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:

The procedures for using liens are generally determined by:

____ are drafts that mature on the payment date set in the future.

Negotiable instruments payable "to bearer" are considered the safest form.

A ____ is one who lends money to, or allows goods or services to be purchased on credit by, another party, the debtor.

Every year ____ people file for bankruptcy.

To be enforceable, a security interest must be detached from the debtor.

Under Article 3 of the UCC, a check is:

Which of the following is one of the UCC's requirements for an instrument to be negotiable:

A secured creditor is one who:

The amount of money owed in a debt is called the principal.

The powers of a debtor in possession are balanced by:

The law of negotiable instruments has it origins in:

In a term draft or time draft, the promise to pay expires in the future, usually 60 or 90 days.

The debtor on a mortgage is known as:

In Fordyce Bank and Trust v. Bean Timberland, the bank lent Bean money to buy timber from landowners. Bean gave the bank security interests in the timber, which he sold to lumber companies that milled the logs into lumber. When Bean defaulted on the loan, the bank tried to collect from the lumber companies because it had a secured interest in the timber. The courts held that the bank:

The Brechers owned Contractors Source, which had a company account at Amegy Bank. Straten was a bookkeeper for Contractors. She stole money by forging check over 32 months. Amegy agreed that the checks were forgeries but argued that the terms of the account agreement said that forgeries must be reported within 30 days, so it was not responsible for most forgeries, as it had sent monthly statements that had not been checked. Under the UCC, is Amegy correct?

If an instrument is found to be negotiable under the UCC, it may be freely traded without concern for any existing contract responsibilities if the instrument is in the possession of a holder in due course. To be a holder in due course, one must:

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 the credit he gets from a bank. On the loan, Billy is:

The person who has a negotiable instrument may be either a holder in due course or an ordinary holder.