Question 1

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

Accepted Answer

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

Question 2

With regard to negotiable instruments, which of the following is False?

Accepted Answer

A)  A cheque is a bill of exchange drawn on a bank, payable on demand. 
B)  A cheque that has been certified cannot be countermanded by the drawer. 
C)  A negotiable instrument used to advance credit in a consumer transaction must be marked "consumer purchase." 
D)  Bills of exchange can be made payable for some future date. 
E)  A drawer of a cheque can refuse to pay any holder of it if the drawer can prove that the payee obtained the cheque by fraud. 
A)  A cheque is a bill of exchange drawn on a bank, payable on demand. 
B)  A cheque that has been certified cannot be countermanded by the drawer. 
C)  A negotiable instrument used to advance credit in a consumer transaction must be marked "consumer purchase." 
D)  Bills of exchange can be made payable for some future date. 
E)  A drawer of a cheque can refuse to pay any holder of it if the drawer can prove that the payee obtained the cheque by fraud.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Distinguish between bankruptcy and insolvency.

Accepted Answer

Insolvency is simply not being able to p

Question 5

What is the purpose of the Fraudulent Conveyances Act? (The name varies with the province.)

Accepted Answer

This act is designed to prohib

Question 6

Student loans survive bankruptcy and remain payable for up to seven years after the debtor ceases to be a student.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is the consequence of an unpaid subcontractor failing to file his lien on time? The owner had contracted with the general contractor who in turn had contracted with this subcontractor.

Accepted Answer

A)  He can submit documents giving his reason and he will be allowed to file the lien late. 
B)  He will lose all of his remedies. 
C)  He will lose his right to place a charge against the owner's property, but he can sue the owner directly for the amount owed him, because his work and materials went into the owner's house. 
D)  He would lose his right to place a charge against the owner's property, but he can sue the contractor on the contract. 
E)  He loses his right to claim against the building but can sue the owner of the property directly. 
A)  He can submit documents giving his reason and he will be allowed to file the lien late. 
B)  He will lose all of his remedies. 
C)  He will lose his right to place a charge against the owner's property, but he can sue the owner directly for the amount owed him, because his work and materials went into the owner's house. 
D)  He would lose his right to place a charge against the owner's property, but he can sue the contractor on the contract. 
E)  He loses his right to claim against the building but can sue the owner of the property directly.

Question 8

Explain what happens when the owner of property fails to hold back the appropriate amount when making payments to the general contractor.

Accepted Answer

He can be required to pay out, in additi

Question 9

In the event of a default, if the creditor elects to repossess and resell the goods, how does he protect his right to claim for deficit?

Accepted Answer

This varies from province to province. G

Question 10

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

Accepted Answer

A)  Drawer of the bill 
B)  Drawee or acceptor 
C)  Endorser 
D)  Payee 
E)  No one 
A)  Drawer of the bill 
B)  Drawee or acceptor 
C)  Endorser 
D)  Payee 
E)  No one

Question 11

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 on 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, since 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 claims. 
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 on 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, since 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 claims.

Question 12

Which of the following is a goal of the Bankruptcy and Insolvency Act?

Accepted Answer

A)  To determine the process by which debtors convey their assets to a trustee in bankruptcy who distributes them to the creditors 
B)  To provide an alternative to criminal charges 
C)  To allow persons with impossible burdens of debt to discharge all of their debts 
D)  To protect the interests of debtors 
E)  To help incorporated companies after discharge to carry on without the same burden of debt 
A)  To determine the process by which debtors convey their assets to a trustee in bankruptcy who distributes them to the creditors 
B)  To provide an alternative to criminal charges 
C)  To allow persons with impossible burdens of debt to discharge all of their debts 
D)  To protect the interests of debtors 
E)  To help incorporated companies after discharge to carry on without the same burden of debt

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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 15

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 16

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

Accepted Answer

A)  This legislation applies only to all present transactions where personal property is given as security interest to enforce an obligation. 
B)  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. 
C)  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 the secured creditor. 
D)  If a secured creditor fails to register his security interest in the Personal Property Registry, he loses his rights against the debtor. 
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)  This legislation applies only to all present transactions where personal property is given as security interest to enforce an obligation. 
B)  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. 
C)  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 the secured creditor. 
D)  If a secured creditor fails to register his security interest in the Personal Property Registry, he loses his rights against the debtor. 
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 17

A purchase money security interest

Accepted Answer

A)  will be automatically subordinate to any general security agreement, even if registered within the specified time period. 
B)  will prevail over a general security agreement covering all of a merchant's assets if it registered within the specified time period. 
C)  is also known as a floating charge. 
D)  is now obsolete in light of the Personal Property Security Act. 
E)  is prohibited in most provinces. 
A)  will be automatically subordinate to any general security agreement, even if registered within the specified time period. 
B)  will prevail over a general security agreement covering all of a merchant's assets if it registered within the specified time period. 
C)  is also known as a floating charge. 
D)  is now obsolete in light of the Personal Property Security Act. 
E)  is prohibited in most provinces.

Question 18

Amy Carr looked at a 2016 Ford being sold by a private party who told Carr that the car was free and clear of all encumbrances. Carr had the Ford inspected by Automobile Association, which reported it to be in good condition. Carr bought the Ford for $8000. Two months later, the car was seized by a bank that had properly perfected and attached its security interest. On these facts, which of the following is true?

