Debtor/Creditor Relationships Flashcards
1
Q
How does a creditor protect themselves from a debtor default?
A
Attachment and perfection
2
Q
What is needed for attachment?
A
Three things must happen:
- Property is owned by the debtor (rights to it)
- Interest is created by either taking possession or a signed security agreement (description of asset and signed by debtor)
- Give value to the debtor
PIG*
3
Q
What does attachment do?
A
Gives rights against the debtor
4
Q
How does a creditor perfect?
A
Must only perform one:
- File a financing statement
- Automatic possession
- Taking possession
FAT
5
Q
Who’s jurisdiction dictates filings?
A
Debtors
6
Q
What are the three forms of bankruptcy and what do they do?
A
Chapter 7 - liquidation
Chapter 11 - business reorganization
Chapter 13 - Debt adjustment plan for individuals
7
Q
Which bankruptcy filings are voluntary and which are involuntary?
A
Chapter 7 and Chapter 11 can be both. Chapter 13 is voluntary only.
