Beta. If First National asks Carl to guara
need not be filed with a state office, be in writing, or be "published.
Nanci purchased a home and signed a 25-year mortgage contract with Home Lender Bank. The mortgage contract included a provision that she pay all property taxes, assessments and other claims against the property. Which of the following best describes that
A list of nonloan financial obligations.
The law limits the amount of money that can be garnished from a debtor's weekly take-home pay.
true
Jasmine, a recent college graduate, wants to buy her first home. Her income is relatively low now, although it's enough to qualify for a mortgage. However, her projected yearly income is expected to increase as she moves up the corporate ladder. Which typ
.An adjustable rate mortgage
David had a 25-year mortgage contract with Lenders Bank. He failed to make the mortgage payments. Which of the following is an option that Lenders Bank might choose to avoid foreclosure?
Forbearance
A contract of suretyship is a(n):
express contract between the third party and the creditor.
To foreclose on real property securing a mortgage, the mortgagee must ask a court for a deficiency judgment.
false
In order to execute an artisan's lien, the lienholder must have:
possession of the property on which the lien is placed.
David had a 25-year mortgage contract with Lenders Bank. He failed to make the mortgage payments. Which of the following options has Lender Bank chosen to avoid foreclosure if Lender agrees to a sale of the property for less than the balance due on the mo
short sale
Which of the following actions will release a surety from his or her obligations?
A material modification of the terms of the original contract without the surety's consent.
Dina asks Edie to co-sign a credit application so that she can borrow money and buy a piano from First Chair, a musical instruments and supplies seller. If, after the loan agreement is signed, Dina agrees to a higher rate of interest without telling Edie,
discharged from the agreement.
Kelly promises Mountain State Bank that she will be responsible for a loan taken out by her niece Dallas such that at the moment the debt is due, Mountain State may demand repayment from Kelly. This is known as:
a suretyship.
Builders Construction Company performs a contract with Christina to add a sun porch to her house, but she does not pay. In most states, Builders Construction could create a lien and place it on Christina's property by filing:
a written notice of lien.
A creditor who has a security interest in the debtor's collateral is a ____________.
secured party
If the debtor and secured party agree, a financing statement can be amended to add or substitute new collateral.
true
Abigail borrows $14,000 from Daniel, using her family jewelry collection as collateral. Daniel properly perfects the security interest. When Abigail defaults on the loan, Daniel demands that she give him the jewelry. Abigail refuses. Daniel:
can ask a court to order her to give him the collection.
Mary has a security interest in a black velvet painting that Paolo owns, so she takes the painting and stores it in her garage. Mary:
has a security interest that is perfected.
Authentication means to:
sign, execute, or adopt any symbol on an electronic record verifying that the person signing has the intent to adopt or accept the record.
To create a security interest, a debtor must have rights in the:
collateral
A financing statement can be amended:
to add or substitute new collateral, but only if the debtor and secured party agree.
The debtor has the right to request a confirmation of the unpaid debt or listing of collateral. The secured party:
must comply with the request by authenticating and sending to the debtor an accounting within fourteen days after the request is received.
Attachment under Article 9 gives the:
creditor an enforceable security interest in the collateral.
When an asset that is not the subject of a loan is used to collateralize the loan, this is:
cross-collateralization.
The document filed by the creditor that gives notice to the public of the secured party's interest in collateral belonging to the debtor is known as the ___________________.
financing statement
As a general rule, when more than one security interest has been perfected on the same collateral, the first to perfect (or file) has priority.
true
Johnson enters into a security agreement with Smith that identifies the collateral as all the debtor's assets. This description of the collateral:
is insufficient under the UCC because it does not reasonably identify the collateral.
Big Furniture Company, Inc. (BC) sold furniture to customers on credit. The customers signed promissory notes. BC sold the promissory notes to Xavier Bank. BC's customers did not pay all the value of the notes and there was a deficiency of $10,000. Which
Xavier Bank cannot collect the deficiency from BC.
