Chapter 15 Flashcards
Accounts receivable
Funds owed to a business for goods or services provided to customers
Assignment in bankruptcy
The voluntary transfer of a debtor’s assets to a trustee in bankruptcy so that they can be administered for the benefit of the creditors; also known as voluntary assignment in bankruptcy
Attachment
Under the personal Property Security Act, the situation in which value has been given pursuant to the contract, giving the creditor a claim against the assets used as security if there is a default by the debtor
Bankrupt
A person who has made an assignment in bankruptcy or been forced into bankruptcy through a court order and who has not been discharged from bankruptcy
Bankruptcy
The process by which an insolvent person voluntarily or involuntarily transfers assets to a trustee for distribution to creditors
Bankruptcy order
A statutory assignment of a debtor’s assets to a trustee in bankruptcy
Bill of sale
A written agreement that conveys title from seller to buyer
Bona fixe purchaser for value
An innocent third party who has paid a fair price for goods under claim by a creditor
Book accounts
Accounts receivable that can be used as security for a loan
Chattel mortgage
A loan for which a creditor provides credit to the debtor, securing the loan by taking title of a good such as a car
Chattels
Tangible, movable personal property that can be measured and weighted; also known as goods
Chose in action
The thing or benefit that is transferred in an assignment; intangible personal property, such as a claim or the right to sue
Collateral
Goods or property used to secure a debt
Conditional sale
A sale in which the seller provides credit to the purchaser, holding title until the goods are paid for
Confirmed letter of credit
A document, ratified by the lender, that secures or guarantees the financial aspects of a trade transaction
Consolidation order
A court order issued under the Orderly Payment of Debts program that sets out amounts to be paid into court by the debtor (and the time of each payment) for the benefit of each of the creditors subject to the order
Consumer debtor
An individual who is bankrupt or insolvent, with less than $250,00 in claims against them (excluding a mortgage on their home)
Consumer proposal
An alternative to bankruptcy, created by the Bankruptcy and Insolvency act, whereby a consumer debtor secures some time to reorganize their affairs and make a proposal for partial payment that will satisfy their creditors; Division 2 proposal
Continuing guarantee
A provision in a guarantee allowing the creditor to advance further funds without affecting the obligation of the guarantor to pay in the event of default
Division 1 proposal
An alternative to bankruptcy whereby the debtor secures some time to reorganize their affairs and make a proposal for partial payment that will satisfy their creditors, if the proposal is rejected, the debtor is deemed to have made an assignment in bankruptcy from the day of the meeting with the creditors, and normal bankruptcy proceedings occur
Division 2 proposal
Same as consumer proposal
Estate
All the property the owner has power to dispose of, less any related debt; also the property of a bankrupt given to the trustee in bankruptcy
Fixture
A thing attached to land or to a another fixture attached land
Floating charge
a security not fixed on any particular assets until default or some other specified event
Fraudulent preference
A debtor’s payment of money to one creditor to give that creditor preference over the other creditors
Fraudulent transfer
A debtor’s transfer of property in an attempt to keep it out of the hands of creditors; not a valid sale at a fair price to an innocent third party
Guarantee
A written commitment whereby a guarantor agrees to pay a debt if the debtor does not
Guarantor
A person assuming obligation to pay if the debtor does
Holdback
A specified percentage that a person owing funds on a construction contract must retain for a specified period to protect against claims made by the suppliers of goods and services
Indemnity
A primary obligation of a third party to pay a debt along with the debtor
Insolvency
Inability of a person to pay their debts as they become due
Lease
A secured arrangements whereby possession of the goods goes to the lessee, while the title to the goods remains with lessor
Lease to purchase
A lease in which title to the goods is transferred to the lessee at the end of the lease period
Letter of credit
A commitment by the importer’s bank that the price stated will be paid upon presentation of documentation confirming delivery
Mortgage
A means of securing loans; title of property is held by the moneylender as security in some jurisdictions, in other jurisdictions, a mortgage is simply a charge against title
Official receiver
An officer of the court, appointed by the Superintendent of Bankruptcy for each bankruptcy district
Operating lease
A lease in which the goods are returned to the lessor at the end of the lease period
Perfection
Protection of a secured creditor’s claim, either by registering the secured obligation or by taking possession of the collateral
Personal property
Tangible, movable goods (chattels) and intangible claims (choses in action)
Pledge
An item that a creditor (like a pawnbroker) takes possession of a security and holds until repayment
Preferred creditors
Creditors who by law must be paid before other unsecured creditors
Priority
When there are two or more creditors, the one entitled to be paid first has priority
Proof of claim
A document filed with the trustee in bankruptcy establishing the validity of a creditors claim
Purchase money security interest
A security interest on specific goods that has priority over a general security agreement provided it is registered within a specific time
Real property
Land, buildings attached to the land, and items called fixtures (items attached to the land or the building or to another fixture attached to the land)
Receivership
A proceeding in which a receiver is appointed for an insolvent corporation, partnership, or individual to take possession of assets for its ultimate sale and distribution to creditors
Right to redeem
After a creditor has taken possession of collateral, the right of the debtor to reclaim it on payment of any money owing
Secured creditor
A creditor who has a claim on the property of the debtor, giving them priority on that property over other creditors
Secured transaction
A collateral right to debt giving the creditor the right to take back the goods or intercept the debt owing used as security in the event of default
Settlement
Transfer of assets where nominal or no consideration is involved
Standby letter of credit
A commitment by the importer’s bank that the price stated will be paid upon presentation of document confirming delivery, used as a guarantee
Superintendent of Bankrupty
The government official appointed by the federal government who is responsible for the administration of bankruptcy across Canada
Surplus income
Amount a bankrupt’s income exceeds what is necessary to maintain a reasonable standard of living according to the standards set by the Office of Superintendent of Bankruptcy
Trustee in bankruptcy
The licensed professional appointed to administer the estate of a bankrupt for the benefit of the creditors
Voluntary assignment in bankruptcy
The voluntary transfer of a debtor’s assets to a trustee in bankruptcy so that they can be administered for the benefit of the creditors; assignment in bankruptcy
