Question 1

A person who takes a note for a past-due debt can have HDC status.

True

False

Question 2

In a garnishment proceeding, the third party - the person or business entity on whom the garnishment judgment is served - is called the garnishee.

True

False

Question 3

A breach of a contract for which a note qualifying as a negotiable instrument was issued will defeat the demand by a HDC for payment on the instrument, regardless of the breach.

True

False

Question 4

Discharge in bankruptcy will defeat the claim of a HDC.

True

False

Question 5

Elderly, blind Aunt Sue is asked by Nephew Norm to sign what she believes to be a birthday card, but what is really a promissory note by which she is promising to pay to the order of Nephew Norm $5,000. A person in good faith who pays value for the instrument and does not know of Norm's wrongdoing (a HDC) can demand payment from Aunt Sue.

True

False

Question 6

Between the drawer and drawee, there is a debtor/creditor relationship. The drawee is the creditor and the drawer is the debtor.

True

False

0 points

Question 7

If a debtor fails to list a particular debt on his/her bankruptcy petition, then that particular debt will not be discharged.

True

False

Question 8

A creditor with a purchase-money security interest may prevail against a trustee, but such creditor is required to appear in Bankruptcy Court and file the required proof of claim.

True

False

Question 9

When a business debtor files for Chapter 11 protection, the debtor is never allowed to continue in business.

True

False

Question 10

If a chapter 11 debtor-in-possession had made a payment for a prior, pre-existing debt 100 days prior to the petition date for the bankruptcy, the preferred creditor can automatically be required to return such payment to the estate of the bankrupt debtor by the trustee or an action of the creditors committee, because there is a presumption that the debtor was insolvent at the time of the payment

True

False