The debtor has the right to request a confirmation of the unpaid debt or list of collateral without charge every six months.
true
In January 2014, Money Bank made a $100,000 loan to Best-Dressed, Inc., a company owned by Janice Dress. Money Bank properly perfected its security interest in Best-Dressed's equipment, inventory, and after acquired property. In August 2014, Best-Dressed
money bank
Gabrielle United does business as Best Actresses (BA), although her company's legal (incorporation) name is Actresses United, Inc. Gabrielle borrows $20,000 from All Actor's Group (AAG) and gives AAG a security interest in her one-of-a-kind ballroom dress
Actresses United, Inc. and All Actor's Group
After acquired property is property that is acquired by the debtor:
after executing a security agreement with a particular creditor.
Debit & Credit Financing, Inc., and Equity Lending Company are secured parties with security interests in property owned by Fleet Shipping Corporation. Priority between these security interests is generally determined by:
the time of perfection or attachment.
If a secured party fails to file or send a termination statement as requested by the debtor, the debtor cannot recover any additional loss suffered.
false
In order for a security interest to attach, the secured party must give value. Which of the following is considered value for these purposes?
Direct loan to the debtor
For a security interest to attach, the security agreement must be written or authenticated. Which of the following best describes what it means for the debtor to authenticate the agreement?
The debtor must sign, or adopt any symbol on an electronic record to verify that the person signing has the intent to adopt or accept the records.
Sammy loaned Andrea $500 and wishes to perfect a security interest in Andrea's computer and printer. Which of the following actions by Sammy will result in a perfected security interest in Andrea's computer and printer?
Sammy takes possession of the computer and printer.
The payment of Olinda's debt to Pari is guaranteed by Olinda's personal property. Pari is most likely to perfect her interest by:
filing a financing statement with the appropriate authority.
Daisy operates a retail store. She sells personal electronics such as cell phones, tablets and their accessories. Some customers pay by cash and some by debit or credit card. Daisy purchases her inventory from Electronics Sellers, Inc., which sells the in
ensure that the original security agreement between Electronics and Daisy automatically extended the perfection period for any proceeds.
Daisy operates a retail store. She sells personal electronics such as cell phones, tablets and their accessories. Customers purchase the personal electronics and Daisy's inventory is therefore constantly changing. Daisy financed her business through Good
An after acquired property clause
For a creditor to have an enforceable security interest, the debtor must have rights in the collateral.
true
Daisy operates a retail store. She sells personal electronics such as cell phones, tablets and their accessories. Daisy purchases her equipment from Electronic Manufacturing, which sells the equipment to Daisy on credit. Electronic properly perfects a sec
electronic
A security agreement need not be in writing if the collateral is transferred to the secured party.
true
This is a type of creditor who can have a security interest in the debtor's personal property or fixtures.
Buyer of accounts or chattel paper
On May 1, 2015, Carl loaned money to Mark. To secure the loan, Carl took possession of Mark's rare guitar. On June 1, 2015, Jonathan loaned money to Mark and took a security interest in the same rare guitar Carl had as collateral. Jonathan properly filed
carl
When the collateral is other than consumer goods, then on an authenticated demand by the debtor, the secured party must either send a termination statement to the debtor or file such a statement within:
twenty days.
Thelma Jones and Louise Smith operated their business informally under a trade name "Women of Great Power (WOGP)." Their group borrowed money from Bankers Bank to purchase a set of costumes. The group performed plays at various schools throughout the area
Thelma Jones and Louise Smith
A secured party can obtain a security interest only on property which is in the present possession or control of the debtor.
false
In January 2014, Money Bank made a $100,000 loan to Best-Dressed, Inc., a company owned by Janice Dress. Money Bank properly perfected its security interest in Best-Dressed's equipment, inventory and after acquired property by filing a financing statement
Best Dressed is entitled to such an accounting free of charge every six months.
A debtor makes a security agreement to:
create a security interest
A floating lien is a security interest in which of the following?
