Question 1

In a(n)________ arrangement, a third party promises to be primarily liable with the borrower for the payment of the borrower's debt.

Accepted Answer

The answer of In a(n)________ arrangement, a third party promises...

Question 2

________ is a rehabilitation form of bankruptcy that permits bankruptcy courts to supervise the debtor's plan for the payment of unpaid debts in installments over the plan period.

Accepted Answer

A)  Chapter 7 
B)  Chapter 13 
C)  Chapter 11 
D)  Chapter 12 
A)  Chapter 7 
B)  Chapter 13 
C)  Chapter 11 
D)  Chapter 12

Question 3

A(n)________ is an instrument that evidences a borrower's debt to the lender for a real property.

Accepted Answer

A)  note 
B)  consignment 
C)  accommodation 
D)  deed of trust 
A)  note 
B)  consignment 
C)  accommodation 
D)  deed of trust

Question 4

Explain in brief the constitution of a bankruptcy estate.

Accepted Answer

The bankruptcy estate includes all the d

Question 5

The suspension of certain legal actions by creditors against a debtor or the debtor's property is known as a(n)________.

Accepted Answer

A)  discharge of debt 
B)  composition 
C)  automatic stay 
D)  order for relief 
A)  discharge of debt 
B)  composition 
C)  automatic stay 
D)  order for relief

Question 6

To which of the following type of mortgages does the antideficiency statute apply?

Accepted Answer

A)  foreign currency mortgages 
B)  home improvement mortgages 
C)  first purchase money mortgages 
D)  second purchase money mortgages 
A)  foreign currency mortgages 
B)  home improvement mortgages 
C)  first purchase money mortgages 
D)  second purchase money mortgages

Question 7

Perfection by investment of collateral is one of the methods of perfecting a security interest under the UCC.

Accepted Answer

A) True 
 B)False

Question 8

When is a creditor referred to as a secured creditor?

Accepted Answer

A)  when the creditor has been guaranteed payment by a trustee 
B)  when the creditor gives a loan without security 
C)  when the creditor has been paid back his debt 
D)  when the creditor has acquired collateral 
A)  when the creditor has been guaranteed payment by a trustee 
B)  when the creditor gives a loan without security 
C)  when the creditor has been paid back his debt 
D)  when the creditor has acquired collateral

Question 9

What is an executory contract?

Accepted Answer

A)  a contract that cannot be discharged under Chapter 13 
B)  a contract that the debtor is obliged to perform despite filing for bankruptcy 
C)  an agreement between several creditors and a single debtor, dividing the debtor's property 
D)  a lease that has not been fully performed 
A)  a contract that cannot be discharged under Chapter 13 
B)  a contract that the debtor is obliged to perform despite filing for bankruptcy 
C)  an agreement between several creditors and a single debtor, dividing the debtor's property 
D)  a lease that has not been fully performed

Question 10

Tangible personal property includes securities, patents, trademarks, and copyrights.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following constitutes the property of a Chapter 13 estate?

Accepted Answer

A)  nonexempt property of the debtor before the case is closed 
B)  exempt property of the debtor before the case is closed 
C)  debtor's income before and after the case is closed 
D)  property that is exempt from Chapter 7 estate 
A)  nonexempt property of the debtor before the case is closed 
B)  exempt property of the debtor before the case is closed 
C)  debtor's income before and after the case is closed 
D)  property that is exempt from Chapter 7 estate

Question 12

Which article of the Uniform Commercial Code governs secured transactions in personal property?

Accepted Answer

A)  Article 8 
B)  Article 9 
C)  Article 18 
D)  Article 19 
A)  Article 8 
B)  Article 9 
C)  Article 18 
D)  Article 19

Question 13

Which of the following is determined by the means test?

Accepted Answer

A)  The debtor's median family income is less than the state's median family income. 
B)  The debtor's median family income is more than the state's median family income. 
C)  A debtor can pay prepetition debts out of postpetition income. 
D)  A debtor who has sufficient disposable income to pay prepetition debts qualifies for Chapter 13 bankruptcy. 
A)  The debtor's median family income is less than the state's median family income. 
B)  The debtor's median family income is more than the state's median family income. 
C)  A debtor can pay prepetition debts out of postpetition income. 
D)  A debtor who has sufficient disposable income to pay prepetition debts qualifies for Chapter 13 bankruptcy.

