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

Reference - Claims to Funds. Paul had a great job as a bank executive. Unfortunately, his bank came under scrutiny by federal regulators and while Paul had done nothing illegal, he ended up being fired. Unfortunately for Paul, he had a number of debts. Among his assets were a house worth $250,000 on which he owed $150,000 to a bank which held a security interest; three vehicles; an expensive watch worth $5,000; and $120,000 in an Individual Retirement Account "IRA". He owed $900 per month in child support to his ex-wife Suzy and was behind on payments in the amount of $1,800. He also owed $2,000 in wages consisting of four months of back pay to Bob who took care of Paul's landscaping needs and swimming pool care. Unable to find a job and believing that he had no other option, Paul filed for Chapter 7 bankruptcy. All debtors angrily demanded payment from liquidation of Paul's assets. Paul, on the other hand, claims that he needs all the above mentioned assets and that he should not have to give up anything. Only federal bankruptcy exemptions apply to Paul's case. Which of the following is true under bankruptcy in regard to Paul's claim to the watch?

Which of the following are examples of collateral?

Which of the following is true regarding the number of creditors who must vote to accept a reorganization plan under a Chapter 11 proceeding?

Perfection of a security interest in a motor vehicle generally occurs when the secured party files the interest with the state's Department of Motor Vehicles.

Which of the following types of collateral must be perfected through possession?

Which of the following may a buyer purchase in the ordinary course of business and obtain the goods free of any security interest so long as the buyer is unaware of any security interest in the good?

Set forth the steps that a creditor must take to become a secured party.

Which of the following provides for adjustment of debts of family farmers?

Which of the following titles of the United States Code contains the Bankruptcy Code?

Which of the following is true under the UCC regarding a security interest in collateral that has been perfected in one state when the collateral is moved to another state?

Which of the following is true regarding the effect of an automatic stay on claims of secured creditors in a Chapter 7 proceeding?

How is a determination made regarding the identity of the permanent trustee in a Chapter 7 proceeding?

A _____________ is a written federal court order signed by a bankruptcy judge stating that the debtor is immune from creditor actions to collect debts.

A security interest may not apply to personal property that is not yet in the debtor's possession.

Reference - Claims to Funds. Paul had a great job as a bank executive. Unfortunately, his bank came under scrutiny by federal regulators and while Paul had done nothing illegal, he ended up being fired. Unfortunately for Paul, he had a number of debts. Among his assets were a house worth $250,000 on which he owed $150,000 to a bank which held a security interest; three vehicles; an expensive watch worth $5,000; and $120,000 in an Individual Retirement Account "IRA". He owed $900 per month in child support to his ex-wife Suzy and was behind on payments in the amount of $1,800. He also owed $2,000 in wages consisting of four months of back pay to Bob who took care of Paul's landscaping needs and swimming pool care. Unable to find a job and believing that he had no other option, Paul filed for Chapter 7 bankruptcy. All debtors angrily demanded payment from liquidation of Paul's assets. Paul, on the other hand, claims that he needs all the above mentioned assets and that he should not have to give up anything. Only federal bankruptcy exemptions apply to Paul's case. Which of the following parties has first claim to proceeds from the house?

Which of the following is true under the UCC if a buyer of a consumer good subject to purchase-money security interest later sells the good?

Under the UCC, a buyer in the ordinary course of business can take goods free of any security interest created by the seller of the goods even if the security interest is perfected.

Which of the following chapters of the Bankruptcy Code is used for a sale of a debtor's assets by a trustee and the distribution of money to creditors?

Which of the following cannot be forced into involuntary bankruptcy under Chapter 7?

Which of the following chapters of the Bankruptcy Code recognizes insolvency proceedings pending in a foreign country and relief for foreign debtors?