Business Law - Ch 32-33 Revision

Because the creditor has collateral and the legal right of repossession, the debt is always paid in full in a secured transaction.

• True

• False

As an alternative to resale, the secured creditor in most instances may retain the collateral in full settlement of the debt.

• True

• False

Records of secured transactions may be properly filed centrally in the office of the secretary of state or an office in the county where the goods are located, or both.

• True

• False

If the debtor defaults, the secured creditor who does not have possession of the collateral may take possession of it as long as there is no breach of peace.

• True

• False

Bankruptcy laws protect only the debtors.

• True

• False

Usury laws that set maximum interest rates usually apply only to loans of money.

• True

• False

A security interest is created when

• the debtor has rights in the collateral.

• the creditor gives value.

• an agreement between the debtor and creditor gives the creditor a security interest.

• all of these.

Which of the following is not considered a class of goods for tangible property used as collateral?

• equipment

• farm products

• inventory

• stock and bonds

A person who has not been paid for labor to build a home is allowed to file a legal claim against the property under

• an artisan's lien.

• a mechanic's lien.

• a pawn.

• a pledge.

Betty's home needs to be painted. Her nephew, Dwight, has agreed to paint her house if she will provide the paint and pay him $700. Dwight is unreliable, and Betty fears that he will start the job and not finish it. Dwight gives Betty his car and the keys to the car to hold as his guarantee that he will fulfill his obligation to her. In this situation, Betty is the

• pledgee.

• guarantor.

• pledgor.

• debtor.