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