Acct-340
B. purchase money
A creditor who extends credit to a consumer to purchase a consumer good under a written security agreement obtains a(n) _____ security interest in the consumer good. A. constructive B. purchase money C. symbolic D. incidental E. equitable
A. secured; unsecured
A creditor who has the only _____ interest in the debtor's collateral has priority over _____ interests. A. secured; unsecured B. conditional; unconditional C. constructive; symbolic D. equitable; contractual E. unsecured; secured
C. 180
A debtor must receive prepetition credit counseling within _____ days prior to filing his or her petition for bankruptcy. A. 30 B. 90 C. 180 D. 60 E. 120
D. three-party; buyer-debtor; lender-secured
A farmer purchases equipment from a manufacturer. The farmer obtains a loan to purchase the equipment from a bank, which obtains a security interest in the equipment. The equipment manufacturer is paid for the equipment out of the proceeds of the loan. This is a __________ secured transaction. The manufacturer is the seller, the farmer is the __________, and the bank is the ___________ creditor. A. two-party; buyer-debtor; seller-lender-secured B. two-party; buyer-debtor; seller-lender-unsecured C. two-party; seller-lender; buyer-debtor-secured D. three-party; buyer-debtor; lender-secured E. three-party; seller-lender; buyer-debtor-secured
D. two-party; buyer-debtor; seller-lender-secured
A farmer purchases equipment on credit from a farm equipment dealer. The dealer retains a security interest in the farm equipment that becomes collateral for the loan. This is a _________ secured transaction. The farmer is the __________ and the farm equipment dealer is the _________ creditor. A. two-party; seller-lender; buyer-debtor-secured B. three-party; buyer-debtor; lender-secured C. three-party; seller-lender; buyer-debtor-secured D. two-party; buyer-debtor; seller-lender-secured E. two-party; buyer-debtor; seller-lender-unsecured
E. secured; personal
A financing statement is a document filed by a(n) _____ creditor with the appropriate government office that constructively notifies the world of his or her security interest in _____ property. A. unsecured; personal B. secured; real C. unsecured; real D. non-commercial; real E. secured; personal
D. execution; seize the debtor's property
A writ of _________ is a court order directing a sheriff or other government officials to _________ that is in the debtor's possession and authorizes a judicial sale of that property. A. attachment; post a bond with the court B. attachment; seize the debtor's property C. execution; post a bond with the court D. execution; seize the debtor's property E. garnishment; seize the debtor's property
C. deficiency; secured
A(n) _____ judgment is a judgment of a court that permits a(n) _____ lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan. A. summary; non-commercial B. default; unsecured C. deficiency; secured D. declaratory; commercial E. executory; secured
E. artisan's; statutory
A(n) _____ lien is a _____ lien given to workers on personal property to which the workers furnish services or materials in the ordinary course of business. A. common law; statutory B. artisan's; common law C. statutory; common law D. artisan's; precedential E. artisan's; statutory
A. tangible personal
All things that are movable when a security interest attaches are called _____ property. A. tangible personal B. tangible real C. intangible intellectual D. intangible personal E. intangible real
E. intangible personal
All things that are nonphysical property when a security attaches are called _____ property. A. tangible personal B. intangible real C. tangible intellectual D. tangible personal E. intangible personal
C. CFPB; FTC
Although the automobile industry is exempt from _____ supervision, it is subject to oversight by the _____. A. CPSC; CFPB B. CPSC; EPA C. CFPB; FTC D. FTC; CFPB E. EPA; CPSC
D. secured; personal
Article 9 of the Uniform Commercial Code (UCC) governs _____ transactions in _____ property. A. unsecured; real B. unsecured; intangible C. secured; real D. secured; personal E. secured; intangible
B. 9; Commercial
Article _____ of the Uniform _____ Code governs secured transactions where personal property is used as collateral for a loan or the extension of credit. A. 2; Commercial B. 9; Commercial C. 3; Contracts D. 9; Contracts E. 3; Commercial
E. I; 8
Article _____, Section _____, Clause 4 of the U.S. Constitution states, "The Congress shall have the power...to establish...uniform laws on the subject of bankruptcies throughout the United States." A. I; 5 B. II; 8 C. III; 8 D. II; 5 E. I; 8
A. pay the debtor $25,150, pay off the mortgage; $6,850
Assume that a debtor owns a principal residence worth $100,000 that is subject to a $70,000 mortgage and the debtor therefore owns $30,000 of equity in the property. The debtor files a petition for Chapter 7 liquidation bankruptcy. The trustee may sell the home, _________, (applying the federal exemption), and use the remaining proceeds of ___________ for distribution to the debtor's creditors. A. pay the debtor $25,150, pay off the mortgage; $6,850 B. pay off the mortgage, pay the debtor $23,675; $6,325 C. pay off the mortgage, pay the debtor $0; $30,000 D. pay off the mortgage, pay the debtor $6,325; $23,675 E. pay off the unsecured creditors, pay the debtor $23,675; $6,325
