Deck 13: Credit, Suretyship, and Bankruptcy

Question 1

A creditor would rather be:

A)Unsecured.
B)Totally funded.
C)Secured.
D)Well financed.

Answer 1

C

Question 2

In a credit transaction,the borrower is the debtor and the lender is the creditor.

Answer 2

True

Question 3

In In re Greenbelt Cooperative the court found that Raymond had sufficiently identified the actual debtor.

Answer 3

False

Question 4

The primary purpose of the bankruptcy law is to get debtors to pay back what they owe to creditors.

Question 5

A mortgage is a three-party instrument.

Question 6

Security interests in personal property are governed by which article of the UCC?

A)2
B)4
C)6
D)9

Question 7

In a surety arrangement,a third person promises to be liable for the payment of another's debt.

Question 8

In GMAC v.Daniels Seymour was found not liable for John's car loan.

Question 9

Judgment-proof means that the creditor:

A)Will likely be able to collect.
B)Has won many lawsuits.
C)May not collect.
D)Is a good litigator.

Question 10

A financing statement is required if the creditor has physical possession of the collateral.

Question 11

An improperly recorded document is not effective against:

A)Subsequent purchasers of the real property.
B)Other mortgagees or lienholders who have no notice of the prior mortgage.
C)Both of the above.
D)None of the above.

Question 12

In a credit transaction,the creditor will usually take a security interest through:

A)The mortgage note.
B)Collateral
C)A high interest rate.
D)All of the above.

Question 13

Financing statements are effective for how many years?

A)10
B)15
C)1
D)5

Question 14

The owner-debtor is the mortgagee.

Question 15

Security means collateral.

Question 16

Contractors and laborers that provide time and materials are protected in their investments through:

A)Mechanic's lien.
B)Material person's lien.
C)Both of the above.
D)None of the above.

Question 17

Bankruptcy judges are appointed by the president for how many years?

A)Life
B)16
C)14
D)10

Question 18

Unsecure credit requires collateral.

Question 19

In a guaranty arrangement,who agrees to pay the debt of the principal debtor?

A)The principal debtor.
B)The guarantor.
C)The codebtor.
D)All of the above.

Question 20

To be a valid written security agreement,it must:

A)Clearly identify the collateral.
B)Contain the debtor's promise to repay the creditor.
C)Set forth the creditor's rights upon default.
D)All of the above.