Q&A Hero

Q: Set forth the first four classes of priority claims among unsecured creditors in a Chapter 7 bankruptcy case in order of priority.

Q: A transaction in which the payment of a debt is guaranteed by personal property owned by the debtor is called a secured transaction.

Q: Article 2(A) of the UCC governs secured transactions in personal property.

Q: Set forth the steps that a creditor must take to become a secured party.

Q: List three advantages associated with perfection by possession.

Q: Everett buys a new bicycle on credit from Bicycle City. Bicycle City has a security agreement for a purchase-money security interest in the bicycle but did not file a financing statement. Everett, however, discovers that he does not have enough money to pay his rent. Therefore, he sells his bicycle to his neighbor, Helen, who is unaware of Bicycle City's security interest in the bicycle. Everett fails to make payments on the bicycle and Bicycle City seeks to repossess it. Discuss the rights and obligations of the parties.

Q: What rights, if any, does a creditor who does not wish to repossess collateral have in the event of a default, and why might a creditor prefer a remedy other than repossession of collateral?

Q: Claims to Funds. Paul had a great job as a bank executive. Unfortunately, his bank came under scrutiny by federal regulators and while Paul had done nothing illegal, he ended up being fired. Unfortunately for Paul, he had a number of debts. Among his assets were a house worth $250,000 on which he owed $150,000 to a bank that held a security interest; three vehicles; an expensive watch worth $5,000; and $120,000 in an Individual Retirement Account "IRA". He owed $900 per month in child support to his ex-wife Suzy and was behind on payments in the amount of $1,800. He also owed $2,000 in wages consisting of four months of back pay to Bob who took care of Paul's landscaping needs and swimming pool care. Unable to find a job and believing that he had no other option, Paul filed for Chapter 7 bankruptcy. All debtors angrily demanded payment from liquidation of Paul's assets. Paul, on the other hand, claims that he needs all the above-mentioned assets and that he should not have to give up anything. Only federal bankruptcy exemptions apply to Paul's case. Which of the following is true in regard to the claims of Suzy and Bob in reference to their status as unsecured creditors? A. Suzy's claims have priority. B. Bob's claims have priority. C. Suzy and Bob are on equal footing and will receive the same percentage of funds. D. Suzy's claims have priority only up to $1,000 and after that amount is satisfied, Suzy and Bob are on equal footing and will receive the same percentage of funds. E. Bob's claims have priority only up to $1,000 and after that amount is satisfied, Suzy and Bob are on equal footing and will receive the same percentage of funds.

Q: Repossession. Tina sold used vehicles. She sold a used pick-up truck to Joan and a used convertible to Barry. She properly obtained a security interest in both vehicles. Both Joan and Barry defaulted on payments owed to Tina for the vehicles. Tina told her assistant, Samantha that the only legal remedy was repossession; that she was going after the vehicles; and that Samantha should call law enforcement if she did not show up at the office by 10 a.m. for the next few mornings. Tina decided that she would repossess Joan's pick-up at Joan's house. Therefore, Tina slipped into the driveway at midnight one night and started the engine. Joan immediately ran out and confronted Tina. Tina shoved Joan away and drove off in the pick-up truck. Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him. Which of the following is true regarding Tina's repossession of the pick-up truck? A. She improperly breached the peace in recovering the collateral. B. Tina did not breach the peace in recovering the collateral unless Joan can establish the existence of actual injuries. C. Tina did not breach the peace because she was entitled to repossess the vehicle and any injury sustained by Joan was her own fault. D. Tina breached the peace, but only because she did not provide Joan with prior notification that she was coming to repossess the collateral. E. Tina breached the peace, but only because she acted to repossess the collateral after 10:00 p.m. at night.

Q: Repossession. Tina sold used vehicles. She sold a used pick-up truck to Joan and a used convertible to Barry. She properly obtained a security interest in both vehicles. Both Joan and Barry defaulted on payments owed to Tina for the vehicles. Tina told her assistant, Samantha that the only legal remedy was repossession; that she was going after the vehicles; and that Samantha should call law enforcement if she did not show up at the office by 10 a.m. for the next few mornings. Tina decided that she would repossess Joan's pick-up at Joan's house. Therefore, Tina slipped into the driveway at midnight one night and started the engine. Joan immediately ran out and confronted Tina. Tina shoved Joan away and drove off in the pick-up truck. Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him. Which of the following is true regarding Tina's taking possession of Barry's convertible? A. Tina breached the peace because she did not provide Barry prior notification that she was going to repossess the vehicle. B. Tina breached the peace because she took the vehicle from a public lot. C. Tina breached the peace unless she can establish that Barry gave her prior permission to repossess the vehicle in a public lot. D. Tina did not breach the peace because she acted in a reasonable manner in taking the collateral. E. Tina did not breach the peace because Barry sustained no documented physical injury.

