REG 7.0

Question 1

• To be negotiable a note must be payable in money and only money T/F?
• What constitutes a bearer or an order?
• Restrictive?
• Qualified?

Answer 1

• T
• Bearer = blank open to whoever has possession
• Order = specific person (special endorsee)
• Restrictive = “for collection”
• Qualified = “Without Recourse”
  
  • Negates contract liability on the instrument. Contract liability is the promise to pay upon dishonor

Question 2

*How does the UCC define a negotiable instrument?

Answer 2

• 1. Writing
     
     2. Signed by maker or drawer
     3. Unconditional promise or order to pay
     4. Fixed amount of money (Only Money)
     5. Demand or definite time
     6. No other promise
     7. Pay to order or bearer (exception checks)

Question 3

*Define a holder in due course?

Answer 3

• Obtains instrument:
  1. Value
  2. Good Faith
  3. Without overdue or dishonored etc.

Question 4

• UCC Commercial paper list, what acceptable to obtain?

* What not considered acceptable to obtain?

Answer 4

• YES
  1. Draft 3
  2. Check 3

4. Promissory Note 2
5. CD 2
6. Note Payable 2

• NO
  1. BOL
  2. Warehouse Rec
  3. Invest Sec

Question 5

• What occurs after collateral is repossessed and more than 60% of price paid?
• What does perfection mean?

Answer 5

*Unless debtor agrees otherwise, collateral must be sold within 90 days, creditor can hold the debtor liable for any deficiency

• Perfection = serves as a form of notice that a creditor has a security interest in collateral
• Establishing priority over the claims of most subsequent secured creditors

Question 6

*Hierarchy for paying unsecured priority?

Answer 6

• SECURED CREDITORS
• Support to spouse and child
• Admin Exp for bank proceedings
• Gap creditors
• Wages to 12,475 is earned 180 days of filing
• Employee benefit plan contribution up to 12,475
• Grain farmers and fisherman up to 6,150
• Consumer deposits for goods paid but not delivered up to 2,775
• Taxes due w/i 3 years filing
• Injury claims caused by intoxicated driving

Question 7

• Who may not file chapter 7 bankruptcy?

* Who may not file chapter 11 bankruptcy?

Answer 7

• 1.Railroads
  2. Insurance companies
  3. Banks
  4. Small business investment companies
• 1.Brokers
  2. Insurance companies
  3. Banks
  4. Small business investment companies

Question 8

*When does attachment in a security interest take place?

Answer 8

• 1. Agreement between creditor and debtor (or creditor has either possession of or control of the collateral)
     
     2. Value is given by creditor
     3. Debtor has rights to collateral