Exam 21: Creditors Rights and Bankruptcy

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A pipe in Gert's house springs a leak. Gert contracts with Holly's Plumbing & Construction Company to repair the pipe and fix the damage to Gert's house. Gert pays 10 percent of the price in advance. Holly's does the work, but Gert refuses to pay the rest of the price. What can Holly's do, and how is it done?

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Question 1

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Holly's can place a me chanic's lien on Gert's house. State law governs mechanic's liens. Under that law, if a property owner in Gert's situation does not pay what he or she owes, the house can be sold to satisfy the debt. The only requirements are that the lien be filed within a specific time from the time of the work, depending on the appli cable stat ute, which usually specifies 60 to 120 days. Notice of the fore clo sure and sale of the house must be given to Gert in ad vance. The pro ceeds from the sale are used to pay the debt and the costs of the proceed ings, with any surplus paid to Gert.

A writ of execution is a writ that puts in force a court decree or judgment.

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Question 2

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True

William is a surety for Jeannie's loan from Richard. Richard knows of William's existence. When the loan comes due, Jeannie tries to pay Richard, but Richard rejects the payment. William is

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Question 3

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A creditor must exhaust all legal remedies against the principal debtor before holding the surety responsible for payment.

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Question 4

A lien is an encumbrance on property to satisfy a debt or protect a claim for the payment of a debt.

(True/False)

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Question 5

Dina asks Edie to co-sign a credit application so that she can borrow money and buy a truck from First Street Motors. If, after the loan agreement is signed, Dina agrees to a higher rate of interest without telling Edie, then Edie is

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Question 6

Once a writ of execution has been issued, the debtor cannot pay the judgment and redeem the property until after a sale has taken place.

(True/False)

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Question 7

Portia owes Bon $500 on their contract, but refuses to pay. To collect, Bon files a mechanic's lien, under which security for the debt is represented by

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Question 8

Fact Pattern 21-1 Mary's home is in a state that has a $30,000 homestead exemption. Mary defaults on a $60,000 debt that she owes to Nina. Mary's home is sold at auction for $80,000. -Refer to Fact Pattern 21-1. Other property Mary may own that may be exempt from satisfaction of judgment debts includes

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Question 9

Bobby has fifteen creditors. To force Bobby into bankruptcy proceedings, at least three creditors must join the petition and their unsecured claims must add up to at least

(Multiple Choice)

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Question 10

Gerald files a bankruptcy petition. The resulting automatic stay will apply to Gerald's

(Multiple Choice)

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Question 11

Joe files a voluntary petition for Chapter 7 bankruptcy. His petition does not need to include

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Question 12

Certain types of property are exempt from writs of execution or attachment.

(True/False)

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Question 13

Dorothy files a petition for bankruptcy under Chapter 13. If she is granted a discharge, debts that will most likely be discharged include

(Multiple Choice)

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Question 14

Ed is a debtor. Financial Loans, Inc., and the government are Ed's creditors. For these parties, a bankruptcy proceeding under Chapter 13 could be initiated by the filing of a petition by

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Question 15

Daphne defaults on a debt to Country Loan Corporation (CLC). As a creditor, CLC can place liens on all of Daphne's property except

(Multiple Choice)

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Question 16

An order for relief in a bankruptcy proceeding amounts to a discharge of the debts of the party petitioning for bankruptcy protection.

(True/False)

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Question 17

In some states, a judgment creditor must obtain a separate order of garnishment to cover each of the debtor's pay periods.

(True/False)

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Question 18

Once a discharge is granted, it may not be revoked, even if, for example, a debtor concealed property to defraud a creditor.

(True/False)

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Question 19

Norma Jean files for Chapter 7 bankruptcy. She turns her assets over to Addie, who sells the assets and then distributes the proceeds to Norma Jean's creditors. Addie is a

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Question 20

Showing 1 - 20 of 72

Exam 21: Creditors Rights and Bankruptcy

A writ of execution is a writ that puts in force a court decree or judgment.

William is a surety for Jeannie's loan from Richard. Richard knows of William's existence. When the loan comes due, Jeannie tries to pay Richard, but Richard rejects the payment. William is

A creditor must exhaust all legal remedies against the principal debtor before holding the surety responsible for payment.

A lien is an encumbrance on property to satisfy a debt or protect a claim for the payment of a debt.

Dina asks Edie to co-sign a credit application so that she can borrow money and buy a truck from First Street Motors. If, after the loan agreement is signed, Dina agrees to a higher rate of interest without telling Edie, then Edie is

Once a writ of execution has been issued, the debtor cannot pay the judgment and redeem the property until after a sale has taken place.

Portia owes Bon $500 on their contract, but refuses to pay. To collect, Bon files a mechanic's lien, under which security for the debt is represented by

Bobby has fifteen creditors. To force Bobby into bankruptcy proceedings, at least three creditors must join the petition and their unsecured claims must add up to at least

Gerald files a bankruptcy petition. The resulting automatic stay will apply to Gerald's

Joe files a voluntary petition for Chapter 7 bankruptcy. His petition does not need to include

Certain types of property are exempt from writs of execution or attachment.

Dorothy files a petition for bankruptcy under Chapter 13. If she is granted a discharge, debts that will most likely be discharged include

Ed is a debtor. Financial Loans, Inc., and the government are Ed's creditors. For these parties, a bankruptcy proceeding under Chapter 13 could be initiated by the filing of a petition by

Daphne defaults on a debt to Country Loan Corporation (CLC). As a creditor, CLC can place liens on all of Daphne's property except

An order for relief in a bankruptcy proceeding amounts to a discharge of the debts of the party petitioning for bankruptcy protection.

In some states, a judgment creditor must obtain a separate order of garnishment to cover each of the debtor's pay periods.

Once a discharge is granted, it may not be revoked, even if, for example, a debtor concealed property to defraud a creditor.

Norma Jean files for Chapter 7 bankruptcy. She turns her assets over to Addie, who sells the assets and then distributes the proceeds to Norma Jean's creditors. Addie is a

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