C. reaffirmation
A _____ agreement is an agreement entered into by a debtor with a creditor prior to discharge whereby the debtor agrees to pay the creditor a debt that would otherwise be discharged in bankruptcy. A. reclamation B. rehabilitation C. reaffirmation D. restitution E. revocation
B. deficiency
A _____ judgment permits a secured lender to recover other property or income from a defaulting debtor if the collateral is insufficient to repay the unpaid loan. A. proffer of judgment B. deficiency C. declaratory D. preliminary E. summary
D. termination; the debt has been paid
A _____ statement is a document filed by a secured party that ends a secured interest because _____. A. reconveyance; of commercial impracticability B. reconveyance; the debt has been paid C. termination; of frustration of purpose D. termination; the debt has been paid E. termination; of commercial impracticability
B. two-party secured
A _____ transaction occurs when a seller sells goods to a buyer on credit and retains a security interest in the goods. A. two-party unsecured B. two-party secured C. three-party secured D. multi-party; unsecured E. three-party unsecured
A. three-party secured
A _____ transaction occurs when a seller sells goods to a buyer who has obtained financing from a third-party lender who takes a security interest in the goods sold. A. three-party secured B. two-party mortgage C. three-party unsecured D. two-party unsecured E. two-party secured
A. Collateral
Because lenders are sometimes reluctant to lend large sums of money simply on the borrower's promise to repay, many lenders take a security interest in the property purchased or some other property of the debtor. _____ secures payment of a secured loan. A. Collateral B. An ethical obligation C. A contract obligation D. A promise E. Income
A. liquidation
Chapter 7 bankruptcy is also called _____ bankruptcy. A. liquidation B. non-liquidation C. rescheduling D. debtor-in-possession E. reaffirmation
E. 11; reorganization
Chapter _____ is a bankruptcy method that allows the _____ of the debtor's financial affairs under the supervision of the bankruptcy court. A. 11; liquidation B. 7; reorganization C. 7; restructuring D. 13; liquidation E. 11; reorganization
E. 13; rehabilitation
Chapter _____ is a _____ form of bankruptcy that permits bankruptcy courts to supervise the debtor's plan for the payment of unpaid debts in installments over the plan period. A. 11; liquidation B. 7; rehabilitation C. 13; liquidation D. 7; liquidation E. 13; rehabilitation
A. First Bank cannot recover the car from Kim because she is a purchaser in the ordinary course of business
Cougar Car Sales, Inc. (Cougar), a new car dealership, finances all its inventory of new automobiles at First Bank. First Bank takes a security interest in Cougar's inventory of cars and perfects this security interest. Kim, a buyer in the ordinary course of business, purchases a car from Cougar for cash. If Cougar defaults on its payments to the bank, _______. A. First Bank cannot recover the car from Kim because she is a purchaser in the ordinary course of business B. Cougar can recover the car from Kim because she is a purchaser in the ordinary course of business C. Cougar can avoid the payments to First Bank because it no longer has the car D. First Bank can recover the car from Kim because she is a purchaser in the ordinary course of business E. First Bank cannot recover the car from Kim because she has a perfected security interest in the car
E. UCC-1
Form _____ is a uniform financing statement form that is used in all states. A. FTC-1 B. CFPB-1 C. NYSE-2 D. SEC-1 E. UCC-1
A. nonexempt
If a debtor qualifies for a Chapter 7 bankruptcy, the _________ property of the bankruptcy estate must be distributed to the debtor's secured and unsecured creditors pursuant to statutory priority established by the Bankruptcy code. A. nonexempt B. exempt C. voidable D. executed E. executory
B. judgment proof
If the debtor is _____, he or she has little or no property or income that can be garnished to pay the debt. A. secured B. judgment proof C. unsecured D. a corporation E. a sole proprietorship
B. attach
If two or more secured parties claim an interest in the same collateral but neither has a perfected claim, the first to _____ has priority. A. litigate B. attach C. arbitrate D. mediate E. detach
D. perfected
If two or more secured parties claim an interest in the same collateral but only one has perfected his or her security interest, the _____ interest has priority. A. constructive B. unperfected C. symbolic D. perfected E. equitable
C. perfect
If two or more secured parties have perfected security interests in the same collateral, the first to _____ has priority. A. litigate B. arbitrate C. perfect D. detach E. remunerate
E. surety; guaranty
In a _____ arrangement, a third party promises to be primarily liable with the borrower for the payment of the borrower's debt, while in a _____ arrangement, a third party promises to be secondarily liable for the payment of another's debt. A. mortgage; deed of trust B. guaranty; surety C. subrogation; cosigner D. deed of trust; mortgage E. surety; guaranty
E. the bank can claim any available original inventory as well as enough after-acquired inventory to satisfy its secured claim
