229. If a debtor cannot meet credit obligations it is said:
a. to relapse
b. to expire
c. to default
d. to attach
e. to perfect its claim
230. If a debtor cannot meet credit obligations it is said:
a. to relapse
b. to expire
c. to perfect its claim
d. to attach a lien
e. none of the other choices
231. If a repossessed product is sold for more than what is owed by the debtor:
a. the seller is not obligated to return the difference
b. the seller is obligated to return the difference
c. the debtor and seller must split the difference
d. the seller must give the debtor at least 50% of the difference
e. none of the other choices are correct
232. Candy bought a sofa from Max on credit. She is to make 5 monthly payments of $200 each. After one month
Candy stops making payments. Max is a secured creditor; he may:
a. may enter Candy’s home at any time to take the sofa
b. take steps to repossess the sofa from Candy
c. require Candy to perform manual labor in exchange for the cash payments
d. force Candy to turn over the sofa plus other property to make up for Max’s time and efforts spent on
collection
e. do none of these things, Max is not an unsecured creditor
233. Candy bought a sofa from Max on credit. She is to make 5 monthly payments of $200 each. After one month
Candy stops making payments. Max is a secured creditor; he may:
a. may enter Candy’s home at any time to take the sofa
b. do nothing because personal property may not be reclaimed
c. require Candy to perform manual labor in exchange for the cash payments
d. force Candy to turn over the sofa plus other property to make up for Max’s time and efforts spent on
collection
e. none of the other choices
234. According to the UCC, a creditor may repossess a product in which it has a security interest:
a. without judicial process
b. with a property warrant
c. so long as this doesn’t cause a breach of peace
d. without judicial process but with a property warrant
e. without judicial process so long as it does not cause a breach of peace
235. In Fordyce Bank and Trust v. Bean Timberland, the bank lent Bean money to buy timber from landowners.
Bean gave the bank security interests in the timber, which he sold to lumber companies that milled the logs into
lumber. When Bean defaulted on the loan, the bank tried to collect from the lumber companies because it had a
secured interest in the timber. The courts held that the bank:
a. gets nothing from the timber companies, they were not responsible for the security interests and breached no
duty to the bank
b. collect the unpaid balance of the loan from the timber companies, depending on how much secured timber
they bought from Bean
c. collect the unpaid balance of the loan from the timber companies, which are each jointly and severally
responsible under UCC 4-320, which sets strict standards for security interests
d. collect the unpaid balance of the loan from the timber companies only if it can show that the companies had
been notified by the bank each time they accepted timber from Bean
e. none of the other choices
236. In Fordyce Bank and Trust v. Bean Timberland, the bank lent Bean money to buy timber from landowners.
Bean gave the bank security interests in the timber, which he sold to lumber companies that milled the logs into
lumber. When Bean defaulted on the loan, the bank tried to collect from the lumber companies because it had a
secured interest in the timber. The courts held that the bank:
a. collects nothing from the banks because it failed to attach its interest
b. collect the unpaid balance of the loan from the timber companies, depending on how much secured timber
they bought from Bean
c. collect the unpaid balance of the loan from the timber companies, which are each jointly and severally
responsible under UCC 4-320, which sets strict standards for security interests
d. collect the unpaid balance of the loan from the timber companies only if it can show that the companies had
been notified by the bank each time they accepted timber from Bean
e. none of the other choices
237. In Fordyce Bank and Trust v. Bean Timberland, the bank lent Bean money to buy timber from landowners.
Bean gave the bank security interests in the timber, which he sold to lumber companies that milled the logs into
lumber. When Bean defaulted on the loan, the bank tried to collect from the lumber companies because it had a
secured interest in the timber. The courts held that:
a. since there was abundant evidence that purchasing gatewood without performing a lien search was the
standard practice in the timber industry, the timber companies had no duty to perform a lien search and so
there was no breach of duty
b. since there no evidence that purchasing gatewood without performing a lien search was the standard
practice in the timber industry, the timber companies had a duty to perform a lien search and so there was a
breach of duty
c. without more evidence, the court could not decide whether purchasing gatewood without performing a lien
search was the standard practice in the timber industry
d. the case should be dismissed because neither side could present sufficient evidence regarding whether
purchasing gatewood without performing a lien search was the standard practice in the timber industry
