CCM Credit Law and Regulations 3

Question 1

Under the Fair Debt Collection Practices Act (FDCPA), which entity is primarily regulated by the statute?

Accepted Answer

Third-party debt collectors

Answer

The FDCPA primarily regulates third-party debt collectors, not original creditors collecting their own consumer debts.

Question 2

A creditor who sold goods on credit discovers the buyer committed fraud in obtaining the credit. Under the UCC, the seller may seek to:

Accepted Answer

Reclaim the goods if demand is made within a reasonable time, generally 10 days

Answer

UCC § 2-702 allows a seller to reclaim goods sold on credit if the buyer was insolvent and the seller demands return within a reasonable time, with 10 days as a statutory guideline.

Question 3

Which of the following best describes a 'preference payment' in the context of bankruptcy law?

Accepted Answer

A payment made to a creditor within 90 days before bankruptcy that improves their position over other creditors

Answer

A preference is a payment made to a creditor within 90 days before bankruptcy (one year for insiders) that allows that creditor to receive more than they would in a Chapter 7 liquidation.

Question 4

The concept of 'piercing the corporate veil' in credit law allows a creditor to:

Accepted Answer

Hold shareholders or officers personally liable for corporate debts

Answer

Piercing the corporate veil is an equitable remedy that holds shareholders or officers personally liable when the corporate form is abused to perpetrate fraud or injustice.

Question 5

Under the Bankruptcy Code, a Chapter 7 trustee has the power to avoid which type of transaction?

Accepted Answer

Fraudulent conveyances made within 2 years before filing with actual or constructive fraud

Answer

Under 11 U.S.C. § 548, a trustee may avoid fraudulent transfers made within 2 years before filing if made with actual fraudulent intent or for less than reasonably equivalent value.

(CCM) Certified Credit Manager Practice Test

(CCM) Certified Credit Manager Practice Test

CCM Credit Law and Regulations 3