R7

Question 1

What makes an instrument negotiable?

Answer 1

In writing, signed, unconditional, on demand or difinite time, fixed amount of money only, pay to the order/ bearer of (except checks)

Question 2

A holder in due course needs to take the paper in what way?

Answer 2

for value(not a gift, and not executory); in good faith;without notice of any deffense; and paper’s negotiable.

Question 3

Does a holder need to be holder in due course to have HDC rights?

Answer 3

NO. Shelter doctrine, take transferor’s right.

Question 4

What defenses are HDC subject to?

Answer 4

Real defenses- FAIDS.
Fruad in execution,Forgery;Adjudicated insanity, Alteration; Infancy,Illegality; Duress, Discharged in bankruptcy and other discharges;Suretyship defenses(HDC had knew), Staute of limitaion.

Question 5

Drawer vs drawee, who’s primarily liable for a draft?

Answer 5

Drawee (must signed).

Question 6

Are endoresors liable for the instrument?

Answer 6

Yes, secondary unless noted “without recourse”

Question 7

Requisites for Attachment OF THE SECURITY INTEREST?

Answer 7

Authenticated record(written or electronic) signed by debtor or creditor taken possesion(or control) of collateral;
Creditor give value;
Debtor must have rights in the collateral (own or possess).

Question 8

Methods of PERFECTION OF THE SECURITY INTEREST?

Answer 8

1. filing financing statement (debtor must sign);2. taking possesion(tangible); 3. control (investment property); 4.automatic perfection of PMSI consumer goods (and small scale assignment of accounts); 5. temperory perfection.

Question 9

How long does a filling of financing statement last?

Answer 9

5 years and can renew every 5 years.

Question 10

priority ranking of collateral interest holder?

Answer 10

buyer in the ordinary course of business, HDC and possesory lien;
perfected PMSI (first to file wins);
perfected non-PMSI (first to file wins);
unperfected (attach only);
the debtor.

Question 11

Why should an automatic perfected PMSI holder of consumer goods still file financing statement?

Answer 11

To protect against garage sale rule. No filing then garage sale buyer wins.

Question 12

When does a PMSI holder need to file to have priority over prior(or concurrent) perfected security interest holder?

Answer 12

Consumer (rare)-automatic.
Inventory-before debtor receives the inventory.
Equipment- within 20 days after debtor receives the equipment (relates back to the day of possesion).

Question 13

Upon default, can a secured party take the collateral and then seek to recover the deficiency?

Answer 13

Normally yes, unless the secured party keep the collateral(do not sell) and it’s with consumers, then no deficiency may be recovered.

Question 14

Upon default, can a secured party take the collateral and keep it in satisfaction of the debt?

Answer 14

Normally yes, unless it’s consumer goods and debtor paid over 60% already, then must take and sell it (distribute proceeds).

Question 15

Tests for chapter 7 and chapter 13 presumption of abuse for individuals?

Answer 15

1. compare current income (based on past 6 months) with state median. If lower-Ch 7. If higher- step 2.
2. means test: 60*(income-expense), if less than 7k-ch 7; if over 12k- ch 13; if in between- step 3.
3. over 25% of Nonpriority Claims- no ch 7.
   all test results are not definite. General abuse-“bad faith”,violent crime, etc.

Question 16

Who can not be involuntarily petitioned into bankruptcy?

Answer 16

Farmers and charities. And all chapter 13’s are voluntary.

Question 17

Who may petition a debtor involuntarily into bankruptcy?

Answer 17

Creditors who are owed, individually or in aggregate, at least $15,325 in unsecured, undisputed debt.

Question 18

How many crediors are needed to file an involuntary bankruptcy petition?

Answer 18

If total creditors less than 12- one owed 15,325 is enough.

If total more than 12- at least three owed 15.325 (added up) are needed.

Question 19

What’s a Section 341 Meeting?

Answer 19

meeting of creditors within 20-40 days after order of relief in bankruptcy filling, to examine the debtor.

Question 20

what are excluded from bankruptcy estate?

Answer 20

post filling earnings; education IRAs/programs; house,car, and other things necessary to live (up to a modest limit);government benefits (ss, unemployment); alimony and support. Property received from devorce, inheritance, insurance after 180 days of filling.

Question 21

what’s A Preferential Payment in bankruptcy?

Answer 21

Payments made within 90 days (1 year if insider,relative) ,while insolvent(presumed anyways), to a preexisting creditor, resulting the creditor receiving more than he would have received under the Bankruptcy Code. If consumer debts, under 600 is ok

Question 22

Do creditors need to file a cliam in order to get a share of debtor’s estate?

Answer 22

unsecured - yes.

perfected security interest- no need.

Question 23

how often can you file for bankruptcy?

Answer 23

once every 8 years.

Question 24

What debts are not dischargable in bankruptcy?

Answer 24

Wafted.
generally, willful criminal tort related (negligence tort is dischargable); Alimony; fraud; Taxed; Education loan; Debts undisclosed, etc.

Question 25

Order of claimants payment in bankruptcy?

Answer 25

Secured(split); SAG WEG CTI; general creditors(split).
Support to spouse and children; Administrative expense; involuntary Gap claimant; Wage-up to 12k/employee; Employee benefit plan-up to 12k/employee(reduced by W); Grain farmer; Consumer deposit; Tax; Intoxicated driving.

Question 26

Is a trustee appointed on a chapter 11 case?

Answer 26

normally no, usually remains in possession of the estate’s assets, unless fraud/ gross mismanagement etc.

Question 27

Who makes the Reorganization Plan for a chaper 11 case?

Answer 27

The debtor, unless trustee has been appointed, or debtor doesn’t file within 120 days, or not accepted within 180 days by all impaired class(creditors,2/3 votes), then creditors can do it.