Bankruptcy Terminology Review

The entity who the business owes money is called

• Creditor

• Debtor

• Asset

• Liability

Which debts are paid back first in the case of a bankruptcy filing?

• Winding Up Expenses

• Secured Creditors

• Unsecured Creditors

• Total Liabilities

The procedure whereby the assets of a company are gathered in and realized, the liabilities met and the surplus, if any, distributed to members.

• insolvent

• winding-up

• liquidator

• bankruptcy

The person appointed to deal with the the assets and liabilities of the company once the resolution to wind-up has been passed or a compulsory winding-up order has been made.

• trader

• liquidator

• creditor

• officer

This occurs when a business' Assets are less than its Liabilities

• Bankruptcy

• Foreclosure

• Credit

• Mortgage

Liquidation means to do what?

• Sell assets to raise cash.

• Soak your debts with cash

• Pay off all your credit cards.

Which of the following best describes the difference between secured and unsecured debt?

• Secured debt comes from a bank, which is FDIC insured; unsecured debt comes from elsewhere.

• Secured debt is covered by the owner's insurance policies; unsecured debt is totally uninsured.

• Secured debt is guaranteed by a physical object, such as your car or house; unsecured debt has no item that could be repossessed for nonpayment.

In Bankruptcy terms, what does the phrase "30 cents in the dollar" mean?

• Unsecured Creditors receive 30 cents for every dollar owed to them

• Unsecured Creditors receive 30% of every dollar owed to them

• An Unsecured Creditor owed $100 receives $30.

• An Unsecured Creditor owed $100 receives 30 cents.

After liquidating the Assets, the ORDER of payments in bankruptcy is:

• Secured creditors, then Unsecured Creditors

• Winding Up Expenses, then Secured Creditors, then Unsecured Creditors

• Secured Creditors, then Unsecured Creditors then Winding Up Expenses

• Secured Creditors, then Winding Up Expenses then Unsecured Creditors

Did you know that the term "PROCEEDS" refers to the money raised from liquidating Assets?

(This is an ungraded Poll Question)

• Yes

• No