Proceeds
b.After acquired property
c.Collateral subject to future advances
d.All of these choices** this is correct
In January 2014, Money Bank made a $100,000 loan to Best Dressed, Inc., a company owned by Janice Dress. Money Bank properly perfected its security interest in Best-Dressed's equipment, inventory, and after acquired property. In August 2014, Best-Dressed
money bank
Angela borrowed $2000 from Everyday-Payday Co. Everyday-Payday Co. took a security interest in Angela's car. Angela's car is the __________ for the loan from Everyday-Payday.
collateral
Khalil holds a security interest in inventory owned by Luc. Khalil protects his claim to the inventory in the event of Luc's default by:
perfection
Owen borrows money from Pat. Owen pledges his keyboard as collateral for the loan. Owen fails to pay the debt on time. If Pat wants to sell the collateral to pay the debt, Pat must notify Owen in writing prior to the sale or disposition of the collateral.
true
Big Furniture Company, Inc. (BC) manufactures and sells office furniture. BC borrowed money from Third Bank and Third Bank took a security interest in the inventory and after acquired property. BC defaulted on the loan and Third Bank needs to collect its
Give written notice to BC of intent to sell the collateral and sell the collateral in a commercially reasonable manner.
Both the financing statement and the security agreement must describe the collateral which is subject to the security interest. Which of the follow is true about the description?
The description in the security agreement must be specific. The description in the financing statement may be general.
A security agreement and a security interest are identical under Article 9.
false
Ahmed operates Electronics 4 All, Inc., a retail store where he sells computers and computer equipment. He purchases pre-made computers and also purchases computer components which he then assembles into computers to sell. First Bank attached and properly
first bank
Big Furniture Company, Inc. (BC) sold furniture to customers on credit. The customers signed promissory notes. BC sold the promissory notes to Xavier Bank. How will the proceeds from the sale of this collateral be distributed?
First, Xavier will be reimbursed the reasonable expenses incurred by repossessing, storing and reselling the collateral.
Jose borrowed $5000 from Circle Finance. Circle Finance took Jose's jewelry collection as collateral. If Circle Finance filed an instrument to give public notice to third parties of its interest in Jose's jewelry collection, that would be known as a:
financing statement
Owen borrows money from Pat. Owen fails to pay the debt on time. This is known as a:
default
Adam Mith and Kenneth Galbrit have security interests in the same collateral owned by John Debtor. Mith's security interest attached in March 2014. Galbrit's security interest attached and was properly perfected in April 2014. Who would be entitled to the
Kenneth Gilbert
An amendment to a financing statement:
does not extend the time period of perfection.
If the secured party perfected its security interest in the collateral by filing, the debtor is entitled to have a termination statement filed:
when the debtor has fully paid the debt.
In January 2014, Money Bank made a $100,000 loan to Best-Dressed, Inc., a company owned by Janice Dress. Money Bank properly perfected its security interest in Best-Dressed's equipment, inventory and after acquired property. In August 2014, Best-Dressed a
Contact the appropriate government filing office to find out whether other creditors have security interests in Best-Dressed's equipment.
Mandy operates Custom Furniture, Inc., a retail store where she sells custom-made furniture. First Bank loans money to Custom Furniture to finance its operation. After Custom Furniture signed the security agreement with First Bank, the company purchased a
floating lien
A perfected security interest holder gets priority over the interests of most other parties for the collateral (or the proceeds from the sale of that collateral) even in a bankruptcy.
true
A creditor's repossession can be peaceful if the secured party took the collateral without trespassing on the land, without assaulting and/or battering, and without breaking and entering.
true
Personal property and fixtures are a type of collateral that a debtor can use to create a _________________ with a creditor for money borrowed.
security interest
Delta Finance Company obtains a judgment against Evan for a debt and wishes the sheriff to seize and sell Evan's property. Delta must return to the court that issued the judgment and obtain a writ of:
execution
A ____________ owes payment or other performance of a secured obligation to another.
debtor
First State Bank holds a properly perfected security interest on certain items of Gigi's personal property. Gigi defaults on the debt. The bank sells the personal property. If the proceeds of the assets' sale are insufficient to pay the costs of the sale
obtain a deficiency judgment against Gigi.
