Question 1

Which party routinely buys goods in good faith from a person who routinely sells such goods?

Accepted Answer

A)  A commercial purchaser
B)  A non-commercial purchaser
C)  A course of dealings purchaser
D)  A buyer in the ordinary course of business
E)  A holder of goods in due courseF) A) and C)
G) A) and B) D

Question 2

Repossession.Tina sold used vehicles.She sold a used pick-up truck to Joan and a used convertible to Barry.She properly obtained a security interest in both vehicles.Both Joan and Barry defaulted on payments owed to Tina for the vehicles.Tina told her assistant Samantha that the only legal remedy was repossession; that she was going after the vehicles; and that Samantha should call law enforcement if she did not show up at the office by 10 a.m.for the next few mornings.Tina decided that she would repossess Joan's pick-up at Joan's house.Therefore,Tina slipped into the driveway at midnight one night and started the engine.Joan immediately ran out and confronted Tina.Tina shoved Joan away and drove off in the pick-up truck.Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him.Which of the following is true regarding Tina's repossession of the pick-up truck?

Accepted Answer

A)  Tina improperly breached the peace in recovering the collateral.
B)  Tina did not breach the peace in recovering the collateral,unless Joan can establish the existence of actual injuries.
C)  Tina did not breach the peace because she was entitled to repossess the vehicle and because any injury sustained by Joan was her own fault.
D)  Tina breached the peace,but only because she did not provide Joan with prior notification that she was coming to repossess the collateral.
E)  Tina breached the peace,but only because she acted to repossess the collateral after 10:00 p.m.at night.F) All of the above
G) A) and B)

Question 3

A security interest may not apply to personal property that is not yet in the debtor's possession.

Accepted Answer

A) True 
 B)False

Question 4

Creditors can attempt to repossess property during bankruptcy proceedings.

Accepted Answer

A) True 
 B)False

Question 5

An interest in personal property or fixtures which secures payment or performance of an obligation is a called a(n) ________.

Accepted Answer

A)  debenture
B)  secured interest
C)  promissory note
D)  mutual-benefit bailment
E)  accord and satisfactionF) A) and B)
G) A) and C)

Question 6

________ is a writing that demonstrates a right to payment of money.

Accepted Answer

A)  Chattel paper
B)  Transactional paper
C)  An allonge
D)  An instrument
E)  An addendumF) C) and D)
G) A) and B)

Question 7

Which of the following is true regarding the effect of an automatic stay on claims of secured creditors in a Chapter 7 proceeding?

Accepted Answer

A)  The automatic stay affects the claims of secured creditors in the same way it affects the claims of unsecured creditors.
B)  Secured creditors with claims of over $5,000 are not affected by the automatic stay.
C)  Secured creditors with claims of over $15,000 are not affected by the automatic stay.
D)  Secured creditors with claims of over $20,000 are not affected by the automatic stay.
E)  The court may exclude secured creditors from the automatic stay if they petition the court to show that they do not have adequate protection under the stay.F) A) and E)
G) B) and E)

Question 8

Which of the following is a meeting of all the creditors listed in the Chapter 7 required schedule for liquidation?

Accepted Answer

A)  Settlement conference
B)  Pre-trial conference
C)  Creditors' meeting
D)  Binding arbitration
E)  Non-binding arbitrationF) None of the above
G) A) and E)

Question 9

Under the Uniform Commercial Code,a buyer in the ordinary course of business can take goods free of any security interest created by the seller of the goods unless the security interest is perfected.

Accepted Answer

A) True 
 B)False

Question 10

If a buyer purchases chattel paper or an instrument in the ordinary course of business and he or she is unaware of any security interest in the good,the buyer obtains the good ________.

Accepted Answer

A)  subject to an unperfected security interest
B)  subject to a perfected security interest by possession
C)  subject to an automatically-perfected security interest
D)  subject to an automatically-perfected security interest and a perfected security interest by possession
E)  free of any security interestF) B) and E)
G) C) and D) E

Question 11

According to the Uniform Commercial Code (UCC) ,a purchase money security interest (PMSI) exists in all but which of the following situations?

