Quiz on Negotiable Instruments, Credit and Bankruptcy

A balloon notes has one large payment up front then a series of smaller payments over time

False

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 mechanic's lien applies only to "mechanical" work, such as car repairs or plumbing work on a house

False

A mechanic's lien is also called an artisan's lien

False

A negotiable instrument is a promise by one party to pay an 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

A note involves two parties, the maker and the payee. Payment must be on demand

False

According to the Statues of Fraud, mortgages may be either oral or in writing

False

An open account is the least common form of business credit account

False

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 garnishment is when a creditor gets the right to attach a certain percentage of a debtor's wages

True

A person who files bankruptcy may not file again for another eight years

True

A secured creditor is one is able to take a non-paying customer's property to satisfy the customer's debt

True

Even though a person is declared bankrupt, he or she will have to payback student loans; they are usually not eliminated

True

A mortgage will typically contain

a description of the property and the amount of debt involved

Alimony and child support payments, back taxes and most student loans are all examples of

debt that is not extinguished by bankruptcy

Chapter 13 bankruptcy proceedings are used mainly by businesses

false

A mortage

is a debt obligation (lien) attached to real property and gives the mortgagee the right to sell property in case of default

A (n)______ has the same contract responsibilities as an assignee under a nonnegotiable instrument

none of the other choices are correct

A (n)______ is a court-ordered seizure of goods from the customer to prevent the customer from disposing of it during the lawsuit

none of the other choices are correct

A financial institution that receives a promissory note has the right to:

sell the note to another party

A ______ is issued by the clerk of the court and directs the sheriff to seize and sell any of the debtor's nonexempt real or personal property within the court's jurisdiction.

writ of execution