Exam 24: Debtor-Creditor Relations and Bankruptcy

A ________ loan is one in which the original lender sells shares to other parties.

The UCC provides that,unless otherwise agreed,a security agreement gives the secured party a security interest in the proceeds if collateral is sold,exchanged,collected,or otherwise disposed of.

Matthew has filed for Chapter 7 bankruptcy relief.He had borrowed money from his best friend,Rick,for the purchase of a car.Matthew really wants to repay Rick,but does not want to jeopardize his bankruptcy relief and the discharge of a number of other debts.What option,if any,is open to Matthew?

Molly got in over her head with credit card debt.She has been receiving phone call after phone call from creditors.She has also received notification from several creditors regarding lawsuits being filed against her.Her mailbox is filled with demands for payment each day.Molly regrets her excessive spending.She wants to pay as much as she can,but she is tired of the pressure from creditors.Is any option open to her?

In order to avoid a bankruptcy proceeding,the parties often try to negotiate an out-of-court settlement-called a workout-that restructures the debtor's financial affairs.

Congress is given the power to enact bankruptcy laws by

A creditor's claim in bankruptcy may be involuntarily postponed through application of the doctrine of equitable subordination.

A ________ loan may be repaid form time to time at the borrower's discretion,subject to a final maturity date when all sums outstanding become due and payable.

A bank's ________ rate is the lowest published rate of interest at which the bank lends to its best and most creditworthy commercial customers.

A Chapter 7 discharge is not available to a debtor who has received a discharge in a bankruptcy filed in the preceding ____ years.

National banks acting as lenders are subject to state usury laws.

A commitment fee is an amount a lender requires as consideration for its promise to keep a commitment to loan available.

What is required in a filing for a voluntary petition in bankruptcy? An involuntary petition?

Discuss the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA")in regards to whether Chapter 7 or Chapter 13 relief is appropriate.

A(n)________ clause in a loan document provides that any breach by the borrower under any other loan agreement constitutes an event of default.

In a composition plan under Chapter 13,the creditor receives a percentage of the debt owed and the remaining amount is discharged.

A bankruptcy plan that reduces the amount payable to all creditors is known as a ________ plan.

Rhonda purchases a refrigerator from AA Appliance Store.She store sells the refrigerator to her on credit.A few months later,Rhonda decides to move in with a friend and sells the refrigerator to Sally for $50.She also stops making payments on the refrigerator.When a representative from AA Appliance Store calls Rhonda,she tells them to get lost,that she has no money,and that the refrigerator is at Sally's house.The refrigerator is now worth less than Rhonda owes on it.Which of the following is true regarding the store's rights,if any,against Sally?

Chapter 13 does not provide a bankruptcy discharge for corporations.

What is a guaranty? Define and explain the difference between a guaranty of payment and a guaranty of collection.