Under UCC in some instances, a properly perfected purchase-money security interest will prevail over another security interest in after-acquired collateral, even though the other was perfected first.
true
A floating lien is a lien on a ship or other maritime goods.
false
In order to create a security interest, the secured party must give something of value to the debtor.
true
A security agreement under Article 9:
a.must be in writing in order for a secured party to create a security interest.
b.may be oral if the secured party has possession of the collateral.
c.must be signed or authenticated by the debtor.
d.provides notice
may be oral if the secured party has possession of the collateral.
A financing statement can be amended to add or substitute new collateral without approval from the secured party.
false
Which of the following is not a requirement for a secured party to have an enforceable security interest in the debtor's collateral?
The debtor must sign and file the financing statement which reasonably describes the collateral.
In January 2014, Money Bank made a $100,000 loan to Best-Dressed, Inc., a company owned by Janice Dress. Money Bank properly perfected its security interest in Best-Dressed's equipment, inventory and after acquired property by filing a financing statement
The secured party must file a termination statement if the debtor requests one.
Mandy operates Custom Furniture, Inc., a retail store where she sells custom-made furniture. First Bank attached and properly perfected a security interest in the inventory, after-acquired inventory and proceeds of the company. After Custom Furniture sign
first bank
The contract between the secured party and the debtor that creates or provides for a security interest between the debtor and the secured party is known as the __________________.
security agreement
Jose borrowed $5000 from Circle Finance. Circle Finance took Jose's jewelry collection as collateral. The contract Jose signed to pledge his jewelry collection as collateral is known as a _________.
security agreement
If a debtor's name changes, the financing statement remains effective for collateral the debtor acquired before or within:
four months after the name change.
Xiong borrowed $3000 from Finance, Inc. Finance, Inc., took Xiong's coin collection as collateral. Xiong failed to pay the debt until two days after it was due. This failure to pay is known as a _________________.
default
In which of the following scenarios would Julia be a buyer in the ordinary course of business whose purchase would be free and clear of the business debtor's perfected security interest?
Julia purchases a dress from a retail store that sells clothing.
In most states, a financing statement must be filed centrally in the appropriate:
state office in the state where the debtor is located.
A cosigner cannot be a secured party in an Article 9 transaction.
false
Margo buys a refrigerator from the Appliance Depot. She makes a down payment, and she and the store create a purchase-money security interest (PMSI) in the refrigerator so that she can pay it off over time. For Appliance Depot to have the PMSI perfected,
do nothing, as PMSIs are automatically perfected.
The __________________ is the interest in personal property or fixtures that secures payment or performance of an obligation.
security interest
A security interest is enforceable only if the collateral is in the creditor's possession.
false
Attachment gives the debtor a defense against a creditor's attempt to enforce a security interest in the debtor's collateral.
false
In order to give notice to third parties of a security interest, the creditor can do all except which of the following?
File a security agreement as a financing statement.
If a secured party fails to file or send a termination statement as requested by the debtor, the debtor can recover:
$500 plus any additional loss suffered.
An important exception to the first-in-time rule involves:
certain types of collateral, such as equipment, that is not inventory or livestock and in which one of the secured parties has a perfected purchase-money security interest.
Ahmed owns a retail store where he sells computers. Second Bank finances Ahmed's inventory through a properly perfected security interest in Ahmed's current inventory and after acquired property. Jane purchased a computer from Ahmed's retail store. If Ahm
false
When a debtor redeems collateral, the secured party is responsible for expenses reasonably incurred while retaking and maintaining the collateral.
false
On May 1, 2015, Carl loaned money to Mark. To secure the loan, Carl asked Mark to sign a written security agreement listing Mark's rare guitar as collateral. On June 1, 2015, Jonathan loaned money to Mark and asked Mark to sign a written security agreemen
carl
Dawn operates a toy store. The store's inventory is constantly being sold and replaced with new inventory. If Bankers Co. extends credit to Dawn to purchase inventory, Bankers Co. cannot obtain an enforceable security interest over any portion of Dawn's i
false
In the context of secured transactions, attachment:
gives the creditor an enforceable security interest in the collateral.
