Exam 13: Negotiable Instruments, Credit, and Bankruptcy

People who have above average income are more likely to use Chapter 13 bankruptcy rather than Chapter 7.

If the principal does not pay the creditor, and the surety has to satisfy the debt, the principal:

Before filing for bankruptcy, a person must go through credit counseling.

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

Chapter 11 bankruptcies, which are filed by businesses:

When the maker of a note promises to repay the note in specific installments over time, it is a balloon note.

A(n) ____ is a note promising to repay borrowed money, probably with interest.

For credit under a(n) ____ the terms define the credit period available to the customer and any discounts offered for early payment.

Don borrows $90,000 to buy a home. His mortgage is with Western Bank. Don is unable to make his mortgage payments. Western forecloses on Don's house and sells it in a judicial sale. The bank gets $95,000 for the house. In this case, it:

The mortgagee is the debtor who obtains a mortgage.

An open account means:

Governments disfavor bearer instruments because:

Open accounts usually require full payment within a fixed time period.

A suretyship is most often required for:

The ____ allows a debtor to retain the family home up to a specified amount free from creditors' claims.

Not all promises to pay are negotiable instruments.

Capital refers to:

The maker or the drawer may create a bearer instrument by using the following language: "to bearer" or "to the order of bearer."

The higher the income of a bankrupt, the more likely the debts will be discharged by Chapter 7 bankruptcy rather than by debt repayment over time.

Before passage of laws affecting negotiable instruments: