Exam 16: Creditors Rights and Bankruptcy

Norma files a petition in bankruptcy. She turns her assets over to O'Brien, who sells them and then distributes the proceeds to Norma's creditors. O'Brien is

Purchase-money security interests in consumer goods are perfected by filing a financing statement.

Capital Projects, Inc., files a financing statement to provide notice of its security interest in the property of Data Network Corporation. The initial effective term of a financing statement is a period of

When more than one party claims an interest in the same collateral, a perfected secured party's interest has priority over security interests that are perfected later.

Sasha's debt to Tully is past due. Tully brings a legal action against Sasha to collect the debt. To ensure that a judgment in Tully's favor will be collectible, he asks the court to enter a prejudgment order to seize Sasha's property. This is a request for

A court can dismiss a debtor's petition for a Chapter 13 adjustment if the circumstances indicate bad faith.

A preference occurs when a debtor transfers property or money favoring one creditor over others.

On the entry of an order for relief in a reorganization case, the creditors generally take over the operation of the debtor's business.

Lena borrows from Mac and Nicol, using the same collateral for both loans. Only Nicol has a perfected security interest. Lena defaults on both loans. The party with first rights to the collateral is

Oscar refuses to pay Petra $500 in cash on their contract to repair Oscar's washing machine, which Petra still possesses at her repair shop. Petra's lien on the machine will terminate

A defaulting debtor cannot redeem nonexempt property before a sale under a writ of execution.

Natural Resource Investment Company and Mega Bank are secured parties with security interests in property owned by LNG Gas Corporation. Between these interests, the first to be filed or perfected has priority over other filed or perfected security interests in

A homestead exemption allows a debtor to subtract the value of the family home from the amount of a debt.

Debit & Credit Financing, Inc., and Equity Lending Company are secured parties with security interests in property owned by Fleet Shipping Corporation. Priority between these security interests is generally determined by

Creditors Loan Company and Debtors Service Corporation-Ellen's creditors-contract with Ellen for the discharge of her liquidated debts on payment of a lesser sum. This is

In a repayment plan case, the plan must provide for payment of all claims in full, whether or not they are entitled to priority.

A surety is primarily liable for the debt of a principal.

A security interest is enforceable only if the debtor has rights in the collateral.

All debts are dischargeable in bankruptcy.

A purchase-money security interest in consumer goods is created when a person buys goods on credit.