Question 12 pts

More than one person can own an interest in a particular parcel of real property.

True

False

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Question 22 pts

A sidewalk is usually considered to be a fixture.

True

False

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Question 32 pts

A bankruptcy discharges all of the debtor's debts.

True

False

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Question 42 pts

It is possible to acquire an ownership interest in real property without the consent or agreement of the owner of the real property.

True

False

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Question 52 pts

A secured creditor can have his security interest automatically perfected upon attachment.

True

False

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Question 62 pts

In a bankruptcy proceeding, some creditors are more likely to be paid than others.

True

False

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Question 72 pts

When a debtor declares bankruptcy, all of his property will be sold to satisfy his debts.

True

False

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Question 82 pts

A secured creditor is always repaid in full.

True

False

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Question 92 pts

In a cavern, in a canyon, while excavating for a mine, Dusty Geezer meets Midarlyn Clementine. After a stormy yet passionate courtship, the couple marry in a state which recognizes tenancy by the entirety. The couple's relationship deteriorates after Midarlyn concludes she can no longer tolerate Dusty's peculiar (some might say uncivilized) behavior. Dusty and Midarlyn decide to remain married but to live separately. A few years later, Midarlyn drowns in a tragic mining mishap. During their marriage Dusty and Midarlyn acquired title to a parcel of land called Greenacre. In her will, Midarlyn conveys her interest in Greenacre to her cousin Netty. Dusty challenges the bequest claiming that he alone is entitled to Greenacre. At trial the court will:

a. award Greenacre to Netty and Dusty as tenants in common.

b. award Greenacre to Netty and Dusty as joint tenants.

c. award Greenacre solety to Dusty.

d. award Greenacre solety to Netty.

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Question 102 pts

The secured creditor who perfects his or her security interest first is referred to as the:

a. Perfection Creditor

b. Senior Secured Creditor

c. Superior Creditor

d. Creditor Without Equal

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Question 112 pts

Seller is selling his interest in Blackacre to Buyer. Seller wants to convey to Buyer only the interest Seller has in Blackacre and nothing else. To accomplish this, Seller should give Buyer a:

a. quit claim deed.

b. general warranty deed.

c. a security interest.

d. a perfected security interest.

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Question 122 pts

Which of the following transfers will the bankruptcy trustee most likely be able to rescind?

a. Jeff makes his regular $700 payment to his landlord the month before he files for bankruptcy.

b. 120 days before filing for bankruptcy, Sally makes a $3400 payment to her therapist for past counseling sessions.

c. Ginger pays Ed's Auto Repair $900 to rebuild the engine in her car 78 days before declaring bankruptcy.

d. Henry makes a $650 payment to Cam Credits on a bad debt they have purchased 60 days before filing bankruptcy.

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Question 132 pts

The process that creates a security interest in the debtor's property is known as:

a. Perfection.

b. Securing.

c. Attachment.

d. Claiming.

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Question 142 pts

The judge's order that prevents creditors from attempting to collect a debt after a bankruptcy is filed is called:

a. a deficiency judgment.

b. an equity hold.

c. an automatic stay.

d. a debtor's easement.

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Question 152 pts

Which of the following is a false statement?

a. Taxes owed to the government can not be discharged in bankruptcy.

b. An interest in real property can sometimes transfer to another person upon the owner's death.

c. A debtor in default whose property has been repossessed by a secured creditor can redeem his property by fully paying the secured creditor along with the costs associated with the repossession.

d. To be repaid, a secured creditor must perfect his security interest by filing or possession.

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Question 162 pts

When Sally files for bankruptcy she declares the following debts:

$1600 Sears credit account;

$250 back taxes owed to State of Oregon;

$4000 judgment in favor of a past business partner from a lawsuit which established that Sally stole money from the business partner;

$3500 owed to her father.

Of the above debts, how many will be discharged by the bankruptcy?

a. One debt.

b. Two of the debts.

c. Three of the debts.

d. Four of the debts.

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Question 172 pts

Questions 17 - 21 refer to the following fact situation (repeated for each question):

Shawn agrees to paint Clifford's house for $700. Clifford pays him with a $700 promissory note which requires Clifford to pay Shawn on January 1. To insure repayment of the loan Shawn requires Clifford to sign a security agreement which pledges Clifford's computer as collateral for the note. Later in the month, Clifford borrows $500 from his Aunt Bea to be repaid on January 1. Aware of Clifford's poor credit history, Aunt Bea has Clifford sign a written security agreement which pledges Clifford's computer as collateral for the loan. Aunt Bea then requires Clifford to bring the computer to her house and put it in her bedroom closet. Clifford then enrolls in a welding class at Mitch's Trade School. He pays his tuition by giving Mitch a promissory note for $800 to be paid in full in 60 days. Mitch requires Clifford to sign a security agreement which pledges his computer as collateral for the note. As soon as Clifford sign the agreement Mitch files a financing statement at the courthouse. Clifford defaults on all his obligations.

