lecture 1

Question 1

debt

Answer 1

owe money to a creditor. Usually, a contract it formed, payment is due.

Question 2

Insolvency

Answer 2

Person in a situation where they cant pay their debts when they fall due.

Question 3

Bankruptcy

Answer 3

the formal procedure followed when someone becomes insolvent.

Question 4

Liquidation/winding up

Answer 4

The formal procedure followed when a company becomes insolvent.

Question 5

The order creditors get paid out in?

Answer 5

Based on statute and typically, preferential creditors, secured creditors then unsecured creditors.

Question 6

guarantee

Answer 6

a contract between person A and person C regarding a debt owed by B to A. If B defaults on payment then C has to pay on B’s part.

Question 7

Securities

Answer 7

Loose umbrella term regarding the various interests given to a secured creditor that, allowing them to seize/hold, retain/sell the thing the interest is secured over.

Question 8

Types of securities

Answer 8

security over a specific property.
securities over all assets of the debtor, present and future.
securities with recourse (after the creditor has seized and sold collateral of debtor, debtor is still liable for the overdue, bank can sue for remaining).
securities without recourse.

Question 9

general security agreement (GSA)

Answer 9

modern version of debenture.

Question 10

what is an official assignee (OA)?

Answer 10

The official assignee is appointed by “the Act”. OA administers bankruptcies and liquidations by collecting and selling assets to repay creditors.

Question 11

fraudulent conveyance

Answer 11

when the insolvent gives away or hides assets to avoid capture.

Question 12

How long til discharge from bankruptcy?

Answer 12

3 years. s 290