Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Greg told Rick that he would be willing to pay a high rate of interest for a two-month loan of $2,000. Rick agreed to lend Greg this amount at an annual rate of 20%, 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 $2,000. Now that Greg is in default, which of the following is false?

Accepted Answer

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

Question 3

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?

Accepted Answer

A)  Assignment of accounts receivable 
B)  Security under sections 426 and 427 of the Bank Act 
C)  Conditional sale contract 
D)  Floating charge debenture 
E)  Chattel mortgage 
A)  Assignment of accounts receivable 
B)  Security under sections 426 and 427 of the Bank Act 
C)  Conditional sale contract 
D)  Floating charge debenture 
E)  Chattel mortgage

Question 4

Why is the distinction between a guarantee and an indemnity important?

Accepted Answer

In some provinces, a guarantee has to be

Question 5

Give three examples of types of things that can be used as security under the Personal Property Security Act.

Accepted Answer

Tangible goods, such as cars, boats, and

Question 6

Settlements involve the transfer of assets for nominal or no consideration.

Accepted Answer

A) True 
 B)False

Question 7

When the transaction is registered, the creditor's rights include all of the following except

Accepted Answer

A)  right to sue debtor rather than seize security. 
B)  seize the security. 
C)  resell the security. 
D)  contractual remedies upon default. 
E)  right to order the debtor arrested or detained. 
A)  right to sue debtor rather than seize security. 
B)  seize the security. 
C)  resell the security. 
D)  contractual remedies upon default. 
E)  right to order the debtor arrested or detained.

Question 8

Which of the following is false with regard to "property"?

Accepted Answer

A)  Personal property includes chattels. 
B)  Personal property includes intangible rights. 
C)  Real property includes "fixtures." 
D)  Both real and personal property can be given as security to a creditor that he will be repaid. 
E)  Real property consists of land but does not include the buildings on that land. 
A)  Personal property includes chattels. 
B)  Personal property includes intangible rights. 
C)  Real property includes "fixtures." 
D)  Both real and personal property can be given as security to a creditor that he will be repaid. 
E)  Real property consists of land but does not include the buildings on that land.

Question 9

Real and personal property can be used to secure a loan.

Accepted Answer

A) True 
 B)False

Question 10

A company named Printers World Ltd. bought a $9,000 plotter under a conditional sale contract and, because of business reverses, is unable to make the payments. Which of the following is accurate with respect to the legal position of the parties?

Accepted Answer

A)  The seller could seize the goods without a court order only if it had properly registered the conditional sale contract. 
B)  The seller could seize the goods but, before resale can take place, the debtor must be given notice and an opportunity to redeem. 
C)  The seller could only seize the goods, and could not instead opt to sue the company. 
D)  The seller could seize and sell the same day because it had already waited three months after default before taking any action. 
E)  The seller could seize the goods only if it obtained a court order. 
A)  The seller could seize the goods without a court order only if it had properly registered the conditional sale contract. 
B)  The seller could seize the goods but, before resale can take place, the debtor must be given notice and an opportunity to redeem. 
C)  The seller could only seize the goods, and could not instead opt to sue the company. 
D)  The seller could seize and sell the same day because it had already waited three months after default before taking any action. 
E)  The seller could seize the goods only if it obtained a court order.

Question 11

When a mortgage is taken on personal property in a PPSA jurisdiction, the borrower temporarily transfers title to lender.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is governed by federal statute and thus has rules common to all of Canada?

Accepted Answer

A)  Assignments of accounts receivable 
B)  Bankruptcy 
C)  Conditional sale contracts 
D)  Chattel mortgages 
E)  Builder's liens 
A)  Assignments of accounts receivable 
B)  Bankruptcy 
C)  Conditional sale contracts 
D)  Chattel mortgages 
E)  Builder's liens

Question 13

Distinguish between "bankruptcy" and "insolvency".

Accepted Answer

Bankruptcy is the process by which a deb

Question 14

Discuss situations in which a secured creditor may opt not to seize property used as security, and the rationale for taking this approach.

Accepted Answer

When a debtor defaults, a secured credit

Question 15

Where a debtor has defaulted and the creditor, under the Personal Property Security Act, repossesses and resells the goods, what is his obligation with respect to overages or underages?

Accepted Answer

Any surplus must be returned t

Question 16

"Bankruptcy is a convenient way to avoid paying your debts." Discuss the accuracy of this statement.

Accepted Answer

Students should note that this attitude

Question 17

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 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. 
D)  If you become bankrupt, you are restricted from carrying certain activities until you are discharged. 
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 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. 
D)  If you become bankrupt, you are restricted from carrying certain activities until you are discharged. 
E)  The Bankruptcy and Insolvency Act provides a procedure to avoid bankruptcy by making a proposal to your creditors for satisfying their claim

Question 18

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 19

Explain how a bill of sale can be used as a security.

Accepted Answer

A chattel mortgage uses a bill of sale t

Question 20

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

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

Why is the distinction between a guarantee and an indemnity important?

Give three examples of types of things that can be used as security under the Personal Property Security Act.

Settlements involve the transfer of assets for nominal or no consideration.

When the transaction is registered, the creditor's rights include all of the following except

Which of the following is false with regard to "property"?

Real and personal property can be used to secure a loan.

A company named Printers World Ltd. bought a $9,000 plotter under a conditional sale contract and, because of business reverses, is unable to make the payments. Which of the following is accurate with respect to the legal position of the parties?

When a mortgage is taken on personal property in a PPSA jurisdiction, the borrower temporarily transfers title to lender.

Which of the following is governed by federal statute and thus has rules common to all of Canada?

Distinguish between "bankruptcy" and "insolvency".

Discuss situations in which a secured creditor may opt not to seize property used as security, and the rationale for taking this approach.

Where a debtor has defaulted and the creditor, under the Personal Property Security Act, repossesses and resells the goods, what is his obligation with respect to overages or underages?

"Bankruptcy is a convenient way to avoid paying your debts." Discuss the accuracy of this statement.

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?

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.

Explain how a bill of sale can be used as a security.

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

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes the Courts and Alternatives to Litigation

Intentional Torts

Negligence, Professional Liability, and Insurance Law

Formation of Contracts

Formation of Contracts Continued

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

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

Why is the distinction between a guarantee and an indemnity important?

Give three examples of types of things that can be used as security under the Personal Property Security Act.

Settlements involve the transfer of assets for nominal or no consideration.

When the transaction is registered, the creditor's rights include all of the following except

Which of the following is false with regard to "property"?

Real and personal property can be used to secure a loan.

A company named Printers World Ltd. bought a $9,000 plotter under a conditional sale contract and, because of business reverses, is unable to make the payments. Which of the following is accurate with respect to the legal position of the parties?

When a mortgage is taken on personal property in a PPSA jurisdiction, the borrower temporarily transfers title to lender.

Which of the following is governed by federal statute and thus has rules common to all of Canada?

Distinguish between "bankruptcy" and "insolvency".

Discuss situations in which a secured creditor may opt not to seize property used as security, and the rationale for taking this approach.

Where a debtor has defaulted and the creditor, under the Personal Property Security Act, repossesses and resells the goods, what is his obligation with respect to overages or underages?

"Bankruptcy is a convenient way to avoid paying your debts." Discuss the accuracy of this statement.

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?

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.

Explain how a bill of sale can be used as a security.

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

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes the Courts and Alternatives to Litigation

Intentional Torts

Negligence, Professional Liability, and Insurance Law

Formation of Contracts

Formation of Contracts Continued

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