Maya Corporation borrows $100,000 from First Bank and gives the bank a security interest in both its current and after-acquired inventory. If Maya Corporation defaults on its loan to First Bank, _______. A. the bank may only claim after-acquired inventory if it was acquired prior to the filing of a UCC-1 B. the bank may only claim the after acquired inventory C. the bank may only claim after-acquired inventory if it was acquired prior to the signing of the security agreement D. the bank may only claim the original inventory E. the bank can claim any available original inventory as well as enough after-acquired inventory to satisfy its secured claim
B. secured; physical
Perfection by possession of collateral is a rule stating that if a(n) _____ creditor has _____ possession of the collateral, no financing statement has to be filed. A. secured; future B. secured; physical C. unsecured; physical D. unsecured; constructive E. unsecured; symbolic
D. tangible; intangible
Personal property includes _____ property such as equipment, vehicles, furniture, and jewelry, as well as _____ property such as securities, patents, trademarks, and copyrights. A. intangible; tangible B. tangible; real C. intangible; physical D. tangible; intangible E. real; physical
D. sale; foreclosure
Power of _____ is a power stated in a mortgage or deed of trust that permits _____ without court proceedings and sale of the property through auction. A. attorney; reclamation B. attorney; reconveyance C. sale; execution D. sale; foreclosure E. sale; remuneration
A. can recover the $100,000 deficiency from Raymond's other property.
Raymond buys a house for $800,000. He puts $200,000 down and borrows $600,000 from a bank, which takes a mortgage on the property to secure the loan. Raymond defaults, and when the bank forecloses on the property, it is worth only $500,000. There is a deficiency of $100,000 ($600,000 loan ? $500,000 foreclosure sale price). The bank _____. A. can recover the $100,000 deficiency from Raymond's other property. B. can recover $600,000 from Raymond's other property C. can exercise its right of redemption D. can exercise its power of sale E. cannot recover the amount lost
E. security interest; collateral; repossess the automobile
Sarah purchases an automobile from a car dealership. She borrows part of the purchase price from a lender. The lender requires Sarah to give it a _____ in the automobile to secure the loan. This is a secured credit transaction with the automobile being _____ for the loan. If Sarah defaults and fails to make the required payments, the lender can _____. A. mortgage; collateral; repossess the automobile B. mortgage; collateral; enter a deficiency judgment C. right of redemption; protection; foreclose on the property D. right of redemption; protection; repossess the automobile E. security interest; collateral; repossess the automobile
A. may file for a writ of attachment
Tamara sues Jerry for fraud. Tamara lost a large sum of money to Jerry when she invested in what she alleges was a fraudulent investment scheme. If Tamara is afraid that Jerry will dispose of property prior to the resolution of the lawsuit she has filed, in order to attempt to avoid paying her the funds he owes to her, she _______. A. may file for a writ of attachment B. may file for a writ of execution C. must enter into a surety arrangement D. may file for a writ of garnishment E. must enter into a guaranty arrangement
E. two years
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 gives the bankruptcy court the power to void certain fraudulent transfers of a debtor's property made by the debtor within _____ prior to filing a petition for bankruptcy. A. thirty days B. six months C. sixty days D. one year E. two years
certification; perjury
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires an attorney _____ whereby an attorney who represents a client in bankruptcy must certify the accuracy of the information contained in the bankruptcy petition and the schedules, under penalty of _____. A. addendum; conspiracy B. certification; perjury C. certification; conspiracy D. warranty; conspiracy E. addendum; perjury
C. 7; 13; financial management
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires that before an individual debtor receives a discharge in a Chapter _____ or Chapter _____ bankruptcy, the debtor must attend a personal _____ course approved by the U.S. Trustee. A. 11; 13; financial management B. 7; 11; financial management C. 7; 13; financial management D. 7; 13; responsibility E. 7; 11; responsibility
D. disposable
The Chapter 7 means test is a calculation that establishes a bright-line test to determine whether the debtor has sufficient _____ income to pay pre-petition debts out of post-petition income. A. gross B. taxable C. average D. disposable E. median
C. on the commencement of a bankruptcy case
The bankruptcy estate is created _____. A. at the second meeting of creditors B. with the execution of a reclamation agreement C. on the commencement of a bankruptcy case D. at the first meeting of creditors E. with the execution of a reaffirmation agreement
A. 3 years
The federal exemptions established in the Bankruptcy Code are adjusted every _______ to reflect changes in the consumer price index A. 3 years B. 6 months C. 1 year D. 10 years E. 3 months
