Bus Law

To force a debtor with twelve or more creditors into bankruptcy proceedings, at least three of those who join in the petition must have unsecured claims that add up to at least $155 $1575 $15775 $157750

$15775

A buyer in the ordinary course of business takes goods subject to any security interest created by the seller because otherwise the free flow of credit would be hindered.

False

A property owner who hires a realtor to sell a property thereby enters into an agency relationship with an employee for a limited time

False

Providing only a debtor's trade name in a financing statement is sufficient for perfection even if the trade name is not the legal name of the business.

False

When a debtor defaults, a secured party who does not choose to retain the collateral must relinquish the security interest to the debtor.

False

When an agent's acts create the appearance of an agency that does not in fact exist, the principal is estopped to deny the agency relationship

False

Miklos employs Nathalie to handle a list of financial transactions on Miklos's behalf. This power will terminate on any transaction causing a loss to Miklos Miklos's death or incapacity Miklos's sixty-fifth birthday Nathalie's handling of one of each stipulated transaction

Miklos's death or incapacity

A debtor who makes false statements under oath may be denied a discharge of his or her debts in the bankruptcy proceeding

True

A secured party may be liable to a debtor for failing to comply with the debtor's request for confirmation of the amount of the unpaid debt

True

Ann files a petition in bankruptcy under Chapter 7. Brian takes control over her property and reduces it to money for distribution. Brian is a secured creditor a bankruptcy court judge a bankruptcy trustee a debtor who filed jointly for bankruptcy under a single petition

a bankruptcy trustee

Construction Company has a claim against Diners Cafe to satisfy a debt that takes priority over other claims against the same property, This is a lien a fraud a guaranty a garnishment

a lien

Auto Sales & Finance wants to get paid for its goods and services, so it will not sell goods or lend funds unless payment is guaranteed. This is the concept of bad faith fiduciary duty a secured transaction a fair debt collection practice

a secured transaction

Without authorization, Lars contracts on behalf of Mina to have Nemo paint Mina's Boutique. If Mina decides to ratify the contract, she must affirm all of the contract any part of the contract, with Lars liable to Nemo for the difference any part of the contract before performance begins any part of the contract at any time

all of the contract

Rosa introduces Sal to her friend Trey as "my associate." Sal purports to act as Rosa's agent in a business transaction with Trey. If Rosa is liable for Sal's actions, it will be because their relationship is a nullified agency an agency by estoppel an agency by operation of law not an agency relationship

an agency by estoppel

Motor Parts Sales Inc. hires Nolly to work on its shipping dock, accepting deliveries, and dispatching trucks, and dealing with customers and drivers. With respect to Motor Parts, Nolly is most likely an agent an agent and a principal a principal none of the choices

an agent

Nora works at Oil & Gas Inc. She is a sales representative who works with Oil & Gas customers. The company closely supervises its sales reps, and dictates their schedules. With respect to third parties, Nora is an independent contractor an employee only an employee and agent a principal

an employee and agent

Denny, a certified public accountant and an investor, and Ethel, an insurance salesperson and a realtor, may create an agency relationship for a business purpose only any legal purpose any purpose no purpose

any legal purpose

Gary drives a truck as an employee for Hauling Inc. Gary would most likely be considered acting outside the scope of her employment if he crashed into a car at the airport while off duty hit a pedestrian in a parking lot during a "working" lunch ran over an attendant at a gas station while refueling the truck smashed into a store-front while intoxicated on-duty

crashed into a car at the airport while off duty

Under Chapter 7, a debtor who fails to appear at the creditors' meeting when required may be denied a discharge of his or debts in the bankruptcy proceeding ordered to complete a means test forced to submit to an examination by the creditors told to turn over control of his or her property to a bankruptcy trustee

denied a discharge of his or debts in the bankruptcy proceeding

Under Chapter 7, creditors are paid in a certain order of priority. The highest priority class comprises claims for debts related to motor vehicles, household goods, and trade tools domestic support the debtor's equity in his or her residence student loans

domestic support

With respect to creditors, the main goal of bankruptcy law is to ensure that creditors will continue to tend to insolvent debtors protect creditor assets from diminution in value ensure equitable treatment in the competition for debtor assets make all debtor property available for all creditor claims

ensure equitable treatment in the competition for debtor assets

Maritime Bank holds a security interest in Ned's fishing trawler. Ned defaults on the debt. Maritime takes possession of the boat and notifies Ned that it will be sold to recover some of the unpaid debt. Before the sale, Ned can regain possession by obtaining a deficiency judgement agreeing to a floating lien exercising the right of redemption requesting a commercially reasonable sale

exercising the right of redemption

At the time of the filing of the petition and the time of the filing of the plan, Chapter 13 imposes on the debtor the requirement of goodwill good faith substantial means sufficient credit

good faith

Gina's creditors attempt to force her into bankruptcy proceedings. The creditors will be unsuccessful if Gina owns a business with ten or more employees is a farmer is also a creditor refuses to comply

is a farmer

Clark hires Dell, a real estate broker, to sell his beach house. The house is destroyed in a storm before it can be sold. Dell is Clark's agent until Clark's insurer pays Dell's commission until the destroyed house is sold until the destroyed house is rebuilt and sold no more

no more

Ready Credit Inc. holds a security interest in inventory owned by Soy Products Inc. Ready Credit can protect its claim to the inventory in the event of Soy Products' default by assignment perfection redemption retention

perfection

With respect to debtors, the main goal of bankruptcy law is to encourage the continued use of credit ensure that third parties will continue to guarantee loans provide a new start without creditors' claims shield assets from creditors' claims

provide a new start without creditors' claims

If a voluntary petition in bankruptcy is found to be proper, the court's entry of an order for relief puts into place an automatic stay discharges the debtor's obligations dismisses the petition distributes the debtor's assets to his or her creditors

