REG 5 - R7 Bankruptcy & R8 Suretyship

Question 1

Order of Payment after Ch. 7 Liquidation Bankruptcy

Answer 1

1. Secured claims
2. Priority claims
3. Remaining assets are proportionally split among unsecured creditors that filed timely

Question 2

Writ of Attachment

Answer 2

An order to the court by the sheriff to seize a person’s property. It can apply to real and personal property and even when no property is owned.

Question 3

Garnishment

Answer 3

An order to a third person who holds property of the debtor to turn the property over to a creditor

Question 4

Contribution

Answer 4

Result in the sharing of liability on a pro rata basis among co-surieties

Question 5

Lien

Answer 5

A right to keep possession of property belonging to another person until debt owed to that person is discharged.

Question 6

Writ of Garnishment

Answer 6

Allows a creditor to collect money for a debtor’s wages

Question 7

Official Bond

Answer 7

A type of surety bond.

• Many states require public officials to obtain bonds from a surety for faithful performance of their duties.
• Obligate a surety for all losses that the public official causes by negligence or nonperformance of required duties.

Question 8

Convertible Bond

Answer 8

A corporate bond that may be converted into stock

Question 9

Debenture Bond

Answer 9

An unsecured corporate bond

Question 10

Municipal Bond

Answer 10

A bond issued by a city or other local government

Question 11

Securities Act of 1934

Answer 11

Regulates many aspects of securities after they are issued but does not apply to the bank’s collection activities here because it does not appear that the bank was involved in the sale of the securities beyond making the loan to Debbie.

Question 12

The Fair Debt Collection Practices Act

Answer 12

Prohibits debt collection agencies from conducting such activities with respect to consumer debts, but the Act does not apply to a creditor attempting to collect its own debts.

Question 13

The Clayton Act

Answer 13

Applicable to antitrust matters in business, not to collection activities.
Prohibits the merger or acquisition of a company if the effect is to substantially lessen competition.

Question 14

Indemnification

Answer 14

A type of reimbursement for cost and liabilities incurred by the agent as a result of authorized acts on behalf of the principal

Question 15

Actual Authority

Answer 15

The authority that the agent reasonably believes she possesses because of the principal’s communications to the agent.

Question 16

Homestead Exemption

Answer 16

States can’t take your home

Question 17

Pure Conglomerate

Answer 17

A firm acquires a company in a completely different business (i.e. merger between firms that neither compete nor have a customer/supplier relationship).

Question 18

Tying arrangement

Answer 18

Where a seller requires the buyer to purchase one product to obtain another.

Question 19

Exclusive-dealing contract

Answer 19

A seller of goods requires the buyer to promise not to deal in goods of a competitor.

Question 20

Horizontal Merger

Answer 20

When one competitor merges with another competitor to establish market power or restrict competition.

Question 21

Vertical Restraints

Answer 21

Agreements between industry players that are on different marketing levels.