Question 1

What are the practical consequences affecting the individual who declares personal bankruptcy?

Accepted Answer

If he becomes bankrupt,he will lose most of his property.He will also find it difficult in the future to conduct business,or to make personal credit purchases,due to a poor credit rating.A personal bankruptcy will remain on an individual's credit record for about six years.Even after that period of time,it will be obvious to a credit grantor that there must have been serious financial problems,because of the lack of credit transactions during that six-year period.

Question 2

Which of the following statements regarding the securing of debt is true?

Accepted Answer

A)  The term guarantee, otherwise known as an indemnity, refers to a primary debt obligation. 
B)  To avoid problems related to consideration, lending institutions often require that guarantees be placed under seal. 
C)  In every province, there is now a requirement that a guarantor appear before a notary public. 
D)  Because of the principle of caveat emptor, a creditor has no obligation to protect the interests of a guarantor. 
E)  As guarantees are mere formalities, there is little point in getting legal advice prior to executing one. 
A)  The term guarantee, otherwise known as an indemnity, refers to a primary debt obligation. 
B)  To avoid problems related to consideration, lending institutions often require that guarantees be placed under seal. 
C)  In every province, there is now a requirement that a guarantor appear before a notary public. 
D)  Because of the principle of caveat emptor, a creditor has no obligation to protect the interests of a guarantor. 
E)  As guarantees are mere formalities, there is little point in getting legal advice prior to executing one. B

Question 3

A Division I proposal is available only to consumer debtors with less than $75 000 in claims against them.

Accepted Answer

A) True 
 B)False  False

Question 4

Your brother wants to borrow $8000 from the Bank of Britannia and has asked if you would guarantee the loan.You have been told the following with regard to guarantees.Which of the following statements is false?

Accepted Answer

A)  As guarantor, you can use any defence against the bank that your brother could use. 
B)  A guarantor, like an indemnitor, becomes primarily liable on the debt as soon as the document is signed. 
C)  You, as guarantor, may be relieved of your obligation if the bank does anything to weaken your position-e.g., by agreeing with your brother to increase the amount without your consent. 
D)  If he defaulted on his payments and you had to pay the debt to the bank, you would be subrogated to the rights of the bank-i.e., you would get the bank's right to sue your brother. 
E)  A legally enforceable guarantee must satisfy all the elements required to create a binding contract. 
A)  As guarantor, you can use any defence against the bank that your brother could use. 
B)  A guarantor, like an indemnitor, becomes primarily liable on the debt as soon as the document is signed. 
C)  You, as guarantor, may be relieved of your obligation if the bank does anything to weaken your position-e.g., by agreeing with your brother to increase the amount without your consent. 
D)  If he defaulted on his payments and you had to pay the debt to the bank, you would be subrogated to the rights of the bank-i.e., you would get the bank's right to sue your brother. 
E)  A legally enforceable guarantee must satisfy all the elements required to create a binding contract.

Question 5

The assignment of book accounts is the conditional right to collect on outstanding accounts in the event of default.

Accepted Answer

A) True 
 B)False

Question 6

When the value of the security is not great enough to cover the debt,a secured creditor is an unsecured creditor for that outstanding amount.

Accepted Answer

A) True 
 B)False

Question 7

Bankruptcy is a wholly voluntary process designed primarily to protect debtors from abusive creditors.

Accepted Answer

A) True 
 B)False

Question 8

Joe worked as a subcontractor for Harry in framing a house owned by Sam.When it became apparent to Joe that he was not going to be paid by Harry,what rights did Joe have under these circumstances?

Accepted Answer

He could file a buil

Question 9

What is used as security in assignment of book accounts?

Accepted Answer

In these circumstances,the debtor would

Question 10

Where a debtor has committed an act of bankruptcy,a creditor who is owed more than $1000 can petition the court to force that debtor into bankruptcy.

Accepted Answer

A) True 
 B)False

Question 11

Legislation and the principles of contract and common law primarily protect the interests of the debtor in the event of a default.

Accepted Answer

A) True 
 B)False

Question 12

Both a chattel and a chose in action can be used to secure a debt.

Accepted Answer

A) True 
 B)False

Question 13

In which one of the following situations is a chose in action (intangible property)given as security by a debtor to the creditor?

Accepted Answer

A)  A programmer pawns his computer. 
B)  Mr. Jason grants a chattel mortgage on the family car to secure repayment of money borrowed for a trip. 
C)  A farmer gives his future crop to the bank as security for the repayment of money borrowed for seed. 
D)  A dentist assigns her accounts receivable to the bank that lent her money for the purchase of a business. 
E)  Jeff buys a piano under a conditional sale contract. 
A)  A programmer pawns his computer. 
B)  Mr. Jason grants a chattel mortgage on the family car to secure repayment of money borrowed for a trip. 
C)  A farmer gives his future crop to the bank as security for the repayment of money borrowed for seed. 
D)  A dentist assigns her accounts receivable to the bank that lent her money for the purchase of a business. 
E)  Jeff buys a piano under a conditional sale contract.