C. median
The first step in determining whether a debtor qualifies for Chapter 7 relief is to apply the _____ income test. A. average B. poverty C. median D. mode E. mean
B. redemption; default; foreclosure
The right of _____ allows the mortgagor to redeem real property after _____ and before _____. A. ademption; foreclosure; default B. redemption; default; foreclosure C. reconveyance; default; foreclosure D. redemption; foreclosure; default E. reconveyance; default; foreclosure
A. Mortgage; Predatory
The _____ Reform and Anti-_____ Lending Act is designed to eliminate many abusive loan practices and mandates new duties and disclosure requirements for mortgage lenders. A. Mortgage; Predatory B. Tort; Mortgage C. Tort; Predatory D. Mortgage; Tort E. Consumer; Commercial
B. Dodd-Frank; disclosure
Title X of the _____ Act, which is titled the Consumer Financial Protection Act of 2010, is designed to increase relevant _____ regarding consumer financial products and services. A. Smoot-Hawley; security B. Dodd-Frank; disclosure C. Taft-Hartley; market share D. Gramm-Rudman; market share E. Gramm-Rudman; collateral
A. collateral
Unsecured credit does not require any _____ to protect the payment of the debt. A. collateral B. contract C. consideration D. promise E. moral obligation
E. filing a proof of claim
Upon the filing of a voluntary or an involuntary petition, all EXCEPT which of the following creditor actions are stayed? A. enforcing judgments obtained against the debtor B. obtaining, perfecting, or enforcing liens against the property of the debtor C. instituting or maintaining legal actions to collect prepetition debts D. non-judicial collection efforts, such as self-help activities E. filing a proof of claim
C. between 8:00 AM and 9:00 PM
When can a debt collector contact a debtor? A. after 9:00 PM B. prior to 8:00 AM C. between 8:00 AM and 9:00 PM D. at church, mosque, or synagogue E. when the debtor is represented by an attorney
D. up to $150,000 in equity in property used as a primary residence
Which of the following is NOT a federal exemption recognized by the Bankruptcy Code? A. up to $25,150 in equity in a burial plot B. any unmatured life insurance policy owned by the debtor C. personal injury awards up to $25,150 D. up to $150,000 in equity in property used as a primary residence E. up to $4,000 in value in one motor vehicle
B. post-petition counseling
Which of the following is NOT a required procedure for filing a voluntary bankruptcy petition? A. attorney certification B. post-petition counseling C. pre-petition counseling D. a statement of the debtor's monthly income; current income and expenses E. a statement of the financial affairs of the debtor
E. accessions
Which of the following is NOT an example of intangible personal property? A. accounts B. chattel paper C. negotiable instruments D. deposit accounts E. accessions
B. chattel paper
Which of the following is NOT an example of tangible personal property? A. equipment B. chattel paper C. inventory D. accessions E. consumer goods
E. stocks and bonds
Which of the following is NOT an example of tangible collateral? A. moving cranes B. iron ore C. manufactured homes D. unborn young of animals E. stocks and bonds
E. the APR
Which of the following is NOT required to be disclosed in a written solicitation under the Fair Credit and Charge Card Disclosure Act? A. the debt to income ratio required B. any annual membership fee C. any minimum or fixed finance charge D. any transaction charge for use of the card for purchases E. the APR
A. Article 9 applies to transactions involving real estate mortgages, landlord's liens, artisan's or mechanic's liens, liens on wages, judicial liens, and the like.
Which of the following is NOT true about Article 9 of the UCC? A. Article 9 applies to transactions involving real estate mortgages, landlord's liens, artisan's or mechanic's liens, liens on wages, judicial liens, and the like. B. Article 9 (Secured Transactions) of the Uniform Commercial Code (UCC) governs secured transactions in which personal property is used as collateral for a loan or the extension of credit. C. Article 9 does not apply to transactions involving real estate mortgages, landlord's liens, artisan's or mechanic's liens, liens on wages, judicial liens, and the like. D. Most states have enacted Revised Article 9 as the secured transactions statute within their states. E. In 2001, the National Conference of Commissioners on Uniform State Laws and the American Law Institute issued Revised Article 9 (Secured Transactions) of the UCC.
C. Only the trustee can be a debtor-in-possession.
Which of the following is NOT true about a Chapter 11 bankruptcy? A. A debtor-in-possession is empowered to operate the debtor's business during the bankruptcy proceeding. B. The court may appoint a trustee to operate the debtor's business only on a showing of cause, such as fraud, dishonesty, or gross mismanagement of the affairs of the debtor by current management. C. Only the trustee can be a debtor-in-possession. D. In most Chapter 11 cases, the debtor is left in place to operate the business during the reorganization proceeding. E. Credit extended by post-petition unsecured creditors in the ordinary course of business is given automatic priority as an administrative expense in bankruptcy.
