Exam 16: Creditors Rights and Bankruptcy

Ethan fraudulently induces Franz to sign a promissory note to buy a speedboat. Franz's friend, Gus, agrees to act as a guarantor of the note. If Franz fails to make payment to Ethan, with respect to the defense of fraud, Gus can

Smartt Software Company borrows $10,000 from Term 'N All Loans, Inc., but cannot repay the loan when it comes due. Term 'N All refuses to extend the time for repayment unless Smartt can provide an acceptable surety. Uno Venture Corporation agrees to act as a surety for the loan after Smartt offers the firm a discount on software and shows Uno financial statements, compiled with Term 'N All's assistance, that misrepresent Smartt's financial situation. Later, after Uno uses the discount to buy software, Smartt again defaults on repayment of the loan, and Term 'N All files a suit against Uno to collect the amount of the debt. Is Uno liable? Why or why not?

A debtor must be insolvent to file for bankruptcy relief.

Roland files for Chapter 7 bankruptcy. After all his assets have been sold and the proceeds distributed among his creditors, Roland's remaining debts, subject to certain exceptions

If the income of a debtor filing for bankruptcy is below the median income, there is a presumption of bankruptcy abuse.

Dylan defaults on a debt to Eastside Bank. Eastside will be able to recover the debt from all of the following except

To knowingly supply false information on official bankruptcy schedules is a crime.

Joe files a petition in bankruptcy. The initial proceeding on this petition will be in

George borrows funds from Hometown Credit Union (HCU) to buy real property. George signs a written instrument that gives HCU an interest in, or lien on, the property as security for the debt's payment. This is

Lenders Bank provides Molly with a mortgage to buy a home. Six years into the term of the loan, Molly loses her job and is unable to make the payments. Possible methods for these parties to avoid foreclosure include all of the following except

Nell's debt to Olsen is past due. Olsen obtains an order of garnishment to require Nell's employer Pro Transmission Service, Inc., to pay part of Nell's paycheck to Olsen. The law

If a debtor does not pay a mechanic's lien, the debtor's property can be sold to satisfy the debt.

If a homeowner defaults, or fails to make the mortgage payments, the lender has the right to foreclose on the mortgaged property.

Jessie's debt to Karla is past due. Karla brings a legal action against Jessie to collect the debt. Karla asks the court to order Liberty Bank, in which Jessie has an account, to pay a portion of the funds to Karla. This is a request for

The payment of Olinda's debt to Prudent Loan Company is guaranteed by Olinda's personal property. Prudent is most likely to perfect its interest by

The state office in which a financing statement should be filed is always the location of the chattel.

To adjust debt and institute a repayment plan, Bianca-who is not a corporation, a partnership, or a family farmer or fisherman-may file a petition in bankruptcy for relief through

A prepayment penalty clause helps to protect a lender should the borrower refinance within a short time after obtaining a mortgage.

Recording a mortgage ensures that a creditor is officially on record as holding an interest in mortgaged property.

A buyer in the ordinary course of business takes the goods free of any security interest created by the seller.