Question 1

Which one of the following statements about the Personal Property Security Act is true?

Accepted Answer

A)  This legislation applies only to all present transactions where personal property is given as security interest to enforce an obligation. 
B)  Unless a creditor in a secured transaction covered by this act takes steps to attach and perfect his security interest, he could lose that interest to someone outside the contract. 
C)  In a situation where a debtor fraudulently attempts to transfer property that he has given as security, the Act is designed to protect both the debtor and the secured creditor. 
D)  If a secured creditor fails to register his security interest in the Personal Property Registry, he loses his rights against the debtor. 
E)  If someone suspects that an item of personal property has been given as security by a particular person, he can sue on the breach of a condition. 
A)  This legislation applies only to all present transactions where personal property is given as security interest to enforce an obligation. 
B)  Unless a creditor in a secured transaction covered by this act takes steps to attach and perfect his security interest, he could lose that interest to someone outside the contract. 
C)  In a situation where a debtor fraudulently attempts to transfer property that he has given as security, the Act is designed to protect both the debtor and the secured creditor. 
D)  If a secured creditor fails to register his security interest in the Personal Property Registry, he loses his rights against the debtor. 
E)  If someone suspects that an item of personal property has been given as security by a particular person, he can sue on the breach of a condition.

Question 2

Which of the following is a goal of the Bankruptcy and Insolvency Act?

Accepted Answer

A)  To determine the process by which debtors convey their assets to a trustee in bankruptcy who distributes them to the creditors 
B)  To provide an alternative to criminal charges 
C)  To allow persons with impossible burdens of debt to discharge all of their debts 
D)  To protect the interests of debtors 
E)  To help incorporated companies after discharge to carry on without the same burden of debt 
A)  To determine the process by which debtors convey their assets to a trustee in bankruptcy who distributes them to the creditors 
B)  To provide an alternative to criminal charges 
C)  To allow persons with impossible burdens of debt to discharge all of their debts 
D)  To protect the interests of debtors 
E)  To help incorporated companies after discharge to carry on without the same burden of debt

Question 3

When creditors receive notice of a consumer proposal from an insolvent debtor, they must demand a meeting or the proposal will be automatically accepted.

Accepted Answer

A) True 
 B)False

Question 4

Owen borrowed money from a credit union, guaranteed by his father, to buy a car. The credit union also registered a security interest under the Personal Property Security Act against the vehicle. Owen defaulted and, instead of repossessing the vehicle, the credit union demanded payment from the father. Explain the legal position of the father under these circumstances.

Accepted Answer

The credit union has every right to dema

Question 5

Where, in the face of default, goods are repossessed and resold, but the amount recovered is not enough to cover what is owing, what are the rights of the creditor?

Accepted Answer

This varies from jurisdiction to jurisdi

Question 6

Amy Carr looked at a 2016 Ford being sold by a private party who told Carr that the car was free and clear of all encumbrances. Carr had the Ford inspected by Automobile Association, which reported it to be in good condition. Carr bought the Ford for $8000. Two months later, the car was seized by a bank that had properly perfected and attached its security interest. On these facts, which of the following is true?

Accepted Answer

A)  Carr would be able to keep the Ford because the seller had represented that the Ford was free and clear of encumbrances. 
B)  Carr would be able to keep the Ford because she was an innocent purchaser without notice of any lien or charge. 
C)  The bank would get the Ford because it had title to it as security, and it could claim its right to title whether it perfected and attached the security interest or not. 
D)  The bank would get the Ford because it properly perfected and attached its security interest. 
E)  Carr will lose the car and has no recourse against anyone. 
A)  Carr would be able to keep the Ford because the seller had represented that the Ford was free and clear of encumbrances. 
B)  Carr would be able to keep the Ford because she was an innocent purchaser without notice of any lien or charge. 
C)  The bank would get the Ford because it had title to it as security, and it could claim its right to title whether it perfected and attached the security interest or not. 
D)  The bank would get the Ford because it properly perfected and attached its security interest. 
E)  Carr will lose the car and has no recourse against anyone.