Question: Which creditor's security interest was the first to attach to the computer?

a. Mitch

b. Aunt Bea

c. Shawn

d. No security interests have attached to the computer.

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Question 182 pts

Questions 17 - 21 refer to the following fact situation (repeated for each question):

Shawn agrees to paint Clifford's house for $700. Clifford pays him with a $700 promissory note which requires Clifford to pay Shawn on January 1. To insure repayment of the loan Shawn requires Clifford to sign a security agreement which pledges Clifford's computer as collateral for the note. Later in the month, Clifford borrows $500 from his Aunt Bea to be repaid on January 1. Aware of Clifford's poor credit history, Aunt Bea has Clifford sign a written security agreement which pledges Clifford's computer as collateral for the loan. Aunt Bea then requires Clifford to bring the computer to her house and put it in her bedroom closet. Clifford then enrolls in a welding class at Mitch's Trade School. He pays his tuition by giving Mitch a promissory note for $800 to be paid in full in 60 days. Mitch requires Clifford to sign a security agreement which pledges his computer as collateral for the note. As soon as Clifford sign the agreement Mitch files a financing statement at the courthouse. Clifford defaults on all his obligations.

Question: In the above fact situation, how many security interests have beenperfected?

a. None

b. One

c. Two

d. Three

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Question 192 pts

Questions 17 - 21 refer to the following fact situation (repeated for each question):

Shawn agrees to paint Clifford's house for $700. Clifford pays him with a $700 promissory note which requires Clifford to pay Shawn on January 1. To insure repayment of the loan Shawn requires Clifford to sign a security agreement which pledges Clifford's computer as collateral for the note. Later in the month, Clifford borrows $500 from his Aunt Bea to be repaid on January 1. Aware of Clifford's poor credit history, Aunt Bea has Clifford sign a written security agreement which pledges Clifford's computer as collateral for the loan. Aunt Bea then requires Clifford to bring the computer to her house and put it in her bedroom closet. Clifford then enrolls in a welding class at Mitch's Trade School. He pays his tuition by giving Mitch a promissory note for $800 to be paid in full in 60 days. Mitch requires Clifford to sign a security agreement which pledges his computer as collateral for the note. As soon as Clifford sign the agreement Mitch files a financing statement at the courthouse. Clifford defaults on all his obligations.

Question: After Clifford defaults on his obligations, which creditor has a superior claim to Clifford's computer?

a. Shawn

b. Aunt Bea

c. Mitch

d. All creditors have an equal claim to the computer.

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Question 202 pts

Questions 17 - 21 refer to the following fact situation (repeated for each question):

Shawn agrees to paint Clifford's house for $700. Clifford pays him with a $700 promissory note which requires Clifford to pay Shawn on January 1. To insure repayment of the loan Shawn requires Clifford to sign a security agreement which pledges Clifford's computer as collateral for the note. Later in the month, Clifford borrows $500 from his Aunt Bea to be repaid on January 1. Aware of Clifford's poor credit history, Aunt Bea has Clifford sign a written security agreement which pledges Clifford's computer as collateral for the loan. Aunt Bea then requires Clifford to bring the computer to her house and put it in her bedroom closet. Clifford then enrolls in a welding class at Mitch's Trade School. He pays his tuition by giving Mitch a promissory note for $800 to be paid in full in 60 days. Mitch requires Clifford to sign a security agreement which pledges his computer as collateral for the note. As soon as Clifford sign the agreement Mitch files a financing statement at the courthouse. Clifford defaults on all his obligations.

Now, assume that Clifford did not pay any of his debts and the computer is sold to satisfy Clifford's debts. The sale proceeds are $1000 and there are no costs associated with the repossession and sale of the computer.

Question: How much of the proceeds will Mitch receive?

a. $0

b. $300

c. $500

d. $800

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Question 212 pts

Questions 17 - 21 refer to the following fact situation (repeated for each question):

Shawn agrees to paint Clifford's house for $700. Clifford pays him with a $700 promissory note which requires Clifford to pay Shawn on January 1. To insure repayment of the loan Shawn requires Clifford to sign a security agreement which pledges Clifford's computer as collateral for the note. Later in the month, Clifford borrows $500 from his Aunt Bea to be repaid on January 1. Aware of Clifford's poor credit history, Aunt Bea has Clifford sign a written security agreement which pledges Clifford's computer as collateral for the loan. Aunt Bea then requires Clifford to bring the computer to her house and put it in her bedroom closet. Clifford then enrolls in a welding class at Mitch's Trade School. He pays his tuition by giving Mitch a promissory note for $800 to be paid in full in 60 days. Mitch requires Clifford to sign a security agreement which pledges his computer as collateral for the note. As soon as Clifford sign the agreement Mitch files a financing statement at the courthouse. Clifford defaults on all his obligations.

Now, assume that Clifford did not pay any of his debts and the computer is sold to satisfy Clifford's debts. The sale proceeds are $1000 and there are no costs associated with the repossession and sale of the computer.

