Question

6. In a Chapter 7 proceeding, if the value of the debtor's estate does not provide sufficient cash to pay all the creditors, it is given back to the debtor. a. True b. False Multiple Choice Indicate the answer choice that best completes the statement or answers the question. 7. Construction Company has a claim against Diners Café to satisfy a debt that takes priority over other claims against the same property. This is a. a lien. b. a fraud. c. a guaranty. d. a garnishment. 8. To purchase a house, Leo borrows funds from Metro Bank for a home in California. To secure the lender, the loan terms will provide the Metro Bank will be protected by a document recorded against the property. The recorded document will be: a. a Deed of Trust. b. a down payment. c. a short sale. d. predatory lending.

Answer 1

6) b. False

Reason- Because under chapter 7 Bankruptcy case ascertains that creditor's claim will be paid back first to the extent possible. After paying creditor's claim, if balance is left only then debtor's debt will be paid. Hence the amount will not be return to the debtor due to insufficient balance.

7) a. a lien

Reason- a lien means a right to keep ownership of property of an another person as a collateral till the time debt is discharged. If a person makes default in making loan repayment, a lender has right to forfeit the property.

8) a. a deed of trust

Reason- A Deed of Trust is an agreement of trust between lender and borrower where legal title of property is given to the third party to whom we call as trustee. If default occurs, trustee sells the property and amount is paid to the lender.