Chapter 16 Finance Flashcards
(25 cards)
Conditional Sale
in which the seller provides credit to the purchaser, holding title until the goods are paid for
Chattel Mortgage
a loan for which a creditor provides credit to the debtor, securing the loan by taking title of a good such as a car
Collateral
goods or property used to secure a debt
Accounts Receivable
funds owed to a business for goods or services provided to customers
Operating Lease
a lease in which the goods are returned to the lessor at the end of the lease period
Personal Property Security Act (PPSA)
a act that indicates the process of personal property
Lease to Purchase
a lease in which title to the goods is transferred to the lessee at the end of the lease period
Attachment
under the PPSA, the situa-tion in which value has been given pur-suant to the contract, giving the creditor a claim against the assets used as secu-rity if there is a default by the debtor
Perfection
pertection of a secured creditor’s claim either by registering the secured obligation or by taking possession of the collateral
Priority of Creditors
when there are two or more creditors, the one entitled to be paid first has priority; for example, a registered lien usually has first claim ( over other interests) to goods used as security
Purchase Money Security Interest (PMSI)
a security interest on specific goods that has priority over a general security agreement provided it is regis-tered within a specified time
Right to Redeem
after a creditor has taken possession of collateral, the right of the debtor to reclaim it on payment of any money owing
Guarantee
a written commitment whereby a guarantor agrees to pay a debt if the debtor does not
Indemnity
a primary obligation of a third party to pay a debt along with the debtor
Fraudulent Transfer
a debtor’s transfer of property in an attempt to keep it out of the hands of creditors; not a valid sale at a fair price to an innocent third party
Bona Fide Purchaser for Value
innocent third party who has paid a fair price for goods under claim by creditor
Fraudulent Preference
a debtor’s pay-ment of money to one creditor to give that creditor preference over the other creditors
Insolvency
inability of a person to pay her debts as they become due
Bankruptcy
process by which an insol-vent person voluntarily or involuntarily transfers assets to a trustee for distribu-tion to creditors
Trustee in Bankruptcy
the licensed pro-fessional appointed to administer the estate of a bankrupt for the benefit of the creditors
Estate (of a bankrupt)
also the property of a bankrupt given to the Trustee in Bankruptcy
Proof of Claim
document filed with the Trustee in Bankruptcy establishing valid-ity of a creditor’s claim
Preferred Creditor
creditors who, by legislation, must be paid before other unsecured creditors
Unsecured/General Creditor
Creditor that are unsecured, usually the last one to get paid and get paid the least.