Question 7

A purchase money security interest

Accepted Answer

A)  will be automatically subordinate to any general security agreement, even if registered within the specified time period. 
B)  will prevail over a general security agreement covering all of a merchant's assets if it registered within the specified time period. 
C)  is also known as a floating charge. 
D)  is now obsolete in light of the Personal Property Security Act. 
E)  is prohibited in most provinces. 
A)  will be automatically subordinate to any general security agreement, even if registered within the specified time period. 
B)  will prevail over a general security agreement covering all of a merchant's assets if it registered within the specified time period. 
C)  is also known as a floating charge. 
D)  is now obsolete in light of the Personal Property Security Act. 
E)  is prohibited in most provinces.

Question 8

After a creditor has taken possession of collateral, the debtor's right to reclaim it on payment of any money owing is known as a

Accepted Answer

A)  right to salvage. 
B)  right of settlement. 
C)  right to redeem. 
D)  constructive trust. 
E)  collateral contract. 
A)  right to salvage. 
B)  right of settlement. 
C)  right to redeem. 
D)  constructive trust. 
E)  collateral contract.

Question 9

________ requires the debtor to make the stipulated payments into court, such that all of his debts will be paid in full within three years, unless the creditors consent to a longer period.

Accepted Answer

A)  An OPD program 
B)  Restructuring 
C)  An unsecured creditor 
D)  A consolidation order 
E)  A Division 1 proposal 
A)  An OPD program 
B)  Restructuring 
C)  An unsecured creditor 
D)  A consolidation order 
E)  A Division 1 proposal

Question 10

Give three examples of types of things that can be used as security under the Personal Property Security Act.

Accepted Answer

Tangible goods such as cars, boats, and

Question 11

Distinguish between a guarantee and an indemnity.

Accepted Answer

A guarantee is an agreement to pay a deb

Question 12

A "confirmed letter of credit" is another name for a "standby letter of credit."

Accepted Answer

A) True 
 B)False

Question 13

Owen bought a car from Ace Fancy Cars Ltd. on time. The salesman claimed that it had a new engine and a new transmission. Security was registered against the vehicle under the Personal Property Security Act, and Owen's father was required to sign a guarantee to support the debt. Two months later, the car broke down, and upon inspection, it was discovered that, in fact, a used motor and transmission had been installed, not a new one. Owen refused to make any further payments and demanded his money back. The car dealership ignored their right to repossess the vehicle and demanded payment from Owen's father. Explain Owen's father's rights in these circumstances.

Accepted Answer

Owen's father has the same defences avai

Question 14

Which of the following debts is not subject to a stay of proceedings even after a bankrupt has been discharged?

Accepted Answer

A)  Past maintenance for dependents 
B)  Family loans 
C)  Judgment debts 
D)  Ordinary debt 
E)  Unsecured loans 
A)  Past maintenance for dependents 
B)  Family loans 
C)  Judgment debts 
D)  Ordinary debt 
E)  Unsecured loans

Question 15

"Bankruptcy is a convenient way to avoid paying your debts." Discuss the accuracy of this statement.

Accepted Answer

Students should note that this attitude

Question 16

With regard to guarantees, which of the following is false?

Accepted Answer

A)  A guarantor can use any defence against the creditor that the debtor could use. 
B)  A legally binding promise to be primarily responsible for someone else's obligation is an indemnity. 
C)  A verbal guarantee is as enforceable as a written one. 
D)  Subrogation can result in a guarantor's being able to sue successfully the very debtor whose obligation he guaranteed. 
E)  A legally enforceable guarantee must satisfy all the elements required to create a binding contract. 
A)  A guarantor can use any defence against the creditor that the debtor could use. 
B)  A legally binding promise to be primarily responsible for someone else's obligation is an indemnity. 
C)  A verbal guarantee is as enforceable as a written one. 
D)  Subrogation can result in a guarantor's being able to sue successfully the very debtor whose obligation he guaranteed. 
E)  A legally enforceable guarantee must satisfy all the elements required to create a binding contract.

