MHJR 461 Chapter 13
Which of the following debts are not extinguished by a Chapter 7 bankruptcy?
-alimony and child support payments -back taxes -debts incurred by fraud against creditors -fined owed to the government (all)
A debtor filing for Chapter 7 bankruptcy must provide a list of all immediate family members because persons such as spouses may be liable for the bankrupt person's debts.
False
A negotiable instrument is a promise by one party to pay a undefined sum of money to another party. There are two parties: the maker and the payee. While the amount to be paid may vary, the date of payment must be set at a specific time in the future.
False
In a bankruptcy proceeding all creditors must be paid an equal share of the assets available, according to the amount of debt owed.
False
Once a bankruptcy is finished, bankrupts are relieved of paying all debts.
False
The final stage of bankruptcy is the dissolution stage.
False
The most common bankruptcy proceeding is known as adjustment of debt.
False
The role of the trustee is to minimize the amount of the debtor's assets available for distribution to creditors.
False
The debts owed to secured creditors have the greatest protection in bankruptcy proceedings.
True
The law governing bankruptcy is federal statutory law.
True
A mortgage will typically contain:
a description of the property and the amount of debt involved
Which of the following debts are not extinguished by a Chapter 7 bankruptcy?
alimony
The final stage of bankruptcy is known as:
discharge in bankruptcy
A(n) ____ is a legally binding written order to pay a fixed sum of money that involves three parties.
draft
A mechanic's lien is also called an artisan's lien.
false
A mechanic's lien is the most common lien on personal property.
false
A note involves two parties, the maker and the payee. Payment must be on demand.
false
According to the Statutes of Fraud, mortgages may be either oral or in writing.
false
After secured creditors are paid, all other creditors share the proceeds of the debtor's estate equally.
false
Bankruptcy in Chapter 13 is usually to be completed in seven years.
false
Chapter 13 bankruptcy proceedings are used mainly by businesses.
false
In a bankruptcy proceeding all creditors must be paid an equal share of the assets available, according to the amount of debt owed.
false
In an involuntary bankruptcy, the trustee files the petition for bankruptcy.
false
In the priority of classes of creditors, taxes owed to the government come before any other payments.
false
Just as with a Chapter 7 bankruptcy, the debt of a Chapter 13 bankrupt are discharged.
false
Negotiable instruments payable "to bearer" are considered the safest form.
false
Promises to pay include drafts and checks.
false
The creditor is responsible for liquidating all of the debtor's exempt property in bankruptcy proceedings.
false
The higher the income of a bankrupt, the more likely the debts will be discharged by Chapter 7 bankruptcy rather than by debt repayment over time.
false
The only property that is typically exempt from attachment is personal property worth over $1,000.
false
To be ordinary holder of a negotiable instrument, the holder must give value for it, take it without knowledge that it is overdue or defective, and must take it in good faith.
false
To meet the UCC's requirements for negotiability, an instrument must be payable to a specific party.
false
Under Chapter 11 proceedings, businesses are forced to sell all company assets to pay outstanding debts.
false
When real estate is used to back up a note, it is called a collateral note.
false
When the maker of a note promises to repay the note in specific installments over time, it is a balloon note.
false
The framers of the Constitution specifically made bankruptcy a matter of:
federal law
In General Electric Business Financial Services v. Silverman, where Silverman failed to repay a loan from GE Financial after his company went bankrupt, despite having signed a guarantee to repay the loan even if the company went bankrupt, the district court:
granted the plaintiff's movement for summary judgment because the Illinois Credit Agreement Act bars affirmative defenses that rely on oral promises that contradict the written terms of the agreement
A creditor who obtains an interest in the property of a debtor without the debtor's express agreement may obtain:
none of the above
A(n) ____ is a statutory procedure under which a creditor gains the right to attach up to 25 percent of a customer's net wages to be applied to an outstanding debt.
none of the above
Once bankruptcy proceedings are finished, the consumer's credit record:
none of the above
Promissory notes are instruments that involve ____ parties.
none of the above
The ____ of a note is the party who promises to pay another party.
none of the above
The law concerning liens is primarily:
none of the above
The primary objective of the trustee is:
none of the above
When a note is to be paid in regular payments but also includes a final payment more than double the regular payments, the note is called:
none of the above
When real estate is used as collateral to secure the loan, the note is a:
none of the above
When real estate itself is used to secure a debt obligation it is evidenced by a:
none of the above
A promise to pay a certain sum of money to another party is a type of commercial paper called a(n):
note
In a suretyship:
the credit of a third party secures a debt
A mortgagor is:
the debtor on a mortgage
Bankruptcy discharge is:
the final stage of the bankruptcy proceeding for individuals
A guarantor is generally the same as:
the surety
The primary objective of the trustee is:
to maximize the amount of the debtor's assets available for distribution to creditors
A bankruptcy is a matter of credit history record for ten years.
true
A cashier's check is a form of check in which the bank is both the drawer and the drawee.
true
A check is a draft drawn on a bank and payable on demand.
true
A negotiable instrument may be transferred in two basic ways. If the instrument is made "to the order" of the payee, the payee must (1) endorse the instrument and (2) deliver the instrument to a third party. If the instrument is made "to bearer," the party in possession of the instrument is required only to deliver it to transfer it.
true
An artisan's (possessory) lien attaches to personal property.
true
Bankruptcy in Chapter 13 is usually to be completed in five years.
true
Bankruptcy proceedings may be voluntary or involuntary.
true
Chapter 13 bankruptcy largely involved debt rescheduling.
true
Even though a person is declared bankrupt, he or she will still have to pay back student loans; they are usually not eliminated.
true
Even though a person is declared bankrupt, he or she will still have to pay child support, if they have a legal obligation to do so.
true
If a commercial instrument is nonnegotiable, it falls under the common law, not the UCC.
true
In Chapter 13 bankruptcy, there is a confirmation plan worked out by the trustee.
true
Orders to pay include drafts and checks.
true
People who have above average income are more likely to use Chapter 13 bankruptcy rather than Chapter 7.
true
Real estate is typically financed by borrowing money and securing the loan with a mortgage.
true
The creditors with the highest priority in bankruptcy proceedings are the secured creditors.
true
The drawee owes money to the drawer in a negotiable instrument.
true
The mortgagee is the creditor who makes a mortgage.
true
The party to receive a payment from a negotiable instrument is called the payee.
true
The party who agrees to make a payment to another party, based on a document presented to it, such as a bank, is called the drawee.
true
The party who issues or creates a document that requests payment, probably from a bank, is called the drawer.
true
To meet the UCC's requirements for negotiability, an instrument must be in writing.
true
To protect the rights of the mortgagee, a mortgage should be recorded with a state official.
true
Under a Chapter 11 reorganization, the debtor acts as a trustee.
true
When the payee is concerned about the quality of a draft, it may be submitted to the drawee for confirmation. That is called an acceptance or bankers' acceptance.
true
Bankruptcy proceedings hold that transfers of debtor's property ____to the bankruptcy filing are void.
up to 90 days prior
