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Law
Q:
A trustee must call a meeting of the creditors listed in the schedules filed by the debtor.
Q:
In most states, state law determines the amount of a debtor's property that is exempt from distribution on bankruptcy.
Q:
The basic duty of a trustee is to collect the debtor's available estate and reduce it to cash for distribution.
Q:
A trustee has the power to avoid a sale of the debtor's property.
Q:
Child-support debts will be suspended by a voluntary bankruptcy filing.
Q:
A bankruptcy estate consists of all the debtor's interests in property currently held, wherever located.
Q:
An involuntary bankruptcy occurs when a debtor's creditors are forced to accept a discharge of the debtor's debts.
Q:
The filing of a petition for bankruptcy will automatically stay most legal actions against the debtor.
Q:
An order for relief in a bankruptcy proceeding amounts to a discharge of the debts of the party petitioning for bankruptcy protection.
Q:
The means test forces more people to file for Chapter 7 bankruptcy rather than gave their debts discharged under Chapter 13.
Q:
If a debtor's income is below the median income, there is no presumption of bankruptcy abuse.
Q:
Concealing assets from a bankruptcy court is a crime.
Q:
Before filing for bankruptcy, a consumer-debtor must receive credit counseling.
Q:
Any "person"defined as including corporationsmay be a debtor in a liquidation proceeding.
Q:
A husband and wife may file a joint petition for bankruptcy.
Q:
The clerk of a bankruptcy court must provide consumer-debtors with information on the types of services available from credit counseling agencies.
Q:
Rulings from bankruptcy courts are finalthey cannot be appealed.
Q:
Bankruptcy proceedings are held in federal courts.
Q:
Bankruptcy law is state law.
Q:
One goal of bankruptcy law is to protect a debtor.
Q:
The right to petition for bankruptcy relief under federal law may be a necessary evil in our capitalistic society.
Q:
Drew and Earl are brothers. They agree to act as guarantors on a loan made by their sister, Flo. Flo defaults on the payments and Drew refuses to pay. Earl pays the debt. Earl can recover from
a. Drew and Flo under the right of proportionate liability.
b. Drew and Flo under the right of reimbursement.
c. Drew under the right of contribution and Flo under the right of subrogation.
d. no one, because the parties are brothers and sister.
Q:
Consumer Credit, Inc. (CCI), lends $1,000 to Joe. Kay acts as Joe's surety. If Kay pays the loan, she gets
a. any right that CCI had against Joe, but not a right to be reimbursed by Joe.
b. a right to be reimbursed by Joe, but not any right that CCI had against Joe.
c. any right that CCI had against Joe and a right to be reimbursed by Joe.
d. none of the choices.
Q:
Maggie is a surety for Juli's debt to Bill. Bill and Juli decide to make material changes to the original contract without consulting Maggie. Maggie is
a. still bound by the contract.
b. discharged completely.
c. still bound by the contract, but allowed to make additional changes to the contract.
d. still bound by the contract unless she contests it within 30 days of the changes.
Q:
William is a surety for Jeannie's loan from Richard. Richard knows of William's existence. When the loan comes due, Jeannie tries to pay Richard, but Richard rejects the payment. William is
a. released from any obligation on the debt.
b. required to pay the amount of the debt to Richard.
c. required to pay up to half of the amount of the debt to Richard.
d. required to pay the amount of the debt to Jeannie.
Q:
Dina asks Edie to co-sign a credit application so that she can borrow money and buy a truck from First Street Motors. If, after the loan agreement is signed, Dina agrees to a higher rate of interest without telling Edie, then Edie is
a. discharged from the agreement.
b. liable at the higher rate of interest.
c. liable at the lower rate of interest.
d. liable for the principal only.
Q:
Muffins-2-Go buys a truck from Street Vehicles, Inc., under a contract signed by Riley, Muffins-2-Go's president, making him personally liable if Muffins-2-Go does not pay the loan. Riley is
a. a guarantor.
b. a surety.
c. a co-surety.
d. a co-creditor.
Q:
Petro Oil Refinery asks Quality Bank for a loan to increase its oil inventory. Quality requires Robin, Petro's president, sign a personal guaranty to pay the debt if Petro defaults. Meanwhile, to sell fifty barrels of refined oil to Slick Lubricants, Inc., Petro asks its outside accountant Tina to co-sign a credit application.
If, after the loan agreement is signed, Slick agrees to a higher rate of interest without telling Tina, then Tina is
a. discharged from the agreement.
b. liable at the higher rate of interest.
c. liable at the lower rate of interest.
d. liable for the principal only.
Q:
Petro Oil Refinery asks Quality Bank for a loan to increase its oil inventory. Quality requires Robin, Petro's president, sign a personal guaranty to pay the debt if Petro defaults. Meanwhile, to sell fifty barrels of refined oil to Slick Lubricants, Inc., Petro asks its outside accountant Tina to co-sign a credit application.