If a secured party fails to file or send a termination statement as requested by the debtor, the debtor can recover $500 plus any additional loss suffered.
true
Thomas and Laurel have a security interest with Griffin's baseball card collection as collateral. When Griffin defaults on the loan, Thomas and Laurel take possession of the collection (peacefully) and sell it. In order to sell it for fair market value, t
can keep $18,000 plus the cost of selling the collection and must give the surplus to Griffin.
Property which can be collateral for a secured transaction includes:
property in which the debtor currently has title.
b.property in which the debtor has a future ownership interest.
c.proceeds from the sale of collateral.
d.all of these choices.*** this is right
Lenders Bank files a financing statement regarding a transaction with Metro Construction Company. To be valid, the financing statement must contain all of the following except:
a statement of the purpose for the transaction.
Authentication means to sign, execute, or adopt any symbol on an electronic record that verifies that the person signing has the intent to adopt or accept the record.
true
Under the Uniform Commercial Code, some types of security interests are perfected automatically at the time they are created. The most common of these is the:
purchase-money security interest.
A secured party can release all or part of any collateral described in the financing statement, thereby:
terminating its security interest in that collateral.
First State Bank holds a properly perfected security interest on certain items of Gigi's personal property. Gigi defaults on the debt. First State Bank can do which of the following?
Take peaceful possession of the collateral without use of the judicial process.
The financing statement, which must be filed under the name of the debtor, is usually considered misleading if there is even a slight variation in the debtor's name.
false
If a secured party receives non-cash proceeds from the disposition of collateral after default, the secured party must reject those non-cash proceeds.
false
Article 9 defines default so that what constitutes default is always clear.
false
Ahmed operates Electronics 4 All, Inc., a retail store where he sells computers and computer equipment. He purchases pre-made computers and also purchases computer components which he then assembles into computers to sell. Ahmed borrows money from First B
First Bank has a perfected security interest in all inventory that Ahmed has in the store until the loan is paid.
Big Furniture Company, Inc. (BC) manufactures and sells office furniture. BC borrowed money from Third Bank and Third Bank took a security interest in the inventory and after acquired property. BC defaulted on the loan. Third Bank has properly taken posse
The sale must be at a commercially reasonable time.
b.The sale must be at a commercially reasonable place.
c.The sale must be in a commercially reasonable manner.
d.All of these *** choices. this is right
A security interest in collateral can be terminated by:
the secured party by releasing all of the collateral.
b.the secured party by releasing part of the collateral.
c.the secured party by assigning all or part of the collateral to a third party.
d.All of these choices.
On May 1, Ace Credit Company loans Bob $10,000 and properly perfects a security interest in the home entertainment center that Bob buys with the money. Bob files for bankruptcy on May 12. With respect to this debt, Bob must file a statement of intention t
c.intends to redeem the collateral, reaffirm the debt, or surrender the goods.
Special requirements exist when consumer-debtors file bankruptcy.
true
In bankruptcy proceedings, all of the debtor's interests in property currently held, wherever located, together with certain jointly owned property, property transferred in transactions voidable by the trustee, proceeds and profits from the property of th
estate in bankruptcy
The Bankruptcy Code's Chapter 12 is intended to aid charitable institutions.
false
John Patrick Goulding filed for Chapter 7 bankruptcy relief. In his schedules, he listed assets of $62,000 and debts of over $670,000. Two banks were the largest creditors. The banks and the trustee learned that Goulding would receive payments of $12,000
$272,000, the total amount he would receive as a property settlement and an inheritance within 180 days (six months) after filing.
Micro Corporation's creditors agree to a workout with the firm. This is:
a privately negotiated adjustment of creditor-debtor relations.
The chapter of the Bankruptcy Code that provides for the "Adjustment of Debts of an Individual with Regular Income" is:
ch 13
Which statement about discharge under Chapter 13 is correct?
A debtor cannot use a Chapter 13 bankruptcy to eliminate debts arising from injury or property damage caused while driving under the influence of alcohol or drugs.
A Chapter 7 bankruptcy proceeding is commenced by the:
filing of a petition in bankruptcy.
