Q&A Hero

Q: When the seller promises that a product is good for a particular activity, they are implying the warranty of merchantability.

Q: Individual consumers do not have the right to see their own credit report unless they are applying for a loan.

Q: Credit card companies must now give a 45 day notice of any rate hike.

Q: The FDA enforces both specific and general standards for food safety.

Q: Magnuson-Moss Act requires a label with warranty conditions regarding all products that cost $10 or more.

Q: If a buyer has not made a specific representation about a product, the buyer may still be protected by an express warranty.

Q: Expressly false statements can result in breach of warranty lawsuits.

Q: Individual consumers may bring an action against a collection agency for damages suffered by collections efforts.

Q: Collection agencies may threaten to put the debtor in jail in an effort to recover the money that is owed to the creditor as long as the debt is legitimate and overdue.

Q: Agents of the debtor are the only parties that are regulated by the Fair Debt Collection Practices Act.

Q: Once an entry becomes part of credit report, it is permanently a part of the report.

Q: Credit card companies may give out free umbrellas on campus when a student completes an application for a card.

Q: The Equal Credit Opportunity Act is limited to regulating applications for credit, but not to the charging of higher interest rates based on the race of the consumer.

Q: If Annie borrows money to pay for her kitchen upgrades from her aunt Bethany, Bethany does not need to provide required disclosures under the Truth in Lending Act.

Q: Under the Truth in Lending Act, creditors have a week to notify consumers of their right to cancel the transaction.

Q: The Fair Debt Collection Practices Act does not prevent creditors from harassing or using misleading tactics by credit agents.

Q: Historically, the only legal protection a consumer had against a seller that engaged in deceit during a sale was a common law suit for fraud.

Q: The Fair Credit Reporting Act requires each of the credit bureaus to give consumers a free copy of their credit report at least twice a year.

Q: The ________ Act makes it a crime to change vehicle odometers and faulty odometers must be disclosed to the buyers.

Q: In order to _______ a warranty, the seller must do so in a conspicuous writing such as capital letters or bold print.

Q: The Fair Debt Collection Practices Act applies to ________ collecting a debt for the creditor.

Q: What has Congress done to try to prevent individuals from abusing bankruptcy protections?

Q: Give four examples of nondischargeable debt in bankruptcy.

Q: Explain the difference between secured and unsecured creditors. What is the likelihood of financial recovery for each?

Q: What is the means test? Provide an example of how it would be applied.

Q: What is the role of a trustee in bankruptcy?

Q: What is the procedure for Chapter 7 filings?

Q: Discuss the differences between Chapters 7 and 11 bankruptcy proceeding.

Q: Fast Feet, a manufacturer of running shoes, gave Rick's Running, merchandise for their store on credit. Rick's is required to sign an agreement that describes the merchandise as collateral and the Rick's will pay Fast Feet weekly based on the sales of the shoes. Fast Feet files a statement of notice with the appropriate government agency. Fast Feet's shoes are not selling fast enough to pay their debts and continue their operations. They are now insolvent. What options does Fast Feet have?

Q: Fast Feet, a manufacturer of running shoes, gave Rick's Running, merchandise for their store on credit. Rick's is required to sign an agreement that describes the merchandise as collateral and the Rick's will pay Fast Feet weekly based on the sales of the shoes. Fast Feet files a statement of notice with the appropriate government agency. Based on these facts, what kind of creditor is Fast Feet and why?

Q: How does a secured creditor establish their rights to the collateral securing a first priority position?

