Exam 21: Creditors Rights and Bankruptcy

How does a secured creditor establish his or her rights to the collateral securing a first-priority position?

Whose only legal remedy is to bring a lawsuit against a borrower to try to recover the money loaned?

A ________ allows the debtor in possession to avoid any obligation that he or she would otherwise be forced to perform.

Before an individual is allowed to file for bankruptcy, he or she must complete a short credit-counseling seminar.

Properties owned by businesses are eligible for mortgage refinancing under the Mortgage Forgiveness Debt Relief Act.

What is the standard that an individual must meet in order to file for Chapter 7 bankruptcy?

The collateral used for a mortgage is ____.

Unsecured creditors may seize any asset of the borrower once they have a debt collection judgment.

If a person cosigns a loan as a guarantor, that person becomes primarily liable for the debt.

The bankruptcy trustee is a representative of:

Fast Feet, a manufacturer of running shoes, gave merchandise on credit to Rick's Running for its store. Rick's is required to sign an agreement that describes the merchandise as collateral and specifies that Rick's will pay Fast Feet weekly based on the sales of the shoes. Fast Feet files a statement of notice with the appropriate government agency. Based on these facts, what kind of creditor is Fast Feet, and why?

Bankruptcy is primarily governed by:

In liquidation secured creditors are paid first and in full as long as the value of the collateral equals or exceeds the value of their security interests.

An ________ stops creditors from pursuing their collection actions.

The order of payment for unsecured creditors in bankruptcy is specified in the state's UCC statutes.

A Chapter 11 debtor may use bankruptcy as an excuse for not performing contractual obligations.

The bankruptcy trustee is appointed to represent the creditors' interests.

What has Congress done to try to prevent individuals from abusing bankruptcy protections?

What is the role of a trustee in bankruptcy?

A ________ is a contract that specifies the parties, describes the collateral, states the obligations of the debtor, and states the remedies available to the secured party.