If Robin is a guarantor, then the guaranty is required to be in writing because of
a. the debtor's right of redemption.
b. the co-signer's right of contribution.
c. the creditor's transfer of possession.
d. the Statute of Frauds.
Q:
Petro Oil Refinery asks Quality Bank for a loan to increase its oil inventory. Quality requires Robin, Petro's president, sign a personal guaranty to pay the debt if Petro defaults. Meanwhile, to sell fifty barrels of refined oil to Slick Lubricants, Inc., Petro asks its outside accountant Tina to co-sign a credit application.
If Tina signs the application only after language is included that requires Petro to exhaust its legal remedies against Slick before looking to her, then Tina is
a. a surety.
b. a lienor.
c. a guarantor.
d. a creditor.
Q:
Petro Oil Refinery asks Quality Bank for a loan to increase its oil inventory. Quality requires Robin, Petro's president, sign a personal guaranty to pay the debt if Petro defaults. Meanwhile, to sell fifty barrels of refined oil to Slick Lubricants, Inc., Petro asks its outside accountant Tina to co-sign a credit application.
If Tina signs the application but fails to condition her signature on Petro's agreement to pursue its legal remedies against Slick before looking to her, then Tina is
a. a surety.
b. a lienor.
c. a guarantor.
d. a creditor.
Q:
Lenders Loan Company and Mortgage Service CorporationNadya's creditorscontract with Nadya for the discharge of her liquidated debts on payment of a lesser sum. This is
a. a composition agreement.
b. a subrogation.
c. a suretyship agreement.
d. in violation of most states' laws.
Q:
Nell's debt to Olsen is past due. Olsen obtains an order of garnishment to require Nell's employer Pro Transmission Service, Inc., to pay part of Nell's paycheck to Olsen. The law
a. limits the amount that can be taken from Nell's take-home pay.
b. permits Olsen to dismiss Nell because her wages are garnished.
c. practically does not allow Olsen to collect the awarded amount.
d. requires Pro to retain Nell as an employee until the debt is paid.
Q:
A court awards a judgment to Alice, who is the creditor, against Ada, who is the debtor. After the judgment, Alice requests a court order to seize Ada's property to ensure that the judgment will be collectible. This is
a. a judicial lien.
b. a writ of attachment.
c. a writ of execution.
d. a violation of most state laws.
Q:
Friendly Credit Corporation (FCC) believes that Gary may dispose of the assets that FCC expects to receive as payment for Gary's debt before FCC can obtain a judgment. FCC may ask a court to issue a writ of
a. attachment.
b. contribution.
c. execution.
d. redemption.
Q:
Ronald's debt to Greg is past due. Ronald obtains a judgment against Greg to collect the debt, but Greg will not pay. Ronald requests a writ of execution. The property that is seized under the writ of execution must be
a. in Ronald's possession.
b. in Greg's possession.
c. in the possession of Greg's employer or other third party.
d. located within the court's geographic jurisdiction.
Q:
Jessie's debt to Kayla is past due. Kayla brings a legal action against Jessie to collect the debt. Kayla asks the court to order Liberty Bank, in which Jessie has an account, to pay a portion of the funds to Kayla. This is a request for
a. a writ of execution.
b. an order of garnishment.
c. an order that would violate most state laws.
d. a composition agreement.
Q:
Oliver borrows money from Peerless Loan Company. For Peerless to obtain a writ of execution, Oliver must
a. be unable or refuse to pay the amount of a judgment.
b. be unable to redeem Oliver's exempt property.
c. notify Imprints in writing (in a "writ") of his intent.
d. surrender possession of his property to a court.
Q:
Helene's debt to Imprints Printers is past due. Imprints obtains a judgment against Helene, but she refuses to pay it. Imprints asks the court for an order that directs the sheriff to seize and sell any of Helene's nonexempt real or personal property that is within the court's geographic jurisdiction. This is a request for
a. a writ of execution.
b. a composition agreement.
c. an order that would violate most state laws.
d. an order of garnishment.
Q:
Sasha's debt to Tully is past due. Tully brings a legal action against Sasha to collect the debt. To ensure that a judgment in Tully's favor will be collectible, he asks the court to order the seizure of Sasha's property. This is a request for
a. a contract of suretyship.
b. an order that would violate most state laws.
c. a writ of attachment.
d. an order of receivership.
Q:
Oscar refuses to pay Petra $500 in cash on their contract to repair Oscar's washing machine, which Petra still possesses at her repair shop. Petra's lien on the machine will terminate
a. if Petra continues to maintain possession.
b. if Petra does not file a written notice of lien within thirty days.
c. if Petra voluntarily surrenders possession.
d. within thirty days.