Q: Which chapter of the bankruptcy code is best thought of as temporary protection from creditors while a business goes through a planning process to pay creditors while continuing to do business?A.Chapter 7B.Chapter 11C.Chapter 12D.Chapter 13

Q: What is the name of the legislation that helps homeowners avoid foreclosure by offering certain guarantees when refinancing a mortgage? A.Mortgage Forgiveness Debt Relief Act B.Truth in Lending Act C.House Refinancing and Protection Act D.Foreclosure and Debt Prevention Act

Q: What businesses typically need a personal guarantee in order to receive a loan? A.large businesses B.small businesses C.almost all businesses D.businesses do not need personal guarantees

Q: What is not a major change to bankruptcy law in the Bankruptcy Abuse Prevention and Consumer Protection Act?A.credit counselingB.means testC.proof of incomeD.lowering the priority of alimony payments

Q: Bankruptcy is primarily governed by what type of law? A.federal statutes B.state statutes C.blend of state and federal statutes D.administrative regulations

Q: How is a debtor protected in bankruptcy from the moment of filing? A.the debtor goes to credit counseling B.personal guarantees of loans are voided C.an automatic stay is placed on all collection efforts D.certain transactions are now considered to be voidable

Q: This bankruptcy chapter filing option liquidates the debtor's property to repay creditors and discharge the debts. A.Chapter 7 B.Chapter 11 C.Chapter 12 D.Chapter 13

Q: Which of these debts may be discharged in a bankruptcy? A.taxes B.child support C.a new auto purchased 90 days before filing D.punitive damages

Q: What is not typically part of a security agreement? A.description of the collateral B.obligations of debtor C.remedies available to the creditor D.instructions on perfection

Q: Which option does not attempt to repay and discharge debt? A.out of existence B.workout C.Chapter 7 bankruptcy D.Chapter 11 bankruptcy

Q: What is the main difference between Chapters 7 and 11? A.the order for relief B.the automatic stay C.the continued operation of a business D.the manner in which the bankruptcy petition is filed

Q: Chris wanted to get a loan from the bank but he has bad credit. In order to get the money he convinced Eric to cosign as surety. Now Chris has stopped making the payments. When is Eric liable for repayment of the loan? A.at any point B.when Chris stopped making payments C.only after the bank attempts to recover the full amount from Chris D.never because Eric was not the one actually using the money

Q: What is not a requirement for the undue hardship standard? A.the debtor cannot maintain a minimal standard of living for herself and her dependents B.the debtor has no marketable skills that would allow him to be employed C.this state of affairs is likely to persist for a significant portion of the repayment period D.the debtor has made good faith efforts to repay the loan

Q: In In re Jones Jones graduated from college and then went to law school. He graduated from law school but was unable to pass the bar exam. Over the next decade he worked various jobs before going back to school again for a masters. Jones took out student loans to pay for his education, resulting in $140,000 of debt. He filed for bankruptcy and sought to have the student loans discharged for "undue hardship." The court held that the undue hardship standard: A.had been met because the amount of money owed was too much for a person in their 50s to be able to pay. B.had been met because Jones demonstrated that he has made diligent efforts to find employment. C.had not been met because a healthy, educated, employable man paying back the loans would not amount to undue hardship. D.is not applicable to student loans and therefore Jones could not discharge the debt.

Q: The reorganization plan is unique to what type of bankruptcy filing? A.Chapter 7 B.Chapter 11 C.Chapter 12 D.Chapter 13

Q: Trish makes $30,000 a year. The median income for her state is $28,000. She owes over $50,000 in various debts and is considering ways to address her situation. Which of the following is not one of her options to fix her debt issues? A.attempt to negotiate a workout with her creditors B.pay off her loans C.Chapter 7 bankruptcy D.Chapter 13 bankruptcy

Q: What does going through the process of accord and satisfaction do? A.it prevents a creditor from suing while the business is revising its business model B.contract terms with creditors are renegotiated, releasing the debtor from liability by settling debt C.it prevents creditors from filing for involuntary bankruptcy D.it discharges debt

Q: When does an automatic stay become permanent? A.never B.once the bankruptcy proceedings have ended C.when the petition is determined to be valid D.when the debtor files for bankruptcy

Q: A creditor with an interest in real property is called a/an: A.surety. B.unsecured creditor. C.mortgagee. D.mortgagor.

