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MOS 2275: Business Law > Module 8: Debtor and Creditor Law > Flashcards

Module 8: Debtor and Creditor Law Flashcards

1
Q

money laundering

A

the false reporting of income from criminal activity as income from legitimate business

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2
Q

account agreement

A

a contract that specifies the rights and obligations of a bank and its customer

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3
Q

overdraft

A

when money is withdrawn from a bank account with the result that the balance in the account goes below zero

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4
Q

negotiable instrument

A

a signed doc containing an unconditional promise or order to pay a specific sum on demand or on a specified date to a specific person

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5
Q

promissory note

A

a written promise to pay another person a specific amount on demand or on a specific date

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6
Q

bill of exchange

A

a written order by one person (the drawer) to a 3rd person (the drawee) to pay money to another person (The payee)

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7
Q

holder

A

a person who has possession of a negotiable instrument i.e. cheque

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8
Q

holder in due course

A

a holder in good faith without notice of defects, who acquires greater rights than the parties who dealt directly w each other as the drawer and payee

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9
Q

consumer note

A

a negotiable instrument signed by a consumer to buy goods or services on credit

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10
Q

bank draft

A

a cheque written by a bannk on the request (and payment) of its customers

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11
Q

certified cheque

A

a cheque on which the drawee bank has guaranteed payment

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12
Q

stop payment

A

when the drawer of a cheque orders its bank not to pay the holder who presents the cheque for payment

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13
Q

endorsement in blank

A

signing a cheque without any special instructions

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14
Q

restrictive endorsement

A

signing a cheque for deposit only to a bank account

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15
Q

special endorsement

A

signing a cheque and making it payable to a specific person

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16
Q

personal defence

A

a defence that affects the parties themselves rather than the instrument

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17
Q

real defence

A

a defence based no the instrument being fundamentally flawed

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18
Q

secured credit

A

a debt where the creditor has an interest in the debtor’s property to secure payment

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19
Q

unsecured credit

A

a debt where the creditor has only a contractual right to be repaid i.e. usually trade credit

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20
Q

letter of credit

A

a written promise by a buyer’s bank to a seller’s bank to pay the seller when specified conditions are met

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21
Q

events of default

A

failure by the debtor to make required payments on a loan or to fulfill its other obligations under the credit agreement

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22
Q

collateral

A

property in which a creditor takes an interest as security for a borrower’s promise to repay a loan

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23
Q

covenants

A

provisions found in credit agreements which require debtors to carry on business in accordance w specific requirements (basically, conditions)

24
Q

letter of commitment

A

a document that is provided by a lender to a borrower and sets out the terms of a loan

25
Q

general security agreement

A

a security agreement that includes all of the debtor’s personal property assets as collateral

26
Q

After-acquired property

A

collateral that includes personal property acquired by the debtor during the term of the loan

27
Q

security interest

A

an interest in personal property that is intended to secure payment or performance of an obligation (usually a debt)

28
Q

registration

A

the registration of a financing statement to record a security interest

29
Q

financing statement

A

the doc registered as evidence of a security interest

30
Q

purchase-money security interest (PMSI)

A

a security interest that enables the debtor to acquire assets and gives the secured party priority over existing perfected security interests

31
Q

acceleration calause

A

a term of a loan agreement that makes the entire loan due if one payment is missed

32
Q

receiver

A

a person appointed by the secured party or by the court to seize, and usually sell, collateral

33
Q

guarantee

A

a conditional promise to a creditor to pay a debt if the debtor defaults

34
Q

indemnity

A

a primary obligation to pay a debt owed by another person

35
Q

subrogation

A

the right of a guarantor to recover from the debtor any payments made to the creditor

36
Q

consumer debt

A

a loan to an individual for a non-commercial purpose

37
Q

credit bureau

A

an agency that compiles credit info on borrowers

38
Q

collection agency

A

an agency that assists lenders in obtaining payment on outstanding loans

39
Q

payday loans

A

short term loans for a relatively small amount of money, provided by a non-traditional lender to an individual

40
Q

continuing guarantee

A

a guarantee where the guarantor is liable for any past, present, and future obligations of the debtor

41
Q

trustee in bankruptcy

A

the person who has legal responsibility under the BIA for administering bankruptcies and proposal

42
Q

estate

A

the collective term for the assets of a bankrupt individual or corporation

43
Q

insolvent

A

unable to meet financial obligations as they become due or having insufficient assets, if liquidated, to meet financial obligations

44
Q

proposal

A

a formal process administered by a trustee in bankruptcy that allows a debtor to restructure its debts in order to avoid bankruptcy

45
Q

debtor in possession (DIP) financing

A

secured credit provided to companies during the reorganization process with priority over existing secured creditors

46
Q

assignment in bankruptcy

A

the debtor’s voluntary assignment to the trustee in bankruptcy of legal title to the debtor’s property for the benefit of creditors

47
Q

bankruptcy order

A

an order of the court resulting in a person being declared bankrupt

48
Q

act of bankruptcy

A

one of a list of specified acts that the debtor must commit before the court will grant a bankruptcy order

49
Q

inspector

A

a person appointed by creditors to act on their behalf and supervise the actions of the trustee in bankruptcy

50
Q

transfer at undervalue

A

transfer of property or provision of services for less than fiar market value

51
Q

arm’s length

A

people who are independent of each other and not related

52
Q

bankruptcy offences

A

criminal acts defined by the Bankruptcy and Insolvency Act (BIA) in relation to the bankruptcy process

53
Q

proof of claim

A

a formal notice provided by the creditor to the trustee of the amount owed and the nature of the debt

54
Q

preferred creditors

A

certain unsecured creditors who are given priority over other unsecured creditors in the bankruptcy distribution

55
Q

discharge of bankruptcy

A

an order releasing the debtor from bankrupt status and from most remaining debts

MOS 2275: Business Law (10 decks)

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