A debtor must be insolvent to file a petition for bankruptcy.
false
Filing a plan under Chapter 13 can be less expensive and less complicated than filing under Chapter 7 or Chapter 11.
true
Quinn borrows $3,000 in the form of unsecured cash advances on a Reliable Corporation credit card. Quinn later borrows $5,000 from Stable Loan Company, which properly perfects its security interest in the camping trailer Quinn buys with the $5,000. When Q
Stable has priority to payment.
Smith operates an accounting services firm. The firm lost its primary long-term client and must file a Chapter 11 to reorganize its debts. Smith's business liabilities are less than $1 million and Smith does not own real estate. Smith can be a debtor in p
true
Before filing a petition in bankruptcy, a consumer-debtor must attend a consumer education course.
true
The sale of all of the nonexempt assets of a debtor and the distribution of the proceeds to the debtor's creditors is known as:
liquidation
Fred Currey purchased cattle from Itano Farms, Inc. As payment, Currey gave Itano Farms worthless checks totaling $50,250. Currey was later criminally convicted for passing bad checks and ordered to pay Itano Farms restitution of $50,250. Four months late
preferences, because Itano was a creditor and the payments were made within ninety days prior to the date of filing.
One of the advantages of Chapter 13 repayment plans is that:
they are less expensive and less complicated than reorganization proceedings or liquidation proceedings.
A Chapter 11 plan is binding on confirmation and the debtor is discharged.
false
All tax debts are discharged under Chapter 13.
false
Andrea Law Firm (ALF) had spent hundreds of thousands in upfront expenses on a potential class action suit which was ultimately denied by a court. It could no longer pay those and other debts that combined totaled $2 million. ALF neither owned nor managed
a court may confirm it even if only one class of creditors have accepted it if the plan is fair and equitable.
Andrea Law Firm (ALF) had spent hundreds of thousands in upfront expenses on a potential class action suit which was ultimately denied by a court. It could no longer pay those and other debts that combined totaled $2 million. ALF neither owned nor managed
As a debtor in possession, ALF can choose whether to cancel or assume unexpired leases.
Natural Resources, Inc. (NRI), files for bankruptcy under Chapter 11 and assumes the role of a debtor in possession. In this role, NRI is similar to a:
trustee in a liquidation proceeding under Chapter 7.
Cindy Consumer, an individual, needs to file for relief under the federal bankruptcy code. If she is a consumer-debtor, what additional obligations does the Bankruptcy court clerk have?
To give Cindy information on the types of services available from credit counseling agencies
Chapter 12 of the Bankruptcy Code is aimed at helping which group?
family farmers
A debtor who conceals property with intent to defraud a creditor may be denied a discharge.
true
A Chapter 13 plan can be initiated only by creditors filing an involuntary petition.
false
Samuel has fallen seriously behind in his debts, including his child-support payments due Rebecca, his former wife, for their son, Nathan. If Samuel files for Chapter 7 bankruptcy, his debt for the support of Nathan:
will not be discharged due to laws governing exceptions to discharge.
Cindy Consumer, an individual, needs to file for relief under the federal bankruptcy code. She earns a regular income and would like to set up a plan to repay her debts. Under which of the following chapters should she file?
ch 13
Jack files a bankruptcy petition under Chapter 7. Among his debts are support owed to his ex-wife Kayla, overdue state income taxes, unpaid local traffic fines, and amounts representing student loans owed to Loyal University. The debts most likely to be d
student loans
In Chapter 11 bankruptcy, a reorganization plan is established to conserve and administer the debtor's assets in the hope that the business can eventually:
a.return to successful operation and solvency.
Which of the following are purposes of the bankruptcy laws?
Both of these choices.
Cindy Consumer, an individual, needs to file for relief under the federal bankruptcy code. She would like to start over, pay off what debts she can, and discharge the remaining debts. Under which of the following chapters should she file?
ch 7
In the Bankruptcy Code, the chapter that provides for liquidation proceedings is:
ch 7
Fran Farmer has $250,000 in farm debt. To be considered a family farmer for purposes of Chapter 12 bankruptcy, what percentage must $250,000 be of her overall debt?
Fran's liabilities must be a minimum of 50 percent farm related.