Q: Which of these is not a purpose of bankruptcy? A.offer a fresh start to the debtor B.punish the debtor C.create a way for creditors to recover the debt D.prevent creditors from gaining an unfair advantage over one another

Q: Which of the following is not a role of the bankruptcy trustee? A.void certain transfers B.turn the assets into cash C.provide debt counseling D.collect the debtor's assets

Q: Who is the bankruptcy trustee a representative of? A.the debtor B.the creditors C.the court D.the state

Q: A petition for bankruptcy that is filed by creditors against a debtor is known as what type of filing? A.a recovery action B.an involuntary bankruptcy C.a voluntary bankruptcy D.an order for relief

Q: Chapter 13 bankruptcy filings are limited to: A.businesses. B.individuals. C.farms. D.individuals who own sole proprietorships.

Q: What is the standard that an individual must meet in order to file for Chapter 7 bankruptcy? A.means test B.threshold level of debt C.length of time of debt D.attempts to repay under Chapter 13

Q: In In re Richie, Richie had an income of $22,000. She lived in Wisconsin where the median income is over $37,000. Right before filing for bankruptcy she received a master's in "outdoor therapeutic recreation administration." Jobs in that field typically had salaries above the median income. Richie was looking for jobs in that field but there were few opportunities in her geographic area. She was also qualified to work many other jobs that would have brought her above the median income but she only wanted to work in that field. When she filed for Chapter 7 bankruptcy the court held that: A.she was eligible because she met the means test. B.she was eligible because she was unable to find a job in her field of education. C.she was not eligible because she was manipulating the means test by looking for a job in a small field in a small area. D.she was not eligible because she was too financially well off to obtain immediate discharge without an attempt to repay her creditors.

Q: Under Art. 9 of the UCC, which of these could not be used as collateral? A.a car B.a house C.a fixture D.cash

Q: Nora loaned money to Susan and received a signed security agreement from Susan. What could Nora do to make sure she has priority as a creditor? A.give the security agreement to her attorney B.nothing, the date of signing gives Nora priority C.file the security agreement in a security deposit box D.take possession of the collateral

Q: Whose only legal remedy is to bring a lawsuit against a borrower to try to recover the money loaned? A.secured creditors B.unsecured creditors C.mortgager D.government agency

Q: Which of these creditors has first priority? A.alimony due an ex-spouse B.unpaid employees C.general creditors D.court costs

Q: Unsecured creditors have few practical ways to collect their debt.

Q: Alan is the attorney representing Derek in bankruptcy hearings. His fees have the highest priority among the other unsecured debtors.

Q: Bankruptcy laws come solely from state statutes and case law.

Q: Even if a debtor's salary is more than the median income for their state, they are still eligible for Chapter 7.

Q: Only business are able to file for Chapter 13 bankruptcy.

Q: In Chapter 11, creditors file a reorganization plan which articulates a specific strategy and financial plan for emerging from financial distress.

Q: The order of payment for unsecured creditors in bankruptcy is specified in the state's UCC statutes.

Q: Creditors can force a company into bankruptcy proceedings.

Q: The bankruptcy trustee is appointed to represent the creditors.

Q: In liquidation secured creditors are paid first and in full so long as the value of the collateral equals or exceeds the value of their security interest.

Q: An individual filing for Chapter 7 may always keep their car.

Q: Chapter 7 allows business entities to keep some exempt property.

Q: The court cannot force creditors to agree to a reorganization plan even if it is fair, equitable, and feasible.

Q: A Chapter 11 debtor may use bankruptcy as an excuse for not performing contractual obligations.

Q: Kevin's transfer of $10,000 to his brother to pay off a loan two months before filing bankruptcy can be undone by the trustee.

Q: An automatic stay halts all creditors' collection actions except for ones brought by government agencies.

Q: Before an individual is allowed to file for bankruptcy he must complete a short credit counseling seminar.

Q: The U.S. Constitution does not address bankruptcy laws.

Q: If the creditor may keep the property used as collateral in his possession if the debtor defaults, the UCC does not require a lawsuit if there is a security agreement.