Accepted Answer

A)  When a security interest is retained or taken by the seller of the collateral to secure part of the purchase price
B)  When a security interest is retained or taken by the buyer of the collateral to secure the seller's fulfillment of an express or implied warranty
C)  When a security interest is retained or taken by the seller of the collateral to secure all of the purchase price
D)  When a security interest is retained or taken by a person who gives something of value to the debtor so that the debtor can gain rights to the collateral
E)  When a security interest is retained or taken by a person who gives something of value to the debtor so that the debtor can gain use of the collateralF) A) and E)
G) C) and E)

Question 12

What kind of property is acquired by the debtor after the security agreement is made?

Accepted Answer

A)  Post-dated property
B)  After-acquired property
C)  Proceeds
D)  Ex post facto property
E)  Incidental propertyF) C) and E)
G) D) and E)

Question 13

A ________ transaction is a transaction in which the payment of a debt is guaranteed by the debtor's personal property owned by the debtor.

Accepted Answer

A)  subrogated
B)  restricted
C)  secured
D)  leveraged
E)  certifiedF) C) and D)
G) A) and D)

Question 14

Overextended Debtor.Dennis purchased a big-screen television from ABC Electronics and financed the purchase through ABC Electronics based on an agreement granting ABC Electronics a security interest in the television and requiring that Dennis make monthly payments.Three months later,Dennis was unable to continue making payments on the television because he had bought a boat,a new car,an expensive engagement ring for his girlfriend,and some other items.The manager from ABC Electronics called and asked Dennis to return the television.Dennis refused on the basis that ABC Electronics never perfected its interest in the television.Which of the following is the correct term for designating the effect of Dennis's failure to continue making payments?

Accepted Answer

A)  He refused the loan.
B)  He defaulted on the loan.
C)  He unsecured the loan.
D)  He rescinded the loan.
E)  He discharged the loan.F) B) and D)
G) B) and E)

Question 15

Who calls the creditors' meeting in a Chapter 7 bankruptcy proceeding?

Accepted Answer

A)  The trustee
B)  The interim trustee
C)  The executor
D)  The executrix
E)  The committee of creditorsF) C) and D)
G) A) and E)

Question 16

Which of the following is true regarding the number of creditors who must vote to accept a Chapter 11 reorganization plan?

Accepted Answer

A)  For the plan to be accepted,one-third of the creditors of each class of creditors must vote to approve it.
B)  For the plan to be accepted,one-half of the creditors of each class of creditors must vote to approve it.
C)  For the plan to be accepted,two-thirds of the creditors of each class of creditors must vote to approve it.
D)  For the plan to be accepted,three-fourths of the creditors of each class of creditors must vote to approve it.
E)  For the plan to be accepted,one-fourth of the creditors of each class of creditors must vote to approve it.F) B) and D)
G) A) and B)

Question 17

When a debtor sells collateral,the secured party automatically has an interest in the proceeds the debtor receives in exchange for the collateral.

Accepted Answer

A) True 
 B)False

Question 18

Which chapter of the Bankruptcy Code is used for the sale of a debtor's assets by a trustee and the distribution of money to creditors?

Accepted Answer

A)  Chapter 7
B)  Chapter 9
C)  Chapter 11
D)  Chapter 13
E)  Chapter 15F) B) and D)
G) A) and B)

Question 19

Which of the following is a moratorium for almost all creditor litigation against a debtor in a Chapter 7 bankruptcy proceeding?

Accepted Answer

A)  A stop order
B)  An automatic stay
C)  A temporary injunction
D)  A permanent injunction
E)  An interlocutory appealF) A) and C)
G) B) and E)

Question 20

If an individual was a debtor in a bankruptcy case that was dismissed within 180 days of the current case,the individual is generally not eligible to be a debtor under Chapters 7,11,or 13.

Accepted Answer

A) True 
 B)False  True

Exam 19: Secured Transactions and Bankruptcy

Which party routinely buys goods in good faith from a person who routinely sells such goods?

Correct Answer
verified
D

Correct Answer
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A security interest may not apply to personal property that is not yet in the debtor's possession.

Correct Answer
verified

Creditors can attempt to repossess property during bankruptcy proceedings.

Correct Answer
verified

An interest in personal property or fixtures which secures payment or performance of an obligation is a called a(n) ________.

Correct Answer
verified

________ is a writing that demonstrates a right to payment of money.

Correct Answer
verified

Which of the following is true regarding the effect of an automatic stay on claims of secured creditors in a Chapter 7 proceeding?