Question: How much of the proceeds will Shawn receive?

a. $0

b. $300

c. $500

d. $700

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Question 222 pts

With regard to bankruptcy, which of the following is false?

a. The trustee sells some but not all of the debtors property.

b. The trustee protects the debtor's interests.

c. Bankruptcy can be initiated by the debtor.

d. Some creditors receive priority over other creditors.

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Question 232 pts

When the foreclosure sale of the collateral of a secured transaction is not sufficient to pay the debt owed to a creditor, the creditor may obtain a:

a. Equitable judgment.

b. Bankruptcy judgment.

c. Collateral judgment.

d. Deficiency judgment.

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Question 242 pts

The following is used for Questions 24 and 25:

Carol owns Blackacre in fee simple absolute. She conveys Blackacre with a deed that contains the following language: "To Doris for life; then to Old McDonald for so long as the land is used for farming."

Question: Which of the following estates in real property have been created by Carol?

a. Fee Simple

b. Life Estate

c. Fee Simple Defeasible

d. b and c, but not a

e. All of the above

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Question 252 pts

The following is used for Questions 24 and 25:

Carol owns Blackacre in fee simple absolute. She conveys Blackacre with a deed that contains the following language: "To Doris for life; then to Old McDonald for so long as the land is used for farming."

Question: Which of the following statements is false?

a. Doris may sell her interest in Blackacre to anyone she chooses.

b. Old McDonald's interest in Blackacre could exist even after he dies.

c. Carol no longer has any interest in Blackacre.

d. Doris and Old McDonald should record their interests in Blackacre.

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Question 262 pts

Which of the following is an exception to the rule against preferential payments and liens?

a. Payments made in the ordinary course of the debtor's financial affairs.

b. In a payment between the debtor and a creditor involving a contemporaneous exchange of value.

c. A security interest in property owned by the debtor created in favor of a creditor who has threatened to sue the debtor.

d. All of the above.

e. Answers (a) and (b) only.

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Question 272 pts

Ben's family has farmed 40 acres for the past 75 years. Ben's father transfers the 40 acres to Ben and to Ben's brother, Abe, as tenants in common. Ben dislikes Abe and does not want to co-own property with Abe. Ben can end the co-tenancy by requesting:

a. An Eminent Domain

b. A Prescriptive Easement

c. A Public Prescription

d. A Partition

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Question 282 pts

John owes Richard $1000. 130 days before filing for bankruptcy John pays Richard in full. The bankruptcy trustee will be able to invalidate the payment and return the $1000 to the debtor's estate if:

a. The payment was made in the ordinary course of business.

b. Richard was not a secured creditor.

c. John is related to Richard.

d. All of the above.

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Question 292 pts

Which of the following is the maximum interest a person can hold in real property?

a. Life Estate

b. Nonfreehold Estate

c. Tenancy be the Entirety

d. Fee Simple

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Question 302 pts

Which of the following is an example of an easement?

a. Oregon condemns Blackacre to turn it into a park.

b. The owner of Blackacre permanently affixes a flagpole to the property.

c. Oregon Trail Electric purchases the right to run power lines across Blackacre.

d. Barbara occupies Blackacre without the owner's permission.

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Question 312 pts

Stacy owns a 200 acre parcel of land named Blackacre. She subdivides the 40 acres on the N.E. corner of Blackacre which she calls Whiteacre. The only access road to Whiteacre runs across Blackacre. Later Stacy sells Whiteacre to Mike and Mike uses the road across Blackacre to get to the house he builds on Whiteacre. Four years after the sale of Whiteacre, Mike and Stacy have a falling out and Stacy puts a locked gate across the road which runs through Blackacre to Whiteacre. Mike sues seeking access to Whiteacre. A court will most likely rule that:

a. The purchase of Whiteacre did not include an express easement therefore Mike has no right to cross Blackacre.

b. Mike has acquired a right to cross Blackacre based on adverse possession.

c. Mike has acquired a right to cross Blackacre based on easement by necessity.

d. Mike has acquired a right to cross Blackacre based on an easement prescription.

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Question 322 pts

Casey is a secured creditor. The debtor has defaulted on his obligation to pay Casey and she decides to strictly foreclose on the collateral of the security agreement. Which of the following is true?

a. Casey must notify other creditors who have a secured interest in the collateral of her intent to strictly foreclose.

b. The debtor can object to the strict foreclosure.

c. If Casey can strictly foreclose she becomes the owner of the collateral.

d. All of the above are correct.

e. Answers (a) and (c) only.

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Question 332 pts

Greg owes the following amounts to creditors:

$1000 Citibank Visa

$4000 Bronson Lumber

$6000 Uncle Willy

Uncle Willy has a security interest in Greg's only real asset, his boat. Greg files for bankruptcy. The sale of the boat brings only $4000. After the trustee sets aside exempt property and liquidates Greg's other assets the bankruptcy estate is valued at $3500. When the trustee distributes the estate among Greg's creditors, how much should Bronson Lumber receive? (Assume there are no priority creditors or costs associated with bankruptcy proceedings.)

a. $2000

b. $1500

c. $1000

d. $500