Question 17

When the value of the security is not great enough to cover the debt, a secured creditor is an unsecured creditor for that outstanding amount.

Accepted Answer

A) True 
 B)False

Question 18

The Bankruptcy and Insolvency Act allows a supplier of goods to a bankrupt to seek return of those goods.

Accepted Answer

A) True 
 B)False

Question 19

Explain the role of the trustee in bankruptcy proceedings.

Accepted Answer

The function of the trustee is

Question 20

Distinguish between bankruptcy and insolvency.

Accepted Answer

Insolvency is simply not being able to p

Which one of the following statements about the Personal Property Security Act is true?

Which of the following is a goal of the Bankruptcy and Insolvency Act?

When creditors receive notice of a consumer proposal from an insolvent debtor, they must demand a meeting or the proposal will be automatically accepted.

Where, in the face of default, goods are repossessed and resold, but the amount recovered is not enough to cover what is owing, what are the rights of the creditor?

A purchase money security interest

After a creditor has taken possession of collateral, the debtor's right to reclaim it on payment of any money owing is known as a

________ requires the debtor to make the stipulated payments into court, such that all of his debts will be paid in full within three years, unless the creditors consent to a longer period.

Give three examples of types of things that can be used as security under the Personal Property Security Act.

Distinguish between a guarantee and an indemnity.

A "confirmed letter of credit" is another name for a "standby letter of credit."

Which of the following debts is not subject to a stay of proceedings even after a bankrupt has been discharged?

"Bankruptcy is a convenient way to avoid paying your debts." Discuss the accuracy of this statement.

With regard to guarantees, which of the following is false?

When the value of the security is not great enough to cover the debt, a secured creditor is an unsecured creditor for that outstanding amount.

The Bankruptcy and Insolvency Act allows a supplier of goods to a bankrupt to seek return of those goods.

Explain the role of the trustee in bankruptcy proceedings.

Distinguish between bankruptcy and insolvency.

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: the Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contract: Consensus and Consideration

The Elements of a Contract: Capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Agency and Partnership

Corporations

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Sales and Consumer Protection

Filters

Exam 15: Priority of Creditors

Which one of the following statements about the Personal Property Security Act is true?

Which of the following is a goal of the Bankruptcy and Insolvency Act?

When creditors receive notice of a consumer proposal from an insolvent debtor, they must demand a meeting or the proposal will be automatically accepted.

Where, in the face of default, goods are repossessed and resold, but the amount recovered is not enough to cover what is owing, what are the rights of the creditor?

A purchase money security interest

After a creditor has taken possession of collateral, the debtor's right to reclaim it on payment of any money owing is known as a

________ requires the debtor to make the stipulated payments into court, such that all of his debts will be paid in full within three years, unless the creditors consent to a longer period.

Give three examples of types of things that can be used as security under the Personal Property Security Act.

Distinguish between a guarantee and an indemnity.

A "confirmed letter of credit" is another name for a "standby letter of credit."

Which of the following debts is not subject to a stay of proceedings even after a bankrupt has been discharged?

"Bankruptcy is a convenient way to avoid paying your debts." Discuss the accuracy of this statement.

With regard to guarantees, which of the following is false?

When the value of the security is not great enough to cover the debt, a secured creditor is an unsecured creditor for that outstanding amount.

The Bankruptcy and Insolvency Act allows a supplier of goods to a bankrupt to seek return of those goods.

Explain the role of the trustee in bankruptcy proceedings.

Distinguish between bankruptcy and insolvency.

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: the Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contract: Consensus and Consideration

The Elements of a Contract: Capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Agency and Partnership

Corporations

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Sales and Consumer Protection

Filters