BL Ch. 19

Bankruptcy law is __

federal law

If a debtor defaults on a loan, an unsecured creditor may _____

file suit and seek a judgment in the amount of the debt

Priority disputes among creditors who claim interest in the same collateral are most likely to arise when a debtor ______.

files for bankruptcy

How long is a financing statement valid after filing?

five years, plus another possible five years with a continuation statement

Under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005, a bankruptcy judge may dismiss a petition ______

for cause

Susan purchases a car and pledges the car as security for a loan. Her right to possess the car as long as she satisfies the terms of the loan is known as a debtor's right in the _____

collateral

According to the Uniform Commercial Code (UCC), the value given by a secure party to a security agreement between a creditor and a debtor is ______.

consideration

The Uniform Commercial Code (UCC) Section 9-102(23) defines a(n) ______ good as a good used or bought for use primarily for personal, family, or household purposes.

consumer

In the context of Chapter 7 liquidation proceedings, ______ are not eligible for Chapter 7 relief.

credit unions

In the context of liquidation proceedings based on the Bankruptcy Code, an involuntary Chapter 7 petition is filed by a ______

creditor

All creditors listed in Chapter 7 of the Bankruptcy Code required schedule for liquidation are convened for a ______

creditors meeting

In the context of liquidation proceedings, a voluntary Chapter 7 petition is filed by a ______

debtor

liquidation

occurs when a debtor turns all assets over to a trustee

A ______ transfer is a transfer of property made with the intent to defraud creditors or made for an amount significantly lower than the property's fair market value within ______ years of filing for bankruptcy.

fraudulent; two

In a priority dispute between two secured creditors who claim interest in the same collateral, the party that ______ its interest first will have priority over the collateral.

perfected

______ of a security interest in a motor vehicle occurs when the secured party to a transaction makes a notation of this interest on the certificate of title.

perfection

Once the secured party to a transaction ______ its interest in collateral, it is effective until the collateral is sold, exchanged, or transferred.

perfects

As is the case with most bankruptcies, Chapter 7 liquidation begins when a(n) _____

petition is filed

A ______ lists creditors' names and addresses and the amount of debt owed to each creditor.

proof of claim

after-required property

property acquired by a debtor after a security agreement is made

A(n) ______ security interest is formed when a debtor uses borrowed money from the secured party to a security agreement to buy the collateral.

purchase-money

order of relief

states that bankruptcy proceedings can continue

In the context of a secured transaction, what will NOT affect the secured party's perfected interest in collateral?

the collateral is used

For a written security agreement between a creditor and a debtor to be valid, it must describe ______ accurately and in detail

the collateral of the debtor

For a written security agreement between a creditor and a debtor to be valid, it must be signed by _____

the debtor

What is a specific criterion necessary for the attachment of a creditor's security interest in the collateral of a debtor?

the debtor's rights in the collateral

For a security agreement between a creditor and a debtor to be valid, the secured party must give _____

value

Between ______ days after an order of relief has been granted, an interim trustee calls a creditors' meeting.

20 and 40

According to the Uniform Commercial Code (UCC) Section ______, if a debtor defaults on a loan, the secured party can take possession of the debtor's collateral.

9-609

If a debtor made any payments within ______ days of a bankruptcy filing, a bankruptcy trustee can examine these payments as preferential payments.

90

Which of the following is true about a bankruptcy judge's right to dismiss a bankruptcy petition?

A bankruptcy judge may dismiss either a voluntary petition or an involuntary petition.

default

Failure to make payments on a loan

Most bankruptcy cases share a set of procedures, or certain actions that must be taken in every bankruptcy case. What are they?

- The court determining whether an order of relief should be granted - Judicial granting of an automatic stay for creditor actions against the debtor's estate - The filing of a petition for bankruptcy

examples of instruments

- bonds - stocks - certificates of deposit

According to the Uniform Commercial Code (UCC), a consumer good is a good used or bought for use primarily for what ?

- personal purposes - family purposes - household purposes

In the context of a security agreement, a financing statement should include what?

- the signature of the debtor - a description of the collateral - the names of all parties involved

The Uniform Commercial Code Section ______ defines a secured interest as an interest in personal property or fixtures which secures payment or performance of an obligation.

1-201(37)

chattel paper

A writing that indicates both a monetary obligation and a security interest in specific goods

Which of the following is part of the highest priority claim for distributing a debtor's property among unsecured creditors?

Alimony or child support

proceeds, advances

In the context of a secured transaction, these refer to something that is exchanged for collateral

Once a liquidation petition is filed by a debtor, the Bankruptcy Code provides for an automatic stay for almost all creditor litigation against the debtor. Identify a true statement about an automatic stay.