Question 14

Distinguish between personal and real property.

Accepted Answer

Personal property includes tangible and

Question 15

Hank sold three properties for Ms.W and had been paid his commission for the first,but not for the last two.Hank had done everything according to the contract and according to the relevant statutes,but Ms.W wouldn't pay.Hank knows that Ms.W has a bank account with the Bank of Montreal and has money owing to her from a Mr.Gregory.With regard to the collecting of the debt owed,which of the following is false?

Accepted Answer

A)  Hank could sue Ms. W for breach of contract. 
B)  After obtaining judgment, Hank could force the bank to pay into court an amount of money from Ms. W's account to satisfy the debt. 
C)  Hank's claim for commission is unenforceable because he failed to secure the debt by retaining title until the amounts were paid. 
D)  If Hank got judgment against Ms. W, he could get an order commanding seizure of enough of Ms. W's goods to satisfy the judgment debt. 
E)  If Ms. W goes into bankruptcy, Hank may not get paid. 
A)  Hank could sue Ms. W for breach of contract. 
B)  After obtaining judgment, Hank could force the bank to pay into court an amount of money from Ms. W's account to satisfy the debt. 
C)  Hank's claim for commission is unenforceable because he failed to secure the debt by retaining title until the amounts were paid. 
D)  If Hank got judgment against Ms. W, he could get an order commanding seizure of enough of Ms. W's goods to satisfy the judgment debt. 
E)  If Ms. W goes into bankruptcy, Hank may not get paid.

Question 16

Greg told Rick that he would be willing to pay a high rate of interest for a two-month loan of $2000.Rick agreed to lend Greg this amount at an annual rate of 20 percnet,repayable March 1,2011.Greg agreed to these terms.Greg did not pay on March 1.Rick learned that Greg had recently completed some work for Martinson for which Greg was owed $2000.Now that Greg is in default,which of the following is false?

Accepted Answer

A)  Rick could sue Greg for breach of contract. 
B)  Rick could execute against Greg even if Rick had not obtained judgment against him. 
C)  Rick could not place Greg into bankruptcy unless Greg had committed an "act of bankruptcy." 
D)  If Rick obtained a judgment against Greg, he could compel him to be examined about his income, property, and debts. 
E)  Once he has obtained judgment, Rick can garnishee the money owed to Greg by Martinson. 
A)  Rick could sue Greg for breach of contract. 
B)  Rick could execute against Greg even if Rick had not obtained judgment against him. 
C)  Rick could not place Greg into bankruptcy unless Greg had committed an "act of bankruptcy." 
D)  If Rick obtained a judgment against Greg, he could compel him to be examined about his income, property, and debts. 
E)  Once he has obtained judgment, Rick can garnishee the money owed to Greg by Martinson.

Question 17

Distinguish between attachment and perfection under the Personal Property Security Act.

Accepted Answer

The creditor's rights under the Personal

Question 18

Joe bought a car from Harry's Fine Car Lot and owed him $5,000 on the deal,which he was paying back at $500 a month under a conditional sale agreement.Harry assigned that conditional sale agreement to Ace Finance Company,and they served notice on Joe that he was to make his payments in future to them.Joe knew,however,that his deal was with Harry,and he ignored the notification and continued to make the payments to Harry.What danger does he face in these circumstances?

Accepted Answer

Harry's Fine Car Lot had the right to as

Question 19

Identify which of the following statements is true about secured transactions in provinces having a personal property security act.

Accepted Answer

A)  This kind of transaction, which formerly was legal, is now prohibited by law in all provinces. 
B)  Various kinds of secured transactions, such as conditional sales, chattel mortgages, etc., are regulated by their own distinct statutes. 
C)  An assignment of an account receivable does not qualify as a security arrangement because no tangible property is involved. 
D)  All kinds of security arrangements involving personal property as collateral now come under one statute. 
E)  Only tangible personal property can be used as security. 
A)  This kind of transaction, which formerly was legal, is now prohibited by law in all provinces. 
B)  Various kinds of secured transactions, such as conditional sales, chattel mortgages, etc., are regulated by their own distinct statutes. 
C)  An assignment of an account receivable does not qualify as a security arrangement because no tangible property is involved. 
D)  All kinds of security arrangements involving personal property as collateral now come under one statute. 
E)  Only tangible personal property can be used as security.

