Question 1

Which of the following is a correct statement regarding the parties who are eligible for Chapter 11 bankruptcy?

Accepted Answer

A) Stockbrokers and commodities brokers are eligible for Chapter 11 reorganization,while banks and savings and loan companies are not. 
B) Banks and savings and loan companies are eligible for Chapter 11 reorganization,while stockbrokers and commodities brokers are not. 
C) Stockbrokers and banks are eligible for Chapter 11 reorganization,while commodities brokers and savings and loan companies are not. 
D) Commodities brokers and savings and loan companies are eligible for Chapter 11 reorganization,while stockbrokers and banks are not. 
E) Stockbrokers,commodities brokers,banks,and savings and loan companies are not eligible for Chapter 11 reorganization. 
A) Stockbrokers and commodities brokers are eligible for Chapter 11 reorganization,while banks and savings and loan companies are not. 
B) Banks and savings and loan companies are eligible for Chapter 11 reorganization,while stockbrokers and commodities brokers are not. 
C) Stockbrokers and banks are eligible for Chapter 11 reorganization,while commodities brokers and savings and loan companies are not. 
D) Commodities brokers and savings and loan companies are eligible for Chapter 11 reorganization,while stockbrokers and banks are not. 
E) Stockbrokers,commodities brokers,banks,and savings and loan companies are not eligible for Chapter 11 reorganization.

Question 2

Collateral is the property that is subject to a security interest.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following are examples of goods?

Accepted Answer

A) Consumer goods 
B) Farm products 
C) Documents of title 
D) Consumer goods,farm products,and documents of title 
E) Consumer goods and farm products,but not documents of title 
A) Consumer goods 
B) Farm products 
C) Documents of title 
D) Consumer goods,farm products,and documents of title 
E) Consumer goods and farm products,but not documents of title

Question 4

A secured party's interest in proceeds lasts for ________ after the debtor receives the proceeds.

Accepted Answer

A) three years 
B) one year 
C) 180 days 
D) 30 days 
E) 10 days 
A) three years 
B) one year 
C) 180 days 
D) 30 days 
E) 10 days

Question 5

The security agreement must be signed by the debtor and describe the collateral.

Accepted Answer

A) True 
 B)False

Question 6

Under the Uniform Commercial Code,the secured party's interest in proceeds lasts for sixty days after the debtor receives the proceeds.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is an incorrect statement regarding the provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA)of 2005?

Accepted Answer

A) Under the BAPCPA,an individual may not generally be considered a debtor unless within 180 days prior to filing,the debtor receives credit counseling from a nonprofit budget and credit counseling agency. 
B) Under the BAPCPA,if an individual was a debtor in a bankruptcy case that was dismissed within 180 days of the current case,the individual is generally not eligible to be a debtor under Chapters 7,11,or 13. 
C) Under the BAPCPA,if a previous bankruptcy was completed rather than dismissed,the individual is generally permitted to file for bankruptcy again. 
D) Under the BAPCPA,if a party completes a Chapter 7 bankruptcy,the party is not permitted to seek a Chapter 7 bankruptcy again for eight years. 
E) Under the BAPCPA,if a party has at least $10,000 in assets,the party may not file for any type of bankruptcy protection. 
A) Under the BAPCPA,an individual may not generally be considered a debtor unless within 180 days prior to filing,the debtor receives credit counseling from a nonprofit budget and credit counseling agency. 
B) Under the BAPCPA,if an individual was a debtor in a bankruptcy case that was dismissed within 180 days of the current case,the individual is generally not eligible to be a debtor under Chapters 7,11,or 13. 
C) Under the BAPCPA,if a previous bankruptcy was completed rather than dismissed,the individual is generally permitted to file for bankruptcy again. 
D) Under the BAPCPA,if a party completes a Chapter 7 bankruptcy,the party is not permitted to seek a Chapter 7 bankruptcy again for eight years. 
E) Under the BAPCPA,if a party has at least $10,000 in assets,the party may not file for any type of bankruptcy protection.

Question 8

If the debtor made any payments within one year of the bankruptcy filing,the bankruptcy trustee can examine these payments as preferential payments.

Accepted Answer

A) True 
 B)False

Question 9

Chattel paper is a writing that indicates both a monetary obligation and a security interest in specific goods.

Accepted Answer

A) True 
 B)False

Question 10

What type of paper indicates both a monetary obligation and a security interest in specific goods?

Accepted Answer

A) Chattel paper 
B) Service paper 
C) Transactional paper 
D) Commercial paper 
E) Default paper 
A) Chattel paper 
B) Service paper 
C) Transactional paper 
D) Commercial paper 
E) Default paper

Question 11

Chapter 11 reorganization must be voluntary.

Accepted Answer

A) True 
 B)False

Question 12

Under Chapter 7,liquidation may be voluntary but not involuntary.

Accepted Answer

A) True 
 B)False

Question 13

According to the Uniform Commercial Code,what happens if a buyer of a consumer good subject to purchase-money security interest later sells the good?

Accepted Answer

A) The security interest immediately terminates. 
B) The security interest passes to the new buyer. 
C) Regardless of whether the new buyer is aware of the security interest,the security interest terminates if the sale to the buyer is made before the original secured party files a financial statement. 
D) As long as the new buyer is not aware of the security interest,purchases the good for his or her personal use,and purchases the good before the secured party files a financial statement,the buyer obtains the good free of the security interest. 
E) As long as the new buyer is not aware of the security interest,purchases the good for resale,and purchases the good before the secured party files a financial statement,the buyer obtains the good free of the security interest. 
A) The security interest immediately terminates. 
B) The security interest passes to the new buyer. 
C) Regardless of whether the new buyer is aware of the security interest,the security interest terminates if the sale to the buyer is made before the original secured party files a financial statement. 
D) As long as the new buyer is not aware of the security interest,purchases the good for his or her personal use,and purchases the good before the secured party files a financial statement,the buyer obtains the good free of the security interest. 
E) As long as the new buyer is not aware of the security interest,purchases the good for resale,and purchases the good before the secured party files a financial statement,the buyer obtains the good free of the security interest.