Q: Overextended Debtor. Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics based on an agreement granting ABC Electronics a security interest in the television and requiring that Dennis make monthly payments. Three months later, because Dennis had bought a boat, a new car, and an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the correct designation for the television in the agreement between Dennis and the electronic store? A. Pledged goods. B. Acknowledged goods. C. Collateral. D. Defined security. E. Illegal security.

Q: Repossession. Tina sold used vehicles. She sold a used pick-up truck to Joan and a used convertible to Barry. She properly obtained a security interest in both vehicles. Both Joan and Barry defaulted on payments owed to Tina for the vehicles. Tina told her assistant, Samantha that the only legal remedy was repossession; that she was going after the vehicles; and that Samantha should call law enforcement if she did not show up at the office by 10 a.m. for the next few mornings. Tina decided that she would repossess Joan's pick-up at Joan's house. Therefore, Tina slipped into the driveway at midnight one night and started the engine. Joan immediately ran out and confronted Tina. Tina shoved Joan away and drove off in the pick-up truck. Tina was able to repossess Barry's convertible in a public parking lot with no altercation with him. Which of the following is true regarding whether repossession was the only remedy available to Tina? A. Tina was correct regardless of whether a vehicle or another type of good was involved. B. Tina was correct, but only because a vehicle was involved. C. Tina was incorrect, because only when a vehicle is involved, a party must disregard the collateral and proceed to judgment. D. Tina was incorrect because regardless of whether a vehicle or another type of good was involved, Tina only had the right to ignore the collateral and proceed to judgment. E. Tina was incorrect because regardless of whether a vehicle or another type of good was involved, Tina had the right to either take possession of the collateral or ignore rights in the collateral and proceed to judgment.

Q: Overextended Debtor. Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics based on an agreement granting ABC Electronics a security interest in the television and requiring that Dennis make monthly payments. Three months later, because Dennis had bought a boat, a new car, and an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the correct term for designating the effect of the failure of Dennis to continue making payments? A. He refused the loan. B. He defaulted on the loan. C. He unsecured the loan. D. He deaffirmed the loan. E. He discharged the loan.

Q: Overextended Debtor. Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics based on an agreement granting ABC Electronics a security interest in the television and requiring that Dennis make monthly payments. Three months later, because Dennis had bought a boat, a new car, and an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the term for the type of agreement Dennis had with ABC Electronics? A. A pledged money interest. B. A collateralized interest. C. A purchase-money security interest. D. A security perfection interest. E. A cash deferred security interest.

Q: Overextended Debtor. Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics based on an agreement granting ABC Electronics a security interest in the television and requiring that Dennis make monthly payments. Three months later, because Dennis had bought a boat, a new car, and an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is correct regarding the statement of Dennis that the security interest was not perfected? A. Dennis is wrong because the security interest perfected automatically. B. Dennis is wrong because the security interest perfected when he was still in possession of the collateral 30 days after the purchase. C. Dennis is wrong because the security interest perfected when he was still in possession of the collateral 60 days after the purchase. D. Dennis is correct because in the case of luxury goods, a financing statement must be filed within 10 days. E. Dennis is correct because regardless of whether or not a luxury good was involved, the interest was never perfected.

Q: Which of the following was the ruling by the U.S. Supreme Court in Rousey v. Jacoway, the case in the text involving whether funds in an Individual Retirement Account (IRA) qualify for a federal exemption in bankruptcy proceedings? A. That funds in an IRA account are exempt from claims of creditors. B. That funds in an IRA account are not exempt from claims of creditors. C. That funds in an IRA account are exempt from claims of creditors only up to $5,000. D. That funds in an IRA account are exempt from claims of creditors only up to $50,000. E. That funds in an IRA account are exempt from claims of creditors only up to $500,000.

Q: A. The payment was not preferential because it was for a consumer good and was not made within 30 days of the filing of the bankruptcy petition. B. The payment was preferential on the basis that it was made within 90 days of the filing of the bankruptcy petition. C. The payment was preferential on the basis that it was made within 90 days of the filing of the bankruptcy petition only if the trustee is able to establish Mindy's insolvency at the time. D. Because it was for a consumer good, the payment was not preferential unless the bankruptcy trustee can prove intent to defraud. E. The payment was preferential because it was made within two years of the filing of the bankruptcy petition.

