Question 1

Explain the purpose of the bankruptcy process.

Accepted Answer

To ensure that creditors realize as much

Question 2

As long as the debtor lives up to the terms of an accepted consumer proposal,creditors cannot take action against him or her.

Accepted Answer

A) True 
 B)False

Question 3

What purpose is served by requiring the creditor to register his secured transaction?

Accepted Answer

It notifies other people that the goods

Question 4

Explain the purpose of the Personal Property Security Act as used in Ontario and the western provinces.

Accepted Answer

Its purpose is to bring all of

Question 5

Any substantial change in the nature of the contract between the creditor and the debtor without the guarantor's consent will relieve the guarantor of any obligation.

Accepted Answer

A) True 
 B)False

Question 6

A security not fixed on any particular assets until default or some other specified event is known as a ________.

Accepted Answer

The answer of A security not fixed on any particular...

Question 7

With regard to conditional sales and chattel mortgages,which of the following is false?

Accepted Answer

A)  If a conditional buyer defaults in his payments, the conditional seller can generally seize the chattel without a court order. 
B)  A conditional seller can assign the conditional sale contract to a finance company without the consent of the conditional buyer. 
C)  A chattel mortgagee must register the mortgage in the appropriate registration office, not to protect his claim on the chattel against the chattel mortgagor, but to protect his claim against third parties-e.g., a bona fide purchaser for value. 
D)  There is no longer a distinction between a chattel mortgage and a conditional sale. 
E)  These transactions are now governed by the Personal Property Security Act. 
A)  If a conditional buyer defaults in his payments, the conditional seller can generally seize the chattel without a court order. 
B)  A conditional seller can assign the conditional sale contract to a finance company without the consent of the conditional buyer. 
C)  A chattel mortgagee must register the mortgage in the appropriate registration office, not to protect his claim on the chattel against the chattel mortgagor, but to protect his claim against third parties-e.g., a bona fide purchaser for value. 
D)  There is no longer a distinction between a chattel mortgage and a conditional sale. 
E)  These transactions are now governed by the Personal Property Security Act.

Question 8

Which one of the following statements about bankruptcy is true?

Accepted Answer

A)  Bankruptcy law is different in every province. 
B)  Bankruptcy refers to a situation in which a debtor who cannot pay debts transfers his assets to the creditors directly. 
C)  Bankruptcy law forces a debtor to pay all his debts, regardless of his financial position. 
D)  All creditors of a bankrupt debtor are treated equally and will receive shares of the assets directly in proportion to how much is owed to each of them. 
E)  A debtor who has been discharged from bankruptcy is released from his previous financial obligations. 
A)  Bankruptcy law is different in every province. 
B)  Bankruptcy refers to a situation in which a debtor who cannot pay debts transfers his assets to the creditors directly. 
C)  Bankruptcy law forces a debtor to pay all his debts, regardless of his financial position. 
D)  All creditors of a bankrupt debtor are treated equally and will receive shares of the assets directly in proportion to how much is owed to each of them. 
E)  A debtor who has been discharged from bankruptcy is released from his previous financial obligations.

Question 9

With few exceptions,once a bankrupt is discharged,there is no longer an obligation to pay back the creditors.

Accepted Answer

A) True 
 B)False

Question 10

With regard to guarantees and indemnities,which of the following is false?

Accepted Answer

A)  A guarantor can use any defence against the creditor that the debtor could use. 
B)  A legally binding promise to be primarily responsible for someone else's obligation is an indemnity. 
C)  A guarantee cannot be enforced in court unless it satisfies the writing requirements set out in statute. 
D)  Subrogation can result in a guarantor's being able to sue successfully the very debtor whose obligation he guaranteed. 
E)  A legally enforceable guarantee must satisfy all the elements required to create a binding contract except consideration. 
A)  A guarantor can use any defence against the creditor that the debtor could use. 
B)  A legally binding promise to be primarily responsible for someone else's obligation is an indemnity. 
C)  A guarantee cannot be enforced in court unless it satisfies the writing requirements set out in statute. 
D)  Subrogation can result in a guarantor's being able to sue successfully the very debtor whose obligation he guaranteed. 
E)  A legally enforceable guarantee must satisfy all the elements required to create a binding contract except consideration.

Question 11

Because of the special nature of a guarantee,there is no requirement for consideration.

