Exam 18: Holder in Due Course, Liability, and Defenses

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

Which of the following is a person who routinely buys goods in good faith from a person who routinely sells these goods?

Reference - Repossession. Tina sold used vehicles. She sold a used pick-up truck to Joan and a used convertible to Barry. She properly obtained a security interest in both vehicles. Both Joan and Barry defaulted on payments owed to Tina for the vehicles. Tina told her assistant, Samantha, that the only legal remedy was repossession; that she was going after the vehicles; and that Samantha should call law enforcement if she did not show up at the office by 10 a.m. for the next few mornings. Tina decided that she would repossess Joan's pick-up at Joan's house. Therefore, Tina slipped into the driveway at midnight one night and started the engine. Joan immediately ran out and confronted Tina. Tina shoved Joan away and drove off in the pick-up truck. Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him. Which of the following is true regarding Tina's taking possession of Barry's convertible?

Reference - Overextended Debtor. Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics based on an agreement granting ABC Electronics a security interest in the television and requiring that Dennis make monthly payments. Three months later, because Dennis had bought a boat, a new car, an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the term for the type of agreement Dennis had with ABC Electronics?

Chapter 11 reorganization may be involuntary but not voluntary.

Which of the following under the UCC is a good used or bought for use primarily for personal, family, or household purposes?

Which of the following is an agreement by which the debtor agrees to pay a debt even though it could be discharged?

Which of the following are nondischargeable debts under a Chapter 7 bankruptcy filing?

Which of the following articles of the UCC govern secured transactions and personal property?

Which of the following is defined as the series of legal steps a secured party takes to protect its rights and collateral from other creditors who wish to have their debts returned through the same collateral?

Who calls the creditors' meeting in a Chapter 7 proceeding?

Mindy liked to spend and had a large amount of consumer debt for items such as jewelry, clothing, a personal watercraft, and a new car. Mindy was having problems making her credit card payments as they became due. She, however, wanted to make every effort to pay her debts. On September 1^st she repaid a loan to Friendly Jewelry Store because she wanted to remain on good terms with the manager. Unfortunately, Mindy was simply unable to continue making payments; and on November 1^st of that same year, she filed a voluntary petition for bankruptcy relief under Chapter 7. A number of her creditors complained because Friendly Jewelry Store received more from the early payment by Mindy than would have been received in bankruptcy proceedings. Which of the following is the most likely result of a claim of preferential payment based on the payment to the jewelry store?

Reference - Repossession. Tina sold used vehicles. She sold a used pick-up truck to Joan and a used convertible to Barry. She properly obtained a security interest in both vehicles. Both Joan and Barry defaulted on payments owed to Tina for the vehicles. Tina told her assistant, Samantha, that the only legal remedy was repossession; that she was going after the vehicles; and that Samantha should call law enforcement if she did not show up at the office by 10 a.m. for the next few mornings. Tina decided that she would repossess Joan's pick-up at Joan's house. Therefore, Tina slipped into the driveway at midnight one night and started the engine. Joan immediately ran out and confronted Tina. Tina shoved Joan away and drove off in the pick-up truck. Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him. Which of the following is true regarding Tina's repossession of the pick-up truck?

Which of the following is a payment made by an insolvent debtor that gives preferential treatment to one creditor over another?

Reference - Repossession. Tina sold used vehicles. She sold a used pick-up truck to Joan and a used convertible to Barry. She properly obtained a security interest in both vehicles. Both Joan and Barry defaulted on payments owed to Tina for the vehicles. Tina told her assistant, Samantha, that the only legal remedy was repossession; that she was going after the vehicles; and that Samantha should call law enforcement if she did not show up at the office by 10 a.m. for the next few mornings. Tina decided that she would repossess Joan's pick-up at Joan's house. Therefore, Tina slipped into the driveway at midnight one night and started the engine. Joan immediately ran out and confronted Tina. Tina shoved Joan away and drove off in the pick-up truck. Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him. Which of the following is true regarding whether repossession was the only remedy available to Tina?

When a debtor sells collateral, he or she receives _____________, something that is exchanged for collateral.

Which of the following are not permitted to file under Chapter 11 reorganization?

Which of the following are ineligible for Chapter 7 relief in bankruptcy?

Which of the following is true regarding actions that may be taken while an automatic stay is in effect in a Chapter 7 proceeding?

What rights, if any, does a creditor who does not wish to repossess collateral have in the event of a default, and why might a creditor prefer a remedy other than repossession of collateral?