Q: Overextended Debtor. Dennis purchased a big screen television from ABC Electronics and financed the purchase through ABC Electronics based on an agreement granting ABC Electronics a security interest in the television and requiring that Dennis make monthly payments. Three months later, because Dennis had bought a boat, a new car, and an expensive engagement ring for his girlfriend, and some other items, he was unable to continue making payments on the television. The manager from ABC Electronics called and asked Dennis to return the television. Dennis refused on the basis that ABC Electronics never perfected its interest in the television. Which of the following is the proper designation under the UCC for the television? A. It is a consumer good. B. It is a pledge. C. It is an allonge. D. It is unsecured property. E. It is both unsecured and unperfected property.

Q: Which of the following is true regarding the number of creditors who must vote to accept a reorganization plan under a Chapter 11 proceeding? A. For the plan to be accepted, one-third of the creditors of each class of creditors must vote to approve it. B. For the plan to be accepted, one-half of the creditors of each class of creditors must vote to approve it. C. For the plan to be accepted, two-third of the creditors of each class of creditors must vote to approve it. D. For the plan to be accepted, three-fourth of the creditors of each class of creditors must vote to approve it. E. For the plan to be accepted, one-fourth of the creditors of each class of creditors must vote to approve it.

Q: Which of the following is false regarding Chapter 13 of the bankruptcy code? A. Chapter 13 permits individuals to pay their debts to creditors in installment plans under the supervision of the court. B. Any debtor who files under Chapter 13 could also have filed under Chapter 11. C. Chapter 13 repayment plans are usually simpler and less expensive than Chapter 11 plans. D. By statute Chapter 13 plans last between 36 and 60 months. E. Individuals, partnerships and corporations may file for a Chapter 13 repayment plan.

Q: Which of the following was the result on appeal in In re Girolamo Afonica, the case in the text in which the debtor, without a certificate of title, transferred a vehicle securing a loan of over $11,000 to another party purportedly because the debtor's ex-wife objected to the presence of the car in the driveway? A. That the debt was nondischargeable in bankruptcy because the debtor acted to defraud the bank. B. That the debt was nondischargeable in bankruptcy because the debtor acted willfully and maliciously to cause injury to the collateral. C. That the debt was nondischargeable in bankruptcy both because the debtor acted to defraud the bank and because the debtor acted willfully and maliciously to cause injury to the collateral. D. That the debt was totally dischargeable in bankruptcy because proof of fraud was not established. E. That because the debtor acted willfully and maliciously to cause injury to the collateral, only 50% of the debt was dischargeable.

Q: Which of the following are nondischargeable debts under a Chapter 7 bankruptcy filing? A. Claims of willful or malicious conduct by the debtor that caused injury to another person or property. B. Specific student loans, unless payment of the loans imposes undue hardship on the debtor. C. Debts not discharged in previous bankruptcies. D. Judgments against a debtor for claims resulting from the debtor's drinking and driving. E. All of these.

Q: Which of the following is an agreement by which the debtor agrees to pay a debt even though it could be discharged? A. A settlement B. A reaffirmation agreement C. An acknowledgement agreement D. An accord and compromise E. An affirmance

Q: ___________________________ are not permitted to file under Chapter 11 reorganization. A. Stockbrokers B. Commodities brokers C. Banks D. Savings and loan companies E. All of these

Q: Which type of payment does an insolvent debtor that gives preferential treatment to one creditor over another make? A. An unfair payment B. An unequal payment C. A preferential payment D. An unendorsed payment E. An unapproved payment

Q: A(n) ______ is a written federal court order signed by a bankruptcy judge stating that the debtor is immune from creditor actions to collect debts. A. discharge B. release C. grant of immunity D. relinquishment E. abandonment

Q: Who calls the creditors' meeting in a Chapter 7 proceeding? A. The trustee B. The interim trustee C. The bankruptcy judge D. The district court judge E. At least three of the creditors

Q: How is a determination made regarding the identity of the permanent trustee in a Chapter 7 proceeding? A. The bankruptcy judge appoints the trustee. B. The district court judge appoints the trustee. C. The court clerk appoints the trustee. D. The debtor appoints the trustee. E. The creditors elect the trustee.