e. none of the other choices are correct
238. The allows a debtor to retain the family home up to a specified amount free from creditors’ claims.
a. nonexempt exemption
b. necessity exemption
c. homestead exemption
d. mortgage exemption
e. housing exemption
239. The allows a debtor to retain the family home up to a specified amount free from creditors’ claims.
a. nonexempt exemption
b. necessity exemption
c. housing exemption
d. mortgage exemption
e. none of the other choices are correct
240. In some cases, the property of a debtor will not be available to a creditor who wishes to attach and sell it to satisfy
an outstanding debt. Exempt property often includes:
a. the family house
b. the family jewelry
c. some tools used in the debtor’s trade
d. the family house and some tools used in trade
e. the family house, jewelry, and some tools used in trade
241. In some cases, the property of a debtor will not be available to a creditor who wishes to attach and sell it to satisfy
an outstanding debt. Exempt property often includes:
a. the family house
b. the family car
c. some tools used in the debtor’s trade
d. the family house and car
e. the family house, car, and some tools used in trade
242. The debtor on a mortgage is known as:
a. the bank
b. the debtee
c. the mortgagor
d. the mortgagee
e. none of the other choices
243. A mortgagor is:
a. the debtor on a mortgage
b. the debtor on a contract for purchasing furniture
c. the creditor on a mortgage
d. the creditor on a deal with a bank
e. none of the other choices are correct
244. The creditor on a mortgage is known as:
a. the bank
b. the debtee
c. the mortgagor
d. the mortgagee
e. none of the other choices
245. A mortgagee is:
a. the debtor on a mortgage
b. the debtor on a contract for purchasing furniture
c. the creditor on a mortgage
d. the creditor on a deal with a bank
e. none of the other choices are correct
246. A mortgage:
a. is a debt obligation (lien) attached to real property
b. gives the mortgage holder the right to sell the property in case of default
c. gives the principal the right to sell the property in case of default
d. is a debt obligation (lien) attached to real property that gives the mortgagor the right to sell the property in
case of default
e. is a debt obligation (lien) attached to real property and gives the mortgagee the right to sell the property in
case of default
247. When real estate itself is used to secure a debt obligation it is evidenced by a:
a. certificate of real estate
b. draft
c. mortgage
d. credit report
e. lien
248. When real estate itself is used to secure a debt obligation it is evidenced by a:
a. certificate of real estate
b. draft
c. lien
d. credit report
e. none of the other choices are correct
249. The law of mortgages comes from:
a. the UCC
b. state common law
c. state real estate statutes
d. the UCC and state common law
e. state common law and some state real estate statutes and the UCC
250. The law of mortgages comes from:
a. the UCC
b. the Code of Federal Regulations
c. state real estate law
d. federal bank regulations
e. none of the other choices
251. A mortgage will typically contain:
a. a description of the property
b. the amount of debt involved
c. the state’s duties to the mortgagor
d. a description of the property and the amount of debt involved
e. a description of the property, the amount of debt, and the state‘s duties to the mortgagor
252. A mortgage usually contains:
a. a description of the property
b. any warranties relative to the property
c. a statement of the debt
d. a statement of the mortgagor’s duties concerning taxes, insurance, and repairs
e. all of the other specific choices are correct
253. Don borrows $90,000 to buy a home. His mortgage is with Western Bank. Don is unable to make his mortgage
payments. Western forecloses on Don’s house and sells it in a judicial sale. The bank gets $95,000 for the house. In
this case, it:
a. must return the extra $5,000 to Don
b. keeps the extra money to reimburse it for its expenses
c. must pay the secretary of state for the expenses the office has incurred
d. obtain a mechanic’s lien against Don
e. seize Don’s personal property to satisfy its claims
254. Don borrows $90,000 to buy a home. His mortgage is with Western Bank. Don is unable to make his mortgage
payments. Western forecloses on Don’s house and sells it in a judicial sale. The bank gets $95,000 for the house. In
this case, it:
a. keeps the extra money as the new owner of the property
b. keeps the extra money to reimburse it for its expenses
c. must pay the secretary of state for the expenses the office has incurred
d. obtain a mechanic’s lien against Don
e. none of the other choices
255. If the borrower is unable to pay the mortgage, the mortgagee has the right to:
a. fore-close on the property
b. obtain 50% of the value of the property from the borrower
c. take all of the borrower‘s tangible possessions
d. have the borrower put in prison
e. none of the other choices are correct
256. In many states, a mortgagor has the right to redeem the property by paying the debt within:
a. the statutory redemption period
b. a “reasonable” period
c. three months of the default
d. a month of the property being resold
e. the real estate redemption period
257. A creditor who obtains an interest in the property of a debtor without the debtor‘s express agreement may obtain:
a. a fine
b. a lien
c. a misdemeanor
d. a dessein
e. a subrogation
258. A creditor who obtains an interest in the property of a debtor without the debtor‘s express agreement may obtain:
a. a fine
b. a subrogation
c. a misdemeanor
d. a dessein
e. none of the other choices
259. The procedures for using liens are generally determined by:
a. UCC Article 2
b. UCC Article 9
c. UCC Article 5
d. state common or statutory law
e. none of these
260. The procedures for using liens are generally determined by:
a. UCC Article 2
b. UCC Article 9
c. UCC Article 5
d. Code of Federal Regulations
e. none of these
261. The law concerning liens is primarily:
a. federal common law
b. state law, either common or statutory
c. federal statutory law
d. administrative law
e. regulatory law
262. The law concerning liens is primarily:
a. federal common law
b. federal regulatory law
c. federal statutory law
d. administrative law
e. none of the other choices
263. A(n) is a statutory procedure under which a creditor gains the right to attach up to 25 percent of a customer’s
net wages to be applied to an outstanding debt.