puts into place an automatic stay

Credit Corporation holds a perfected security interest in Dental Clinic's real property that includes priority to the proceeds from a sale of the collateral resulting from a bankruptcy trustee, this gives the secured party equal rights superior rights no rights subordinate rights

superior rights

Fara hires Gil, a real estate broker, to act as her agent to sell her land for $150,000. Before the land is sold at the stated price, oil is discovered beneath it, causing its market value to increase considerably. The agreement between Fara and Gil is likely continued with proportionate increase in Gil's sales commission continued until Gil tells prospective buyers of the discovery terminated by act of the parties terminated by operation of law

terminated by operation of law

Under Chapter 7, to be entitled to receive a portion of a debtor's estate, each creditor must file a proof of claim with the bankruptcy court within ninety days of the order of relief the petition the automatic stay the creditors' meeting

the creditors' meeting

Lev, an agent for Mill Grains LLC, executes an unauthorized contract with National Grocers Inc. The deal is highly advantageous to Mill Grains, and the company ratifies the contract. The contract is valid vicarious void voidable

valid

Under Chapter 7, the primary effect of a discharge is to extend the time for the debtor's payment of overdue debts allow a creditor to collect a previous judgment on a discharged debt force a creditor to obtain a new judgement on a discharged debt void a judgement on a discharged debt and prohibit an action to collect it

void a judgement on a discharged debt and prohibit an action to collect it

Barth borrows funds from City Bank to pay his tuition. His mother Debi co-signs the credit application. After the loan agreement is signed, Barth agrees to a higher rate of interest without telling Debi. She is Discharged from the agreement liable at the higher rate of interest liable at the lower rate of interest liable for the principle only

Discharged from the agreement

An agency relationship is based on the attributes of power, control, and financial self-interest not the trust and confidence of a fiduciary relationship

False

Apparent authority in an agency relationship arises when the principal causes the agent to reasonably believe that he or she has the authority to act

False

Bankruptcy relief is provided under state, not federal, law.

False

Because a writ of attachment is a prejudgment remedy, a debtor does not need to be given notice and an opportunity to be heard before the property is seized.

False

Each state permits a debtor in bankruptcy to retain the family home in order to preserve some equity to pay any debts that are discharged

False

In a Chapter 7 proceeding, at a meeting of creditors, one of the creditors is elected to take over the debtor's assets

False

In a Chapter 7 proceeding, if the value of the debtor's estate does not provide sufficient cash to pay all the creditors, its given back to the debtor

False

It is not illegal for a licensed professional to employ an unlicensed agent to perform professional acts

False

Reese applies for a credit card at Sell-Mart. The application gives Sell-Mart a security interest in any goods that Reece buys with the card until she pays for them in full. In this situation, the secured party is Reese Sell-Mart the credit card the goods that are bought with the credit card

Sell-Mart

A security agreement must describe the collateral because no security interest can exist unless the parties agree on the property subject to it

True

A voluntary petition in bankruptcy must include proof of each creditor's claim a list of the debtor's creditors and the amount of the debt owed to each all of the choices a statement indicating that the debtor understands basic economics

a list of the debtor's creditors and the amount of the debt owed to each

Energy Company employs Fred to negotiate the purchase of mineral rights for future mining projects. Fred secretly buys some of the property and sells it to Energy at a profit. Fred has breached the duty of performance the duty of loyalty no duty the duty of notification

the duty of loyalty

A truck driver who drivers a company truck on a regular basis is most likely an employee

True

Any debtor who is eligible for bankruptcy relief under Chapter 7 is eligible under Chapter 11.

True

Any person can be an agent, regardless of whether he or she has the capacity to contract.

True

Because of depreciation, the amount received on the sale of collateral may be less than the amount owed on the debt, but a debtor who has defaulted is not likely to have funds to pay the deficiency

True

Once the agency relationship between a principal and an agent has ended, the agent loses the right to bind the principal.

True

Several documents may be considered together to comprise a security agreement.

True

When a debtor defaults, a secured creditor can take possession of the collateral without a court order and either retain or resell the collateral

True

When an agent, acting within the scope of his or her authority, contracts with a third party, a disclosed principal is liable to the third party

True

United Contractors Inc. holds a lien on Vista Estate's real property. This property can be sold to satisfy the debt if, before the sale, notice is given to Vista Estate Vista Estate's other creditors the general public the state in which the property is located

Vista Estate

In addition to financial statements, each voluntary petition in a bankruptcy must include a plan outlining how debt payments will be made a certificate proving the receipt of credit counseling a creditors' agreement allowing the debtor to continue in business a statement of preference for one creditor over another

a certificate proving the receipt of credit counseling

Capital Inc. holds a security interest in Discount Store's inventory. The parties agree that the interest will continue in the collateral even if it is sold, exchanged, or disposed of in some other way. This is a floating lien a purchase-money security interest a right of redemption a right to subrogation

a floating lien

The UCC does not define the term default. This encourages the parties to a secured transaction to include standards that align with the concept of unconscionability run counter to the UCC's provision regarding good faith stipulate the conditions that will constitute a default provide the creditor with the maximum protection possible

stipulate the conditions that will constitute a default

Petro Refinery asks Quality Bank for a loan to increase its inventory. Quality requires Roma, Petro's president, to sign a personal guaranty to pay the debt if Petro defaults. The guaranty is required to be in writing because the debtor has a right of redemption the co-signer has a right of contribution the main purpose rule applies the main purpose rule does not apply

the main purpose rule does not apply

Under Chapter 13, a repayment plan must provide for the turnover of the debtor's future income to the creditors full payment of all claims, without exception the same treatment of each claim within a particular class of claim all of the choices

the same treatment of each claim within a particular class of claim