Accepted Answer

A) True 
 B)False

Question 12

Holtz hires Joe,a builder,to convert his attic into an apartment,so that Holtz's mother can move in.Joe employs two carpenters,an electrician,and a plumber to do the actual work.When making payments to Joe,Holtz holds back the 10 percent required by statute.After waiting the legislated minimum period,Holtz discovers that several liens have been registered against his property.It turns out that Joe failed to pay the various subcontractors for their work.Which one of the following statements best describes Holtz's position?

Accepted Answer

A)  Holtz has no liability to any of those involved with the job except Joe, because he has a contract only with Joe. 
B)  Holtz and Joe are equally liable to the lien claimants, because of recent amendments to the builders' lien legislation. 
C)  Holtz bears the sole liability to the lien claimants for any debts arising out of their work on his property. 
D)  Holtz's mother will be liable to both Holtz and the lien claimants, as she will be taking the benefit of the renovations. 
E)  If Holtz has complied with the statutory requirements, his obligation will be limited to the amount of the holdback, even if the amount owed under the liens far greater. 
A)  Holtz has no liability to any of those involved with the job except Joe, because he has a contract only with Joe. 
B)  Holtz and Joe are equally liable to the lien claimants, because of recent amendments to the builders' lien legislation. 
C)  Holtz bears the sole liability to the lien claimants for any debts arising out of their work on his property. 
D)  Holtz's mother will be liable to both Holtz and the lien claimants, as she will be taking the benefit of the renovations. 
E)  If Holtz has complied with the statutory requirements, his obligation will be limited to the amount of the holdback, even if the amount owed under the liens far greater.

Question 13

What alternatives are available to the bankruptcy process?

Accepted Answer

The Bankruptcy and Insolvency Act allows

Question 14

Crops still in the ground and products in the process of being made can be used as security.

Accepted Answer

A) True 
 B)False

Question 15

Owen borrowed money from a credit union,guaranteed by his father,to buy a car.The credit union also registered a security interest under the Personal Property Security Act against the vehicle.Owen defaulted and,instead of repossessing the vehicle,the credit union demanded payment from the father.Explain the legal position of the father under these circumstances.

Accepted Answer

The credit union has every right to dema

Question 16

A continuing guarantee

Accepted Answer

A)  allows a creditor to advance further funds without affecting the obligation of the guarantor to pay in the event of default. 
B)  is a primary obligation of a third party to pay a debt along with a debtor. 
C)  is a written commitment not to pursue a legal claim against another. 
D)  is an equitable principle assuring that when security is repossessed, there will be a period of time during which the debtor can still make payment. 
E)  allows a breaching party to pay an amount specified in a contract, rather than facing a lawsuit for damages. 
A)  allows a creditor to advance further funds without affecting the obligation of the guarantor to pay in the event of default. 
B)  is a primary obligation of a third party to pay a debt along with a debtor. 
C)  is a written commitment not to pursue a legal claim against another. 
D)  is an equitable principle assuring that when security is repossessed, there will be a period of time during which the debtor can still make payment. 
E)  allows a breaching party to pay an amount specified in a contract, rather than facing a lawsuit for damages.

Question 17

If a bank as chattel mortgagee fails to register the mortgage of a car,which of the following is false?

Accepted Answer

A)  The failure to register would not affect the rights of the chattel mortgagee against the chattel mortgagor if no third party is involved. 
B)  If the chattel mortgagor would sell the car to a third party and not pay the chattel mortgagee, the third party's claim would override that of the chattel mortgagee. 
C)  If a trustee in bankruptcy seizes the car from the chattel mortgagor, the trustee's claim would override that of the chattel mortgagee. 
D)  A potential purchaser of the car from the chattel mortgagor would not find the bank's interest recorded in the central registry. 
E)  The chattel mortgagee has lost his security and thus all his legal rights. 
A)  The failure to register would not affect the rights of the chattel mortgagee against the chattel mortgagor if no third party is involved. 
B)  If the chattel mortgagor would sell the car to a third party and not pay the chattel mortgagee, the third party's claim would override that of the chattel mortgagee. 
C)  If a trustee in bankruptcy seizes the car from the chattel mortgagor, the trustee's claim would override that of the chattel mortgagee. 
D)  A potential purchaser of the car from the chattel mortgagor would not find the bank's interest recorded in the central registry. 
E)  The chattel mortgagee has lost his security and thus all his legal rights.

Question 18

Explain two methods for a debtor to become bankrupt.

