Exam 13: Negotiable Instruments, Credit, and Bankruptcy

In some cases, the property of a debtor will not be available to a creditor who wishes to attach and sell it to satisfy an outstanding debt. Exempt property often includes:

A mortgagee is:

Chapter 11 bankruptcies, which are filed by businesses:

Under a Chapter 11 reorganization, the debtor acts as a trustee.

Chapter 13 bankruptcy largely involved debt rescheduling.

A principal has rights to be subrogated by the surety.

The one who receives payment from a negotiable instrument is called:

A general creditor usually collects nothing in the event the debtor defaults on the debt and is insolvent.

Refer to Fact Pattern 12-1. Assume that Gena has, besides business debts, student loans. If she is declared bankrupt by a court, what will happen to these loans? They will:

The law regarding the kinds of credit that may be applied to personal property is:

A secured creditor is one is able to take a non-paying customer's property to satisfy the customer's debt.

The law regarding the kinds of credit that may be applied to personal property is:

In a(n) ____, goods and services are sold on an invoice that shows transactions; full payment is expected within a fixed time period.

Perfecting a claim to a security interest may involve filing the claim with a state official.

If an instrument is negotiable under the UCC, the instrument may be freely traded in the market place without concern for any existing contract responsibilities, so long as the instrument is in the possession of a holder in due course.

In a(n) ____, the debtor makes a minimum monthly payment and more debt can be added to the account over time.

In Summers Group v. Tempe Mechanical, Summers (Rexel) sold electrical materials used in a construction project that went into bankruptcy. In the litigation to determine where various claimants stood in their efforts to collect, the appears court held that all lien holders would be treated on "equal ground."

Under the UCC, a secured party may repossess property in which it has a security interest, in any manner it deems necessary.

The purpose of a Chapter 11 bankruptcy is to distribute all of the debtor's assets as efficiently as possible.

Someone who files for bankruptcy under Chapter 13 files: