Exam 16: Priority of Creditors

After graduating,a student set up a business as a systems analyst.His monthly billings are healthy,about $10 000 a month.He rents his office,hardware,and furniture and owns few assets.He rents his apartment,has no car,and spends most of his income on concerts.If he approaches you,a bank manager,to borrow $50,000 for the purpose of increasing his working capital,which of the following securities would you most likely request?

Which of the following is primarily liable on an accepted bill of exchange?

Which one of the following statements about the Personal Property Security Act is true?

Explain what constitutes a bulk sale and how such sales are controlled in some jurisdictions.

The bulk sales acts in place in some provinces are designed to do which of the following?

Discuss alternatives to bankruptcy,and why these alternatives might be preferable to bankruptcy itself.

How is the debtor rehabilitated under the bankruptcy legislation?

Explain the purpose of the Fraudulent Preferences Act (name will vary from province to province).

Explain how,in a creditor-debtor transaction,the exposure of a guarantor is limited and his rights protected.

Owen had borrowed money from a credit union to purchase a car,and the credit union had required a security against the car,which they registered under the Personal Property Security Act.As well,Owen's father guaranteed the loan.Some months later,Owen decided to go back to school,and he had to sell the car to do so.He returned to the credit union and,at his request,the credit union gave up the security they had against the vehicle,knowing that they still had the loan guaranteed by Owen's father.Explain the wisdom of this move.

Explain the role of the trustee in bankruptcy proceedings.

When creditors receive notice of a consumer proposal from an insolvent debtor,they must demand a meeting or the proposal will be automatically accepted.

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

With regard to bankruptcy and debt collection,which of the following is false?

What obligations are placed on the owner of property in respect of builders' liens?

With regard to debt collection,which of the following is false?

In case of default by either the creditor or debtor,breach of contract remedies apply.

What is the primary remedy available when goods have been used to secure a loan which has been defaulted?

Distinguish between a guarantee and an indemnity.

The practice of paying out one creditor over another is known as fraudulent preference.