Q: Which of the following means that bankruptcy relief is ordered and that the bankruptcy proceedings can continue? A. An order of relief B. A stay enforcement order C. An approval order D. A liquidation order E. None of these because if bankruptcy relief is ordered, all collection efforts must cease

Q: Which of the following is true regarding rights of a trustee in a Chapter 7 bankruptcy? A. The trustee takes possession of the debtor's property and has it appraised. B. If someone else holds the debtor's property, the trustee has the power to require the person to return that property. C. The trustee may temporarily take over the debtor's business. D. The trustee takes possession of the debtor's property and has 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. E. The trustee takes possession of the debtor's property and has it appraised; and if someone else holds the debtor's property, the trustee has the power to require the person to return that property; but the trustee may not take over the debtor's business even temporarily.

Q: Which type of meeting is where of all creditors listed in the Chapter 7 required schedule for liquidation?A. A debt meeting B. A control meeting C. A creditors' meeting D. An enforcement meeting E. A counseling meeting

Q: Which of the following is a moratorium for almost all creditor litigation against a debtor in a Chapter 7 bankruptcy? A. A stop order B. An automatic stay C. A semi-automatic dismissal D. A semi-discharge E. A means discharge

Q: Which of the following is true regarding actions that may be taken while an automatic stay is in effect in a Chapter 7 proceeding? A. Creditors cannot attempt to repossess property during bankruptcy proceedings. B. A creditor who received a judgment against a debtor prior to the bankruptcy filing may act to enforce the judgment. C. Legal actions to collect child support payments are not subject to the stay. D. Once a filing is allowed and a stay is in effect, the rules are the same regardless of previous bankruptcies. E. All of these are true.

Q: Which of the following is true regarding the effect of an automatic stay on claims of secured creditors in a Chapter 7 proceeding? A. The stay affects claims of secured creditors in the same way in which it affects claims of unsecured creditors. B. Secured creditors with claims of over $5,000 are not affected by the stay. C. Secured creditors with claims of over $15,000 are not affected by the stay. D. Secured creditors with claims of over $20,000 are not affected by the stay. E. The court may exclude secured creditors from the stay if they petition the court to show that they do not have adequate protection under the stay.

Q: By filing a(n) ______ petition under Chapter 7, creditors can attempt to force a debtor who is not paying debts as they become due into bankruptcy. A. voluntary B. involuntary C. complaint D. accusatory E. dispute

Q: Which of the following cannot be forced into involuntary bankruptcy under Chapter 7? A. Farmers B. Ranchers C. Nonprofit organizations D. Farmers, ranchers, and nonprofit organizations E. Farmers and ranchers, but nonprofit organizations may be forced into involuntary bankruptcy

Q: Under which test may a court presume that an individual is abusing the bankruptcy provisions of Chapter 7 when an individual's debt is primarily consumer debt and the individual's income is above the median income in his or her state? A. The means test B. The assets test C. The median test D. The liquidation test E. The bankruptcy test

Q: Which of the following occurs when a debtor turns over all assets to a trustee? A. Liquidation B. Reorganization C. Reformation D. Acknowledgment E. Avoidance

Q: A(n) _________________ takes over administration of the debtor's estate. A. administrator B. aligner C. organizer D. reformer E. trustee

Q: Which of the following are ineligible for Chapter 7 relief in bankruptcy? A. Banks. B. Railroads. C. Health maintenance organizations. D. Banks, railroads, and health maintenance organizations. E. Banks and railroads, but not health maintenance organizations.

Q: Once a voluntary liquidation proceeding under Chapter 7 is filed, the debtor's prepetition assets form the ______. A. corpus B. remainder C. residual estate D. bankruptcy estate E. relinquished asset pool

Q: Which of the following is called straight bankruptcy? A. Liquidation B. Reorganization C. Reformation D. Acknowledgment E. Avoidance

Q: Which title of the United States Code contains the Bankruptcy Code? A. Title 9 B. Title 11 C. Title 7 D. Title 15 E. Title 34

Q: Which of the following is false regarding provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005? A. Under the Act, an individual may not generally be considered a debtor unless within 190 days prior to filing, the debtor receives credit counseling from a nonprofit budget and credit counseling agency. B. Under the Act, if an individual was a debtor in a bankruptcy case that was dismissed within 190 days of the current case, the individual is generally not eligible to be a debtor under Chapters 7, 11, or 13. C. Under the Act, if a previous bankruptcy was completed rather than dismissed, the individual is generally permitted to file for bankruptcy again. E. Under the Act if a party has at least $10,000 in assets, the party may not file for any type of bankruptcy protection. If an individual's debt is primarily consumer debt and if the individual's income is above the median income in his or her state, the court may presume that the individual is abusing the bankruptcy provisions; but there is no provision that a party may not file for any type of bankruptcy if the party has at least $10,000 in assets.

