Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

"The main purpose of security is to provide some recourse to the person claiming to be paid, if some dispute arises about the quality of the performance of the contract." Discuss the accuracy of that statement.

Accepted Answer

This statement is inaccurate. The main p

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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 5

In secured transactions-type legislation, such as a Conditional Sale Act, the Bills of Sale Act, the Personal Property Security Act, etc., what is the purpose of a registration?

Accepted Answer

The purpose of registration is to notify

Question 6

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

Question 7

Which one of the following statements about bankruptcy is false?

Accepted Answer

A)  Bankruptcy law is identical in every province of Canada. 
B)  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. 
C)  A debtor who has been discharged from bankruptcy is released from his previous financial obligations. 
D)  Bankruptcy refers to a situation in which a debtor who cannot pay debts transfers his assets to a trustee who acts on behalf of creditors 
E)  Bankruptcy law may allow a debtor to escape from having to pay his debts. 
A)  Bankruptcy law is identical in every province of Canada. 
B)  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. 
C)  A debtor who has been discharged from bankruptcy is released from his previous financial obligations. 
D)  Bankruptcy refers to a situation in which a debtor who cannot pay debts transfers his assets to a trustee who acts on behalf of creditors 
E)  Bankruptcy law may allow a debtor to escape from having to pay his debts.

Question 8

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

Accepted Answer

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

Question 9

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

Accepted Answer

A)  In a situation where a debtor fraudulently attempts to transfer property that he has given as security, the Act is designed to protect both the debtor and secured creditor. 
B)  This legislation applies only to all present transactions where personal property is given as security interest to enforce an obligation. 
C)  If a secured creditor fails to register his security interest in the Personal Property Registry, he loses his rights against the debtor. 
D)  Unless a creditor in a secured transaction covered by this Act takes steps to "attach and perfect" his security interest, he could lose that interest to someone outside the contract. 
E)  If someone suspects that an item of personal property has been given as security by a particular person, he can sue on the breach of a condition. 
A)  In a situation where a debtor fraudulently attempts to transfer property that he has given as security, the Act is designed to protect both the debtor and secured creditor. 
B)  This legislation applies only to all present transactions where personal property is given as security interest to enforce an obligation. 
C)  If a secured creditor fails to register his security interest in the Personal Property Registry, he loses his rights against the debtor. 
D)  Unless a creditor in a secured transaction covered by this Act takes steps to "attach and perfect" his security interest, he could lose that interest to someone outside the contract. 
E)  If someone suspects that an item of personal property has been given as security by a particular person, he can sue on the breach of a condition.

Question 10

Distinguish between bankruptcy and insolvency.

Accepted Answer

Insolvency is simply not being

Question 11

Which one of the following actions by a debtor constitutes an act of bankruptcy?

Accepted Answer

A)  Having more debts than assets 
B)  A fraudulent transfer of money or assets 
C)  Generally meeting liabilities as they become due 
D)  A fraudulent conveyance of liabilities to one of the creditors 
E)  Assignment of liabilities to a trustee 
A)  Having more debts than assets 
B)  A fraudulent transfer of money or assets 
C)  Generally meeting liabilities as they become due 
D)  A fraudulent conveyance of liabilities to one of the creditors 
E)  Assignment of liabilities to a trustee

Question 12

What is the role of the Superintendent of Bankruptcy?

Accepted Answer

The Superintendent of Bankrupt

Question 13

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

Accepted Answer

If a debtor becomes bankrupt, he or she

Question 14

Which one of the following statements about bankruptcy is true?

Accepted Answer

A)  A debtor who has been discharged from bankruptcy is released from his previous financial obligations. 
B)  Bankruptcy law is different in every province of Canada. 
C)  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. 
D)  Bankruptcy law forces a debtor to pay all his debts, regardless of his financial position. 
E)  Bankruptcy refers to a situation in which a debtor who cannot pay debts transfers his assets to the creditors directly. 
A)  A debtor who has been discharged from bankruptcy is released from his previous financial obligations. 
B)  Bankruptcy law is different in every province of Canada. 
C)  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. 
D)  Bankruptcy law forces a debtor to pay all his debts, regardless of his financial position. 
E)  Bankruptcy refers to a situation in which a debtor who cannot pay debts transfers his assets to the creditors directly.

