Deck 54: Creditors Rights and Bankruptcy

Question 1

Reid buys a car from Skye online. To assure that the car is delivered in the condition promised, Reid

A)must trust the seller.
B)can use an escrow company.
C)must file a financing statement.
D)may take possession of different property of the seller as collateral.

Answer 1

B

Question 2

Robert borrows $15,000 from State College to help pay for his education. He signs a note payable to the school for the amount of the loan plus interest. Robert defaults, and the school transfers the note to a collection agency. This means that

A)additional costs to collect payment can be added to the unpaid principal.
B)additional requirements can be imposed on the borrower to graduate.
C)none of the choices.
D)Robert may have to accept a job offer from a select list of employers.

Answer 2

A

Question 3

Hailey, a U.S. citizen, buys John Lennon's piano from Kent, who is in Great Britain. Particularly useful to Hailey, who would prefer to conduct this deal as a secured transaction, is

A)Resale Weekly.
B)eBay.com.
C)Escrow.com.
D)Flippa.com.

Answer 3

C

Question 4

Bern defaults on his debt to Credit Loan Company. The creditor obtains a judgment against Bern, who immediately moves to another state. Generally, the judgment will be

A)honored in other states.
B)enforced only in the state in which it was obtained.
C)appealed.
D)revoked.

Question 5

Dora defaults on her debt to EZ Credit Company. The lender obtains a judgment against Dora, who quickly moves to another state. The judgment is domesticated in Dora's new location. If the lifespan of the judgment lapses before it can be collected, the domestication

A)also lapses.
B)may be subject to garnishment.
C)can be renewed.
D)must be frozen.

Question 6

Beth borrows $10,000 from the U.S. Department of Education to help pay for her education at Community College. She signs a note payable to DOE for the amount of the loan plus interest. The borrower will be considered in default if she fails to

A)any of the choices.
B)repay the loan according to the terms in the note.
C)graduate from Community College within four years of the loan.
D)find employment in her program of study after graduation.

Question 7

Lon borrows funds through the U.S. Department of Education (DOE)to pay for his education. He defaults on the loan. DOE

A)can keep the debtor's tax refund.
B)may garnish the debtor's paycheck without a court order.
C)might take the debtor's federal benefits.
D)any of the choices.

Question 8

Maria borrows funds through the U.S. Department of Education (DOE)to pay for her education. She defaults on the loan. In some states

A)any of the choices.
B)a lien can be placed on the debtor's real property to pay the debt.
C)the debt can be collected by garnishment of the debtor's bank account.
D)the debtor's professional license can be revoked.

Question 9

Olivia borrows $25,000 from the U.S. Department of Education to help pay for her education at Public University. She signs a note payable to DOE for the amount of the loan plus interest. The loan may be canceled if she is

A)a teacher in a certain school or subject area.
B)a military serviceperson.
C)a medical technician.
D)any of the choices.

Question 10

Rita borrows $20,000 from the U.S. Department of Education to help pay for her education at State University. She signs a note payable to DOE for the amount of the loan plus interest. The loan may be discharged if

A)Rita does not graduate from State University within six years of the loan.
B)Rita does not find employment in her program of study after graduation.
C)in bankruptcy, repayment would cause Rita undue hardship.
D)any of the choices.