21.

The filing of a bankruptcy petition under Chapter 7 of the Federal Bankruptcy Code:

Select one:

a.

Terminates liens on exempt property.

b.

Terminates all security interests in property in the bankruptcy.

c.

Prevents the debtor from keeping monies earned after filing the bankruptcy petition

d.

Stops enforcement of judgment liens against property in the bankruptcy estate.

22.Mrs. Jones says to Todd, the son of her neighbor: "Todd, if you wash my car today, I will give you $5.00." Later that same day, while Mrs. Jones is out shopping with her husband, Todd sees Mrs. Jones's car in the driveway and washes it. This situation is an example of :

Select one:

a.

An implied contract.

b.

A typical bilateral contract

c.

A typical unilateral contract.

d.

None of the above are correct.

24.

Robert executed a valid security agreement with First Time Bank covering Robert's new purchase of machinery and equipment for his new factory. However, First Time Bank failed to perfect (by filing or possession) its security interest in the equipment and machinery. Six months later, Robert defaults on the loan with First Time Bank. Robert did not sell the machinery or use it as collateral for another loan. Based solely upon the facts provided:

Select one:

a.

First Time Bank may not attempt to enforce its interest in the collateral because it failed to perfect.

b.

First Time Bank must first immediately file a financing statement to be able to proceed against Robert and repossess the collateral.

c.

First Time Bank's failure to perfect its security interest does not affect the validity of its interest in the collateral as against the debtor, Robert.

d.

Two of the above are correct.

e.

None of the above are correct.

25.

Sam went to Stable National Bank, borrowed $1,000, and granted a security interest in his sailboat to the bank. This security interest attached on March 1 and was perfected when the bank filed a financing statement on May 15. On April 12, Sam went to Solid National Bank, and borrowed $2,000 and granted a security interest on the same sailboat. Solid perfected its security interest by filing a financing statement on April 20. Sam defaulted on both loans in June, having paid off none of the principal on either loan. Both banks want to repossess the boat. If the boat can be sold for $1,200, how much of the $1,200 would each bank be entitled to receive?

Select one:

a.

Stable: $1,000 and Solid: $0

b.

Stable: $1,000 and Solid: $200

c.

Stable: $400 and Solid: $800

d.

Stable: $0 and Solid: $800

e.

Stable $0 and Solid: $1,200