D. Chapter 11 is only available to wealthy individuals.
Which of the following is NOT true about a Chapter 11 bankruptcy? A. Chapter 11 is available to partnerships, corporations, limited liability companies, and other business entities. B. The goal of Chapter 11 is to reorganize the debtor with a new capital structure so that the debtor emerges from bankruptcy as a viable concern. C. Approximately 7,000 Chapter 11 bankruptcies are filed each year. D. Chapter 11 is only available to wealthy individuals. E. Chapter 11, which is referred to as reorganization bankruptcy, is often in the best interests of debtors and creditors.
C. A creditor can file an involuntary petition to institute a Chapter 13 case against an individual debtor.
Which of the following is NOT true about a Chapter 13 bankruptcy? A. A Chapter 13 proceeding can be initiated only through the voluntary filing of a petition by an individual debtor with regular income. B. An individual with regular income means an individual whose income is sufficiently stable and regular to enable him or her to make payments under a Chapter 13 plan. C. A creditor can file an involuntary petition to institute a Chapter 13 case against an individual debtor. D. A creditor cannot file an involuntary petition to institute a Chapter 13 case. E. The debts of the individual debtor must be primarily consumer debt.
B. Chapter 13 is only available to corporations, partnerships, and LLCs.
Which of the following is NOT true about a Chapter 13 bankruptcy? A. Chapter 13 enables debtors to catch up on secured credit loans, such as home mortgages, and avoid repossession and foreclosure. B. Chapter 13 is only available to corporations, partnerships, and LLCs. C. Chapter 13 permits a debtor to propose a plan to pay all or a portion of the debts owed in installments over a specified period of time. D. Chapter 13 petitions are usually filed by individual debtors who do not qualify for Chapter 7 liquidation bankruptcy and by homeowners who want to protect nonexempt equity in their residence. E. The bankruptcy court supervises the debtor's plan for the payment in a Chapter 13 bankruptcy case.
D. In a Chapter 7 bankruptcy the debtor's future income can be reached to pay the discharged debt.
Which of the following is NOT true about a Chapter 7 bankruptcy? A. Approximately 475,000 Chapter 7 bankruptcies are filed each year. B. In a Chapter 7 bankruptcy the debtor is permitted to keep a substantial portion of his or her assets (exempt assets). C. In a Chapter 7 bankruptcy the debtor's non-exempt property is sold for cash, and the cash is distributed to the creditors; any of the debtor's unpaid debts are discharged. D. In a Chapter 7 bankruptcy the debtor's future income can be reached to pay the discharged debt. E. In a Chapter 7 bankruptcy the debtor's future income, even if the debtor becomes rich, cannot be reached to pay the discharged debt.
A. If using the means test calculation, a debtor is determined to have a sufficient amount of disposable income as determined by bankruptcy law, the debtor qualifies for Chapter 7 bankruptcy.
Which of the following is NOT true about a Chapter 7 bankruptcy? A. If using the means test calculation, a debtor is determined to have a sufficient amount of disposable income as determined by bankruptcy law, the debtor qualifies for Chapter 7 bankruptcy. B. The claims of secured creditors to the debtor's nonexempt property have priority over the claims of unsecured creditors. C. In a Chapter 7 bankruptcy, the property of the estate is sold, and the proceeds are distributed to satisfy allowed claims. D. The first step in determining whether a debtor qualifies for Chapter 7 relief is to apply the median income test. E. If a debtor qualifies for a Chapter 7 liquidation bankruptcy, the nonexempt property of the bankruptcy estate must be distributed to the debtor's secured and unsecured creditors.
D. The buyer in the ordinary course of business rule applies to persons who buy farm products from a person engaged in farming operations.
Which of the following is NOT true about a buyer in the ordinary course of business? A. The buyer in the ordinary course of business rule is often applied to inventory collateral. B. A buyer in the ordinary course of business who purchases goods from a merchant takes the goods free of any perfected or unperfected security interest in the merchant's inventory, even if the buyer knows of the existence of the security interest. C. The buyer in the ordinary course of business rule does not apply to persons who buy farm products from a person engaged in farming operations. D. The buyer in the ordinary course of business rule applies to persons who buy farm products from a person engaged in farming operations. E. The buyer in the ordinary course of business rule is necessary because buyers would be reluctant to purchase goods if a merchant's creditors could recover those goods if the merchant defaulted on loans owed to secured creditors.
C. If the underlying transaction is the sale of accounts, chattel paper, payment intangibles, or promissory notes, the debtor is entitled to any surplus and is not liable for any deficiency.