Question 14

A security interest in collateral that has been perfected in one state:

Accepted Answer

A) Will generally transfer to another state for a period of four months from the date that the property is brought into the state. 
B) Will generally transfer to another state for a period of six months from the date that the property is brought into the state 
C) Will generally transfer to another state for a period of one year from the date that the property is brought into the state 
D) Will generally transfer to another state for a period of five years from the date that the property is brought into the state 
E) Will not transfer to another state. 
A) Will generally transfer to another state for a period of four months from the date that the property is brought into the state. 
B) Will generally transfer to another state for a period of six months from the date that the property is brought into the state 
C) Will generally transfer to another state for a period of one year from the date that the property is brought into the state 
D) Will generally transfer to another state for a period of five years from the date that the property is brought into the state 
E) Will not transfer to another state.

Question 15

When the creditor becomes a secured party with an interest in the collateral,________ occurs.

Accepted Answer

A) attachment 
B) subrogation 
C) accord and satisfaction 
D) novation 
E) perfection 
A) attachment 
B) subrogation 
C) accord and satisfaction 
D) novation 
E) perfection

Question 16

Which of the following is an amendment to a financing statement stating that the debtor has no obligation to the secured party?

Accepted Answer

A) A declaration against interest 
B) A termination statement 
C) An accord and satisfaction 
D) A settlement agreement 
E) A novation 
A) A declaration against interest 
B) A termination statement 
C) An accord and satisfaction 
D) A settlement agreement 
E) A novation

Question 17

If a party completes a Chapter 7 bankruptcy,the party is not permitted to seek a Chapter 7 bankruptcy again for three years.

Accepted Answer

A) True 
 B)False

Question 18

Bankruptcy remedies are available to individuals and corporations,but not to partnerships.

Accepted Answer

A) True 
 B)False

Question 19

The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA)of 2005 included only minor changes to bankruptcy law.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is false regarding Chapter 13 bankruptcy?

Accepted Answer

A) Chapter 13 permits individuals to pay their debts to creditors in installment plans under the supervision of the court. 
B) Any debtor who files under Chapter 13 could also have filed under Chapter 11. 
C) Chapter 13 repayment plans are usually simpler and less expensive than Chapter 11 plans. 
D) By statute,Chapter 13 plans last between 36 and 60 months. 
E) Individuals,partnerships,and corporations may file under Chapter 13. 
A) Chapter 13 permits individuals to pay their debts to creditors in installment plans under the supervision of the court. 
B) Any debtor who files under Chapter 13 could also have filed under Chapter 11. 
C) Chapter 13 repayment plans are usually simpler and less expensive than Chapter 11 plans. 
D) By statute,Chapter 13 plans last between 36 and 60 months. 
E) Individuals,partnerships,and corporations may file under Chapter 13.

Exam 19: Secured Transactions and Bankruptcy

Which of the following is a correct statement regarding the parties who are eligible for Chapter 11 bankruptcy?

Collateral is the property that is subject to a security interest.

Which of the following are examples of goods?

A secured party's interest in proceeds lasts for ________ after the debtor receives the proceeds.

The security agreement must be signed by the debtor and describe the collateral.

Under the Uniform Commercial Code,the secured party's interest in proceeds lasts for sixty days after the debtor receives the proceeds.

Which of the following is an incorrect statement regarding the provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA)of 2005?

If the debtor made any payments within one year of the bankruptcy filing,the bankruptcy trustee can examine these payments as preferential payments.

Chattel paper is a writing that indicates both a monetary obligation and a security interest in specific goods.

What type of paper indicates both a monetary obligation and a security interest in specific goods?

Chapter 11 reorganization must be voluntary.

Under Chapter 7,liquidation may be voluntary but not involuntary.

According to the Uniform Commercial Code,what happens if a buyer of a consumer good subject to purchase-money security interest later sells the good?

A security interest in collateral that has been perfected in one state:

When the creditor becomes a secured party with an interest in the collateral,________ occurs.

Which of the following is an amendment to a financing statement stating that the debtor has no obligation to the secured party?

If a party completes a Chapter 7 bankruptcy,the party is not permitted to seek a Chapter 7 bankruptcy again for three years.

Bankruptcy remedies are available to individuals and corporations,but not to partnerships.

The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA)of 2005 included only minor changes to bankruptcy law.

Which of the following is false regarding Chapter 13 bankruptcy?

An Introduction to the Fundamentals of Dynamic Business Law

Business Ethics and Social Responsibility

The Uslegal System and Alternative Dispute Resolution

Administrative Law

Constitutional Law

Criminal Law and Business

Tort Law

Real, Personal, and Intellectual Property

Introduction to Contracts and Agreement

Consideration

Capacity and Legality

Reality of Assent

Contracts in Writing and Third-Party Contracts

Discharge and Remedies

Formation and Performance of Sales and Lease Contracts

Sales and Lease Contracts: Performance, Warranties, and Remedies

Negotiable Instruments: Negotiability and Transferability

Holder in Due Course, Liability, and Defenses

Agency and Liability to Third Parties

Forms of Business Organization

Corporations: Formation and Organization

Securities Regulation

Employment and Discrimination Law

Consumer Law

Filters