Question 20

Bret decided to enlarge the fishpond in his backyard.He contracted with a general contractor,Conan.Conan subcontracted with Darson to do the excavation and with Ericson to do the plumbing.Conan's own workers did the masonry work.Bret made "progress payments" to Conan,since Conan said such payments were necessary to pay his workers and subcontractors.Bret learned that the workers and subcontractors had not been paid; Conan had used the payments to pay debts unrelated to the job on Bret's pond.Which of the following best describes Bret's position?

Accepted Answer

A)  Because of the doctrine of privity of contract, Bret will not face any liability whatsoever. 
B)  If Bret held back the 10 percent required by statute from his payments to Conan, but then later paid it out despite liens having been filed against his property, Bret would still face no liability as he technically complied with the legislation. 
C)  Bret will be liable for all unpaid amounts, because the work was on his land and for his benefit. 
D)  If Bret held back the 10 percent required by statute from his payments to Conan, his obligation would generally be limited to the amount of that holdback. 
E)  Bret had no obligation to hold back any amount of the payments made to Conan as the hold back requirement doesn't apply to progress payments. 
A)  Because of the doctrine of privity of contract, Bret will not face any liability whatsoever. 
B)  If Bret held back the 10 percent required by statute from his payments to Conan, but then later paid it out despite liens having been filed against his property, Bret would still face no liability as he technically complied with the legislation. 
C)  Bret will be liable for all unpaid amounts, because the work was on his land and for his benefit. 
D)  If Bret held back the 10 percent required by statute from his payments to Conan, his obligation would generally be limited to the amount of that holdback. 
E)  Bret had no obligation to hold back any amount of the payments made to Conan as the hold back requirement doesn't apply to progress payments.

What are the practical consequences affecting the individual who declares personal bankruptcy?

Which of the following statements regarding the securing of debt is true?

A Division I proposal is available only to consumer debtors with less than $75 000 in claims against them.

Your brother wants to borrow $8000 from the Bank of Britannia and has asked if you would guarantee the loan.You have been told the following with regard to guarantees.Which of the following statements is false?

The assignment of book accounts is the conditional right to collect on outstanding accounts in the event of default.

When the value of the security is not great enough to cover the debt,a secured creditor is an unsecured creditor for that outstanding amount.

Bankruptcy is a wholly voluntary process designed primarily to protect debtors from abusive creditors.

Joe worked as a subcontractor for Harry in framing a house owned by Sam.When it became apparent to Joe that he was not going to be paid by Harry,what rights did Joe have under these circumstances?

What is used as security in assignment of book accounts?

Where a debtor has committed an act of bankruptcy,a creditor who is owed more than $1000 can petition the court to force that debtor into bankruptcy.

Legislation and the principles of contract and common law primarily protect the interests of the debtor in the event of a default.

Both a chattel and a chose in action can be used to secure a debt.

In which one of the following situations is a chose in action (intangible property)given as security by a debtor to the creditor?

Distinguish between personal and real property.

Distinguish between attachment and perfection under the Personal Property Security Act.

Identify which of the following statements is true about secured transactions in provinces having a personal property security act.

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputesthe Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contractconsensus and Consideration

The Elements of a Contract capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Employment

Agency and Partnership

Corporations

Real, Personal, and Intellectual Property

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Sales and Consumer Protection

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Exam 16: Priority of Creditors

What are the practical consequences affecting the individual who declares personal bankruptcy?

Which of the following statements regarding the securing of debt is true?

A Division I proposal is available only to consumer debtors with less than $75 000 in claims against them.

Your brother wants to borrow $8000 from the Bank of Britannia and has asked if you would guarantee the loan.You have been told the following with regard to guarantees.Which of the following statements is false?

The assignment of book accounts is the conditional right to collect on outstanding accounts in the event of default.

When the value of the security is not great enough to cover the debt,a secured creditor is an unsecured creditor for that outstanding amount.

Bankruptcy is a wholly voluntary process designed primarily to protect debtors from abusive creditors.

Joe worked as a subcontractor for Harry in framing a house owned by Sam.When it became apparent to Joe that he was not going to be paid by Harry,what rights did Joe have under these circumstances?

What is used as security in assignment of book accounts?

Where a debtor has committed an act of bankruptcy,a creditor who is owed more than $1000 can petition the court to force that debtor into bankruptcy.

Legislation and the principles of contract and common law primarily protect the interests of the debtor in the event of a default.

Both a chattel and a chose in action can be used to secure a debt.

In which one of the following situations is a chose in action (intangible property)given as security by a debtor to the creditor?

Distinguish between personal and real property.

Distinguish between attachment and perfection under the Personal Property Security Act.

Identify which of the following statements is true about secured transactions in provinces having a personal property security act.

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputesthe Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contractconsensus and Consideration

The Elements of a Contract capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Employment

Agency and Partnership

Corporations

Real, Personal, and Intellectual Property

Information Technology and the Internet

Sales and Consumer Protection

Filters