Q: Congress makes comprehensive changes to bankruptcy law in the ______________. A. Bankruptcy Amendments of 2005 B. Bankruptcy Fraud Protection Act of 2007 C. Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 D. Bankruptcy Fraud and Consumer Shield Act of 2006 E. Insolvency Protection Amendments of 2006

Q: Which chapter of the Bankruptcy Code is used for a sale of a debtor's assets by a trustee and the distribution of money to creditors? A. Chapter 7 B. Chapter 9 C. Chapter 11 D. Chapter 13 E. Chapter 15

Q: Which chapter of the Bankruptcy Code is used as a reorganization of the debtor's financial affairs under supervision of the bankruptcy court? A. Chapter 7 B. Chapter 9 C. Chapter 11 D. Chapter 14 E. Chapter 15

Q: Which of the following chapters of the Bankruptcy Code recognizes insolvency proceedings pending in a foreign country and relief for foreign debtors? A. Chapter 7 B. Chapter 9 C. Chapter 11 D. Chapter 14 E. Chapter 15

Q: Which of the following is true regarding the manner in which a secured party may sell collateral? A. The sale must be in a private sale. B. The sale must be in a public sale. C. The sale may be in either a private sale or a public sale. D. The sale may be in a private sale, public sale, or an acknowledged sale. E. The sale must be in an acknowledged sale.

Q: Bankruptcy remedies are available to ______________________. A. individuals B. individuals and corporations C. individuals and partnerships D. corporations and partnerships E. individuals, corporations, and partnerships

Q: Which of the following is a term used in bankruptcy for debtors who cannot pay their debts in a timely fashion? A. Statutory debtors B. Insolvent debtors C. Owners D. Transactors E. Acknowledged transactors

Q: _________________ paper is a writing that demonstrates a right to payment of money. A. Chattel B. Goods C. Payment D. Instrument E. Authorization

Q: Which of the following may a buyer purchase in the ordinary course of business and obtain the goods free of any security interest so long as the buyer is unaware of any security interest in the good? A. Chattel paper. B. An instrument. C. An authorization. D. Chattel paper, instruments, and authorizations. E. Chattel paper and instruments, but not authorizations.

Q: Which of the following is true regarding the UCC's definition of default? A. The UCC defines default as failure to make any payment when due. B. The UCC defines default as failure to make a payment within 30 days after a payment is due. C. The UCC defines default as failure to make a payment within 60 days after a payment is due. D. The UCC defines default as failure to make a payment within 90 days after a payment is due. E. None of these because the UCC does not define default.

Q: What type of court order does a secured party need to take possession of the collateral if the debtor defaults? A. An order to take possession B. An order to breach the peace C. An order for retention of the collateral D. An order for protective relief E. The secured party does not need an order to take possession.

Q: Which party routinely buys goods in good faith from a person who routinely sells these goods? A. A buyer in the typical course of business. B. An approved buyer. C. An approved buyer in the ordinary course of business. D. A buyer in the ordinary course of business. E. An exchanger in the typical course of business.

Q: What happens under the UCC, if a buyer of a consumer good subject to purchase-money security interest later sells the good? A. The security interest immediately terminates. B. The security interest passes to the new buyer. C. Regardless of whether the buyer is aware of the security interest, the security interest terminates if the sale to the new buyer is made before the original secured party files a financial statement. D. As long as the 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 new buyer obtains the good free of the security interest. E. As long as the 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.

Q: What type of paper indicates both a monetary obligation and a security interest in specific goods? A. Chattel paper. B. Combined paper. C. Transactional paper. D. Monetary and secured paper. E. Specific interest paper.

Q: Under the UCC, a secured party's interest in proceeds lasts for ______ after the debtor receives the proceeds. A. 30 days B. 60 days C. 1 year D. 5 days E. 10 days

Q: Which of the following is an amendment to a financing statement that states that the debtor has no obligation to the secured party? A. An ending statement. B. A termination statement. C. A bind-up statement. D. A release statement. E. A reversion statement.

Q: In a dispute between two secured unperfected parties, which of the following is true? A. The party who attached its interest first will prevail. B. The party who attached its interest second will prevail. C. The parties will divide the proceeds evenly between them. D. The party who loaned the most money on the collateral has priority. E. The party who loaned the least amount on the collateral has priority.