Which of the following is NOT true about a deficiency judgment? A. The parties may agree in their security agreement that the debtor will not be liable for any deficiency. B. If the underlying transaction is the sale of accounts, chattel paper, payment intangibles, or promissory notes, the debtor is not entitled to any surplus and is not liable for any deficiency. C. If the underlying transaction is the sale of accounts, chattel paper, payment intangibles, or promissory notes, the debtor is entitled to any surplus and is not liable for any deficiency. D. Unless otherwise agreed, after a debtor's default, if the proceeds from the disposition of collateral are not sufficient to pay the expenses incurred by the secured party for the collection and enforcement of the debt and to satisfy the debt to the secured party, the debtor is personally liable to the secured party for the payment of the deficiency. E. A secured party may bring an action to recover a deficiency judgment against the debtor.
C. The bankruptcy judge must attend the meeting.
Which of the following is NOT true about a meeting of the creditors? A. The debtor may have an attorney present at this meeting. B. The debtor must appear and submit to questioning, under oath, by creditors. C. The bankruptcy judge must attend the meeting. D. Creditors may ask questions regarding the debtor's financial affairs, disposition of property prior to bankruptcy, possible concealment of assets, and similar matters. E. Within a reasonable time after a court grants an order for relief (not less than 10 days or more than 30 days), a court must call a meeting of the creditors (also called the first meeting of the creditors).
A. The proof of claim must be timely filed, which generally means within 12 months of the first meeting of the creditors.
Which of the following is NOT true about a proof of claim and proof of interest? A. The proof of claim must be timely filed, which generally means within 12 months of the first meeting of the creditors. B. The document for filing a proof of claim is provided by the court. C. An equity security holder (e.g., a shareholder of a corporation) must file a proof of interest. D. A secured creditor whose claim exceeds the value of the collateral may submit a proof of claim and become an unsecured claimant as to the difference. E. A creditor must file a proof of claim stating the amount of the claim against the debtor.
D. The debtor is not entitled to receive any surplus that remains after the sale or other disposition.
Which of the following is NOT true about disposing of the collateral? A. The method, manner, time, place, and terms of the disposition must be commercially reasonable. B. In the event of a debtor's default, a secured party may sell, lease, or otherwise dispose of the collateral in its current condition or following any commercially reasonable preparation or processing. C. Disposition of collateral may be by public or private proceeding. D. The debtor is not entitled to receive any surplus that remains after the sale or other disposition. E. The secured party must notify the debtor in writing about the time and place of any public or private sale or any other intended disposition of the collateral unless the debtor has signed a statement renouncing or modifying the right to receive such notice.
B. After legally repossessing the goods, the secured party must sell the collateral.
Which of the following is NOT true about taking possession of collateral? A. A secured party may repossess the collateral pursuant to judicial process or without judicial process if the self-help repossession of the collateral does not breach the peace. B. After legally repossessing the goods, the secured party must sell the collateral. C. After legally repossessing the goods, the secured party can retain the collateral. D. If necessary, a secured creditor may obtain a court judgment or warrant to repossess personal property. E. Many debtors peacefully allow a secured creditor to repossess goods.
D. If cardholders cancel a card, their remaining balances are subject to any rate increase.
Which of the following is NOT true about the Credit Card Act? A. The terms of the credit card agreement must be written in plain English and in no less than 12-point font (thus avoiding "legalese" and fine-print agreements). B. Card companies cannot retroactively increase interest rates on existing balances. C. If cardholders cancel a card, they have the right to pay off existing balances at the existing interest rate and existing payment schedule (e.g., current minimum monthly payment). D. If cardholders cancel a card, their remaining balances are subject to any rate increase. E. Credit cards cannot be issued to individuals under the age of 21 (the previous minimum age was 18) unless they have a co-signer (e.g., parent) or they can prove they have the means to pay credit card expenses.
C. Information in a consumer credit report may not be provided to a prospective employer.
Which of the following is NOT true about the Fair Credit Reporting Act? A. A credit report cannot be supplied to anyone who does not have a legitimate purpose for using the report as provided in the act. B. Information in a consumer credit report can only be provided to parties who have a purpose for obtaining the information. C. Information in a consumer credit report may not be provided to a prospective employer. D. Users of the information for credit, insurance, employment, and other purposes must notify the consumer when an adverse action is taken on the basis of such reports. E. If a consumer challenges the accuracy of pertinent information contained in a credit file, the agency may be compelled to reinvestigate.
B. Anti-deficiency statutes prohibit deficiency judgments regarding certain types of mortgages, such as second mortgages on residential property.
Which of the following is NOT true about anti-deficiency statutes? A. A first purchase money mortgage is a mortgage taken out to purchase a house. B. Anti-deficiency statutes prohibit deficiency judgments regarding certain types of mortgages, such as second mortgages on residential property. C. Anti-deficiency statutes usually apply only to first purchase money mortgages. D. Second mortgages and other subsequent mortgages, even mortgages that refinance the first mortgage, usually are not protected by anti-deficiency statutes. E. Anti-deficiency statutes prohibit deficiency judgments regarding certain types of mortgages, such as loans for the original purchase of residential property.