Question 14

A(n)________ is an instrument that gives a creditor a security interest in the debtor's real property that is pledged as collateral for a loan.

Accepted Answer

A)  credit report 
B)  letter of credit 
C)  note 
D)  deed of trust 
A)  credit report 
B)  letter of credit 
C)  note 
D)  deed of trust

Question 15

A(n)________ transaction occurs when a seller sells goods to a buyer who has obtained financing from a third-party lender that takes a security interest in the goods sold.

Accepted Answer

The answer of A(n)________ transaction occurs when a seller sells...

Question 16

Ashton borrows $25,000 from Amanda. Amanda lends the money to Ashton without taking an interest in collateral for the loan. Amanda is relying on Ashton's credit standing when she made the loan. What kind of creditor is Amanda?

Accepted Answer

A)  unsecured creditor 
B)  secured creditor 
C)  administrative claim creditor 
D)  post-petition creditor 
A)  unsecured creditor 
B)  secured creditor 
C)  administrative claim creditor 
D)  post-petition creditor

Question 17

Distinguish between two-party and three-party secured transactions with examples.

Accepted Answer

Two-party secure transactions occur, for

Question 18

Which of the following is true about the surety's liability to pay in a surety arrangement?

Accepted Answer

A)  The surety is secondarily liable for payment. 
B)  The surety is primarily liable for payment. 
C)  The principal debtor must be in default before the surety can be approached. 
D)  The surety can only be approached as a last resort to the creditor. 
A)  The surety is secondarily liable for payment. 
B)  The surety is primarily liable for payment. 
C)  The principal debtor must be in default before the surety can be approached. 
D)  The surety can only be approached as a last resort to the creditor.

Question 19

What does the Chapter 11 plan of reorganization set forth?

Accepted Answer

A)  an equilateral division of the Chapter 11 estate among all creditors 
B)  division of the bankruptcy estate according to the debt to be paid to each creditor 
C)  discharge of a debtor's unsecured debts and payment of secured debts 
D)  a proposed new capital structure for a debtor to assume when it emerges from Chapter 11 bankruptcy 
A)  an equilateral division of the Chapter 11 estate among all creditors 
B)  division of the bankruptcy estate according to the debt to be paid to each creditor 
C)  discharge of a debtor's unsecured debts and payment of secured debts 
D)  a proposed new capital structure for a debtor to assume when it emerges from Chapter 11 bankruptcy

Question 20

A(n)________ provides for the reduction of a debtor's debts.

Accepted Answer

A)  extension 
B)  liquidation 
C)  limitation 
D)  composition 
A)  extension 
B)  liquidation 
C)  limitation 
D)  composition

Exam 13: Credit, Secured Transactions, and Bankruptcy

In a(n)________ arrangement, a third party promises to be primarily liable with the borrower for the payment of the borrower's debt.

________ is a rehabilitation form of bankruptcy that permits bankruptcy courts to supervise the debtor's plan for the payment of unpaid debts in installments over the plan period.

A(n)________ is an instrument that evidences a borrower's debt to the lender for a real property.

Explain in brief the constitution of a bankruptcy estate.

The suspension of certain legal actions by creditors against a debtor or the debtor's property is known as a(n)________.

To which of the following type of mortgages does the antideficiency statute apply?

Perfection by investment of collateral is one of the methods of perfecting a security interest under the UCC.

When is a creditor referred to as a secured creditor?

What is an executory contract?

Tangible personal property includes securities, patents, trademarks, and copyrights.

Which of the following constitutes the property of a Chapter 13 estate?

Which article of the Uniform Commercial Code governs secured transactions in personal property?

Which of the following is determined by the means test?

A(n)________ is an instrument that gives a creditor a security interest in the debtor's real property that is pledged as collateral for a loan.

A(n)________ transaction occurs when a seller sells goods to a buyer who has obtained financing from a third-party lender that takes a security interest in the goods sold.

Ashton borrows $25,000 from Amanda. Amanda lends the money to Ashton without taking an interest in collateral for the loan. Amanda is relying on Ashton's credit standing when she made the loan. What kind of creditor is Amanda?

Distinguish between two-party and three-party secured transactions with examples.

Which of the following is true about the surety's liability to pay in a surety arrangement?

What does the Chapter 11 plan of reorganization set forth?

A(n)________ provides for the reduction of a debtor's debts.

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