Question 15

After a creditor has taken possession of collateral, the debtor's right to reclaim it on payment of any money owing is known as a

Accepted Answer

A)  constructive trust. 
B)  right to salvage. 
C)  right to redeem. 
D)  collateral contract. 
E)  right of settlement. 
A)  constructive trust. 
B)  right to salvage. 
C)  right to redeem. 
D)  collateral contract. 
E)  right of settlement.

Question 16

The owner of the house had contracted with a general contractor, Mr. Hadrian, for a greenhouse addition to the house at a cost of $20,000. In accordance with the legislation, the owner withheld 10% and waited the legislated period of time within which any liens are to be filed. Which of the following correctly describes the owner's liability?

Accepted Answer

A)  Lien holders would have no claim against the property but would be entitled to the 10% holdback, in addition to being able to sue the owner for the amount not satisfied by the holdback. 
B)  Whether or not there are liens registered, the owner is free to pay out the retained holdback once the legislated time period has expired. 
C)  The owner is liable to any unpaid subcontractors, whether or not a lien was filed, but can use the holdback money to reduce his liability a certain extent. 
D)  If the owner checks the registry and there are no liens registered, he is free to pay out the retained holdback. 
E)  Unpaid subcontractors can no longer place liens on the owner's property, because of the doctrine of privity of contract. 
A)  Lien holders would have no claim against the property but would be entitled to the 10% holdback, in addition to being able to sue the owner for the amount not satisfied by the holdback. 
B)  Whether or not there are liens registered, the owner is free to pay out the retained holdback once the legislated time period has expired. 
C)  The owner is liable to any unpaid subcontractors, whether or not a lien was filed, but can use the holdback money to reduce his liability a certain extent. 
D)  If the owner checks the registry and there are no liens registered, he is free to pay out the retained holdback. 
E)  Unpaid subcontractors can no longer place liens on the owner's property, because of the doctrine of privity of contract.

Question 17

Provide an example of legislation that gives the federal government priority over all other creditors, including secured creditors.

Accepted Answer

For exampl

Question 18

A "confirmed letter of credit" is another name for a "standby letter of credit".

Accepted Answer

A) True 
 B)False

Question 19

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)  Bret will be liable for all unpaid amounts, because the work was on his land and for his benefit. 
B)  If Bret held back the 10% 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)  Because of the doctrine of privity of contract, Bret will not face any liability whatsoever. 
D)  If Bret held back the 10% 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)  Bret will be liable for all unpaid amounts, because the work was on his land and for his benefit. 
B)  If Bret held back the 10% 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)  Because of the doctrine of privity of contract, Bret will not face any liability whatsoever. 
D)  If Bret held back the 10% 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.

Question 20

What is a bankruptcy offence? Give an example.

Accepted Answer

A bankruptcy offence is some act on the

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

"The main purpose of security is to provide some recourse to the person claiming to be paid, if some dispute arises about the quality of the performance of the contract." Discuss the accuracy of that statement.

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

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.

In secured transactions-type legislation, such as a Conditional Sale Act, the Bills of Sale Act, the Personal Property Security Act, etc., what is the purpose of a registration?

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

Which one of the following statements about bankruptcy is false?

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

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

Distinguish between bankruptcy and insolvency.

Which one of the following actions by a debtor constitutes an act of bankruptcy?

What is the role of the Superintendent of Bankruptcy?

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

Which one of the following statements about bankruptcy is true?

After a creditor has taken possession of collateral, the debtor's right to reclaim it on payment of any money owing is known as a

Provide an example of legislation that gives the federal government priority over all other creditors, including secured creditors.

A "confirmed letter of credit" is another name for a "standby letter of credit".

What is a bankruptcy offence? Give an example.

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

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

"The main purpose of security is to provide some recourse to the person claiming to be paid, if some dispute arises about the quality of the performance of the contract." Discuss the accuracy of that statement.

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

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.

In secured transactions-type legislation, such as a Conditional Sale Act, the Bills of Sale Act, the Personal Property Security Act, etc., what is the purpose of a registration?

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

Which one of the following statements about bankruptcy is false?

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

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

Distinguish between bankruptcy and insolvency.

Which one of the following actions by a debtor constitutes an act of bankruptcy?

What is the role of the Superintendent of Bankruptcy?

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

Which one of the following statements about bankruptcy is true?

After a creditor has taken possession of collateral, the debtor's right to reclaim it on payment of any money owing is known as a

Provide an example of legislation that gives the federal government priority over all other creditors, including secured creditors.

A "confirmed letter of credit" is another name for a "standby letter of credit".

What is a bankruptcy offence? Give an example.

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