C. Financing statements can only be reviewed by approved creditors.
Which of the following is NOT true regarding financing statements? A. They serve as constructive notice to the world that a creditor claims an interest in a property. B. Financing statements are effective for 5 years from the date of filing [Revised UCC 9-515(a)]. C. Financing statements can only be reviewed by approved creditors. D. A continuation statement may be filed up to 6 months prior to the expiration of a financing statement's 5-year term. E. Most states require financing statements covering farm equipment, farm products, accounts, and consumer goods to be filed with the county clerk [Revised UCC 9-501]
A. Bankruptcy law is exclusively federal law.
Which of the following is a correct statement regarding bankruptcy law? A. Bankruptcy law is exclusively federal law. B. Bankruptcy law consists of both federal and state law. C. Bankruptcy law is exclusively state law. D. New York was the first state to enact its own state bankruptcy law. E. Congress enacted the original federal Bankruptcy Act in 1778.
D. The Bankruptcy Code does not permit states to enact their own bankruptcy exemptions.
Which of the following is an INCORRECT statement regarding bankruptcy exemptions? A. The exemptions available under state law are often more liberal than those provided by federal law. B. A state that enacts its own bankruptcy exemptions may require debtors to follow state law regarding those exemptions. C. A state that enacts its own bankruptcy exemptions may give debtors the option of choosing between federal and state exemptions. D. The Bankruptcy Code does not permit states to enact their own bankruptcy exemptions. E. Exempt property is property of the debtor that he or she can keep and that does not become part of the bankruptcy estate.
D. Only a few states permit foreclosure by power of sale, as such a sale is per se unconscionable against the mortgagor and deprives him or her of necessary shelter.
Which of the following is an INCORRECT statement regarding power of sale? A. No court action is necessary to exercise a power of sale. B. The sale must be by auction for the highest price obtainable, and any surplus must be paid to the mortgagor. C. The procedure for the sale is provided in the mortgage or deed of trust itself. D. Only a few states permit foreclosure by power of sale, as such a sale is per se unconscionable against the mortgagor and deprives him or her of necessary shelter. E. Power of sale must be expressly conferred in the mortgage or deed of trust.
B. As a general rule, it is not necessary to record a mortgage or deed of trust in the county recorder's office.
Which of the following is an INCORRECT statement regarding recording statutes? A. The filing of a mortgage in the county recorder's office in the county in which the real property is located is public record and alerts the world that the mortgage has been recorded against the real property. B. As a general rule, it is not necessary to record a mortgage or deed of trust in the county recorder's office. C. The non-recordation of a mortgage does not affect the legality of the instrument between the mortgagor and the mortgagee. D. The mortgagor is obligated to pay the amount of the mortgage according to the terms of the mortgage, even if the document is not recorded. E. The filing of a deed of trust in the county recorder's office in the county in which the real property is located is public record and alerts the world that the deed of trust has been recorded against the real property.
E. Unsecured credit requires collateral for a loan.
Which of the following is an INCORRECT statement regarding secured credit? A. A security interest may be taken in personal property. B. A security interest may be taken in intangible property. C. A security interest may be taken in real property. D. To minimize the risk associated with extending unsecured credit, a creditor may require collateral. E. Unsecured credit requires collateral for a loan.
E. A bankruptcy trustee cannot be appointed in a Chapter 7 bankruptcy case.
Which of the following is an INCORRECT statement regarding the bankruptcy trustee? A. A bankruptcy trustee must be appointed in a Chapter 12 bankruptcy case. B. A bankruptcy may be appointed in a Chapter 11 case on a showing of fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management. C. A bankruptcy trustee must be appointed in a Chapter 13 bankruptcy case. D. Once appointed, a bankruptcy trustee becomes the legal representative of the debtor's estate. E. A bankruptcy trustee cannot be appointed in a Chapter 7 bankruptcy case.
A. It requires collateral to protect the payment of the debt.
Which of the following is an INCORRECT statement regarding unsecured credit? A. It requires collateral to protect the payment of the debt. B. In deciding whether to make the loan, the unsecured creditor considers the debtor's credit history, income, and other assets. C. The creditor relies on the debtor's promise to repay the principal, plus any interest, when the debt is due. D. If the debtor is judgment proof, the creditor may never collect. E. If the debtor fails to make the payments, the creditor may bring legal action and obtain a judgment against the debtor.