Q:
Michael contracts with Jill to fix the brakes on her Honda Civic. Jill leaves her car with Michael, but refuses to pay when the work is done. Michael refuses to return the car until she pays. Michael's lien on Jill's car will end
a. in thirty days.
b. in sixty days.
c. when Michael voluntarily surrenders possession of the car.
d. when Jill obtains a court order requiring Michael to return the car.
Q:
Portia owes Bon $500 on their roof repair contract, but refuses to pay. To collect, Bon files a mechanic's lien. Under a mechanic's lien, security for the debt is represented by
a. Portia's personal property.
b. Portia's real estate.
c. the $500 owed under the contract.
d. the contract.
Q:
Builders Construction Company performs a contract with Christina to add a sun porch to her house, but she does not pay. In most states, Builders Construction could create a lien and place it on Christina's property by filing
a. a creditor's composition agreement.
b. a writ of attachment.
c. a writ of execution.
d. a written notice of lien.
Q:
Francis performs a contract with Genie to add a garage to Genie's property, but Genie does not pay. Francis can file a lien on Genie's property if, from the last date labor or materials were provided, he acts
a. immediately.
b. within 60 to 120 days.
c. within two years.
d. within a reasonable time.
Q:
Kendall performs a contract with Lainie to add a covered porch and a pool deck to Lainie's house, but Lainie does not pay. Kendall notifies Lainie that the property will be sold to satisfy the debt. This is
a. a judicial lien.
b. a mechanic's lien.
c. an artisan's lien.
d. a violation of most state laws.
Q:
Portia owes Bon $500 on their contract, but refuses to pay. To collect, Bon files a mechanic's lien, under which security for the debt is represented by
a. Portia's personal property.
b. Portia's real estate.
c. the $500 owed under the contract.
d. the contract.
Q:
Custom Cabinets & Carpentry Company has a claim against Duane's property to satisfy a debt that takes priority over other claims against the same property. This is
a. a lien.
b. a violation of most state laws.
c. a composition agreement.
d. a contract of suretyship.
Q:
A debtor's vehicle is never exempt from satisfaction of a judgment debt.
Q:
In a few states, statutes allow the homestead exemption only if the judgment debtor has a family.
Q:
A homestead exemption allows a debtor to subtract the value of the family home from the amount of a debt.
Q:
When a surety or guarantor pays a debt owed to a creditor, he or she acquires any right that the creditor had against the debtor.
Q:
A surety cannot assert the principal debtor's bankruptcy as a defense to avoid liability on the debtor's obligation.
Q:
If a creditor surrenders collateral to the debtor without the consent of the guarantor, this can reduce the obligation of the guarantor.
Q:
A surety can never assert fraud as a defense.
Q:
A surety can assert the debtor's bankruptcy as a defense.
Q:
A material change in a loan contract between a creditor and a debtor discharges a surety only to the extent that the surety suffers a loss.
Q:
A guaranty contract must always be in writing to be enforceable.
Q:
A guarantor can be required to pay an obligation only after the principal debtor defaults.
Q:
A guarantor is secondarily liable on an obligation.
Q:
A creditor must exhaust all legal remedies against the principal debtor before holding the surety responsible for payment.
Q:
Creditors can agree with a debtor to discharge the debtor's debts on payment of a sum less than that owed.
Q:
A creditor's composition agreement may be entirely enforceable.
Q:
In some states, a judgment creditor must obtain a separate order of garnishment to cover each of the debtor's pay periods.
Q:
A surety is primarily liable for the debt of a principal.
Q:
In a suretyship relationship, a third person's credit becomes the security for a debt.
Q:
There is no limit to the amount that can be taken from a debtor's weekly take-home pay through garnishment.
Q:
Federal law governs garnishment actions.
Q:
A surety can be required to pay an obligation only after the principal debtor defaults and usually only after the creditor has made an attempt to collect from the debtor.
Q:
A writ of execution applies to a debtor's nonexempt real or personal property wherever located.
Q:
If a creditor wins a judgment against a debtor and the debtor will not or cannot pay the amount due, the dispute is at an end.
Q:
An attachment is a court-ordered seizure and taking into custody of property before a judgment is obtained on a past-due debt.
Q:
A default occurs when a debtor fails to pay a creditor as promised.
Q:
Once a writ of execution has been issued, the debtor cannot pay the judgment and redeem the property until after a sale has taken place.
Q:
A writ of execution is a writ that puts in force a court decree or judgment.
Q:
To use attachment as a remedy, a creditor must have an enforceable right to payment of the debt.
Q:
An artisan's lien is effective only if a creditor has possession of the property.
Q:
An artisan's lien is a security device created at statutory law through which a creditor can recover payment for labor and materials used to increase the value of real property.
Q:
If a debtor does not pay a mechanic's lien, the debtor's property can be sold to satisfy the debt.
Q:
A mechanic's lien is possessory.