Q: What kind of property is property acquired by the debtor after a security agreement covering the property is made? A. Post-dated property. B. After-acquired property. C. Proceeds. D. Post-acquired property. E. Subsequently acquired property.

Q: Which of the following can be considered after-acquired property? A. Inventory. B. Livestock. C. Equipment. D. Inventory, livestock, and equipment. E. Inventory and equipment, but not livestock.

Q: When a debtor sells collateral, he or she receives ______, something that is exchanged for collateral. A. after-acquired property B. subsequent-acquired property C. proceeds D. collateral E. post-financed funds

Q: Which of the following is true regarding a secured party's interest in proceeds? A. A secured party automatically has an interest in proceeds for a limited amount of time. B. A secured party has an interest in proceeds only if the proceeds are taken into the possession of the secured party. C. A secured party has an interest in proceeds only if a financing statement is filed on the proceeds. D. A secured party has an interest in proceeds if the secured party takes the proceeds into the possession of the secured party or if the secured party files a financing statement on the proceeds. E. The secured party may not acquire a security interest in proceeds unless a new agreement regarding the proceeds is reached with the debtor.

Q: Which is not a method of perfection? A. Perfection by pledge B. Perfection by filing C. Perfection by possession D. Automatic possession E. Perfection of movable collateral

Q: What is the national standard to perfect an automobile or boat? A. Perfection by pledge B. Perfection by filing C. Perfection by possession D. Automatic possession E. There is no national standard to perfect an automobile or boat.

Q: Which of the following is true under the UCC regarding a security interest in collateral that has been perfected in one state when the collateral is moved to another state? A. A security interest in collateral that has been perfected in one state will generally expire immediately when the collateral is moved to another state. B. A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of four months from the date that the property is brought into the other state. C. A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of six months from the date that the property is brought into the other state. D. A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of two months from the date that the property is brought into the other state. E. A security interest in collateral that has been perfected in one state will generally transfer to another state for a period of 30 days from the date that the property is brought into the other state.

Q: Transfer of collateral to a secured party for the purpose of perfection is called a(n) ______. A. allegiant B. pledge C. transfer D. allonge E. release

Q: What type of collateral must be perfected through possession? A. Certificates of deposit. B. Stocks. C. Bonds. D. Certificates of deposit, stocks, and bonds. E. There are no types of collateral that must be perfected through possession.

Q: Under the UCC __________________ is a good used or bought for use primarily for personal, family, or household purposes. A. a retail good B. a consumer good C. a pledged good D. a financed good E. an approved good

Q: Which of the following is defined as the series of legal steps a secured party takes to protect its rights and collateral from other creditors who wish to have their debts returned through the same collateral? A. Perfection. B. Filing. C. Noticing. D. Financing noticing. E. Arrangement.

Q: According to the UCC, a financing statement list should include _________. A. the names and addresses of all parties involved only B. the names and addresses of all the parties involved and a description of the collateral only C. the names and addresses of all the parties involved, a description of the collateral, and the signature of the debtor D. the name of the financing bank and the name of the debtor, and a description of the collateral E. the name of the financing bank, the signature of the debtor, a description of the collateral, and details of the loan repayment schedule

Q: Once a financing statement has been filed with a correct agency, for how long is the statement valid under the UCC without renewal? A. 1 year. B. 2 years. C. 3 years. D. 5 years. E. 10 years.

Q: Failure to make payments on a loan is __________________________. A. value B. default C. collateral D. perfection E. PMSI

Q: Which of the following is an example of an intangible(s)? A. Accounts. B. Goodwill. C. Literary rights. D. Accounts, goodwill, and literary rights. E. Accounts and goodwill, but not literary rights.

Q: When, the creditor becomes the secured party who has a security interest in the collateral __________ occurs. A. attachment B. transformation C. reaffirmation D. security E. perfection

Q: When a debtor uses borrowed money from the secured party to buy the collateral, a(n) _____________________ interest is formed. A. secured possessory B. loaned money possessory C. purchase-money security D. purchase-cash consumer E. perfected security

Q: An agreement in which the debtor gives the secured interest to the secured party is a(n) ________________________ agreement. A. collateral B. secured C. debtor D. protected E. security

Q: Which of the following are examples of collateral? A. Goods and indispensable paper. B. Goods and intangibles. C. Goods and proceeds. D. Goods, indispensable paper, and proceeds. E. Goods indispensable paper, intangibles, and proceeds.