Ch.19

1)Which of the following can be considered after-acquired property?

Inventory

Livestock

Equipment

Inventory, livestock, or equipment

Inventory and equipment, but not livestock

2)The secured party is also known as the secured _____.

Multiple Choice

creditor

debtor

assignor

delegator

incidental beneficiary

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

For the plan to be accepted, one-third of the creditors of each class of creditors must vote to approve it.

For the plan to be accepted, one-half of the creditors of each class of creditors must vote to approve it.

For the plan to be accepted, two-thirds of the creditors of each class of creditors must vote to approve it.

For the plan to be accepted, three-fourths of the creditors of each class of creditors must vote to approve it.

For the plan to be accepted, one-fourth of the creditors of each class of creditors must vote to approve it.

4)If a buyer purchases chattel paper or an instrument in the ordinary course of business and he or she is unaware of any security interest in the good, the buyer obtains the good _____.

subject to an unperfected security interest

subject to a perfected security interest by possession

subject to an automatically-perfected security interest

subject to an automatically-perfected security interest and a perfected security interest by possession

free of any security interest

5)Which of the following is false regarding Chapter 13 bankruptcy?

Chapter 13 permits individuals to pay their debts to creditors in installment plans under the supervision of the court.

Any debtor who files under Chapter 13 could also have filed under Chapter 11.

Chapter 13 repayment plans are usually simpler and less expensive than Chapter 11 plans.

By statute, Chapter 13 plans last between thirty-six (36) and sixty (60) months.

Individuals, partnerships, and corporations may file under Chapter 13.

6)Which of the following is true regarding the rights of a trustee in a Chapter 7 bankruptcy?

The trustee may take possession of the debtor's property and have it appraised.

If someone else holds the debtor's property, the trustee has the power to require the person to return that property.

The trustee may temporarily take over the debtor's business.

The trustee may take possession of the debtor's property and have it appraised; if someone else holds the debtor's property, the trustee has the power to require the person to return that property; and the trustee may temporarily take over the debtor's business.

The trustee may take possession of the debtor's property and have it appraised, and if someone else holds the debtor's property, the trustee has the power to require the person to return that property; however, the trustee may not take over the debtor's business even temporarily.

7)Within ninety (90) days of the creditors' meeting, all creditors except _____must file a proof of claim with the bankruptcy court clerk to receive a portion of the debtor's estate.

financial institutions

secured creditors

charitable organizations

the debtor's friends and family members

wholesalers in a business-to-business (B2B) distribution channel

8)Which of the following include accounts, goodwill, and literary rights that can all be subject to security interests?

Goods

Personal property

Real property

Tangibles

Intangibles

9)In a dispute between two secured parties with unperfected security interests, which of the following is true?

The party who attached its interest first will prevail.

The party who attached its interest second will prevail.

The parties must divide the proceeds evenly between them.

The party who loaned the most money on the collateral has priority.

The party who loaned the least money on the collateral has priority.

10)What signifies that the creditor has become a secured party with an interest in certain collateral?

An accord

A satisfaction

Perfection

Attachment

A novation

11)Which of the following is true regarding the manner in which a secured party may sell collateral after the debtor's default?

The sale must be at a private sale.

The sale must be at a public sale.

The sale may be at either a private sale or a public sale.

The sale must be at a "without reserve" sale.

The sale must be at a "with reserve" sale.

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

Claims of willful or malicious conduct by the debtor that caused injury to another person or property and specific student loans (unless payment of the loans imposes undue hardship on the debtor)

Specific student loans (unless payment of the loans imposes undue hardship on the debtor) and debts not discharged in previous bankruptcies

Debts not discharged in previous bankruptcies and judgements against a debtor for claims resulting from the debtor's drinking and driving

Claims of willful or malicious conduct by the debtor that caused injury to another person or property; specific student loans (unless payment of the loans imposes undue hardship on the debtor); and judgments against a debtor for claims resulting from the debtor's drinking and driving

Claims of willful or malicious conduct by the debtor that caused injury to another person or property; specific student loans (unless payment of the loans imposes undue hardship on the debtor); debts not discharged in previous bankruptcies; and judgements against a debtor for claims resulting from the debtor's drinking and driving

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

Creditors can attempt to repossess property.

A creditor who received a judgment against the debtor prior to the bankruptcy filing may act to enforce the judgment.

Legal actions to collect child support payments are not subject to the automatic stay.

Legal actions to determine paternity are subject to the automatic stay.

Legal actions to determine alimony payments are subject to the automatic stay.

14)Which of the following is false regarding the provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005?

Under the BAPCPA, an individual may not generally be considered a debtor unless within 180 days prior to filing, the debtor receives credit counseling from a nonprofit budget and credit counseling agency.

Under the BAPCPA, if an individual was a debtor in a bankruptcy case that was dismissed within 180 days of the current case, the individual is generally not eligible to be a debtor under Chapters 7, 11, or 13.

Under the BAPCPA, if a previous bankruptcy was completed rather than dismissed, the individual is generally permitted to file for bankruptcy again.

Under the BAPCPA, if a party completes a Chapter 7 bankruptcy, the party is not permitted to seek a Chapter 7 bankruptcy again for eight years.

Under the BAPCPA, if a party has at least $10,000 in assets, the party may not file for any type of bankruptcy protection.

15)Which of the following would not be considered collateral used in a security interest?

Goods

Intangibles

Proceeds

Indispensable paper

Lost profits

16)According to the Uniform Commercial Code (UCC), a purchase money security interest (PMSI) exists in all but which of the following situations?

When a security interest is retained or taken by the seller of the collateral to secure part of the purchase price

When a security interest is retained or taken by the buyer of the collateral to secure the seller's fulfillment of an express or implied warranty

When a security interest is retained or taken by the seller of the collateral to secure all of the purchase price

When a security interest is retained or taken by a person who gives something of value to the debtor so that the debtor can gain rights to the collateral

When a security interest is retained or taken by a person who gives something of value to the debtor so that the debtor can gain use of the collateral

17)According to the Uniform Commercial Code (UCC), what happens if a buyer of a consumer good subject to purchase-money security interest later sells the good?

The security interest immediately terminates.

The security interest passes to the new buyer.

Regardless of whether the new buyer is aware of the security interest, the security interest terminates if the sale to the buyer is made before the original secured party files a financial statement.

As long as the new buyer is not aware of the security interest, purchases the good for his or her personal use, and purchases the good before the secured party files a financial statement, the buyer obtains the good free of the security interest.

As long as the new buyer is not aware of the security interest, purchases the good for resale, and purchases the good before the secured party files a financial statement, the buyer obtains the good free of the security interest.

18)According to the Uniform Commercial Code (UCC), value is _____.

intangible

gratuitous

consideration

immeasurable

tangible

19)Overextended Debtor. Dennis purchased a big-screen television from ABC Electronics (ABC) and financed the purchase through ABC based on an agreement granting the retailer a security interest in the television and requiring that Dennis make monthly payments. Three (3) months later, Dennis was unable to continue making payments on the television because he had purchased a boat, a new car, an expensive engagement ring for his girlfriend, and some other items. The ABC store manager called Dennis and asked him to return the television. Dennis refused on the basis that ABC never perfected its interest in the television. According to the Uniform Commercial Code (UCC), what is the proper designation for the television?

It is a consumer good.

It is a pledge.

It is an allonge.

It is unsecured property.

It is both unsecured and unperfected property.

20)If a debtor defaults, what type of court order does the secured party need to take possession of the collateral?

A confiscatory decree

A declaratory judgment

A summary judgment

A temporary injunction

The secured party does not need an order to take possession.