It applies to a voluntary petition or an involuntary petition.

XYZ Inc. sells dishwashers. XYZ Inc. sells a dishwasher on credit to Terri. How should XYZ Inc. perfect its interest in the dishwasher it sold to Terri?

It doesn't need to file to perfect because the security interest in the consumer good perfects automatically

Which of the following is an accurate statement about a petition filed as part of Chapter 7 liquidation proceedings?

It may be voluntary or involuntary.

Which of the following is a nondischargeable debt under the Bankruptcy Code?

Judgments against the creditor related to drinking and driving.

A person filing for bankruptcy has an estate of $3,000 and has $14,000 in credit card charges she has not paid. If she files for bankruptcy, how much will she owe to those creditors after she obtains a discharge?

Nothing; she is no longer responsible for the debt.

According to the Uniform Commercial Code (UCC), a security interest in collateral that has been perfected in one state will generally transfer to another state for a period of four months from the date that the property is brought into the state. What statements is true about the reperfection of the security interest after the four-month period?

The secured party may reperfect the interest in the new state.

According to ______, a security interest in collateral that has been perfected in one state will generally transfer to another state for a period of four months from the date that the property is brought into the state.

Uniform Commercial Code (UCC)

Which of the following is part of the Class 4 priority claim for distributing a debtor's property among unsecured creditors?

Unsecured claims for unpaid wages earned within 180 days of filing of a petition

Fraudulent transfers of property can be ______ or ______ fraudulent.

actually; constructively

financing statement

a document that lists the names and addresses of all parties involved in the transaction, a description of the collateral, and the signature of the debtor.

preferential

a payment is a payment made by an insolvent debtor that gives special treatment to one creditor over another.

preferential payment

a payment made by an insolvent debtor that gives special treatment to one creditor over another.

purchase-money security interest (PMSI)

a security interest formed when a debtor uses borrowed money from the secured party to a security agreement to buy the collateral.

perfection

a series of legal steps a secured party to a security agreement takes to protect its right in the collateral from other creditors who want their debts satisfied through the same collateral.

secured transaction

a transaction in which the payment of a debt is guaranteed by personal property the debtor owns

instrument

a writing that serves as evidence of the right to payment of money.

discharge

a written federal court order signed by a bankruptcy judge stating that a debtor is immune from creditor actions to collect debts.

termination statement

an amendment to a financing statement.

creditor

an entity to whom a debtor owes money

trustee

an individual who takes over the administration of a debtor's estate in bankruptcy proceedings

secured interest

an interest in personal property or fixtures which secures payment or performance of an obligation.

consumer good

as a good used or bought for use primarily for personal, family, or household purposes.

In a priority dispute between two secured creditors who claim interest in the same collateral, if neither party has perfected its security interest, the party that ______ its security interest first will have the first claim to the collateral.

attached

In bankruptcy proceedings, trustees are usually _____

attorneys in private practice who specialize in bankruptcy law

Once a liquidation petition is filed by a debtor, the Bankruptcy Code provides for a(n) ______, or moratorium, for almost all creditor litigation against the debtor.

automatic stay

The secured party to a transaction ______ interest in proceeds.

automatically has an

The assets that are collected from a debtor who files for bankruptcy are collectively known as the bankruptcy _____

estate

If a debtor is not paying debts as they come due, creditors can attempt to force the debtor into bankruptcy by filing a(n) ______ petition under Chapter 7 of the Bankruptcy Code

involuntary

If a debtor is not paying debts as they come due, creditors can attempt to force the debtor into bankruptcy by filing a(n) ______ petition under Chapter 7 of the Bankruptcy Code.

involuntary

A termination statement is an amendment to a financing statement. It provides that a debtor has ______ obligation to the secured party to a transaction.

no further

If the filing of a voluntary petition is proper, the petition automatically becomes an order of ____

relief

A person obtains a loan from a bank and uses his or her boat as collateral. The person sells the boat because he or she needs more money. In this scenario, the bank's secured interest in the boat ______.

remains in effect

Instead of disposing of the collateral, the secured party may choose to keep the collateral in full or partial satisfaction of the debt only if ______

the secured party notifies the debtor of this intent by sending written notice

Almost every state of the United States requires a certificate of ______ for any motor vehicle

title

Bankruptcy remedies are available to ____

to individuals, partnerships, and corporations

In the context of Chapter 11 of the Bankruptcy Code, the goal of a plan to reorganize a debtor's financial affairs is _____

to rehabilitate the debtor while preserving the debtor's assets for the creditors

When a debtor decides to file for bankruptcy, he or she files a(n) ______ liquidation petition

voluntary