Exam 13: Negotiable Instruments, Credit, and Bankruptcy

The law of mortgages comes from:

Under Article 3 of the UCC, a check is an unconditional written order to pay that involves three parties in distinct capacities: drawer, drawee, and payee. The drawee must be a bank. Payment must be "on demand."

Promissory notes are instruments that involve ____ parties.

If a negotiable instrument is ____, the transferee takes the instrument free of any of the transferor's contract obligations.

____ of the bankruptcy code means liquidation and fair distribution of the debtor's non-exempt assets to the creditors.

Billy wants to borrow $10,000 to start a male belly dancing business. Creditors are not anxious to lend him the funds. Billy convinces Gary to back-up his credit. Gary is:

In most Chapter 11 bankruptcies, the ____ operates the "reorganized" business.

A commercial instrument where one party has a legal obligation to pay another party a certain sum of money and involves a maker and a payee only is called:

A(n) ____ is a court-ordered seizure of goods from the customer to prevent the customer from disposing of it during the lawsuit.

The UCC prohibits the use of "floating liens" that keep carrying forward against a debtor when more supplies are added to an existing account.

An advantage of a well-planned Chapter 11 bankruptcy, compared to liquidation, includes:

A person who files bankruptcy may not file again for another eight years.

A form of check in which the bank is both the drawer and the drawee is called a:

In a ____, creditors file a petition with the court, forcing the declaration of bankruptcy and the beginning of proceedings.

A bankruptcy is a matter of credit history record for ten years.

Karen's Kitchens renovates Mark's old kitchen. Mark only pays part of his bill. To help try to collect the rest of the money owed her, Karen may obtain:

The creditors with the highest priority in bankruptcy proceedings are the secured creditors.

The agreement providing security in real property is a(n):

Tetzlaff earned an MBA and a law degree suing student loans to finance the schooling. At the end, he could not find work, was living with his aged mother, and owed $260,000 in student loans. He filed for Chapter 7 bankruptcy and asked that the student loans be discharged as an undue hardship. The bankruptcy court and district court refused. The appeals court held that the debt would:

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