A Chapter 11 reorganization can only be started by filing a voluntary petition.
false
Sanderson is considering filing a Chapter 13 bankruptcy petition. Which statement about Chapter 13 is correct?
Sanderson's plan will last three or five years, depending on his income.
Cody is the sole proprietor of Diners Cafe, which owes debts in an amount more than Cody believes he and Diners can repay. The creditors agree that liquidating the business would not be in their best interests. To stay in business, Cody could file for ban
ch 11 or 13
On July 1, Edward filed for bankruptcy under Chapter 7. His petition listed various debts, including an unpaid domestic support obligation owed to Fran and a debt with lower priority owed to Gwen. Edward's estate does not have enough assets to pay all pri
Fran has priority to payment.
A provision of the Bankruptcy Code that allows a court to confirm a debtor's Chapter 11 reorganization plan, even though only one class of creditors has accepted it, is called a:
cram-down provision
In some instances, creditors may prefer a workout to bankruptcy proceedings because a workout can be:
faster.
b.more flexible.
c.less costly.
d.All of these choices.** this is right answer
Chapters 1, 3 and 5 of the Bankruptcy Code apply only to liquidations under Chapter 7.
false
James Bland filed a Chapter 13 to pay individual unsecured debts of $150,000. His plan of rehabilitation by repayment must provide for:
the turning over to the trustee of such future earnings or income of the debtor as is necessary for execution of the plan.
b.full payment through deferred cash payments of all claims entitled to priority.
c.identical treatment of all claims within a parti
In Chapter 11 bankruptcy proceedings, a debtor who is allowed to continue in possession of the business and to continue business operations is a:
debtor in possession
Andrea Law Firm (ALF) had spent hundreds of thousands in upfront expenses on a potential class action suit which was ultimately denied by a court. It could no longer pay those and other debts that, combined, totaled $2 million. ALF neither owned nor manag
designation of classes of claims and interests
b.specification of treatment to be afforded the classes
c.plan for payment of tax claims over a five-year period
d.all of these choices** this is right answer
Fannie Farmer, a farmer, needs to file for relief under the federal bankruptcy code. Under which of the following chapters would she file?
ch 12
John had filed for Chapter 7 bankruptcy after transferring a vacation home he owned to his brother, so that he would not have to list it as an asset in the bankruptcy proceeding, with the understanding that after the bankruptcy was completed, his brother
an objection to discharge.
A corporate debtor must be "out of business" before it can file a bankruptcy petition for reorganization under Chapter 11.
false
Jason owns a small business that manufactures widgets. The business is in financial distress. Jason believes the operation ultimately can succeed, but certain restructuring is required. Which statement below is correct?
A restructuring of Jason's business under Chapter 13 is likely to be less expensive and more flexible than a reorganization under Chapter 11.
Chapter 13 of the Bankruptcy Code may be used by:
individuals
If a creditor willfully violates an automatic stay in a bankruptcy proceeding, an injured party is entitled to damages.
true
An agreement between a debtor and a creditor in which the debtor voluntarily agrees to pay a debt dischargeable in bankruptcy is called a:
reaffirmation agreement.
Bankruptcy proceedings are held:
in federal bankruptcy courts.
In the Bankruptcy Code, the chapter that provides for corporate reorganization proceedings is:
ch 11
Bankruptcy law has one goal�to encourage the continued use of credit.
false
Which of the following is an accurate statement about the source of bankruptcy law?
Bankruptcy relief is provided under federal law. State laws on property also affect the bankruptcy law.
What are the two goals of bankruptcy law in the United States?
To give debtors a fresh start and to provide equitable treatment to creditors competing for debtor assets
Normally, in order to receive a portion of a debtor's estate, what must each creditor file?
a proof of claim
Bond Corporation, a corporation with debts and liabilities in excess of $5 million, filed a Chapter 11 reorganization plan in order to continue in operation. As part of developing and administering the plan,
the creditors' committee may consult with the trustee or debtor concerning administration of the case.
b.additional committees may be appointed to represent special interest creditors.
c.the creditors' committee must either consent to orders affecting the
The type of bankruptcy proceeding used most commonly by corporations is a reorganization under:
ch 11