Accepted Answer

A)  Carr would be able to keep the Ford because the seller had represented that the Ford was free and clear of encumbrances. 
B)  Carr would be able to keep the Ford because she was an innocent purchaser without notice of any lien or charge. 
C)  The bank would get the Ford because it had title to it as security, and it could claim its right to title whether it perfected and attached the security interest or not. 
D)  The bank would get the Ford because it properly perfected and attached its security interest. 
E)  Carr will lose the car and has no recourse against anyone. 
A)  Carr would be able to keep the Ford because the seller had represented that the Ford was free and clear of encumbrances. 
B)  Carr would be able to keep the Ford because she was an innocent purchaser without notice of any lien or charge. 
C)  The bank would get the Ford because it had title to it as security, and it could claim its right to title whether it perfected and attached the security interest or not. 
D)  The bank would get the Ford because it properly perfected and attached its security interest. 
E)  Carr will lose the car and has no recourse against anyone.

Question 19

Consider the following statements about the use of personal property as security for a creditor in a creditor-debtor transaction. Indicate the False statement.

Accepted Answer

A)  If the transaction involves the use of consumer goods as collateral, upon default of payment by the debtor, the creditor can seize the goods and sell them, but also always retains the right to sue the debtor on his personal covenant to pay for any deficiency. 
B)  Regardless of the type of personal property involved, whether tangible or intangible, as long as it is being used as security then the transaction is governed by the Personal Property Security Act, and therefore an unpaid creditor may be able to repossess them. 
C)  Real estate professionals need to be aware of the Personal Property Security Act because items that constitute fixtures under real property law may also constitute chattel security, and thus an unpaid creditor may be able to repossess them. 
D)  Before a creditor who has been promised an interest in personal property as security can claim priority rights, two processes must have taken place: the security interest must have attached to the collateral item, and the security must have been perfected. 
E)  If the required procedures have taken place, a potential buyer from an unscrupulous debtor who has already given personal property as security will be protected; i.e., the creditor will either have registered his interest in the Personal Property Registry or will have actual possession of the collateral. 
A)  If the transaction involves the use of consumer goods as collateral, upon default of payment by the debtor, the creditor can seize the goods and sell them, but also always retains the right to sue the debtor on his personal covenant to pay for any deficiency. 
B)  Regardless of the type of personal property involved, whether tangible or intangible, as long as it is being used as security then the transaction is governed by the Personal Property Security Act, and therefore an unpaid creditor may be able to repossess them. 
C)  Real estate professionals need to be aware of the Personal Property Security Act because items that constitute fixtures under real property law may also constitute chattel security, and thus an unpaid creditor may be able to repossess them. 
D)  Before a creditor who has been promised an interest in personal property as security can claim priority rights, two processes must have taken place: the security interest must have attached to the collateral item, and the security must have been perfected. 
E)  If the required procedures have taken place, a potential buyer from an unscrupulous debtor who has already given personal property as security will be protected; i.e., the creditor will either have registered his interest in the Personal Property Registry or will have actual possession of the collateral.

Question 20

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

Accepted Answer

A) True 
 B)False

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

With regard to negotiable instruments, which of the following is False?

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

Distinguish between bankruptcy and insolvency.

What is the purpose of the Fraudulent Conveyances Act? (The name varies with the province.)

Student loans survive bankruptcy and remain payable for up to seven years after the debtor ceases to be a student.

Which of the following is the consequence of an unpaid subcontractor failing to file his lien on time? The owner had contracted with the general contractor who in turn had contracted with this subcontractor.

Explain what happens when the owner of property fails to hold back the appropriate amount when making payments to the general contractor.

In the event of a default, if the creditor elects to repossess and resell the goods, how does he protect his right to claim for deficit?

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

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?

Which of the following is a goal of the Bankruptcy and Insolvency Act?

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

Attachment takes place when

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

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

A purchase money security interest

Consider the following statements about the use of personal property as security for a creditor in a creditor-debtor transaction. Indicate the False statement.

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

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: the Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contract: Consensus and Consideration

The Elements of a Contract: Capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Agency and Partnership

Corporations

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Sales and Consumer Protection

Filters

Exam 15: Priority of Creditors

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

With regard to negotiable instruments, which of the following is False?

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

Distinguish between bankruptcy and insolvency.

What is the purpose of the Fraudulent Conveyances Act? (The name varies with the province.)

Student loans survive bankruptcy and remain payable for up to seven years after the debtor ceases to be a student.

Which of the following is the consequence of an unpaid subcontractor failing to file his lien on time? The owner had contracted with the general contractor who in turn had contracted with this subcontractor.

Explain what happens when the owner of property fails to hold back the appropriate amount when making payments to the general contractor.

In the event of a default, if the creditor elects to repossess and resell the goods, how does he protect his right to claim for deficit?

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

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?

Which of the following is a goal of the Bankruptcy and Insolvency Act?

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

Attachment takes place when

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

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

A purchase money security interest

Consider the following statements about the use of personal property as security for a creditor in a creditor-debtor transaction. Indicate the False statement.

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

Managing Your Legal Affairs

Introduction to the Legal System

The Resolution of Disputes: the Courts and Alternatives to Litigation

Intentional Torts and Torts Impacting Business

Negligence, Professional Liability, and Insurance

The Elements of a Contract: Consensus and Consideration

The Elements of a Contract: Capacity, Legality, and Intention

Factors Affecting the Contractual Relationship

The End of the Contractual Relationship

Agency and Partnership

Corporations

Employment

Intellectual Property

Real and Personal Property and Protection of the Environment

Sales and Consumer Protection

Filters