a. easement
b. garnishment
c. lien
d. mortgage
e. financing lien
264. A(n) is a statutory procedure under which a creditor gains the right to attach up to 25 percent of a customer’s
net wages to be applied to an outstanding debt.
a. easement
b. financing lien
c. lien
d. mortgage
e. none of the other choices are correct
265. Karen‘s Kitchens renovates Mark’s old kitchen. Mark only pays part of his bill. To help try to collect the rest of the
money owed her, Karen may obtain:
a. a writ of certiorari
b. an artisan’s lien
c. a distraint lien
d. a lien of circumstance
e. a mechanic’s lien
266. Karen‘s Kitchens renovates Mark’s old kitchen. Mark only pays part of his bill. To help try to collect the rest of the
money owed her, Karen may obtain:
a. a writ of certiorari
b. an artisan’s lien
c. a distraint lien
d. a lien of circumstance
e. none of the other choices
267. The most common lien on real property is:
a. a mechanic’s lien
b. an artisan’s lien
c. an integrated lien
d. a second mortgage lien
e. a possessory lien
268. The most common lien on real property is:
a. a possessory lien
b. an artisan’s lien
c. an integrated lien
d. a second mortgage lien
e. none of the other choices
269. When the party that furnished material, labor, or services for the construction or repair of a building or other real
property places a lien on the property for unpaid bills it is called a(n):
a. mechanic’s lien
b. artisan’s lien
c. real lien
d. due process lien
e. possessory lien
270. When the party that furnished material, labor, or services for the construction or repair of a building or other real
property places a lien on the property for unpaid bills it is called a(n):
a. possessory lien
b. artisan’s lien
c. real lien
d. due process lien
e. none of the other choices are correct
271. The most common lien on personal property is:
a. a mechanic‘s lien
b. a possessory lien
c. an integrated lien
d. a mortgage lien
e. a potential lien
272. The most common lien on personal property is:
a. a mechanic’s lien
b. a potential lien
c. an integrated lien
d. a mortgage lien
e. none of the other choices
273. A offers the right to continue to hold goods on which work has been done, or for which materials have been
supplied, until the customer pays.
a. possessory lien
b. potential lien
c. material lien
d. services lien
e. mechanic’s lien
274. A offers the right to continue to hold goods on which work has been done, or for which materials have been
supplied, until the customer pays.
a. mechanic’s lien
b. potential lien
c. material lien
d. services lien
e. none of the other choices are correct
275. Millie takes her old VW to George’s garage for repairs. George works on a cash only basis. He fixes the problems
for $687. He tells her he will keep the car until she pays. Millie pays $150. George may:
a. continue to hold onto the car until Millie pays
b. force the sale of the car
c. seize Millie’s computer to satisfy her debt
d. continue to hold onto the car until Millie pays and force the sale of the car
e. continue to hold onto the car until Millie pays and force the sale of the car and sell other property that
belongs to Millie
276. A(n) is a court-ordered seizure of goods from the customer to prevent the customer from disposing of it
during the lawsuit.
a. holding lien
b. attachment lien
c. final lien
d. nonnegotiable lien
e. merchant’s lien
277. A(n) is a court-ordered seizure of goods from the customer to prevent the customer from disposing of it
during the lawsuit.
a. holding lien
b. merchant’s lien
c. final lien
d. nonnegotiable lien
e. none of the other choices are correct
278. John bought a ring for Sue on credit. After six months John defaulted on his debt to Big Rock Jewelers. Big Rock
sues John for payment of his debt. If Big Rock is worried that John might sell the ring before court proceedings,
something it doesn’t want to happen, it should obtain:
a. a mechanic’s lien
b. a lien pendant
c. a detachment lien
d. an attachment lien
e. a refractory lien
279. John bought a ring for Sue on credit. After six months John defaulted on his debt to Big Rock Jewelers. Big Rock
sues John for payment of his debt. If Big Rock is worried that John might sell the ring before court proceedings,
something it doesn’t want to happen, it should obtain:
a. a mechanic’s lien
b. a lien pendant
c. a detachment lien
d. a refractory lien
e. none of the other choices
280. If a creditor is successful in a legal action against a debtor, the court will award the creditor:
a. a revisionary lien
b. a judgment lien
c. a detachment lien
d. a lien pendant
e. none of these
281. If a creditor is successful in a legal action against a debtor, the court will award the creditor:
a. a revisionary lien
b. a possessory lien
c. a detachment lien
d. a lien pendant
e. none of the other choices