Correct Answer
verified

Which of the following is a meeting of all the creditors listed in the Chapter 7 required schedule for liquidation?

Correct Answer
verified

Under the Uniform Commercial Code,a buyer in the ordinary course of business can take goods free of any security interest created by the seller of the goods unless the security interest is perfected.

Correct Answer
verified

If a buyer purchases chattel paper or an instrument in the ordinary course of business and he or she is unaware of any security interest in the good,the buyer obtains the good ________.

Correct Answer
verified
E

According to the Uniform Commercial Code (UCC) ,a purchase money security interest (PMSI) exists in all but which of the following situations?

Correct Answer
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What kind of property is acquired by the debtor after the security agreement is made?

Correct Answer
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A ________ transaction is a transaction in which the payment of a debt is guaranteed by the debtor's personal property owned by the debtor.

Correct Answer
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Correct Answer
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Who calls the creditors' meeting in a Chapter 7 bankruptcy proceeding?

Correct Answer
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Which of the following is true regarding the number of creditors who must vote to accept a Chapter 11 reorganization plan?

Correct Answer
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When a debtor sells collateral,the secured party automatically has an interest in the proceeds the debtor receives in exchange for the collateral.

Correct Answer
verified

Which chapter of the Bankruptcy Code is used for the sale of a debtor's assets by a trustee and the distribution of money to creditors?

Correct Answer
verified

Which of the following is a moratorium for almost all creditor litigation against a debtor in a Chapter 7 bankruptcy proceeding?

Correct Answer
verified

If an individual was a debtor in a bankruptcy case that was dismissed within 180 days of the current case,the individual is generally not eligible to be a debtor under Chapters 7,11,or 13.

Correct Answer
verified
True

Exam 19: Secured Transactions and Bankruptcy

Which party routinely buys goods in good faith from a person who routinely sells such goods?

Correct AnswerverifiedD

Correct AnswerverifiedShow Answer

A security interest may not apply to personal property that is not yet in the debtor's possession.

Correct AnswerverifiedShow Answer

Creditors can attempt to repossess property during bankruptcy proceedings.

Correct AnswerverifiedShow Answer

An interest in personal property or fixtures which secures payment or performance of an obligation is a called a(n) ________.

Correct AnswerverifiedShow Answer

________ is a writing that demonstrates a right to payment of money.

Correct AnswerverifiedShow Answer

Which of the following is true regarding the effect of an automatic stay on claims of secured creditors in a Chapter 7 proceeding?

Correct AnswerverifiedShow Answer

Which of the following is a meeting of all the creditors listed in the Chapter 7 required schedule for liquidation?

Correct AnswerverifiedShow Answer

Under the Uniform Commercial Code,a buyer in the ordinary course of business can take goods free of any security interest created by the seller of the goods unless the security interest is perfected.

Correct AnswerverifiedShow Answer

If a buyer purchases chattel paper or an instrument in the ordinary course of business and he or she is unaware of any security interest in the good,the buyer obtains the good ________.

Correct AnswerverifiedE

According to the Uniform Commercial Code (UCC) ,a purchase money security interest (PMSI) exists in all but which of the following situations?

Correct AnswerverifiedShow Answer

What kind of property is acquired by the debtor after the security agreement is made?

Correct AnswerverifiedShow Answer

A ________ transaction is a transaction in which the payment of a debt is guaranteed by the debtor's personal property owned by the debtor.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Who calls the creditors' meeting in a Chapter 7 bankruptcy proceeding?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the number of creditors who must vote to accept a Chapter 11 reorganization plan?

Correct AnswerverifiedShow Answer

When a debtor sells collateral,the secured party automatically has an interest in the proceeds the debtor receives in exchange for the collateral.

Correct AnswerverifiedShow Answer

Which chapter of the Bankruptcy Code is used for the sale of a debtor's assets by a trustee and the distribution of money to creditors?

Correct AnswerverifiedShow Answer

Which of the following is a moratorium for almost all creditor litigation against a debtor in a Chapter 7 bankruptcy proceeding?

Correct AnswerverifiedShow Answer

If an individual was a debtor in a bankruptcy case that was dismissed within 180 days of the current case,the individual is generally not eligible to be a debtor under Chapters 7,11,or 13.

Correct AnswerverifiedTrue

Correct Answer
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D

Correct Answer
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E

Correct Answer
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True