C. Chapter 5
Which of the following is not a special chapter of the Bankruptcy Code which provides different types of bankruptcy under which individual and business debtors may be granted remedy? A. Chapter 13 B. Chapter 12 C. Chapter 5 D. Chapter 7 E. Chapter 11
D. evidence of payments received from employers within 120 days prior to the filing of the petition
Which of the following schedules is NOT required to be submitted by an individual debtor who files a voluntary bankruptcy petition? A. a statement of the financial affairs of the debtor B. a statement of the debtor's monthly income; current income and expenses C. a list of all property owned D. evidence of payments received from employers within 120 days prior to the filing of the petition E. a list of secured and unsecured creditors, with addresses
E. Dual
_____ agency occurs when an agent acts for two or more different principals in the same transaction. A. Conditional B. Symbiotic C. Cooperative D. Unilateral E. Dual
A. Unsecured
_____ credit does not require any security (collateral) to protect the payment of the debt. A. Unsecured B. Secondary C. Primary D. Secured E. Commercial
D. Foreclosure
_____ is a legal procedure by which a secured creditor causes the judicial sale of the secured real estate to pay a defaulted loan. A. Reconveyance B. Remuneration C. Execution D. Foreclosure E. Reclamation
C. Attachment
_____ is a situation in which a creditor has an enforceable security interest against a debtor and can satisfy the debt out of the designated collateral. A. Rapprochement B. Detachment C. Attachment D. Denouement E. Abasement
C. Retention
_____ of collateral is a secured creditor's repossession of collateral on a debtor's default and proposal to retain the collateral in satisfaction of the debtor's obligation. A. Revocation B. Remuneration C. Retention This is the correct answer. D. Rejection E. Rescission
A. Disposition; commercially reasonable
_____ of collateral is a secured creditor's repossession of collateral on a debtor's default and selling, leasing, or otherwise disposing of it in a _____ manner. A. Disposition; commercially reasonable B. Disposition; personally convenient C. Defalcation; commercially reasonable D. Deposition; commercially reasonable E. Defalcation; personally convenient
E. Exempt
_____ property is property that may be retained by the debtor pursuant to federal or state law that does not become part of the bankruptcy estate. A. Executed B. Void C. Voidable D. Executory E. Exempt
D. floating
A(n) _____ lien is a security interest in property that was not in the possession of the debtor when the security agreement was executed. A. elusive B. non-collateralized C. intangible D. floating E. unsecured
C. anti-deficiency; residential
A(n) _____ statute prohibits deficiency judgments regarding certain types of mortgages, such as those on _____ property. A. reconveyance; urban B. deficiency; government-owned C. anti-deficiency; residential D. deficiency; commercial E. anti-deficiency; rural
E. voluntary; Chapters 7, 11, 12 and 13
A(n) ________ petition can be filed by the debtor in ________ bankruptcy cases. A. voluntary; Chapters 12 and 13, but not in Chapters 7 and 11 B. voluntary; Chapters 7 and 11, but not in Chapters 12 and 13 C. involuntary; Chapters 7, 11, 12 and 13 D. involuntary; Chapters 7 and 11, but not in Chapters 12 and 13 E. voluntary; Chapters 7, 11, 12 and 13
E. guaranty arrangement; is secondarily liable
Irene, a college student, wants to purchase a new BMW automobile. She goes to Auto Dealer and finds exactly the car she wants, and she wants to finance the car. Auto Dealer will not sell the car to Irene on credit based on Irene's own credit standing. Auto Dealer requires Irene to find a co-signer for the purchase and credit contract. Irene asks her mother to agree to pay the debt if she defaults. If Irene's mother signs such a document, this is known as a ________. Irene's mother ________ on the loan. A. surety arrangement; is primarily liable B. writ of attachment; is not liable C. writ of garnishment; is secondarily liable with Irene D. writ of execution; is primarily liable with Irene E. guaranty arrangement; is secondarily liable
D. must first attempt unsuccessfully to recover the payments from Isaias before taking legal action against Edward to recover payment
Isaias, a college student, wants to purchase a new computer, printer, and other electronic equipment on credit from Electronics Retail, Inc. Electronics will not sell the computer and other equipment to Isaias unless he can get someone to guarantee the payment. Isaias asks his roommate, Edward, to guarantee the payment. Edward agrees, and he is placed on the credit agreement as a guarantor. If Isaias fails to make the necessary payment, Electronics _____. A. may only recover against Isaias B. may file a joint action against both Isaias and Edward C. may immediately file an action against Edward D. must first attempt unsuccessfully to recover the payments from Isaias before taking legal action against Edward to recover payment E. may only recover against Edward
C. Secured
_____ credit requires collateral that secures payment of the loan. A. Subprime B. Secondary C. Secured D. Primary E. Unsecured
A. Discharge
_____ is a court order that relieves a debtor of the legal liability to pay his or her debts that were not paid in the bankruptcy proceeding. A. Discharge B. Proof of claim C. Proof of interest D. Temporary injunction E. Automatic stay
D. Perfection; secured
_____ of a security interest is a process that establishes the right of a(n) _____ creditor against other creditors who claim an interest in the collateral. A. Detachment; secured B. Detachment; unsecured C. Perfection; unsecured D. Perfection; secured E. Separation; secured