Accepted Answer

(1)Voluntary assignment,where the debtor

Question 19

Attachment takes place when

Accepted Answer

A)  a contract is executed. 
B)  notice of a security arrangement is given. 
C)  after-acquired assets are secured. 
D)  a debtor receives some value under the contract. 
E)  a purchase money security interest arises. 
A)  a contract is executed. 
B)  notice of a security arrangement is given. 
C)  after-acquired assets are secured. 
D)  a debtor receives some value under the contract. 
E)  a purchase money security interest arises.

Question 20

You are in debt to three creditors for $200 000,and the debt is increasing because you are not able to meet your monthly financial obligations.Which of the following is false with regard to your situation?

Accepted Answer

A)  It is illegal for you to transfer assets to a spouse or friend to shield them from your creditors 
B)  If you become bankrupt, your assets are conveyed to a trustee in bankruptcy who deals with them for the benefit of your creditors. 
C)  If you become bankrupt, you are restricted from carrying certain activities until you are discharged. 
D)  If your long-time financial well-being would be served by bankruptcy, you must ask your creditors to begin the procedure; you cannot begin it yourself. 
E)  The Bankruptcy and Insolvency Act provides a procedure to avoid bankruptcy by making a proposal to your creditors for satisfying their claim. 
A)  It is illegal for you to transfer assets to a spouse or friend to shield them from your creditors 
B)  If you become bankrupt, your assets are conveyed to a trustee in bankruptcy who deals with them for the benefit of your creditors. 
C)  If you become bankrupt, you are restricted from carrying certain activities until you are discharged. 
D)  If your long-time financial well-being would be served by bankruptcy, you must ask your creditors to begin the procedure; you cannot begin it yourself. 
E)  The Bankruptcy and Insolvency Act provides a procedure to avoid bankruptcy by making a proposal to your creditors for satisfying their claim.

Explain the purpose of the bankruptcy process.

As long as the debtor lives up to the terms of an accepted consumer proposal,creditors cannot take action against him or her.

What purpose is served by requiring the creditor to register his secured transaction?

Explain the purpose of the Personal Property Security Act as used in Ontario and the western provinces.

Any substantial change in the nature of the contract between the creditor and the debtor without the guarantor's consent will relieve the guarantor of any obligation.

A security not fixed on any particular assets until default or some other specified event is known as a ________.

With regard to conditional sales and chattel mortgages,which of the following is false?

Which one of the following statements about bankruptcy is true?

With few exceptions,once a bankrupt is discharged,there is no longer an obligation to pay back the creditors.

With regard to guarantees and indemnities,which of the following is false?

Because of the special nature of a guarantee,there is no requirement for consideration.

What alternatives are available to the bankruptcy process?

Crops still in the ground and products in the process of being made can be used as security.

A continuing guarantee

If a bank as chattel mortgagee fails to register the mortgage of a car,which of the following is false?

Explain two methods for a debtor to become bankrupt.

Attachment takes place when

You are in debt to three creditors for $200 000,and the debt is increasing because you are not able to meet your monthly financial obligations.Which of the following is false with regard to your situation?

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

Exam 16: Priority of Creditors

Explain the purpose of the bankruptcy process.

As long as the debtor lives up to the terms of an accepted consumer proposal,creditors cannot take action against him or her.

What purpose is served by requiring the creditor to register his secured transaction?

Explain the purpose of the Personal Property Security Act as used in Ontario and the western provinces.

Any substantial change in the nature of the contract between the creditor and the debtor without the guarantor's consent will relieve the guarantor of any obligation.

A security not fixed on any particular assets until default or some other specified event is known as a ________.

With regard to conditional sales and chattel mortgages,which of the following is false?

Which one of the following statements about bankruptcy is true?

With few exceptions,once a bankrupt is discharged,there is no longer an obligation to pay back the creditors.

With regard to guarantees and indemnities,which of the following is false?

Because of the special nature of a guarantee,there is no requirement for consideration.

What alternatives are available to the bankruptcy process?

Crops still in the ground and products in the process of being made can be used as security.

A continuing guarantee

If a bank as chattel mortgagee fails to register the mortgage of a car,which of the following is false?

Explain two methods for a debtor to become bankrupt.

Attachment takes place when

You are in debt to three creditors for $200 000,and the debt is increasing because you are not able to meet your monthly financial obligations.Which of the following is false with regard to your situation?

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