Credit Transactions Essay 2013

1. How are secured creditors treated in a -

(a) court-supervised rehabilitation

(b) liquidation proceedings

2. Lanie borrowed from Glen P200k and to guarantee said obligation, she
pledged her emerald earrings worth P150k and her Mikimoto brooch worth
P50k. When the loan matured, Lanie paid Glen P50k only. After payment,
she now demands return of the Mikimoto brooch on the ground of payment
of P50k. Is Lanie correct? Reasons.

3. Discuss the procedure in the following:

(a) judicial foreclosure of real estate mortgage

(b) extrajudicial foreclosure of real estate mortgage
(c) suspension of payments
(d) pre-negotiated rehabilitation

4. can a mortgagee in a chattel mortgage recover deficiency in all cases?

Reasons,

4. what are the common credits and how are they paid?

5. what information must a creditor furnish the debtor prior to the

consummation of the loan transaction?

6. May a pawnbroker dispose of the pawned article in case of failure to redeem

within 90 days from the date of the maturity of the obligation? How?

7. Discuss the principles laid down in the following cases:

(a) Central Bank v. Morfe

(b) Guanco v. Antolo
(c) Pasual v. Universal Motors Inc.
(d) State Investment House, Inc. v. Citibank
Credit Transactions Essay 2012
1. Bong borrowed money P5M from Dindi. To secure his obligation, he
mortgaged to Dindi his Hidalgo condominium unit and gave her the option to
“buy said condominium unit” absolutely on any date with the one year period
of the mortgage at the agreed price of P10M.
(a) is the stipulation on the option to buy valid?
(b) In case Dindi decides to exercise the option to purchase within the
stipulated period and Bong refuses on the ground that there is no
consideration for the promise to sell, how should the controversy be
resolved? reasons.
(c) If Bong defaults, can Dindi enforce the mortgagee?
(d) Discuss the procedure for judicial foreclosure (* answered)
2. What are the formalities required for the sale of a pledged article in case of
default of the debtor?
3. Mark purchased from Honda Balintawak a Honda Civic and said purchase
was financed by BPI-Family Bank. To secure the loan, the bank required
Mark to execute a chattel mortgage in favor of the bank. After three years,
Mark defaulted in the payment of the monthly instalments and so the bank
foreclosed the mortgage. The car was sold for only 1/3 of its value prompting (b) Yes, it will still be valid. The absence of an affidavit of GF is not necessary
the bank to sue Mark for the deficiency.
(a) will the case prosper? reasons.
(b) In case the chattel mortgage fails to include an affidavit of good faith, is
the mortgage valid? reasons.
4. How is preference determined among credits evidenced by public
instruments and final judgements?
(a) Yes. There is nothing illegal or immoral in this. The mortgage carried with it a
special provision which renders the right to redeem defeasible. It is simply
an option to buy sanctioned under Article 1479. The promise to sell is
supported by the same consideration as that of the mortgage itself which is
distinct from that which would support the sale (an additional amount is
needed to make up the P10M) (Soriano v. Bautista)
(b) Specific performance. As stated above, the promise to sell is supported by
the SAME consideration as that of the mortgage itself, which is distinct from
that which would support the sale. (The separate consideration is the P5M
that you will add to the loan to exercise the option)
(c) If there is default, Dindi may enforce the mortgage and foreclose on the unit.
A debt which remains unpaid upon maturity entitles the mortgagee to
foreclose the property mortgaged. (*bluebook answer)
(d) See other questions for procedure :)
Article 2112 (p. 375 in book)
(a) The debt is due and unpaid
(b) The sale must be at a public auction
(c) There must be notice to the pledgor and the owner, stating the amount due,
and
(d) The sale must be made with the intervention of a notary public
(a) No, the case will not prosper. Although a creditor may ordinarily sue the
debtor for deficiency, an exception is provided for under the RECTO LAW.
Since the creditor already chose to foreclose, he is already barred from
going after the debtor for the deficiency.
for the validity of the chattel mortgage. It is required only for the purpose of
transforming an already valid mortgage into a preferred mortgage, giving it a
preferred status.
Credits evidenced by public instruments and final judgements are placed in the
same order of preference. Preference among themselves is determined by
considering the priority of the dates of the instruments and of the final
judgements. (priority in time)
5. Discuss the effects of the issuance of a suspension order in a court
supervised rehabilitation proceeding
6. What are the effects of the issuance of a liquidation order?
(1) suspend all actions or proceedings, in court or otherwise, for the
enforcement of claims against the debtor;
(2) suspend all actions to enforce any judgment, attachment or other provisional
remedies against the debtor;
(3) prohibit the debtor from selling, encumbering, transferring or disposing in
any manner any of its properties except in the ordinary course of business;
and
(4) prohibit the debtor from making any payment of its liabilities outstanding as
of the commencement date except as may be provided herein. (FRIA, sec.
16)
(a) the juridical debtor shall be deemed dissolved and its corporate or juridical
existence terminated;
(b) legal title to and control of all the assets of the debtor, except those that may
be exempt from execution, shall be deemed vested in the liquidator or,
pending his election or appointment, with the court;
(c) all contracts of the debtor shall be deemed terminated and/or breached,
unless the liquidator, within ninety (90) days from the date of his assumption
of office, declares otherwise and the contracting party agrees;
(d) no separate action for the collection of an unsecured claim shall be allowed.
Such actions already pending will be transferred to the Liquidator for him to
accept and settle or contest. If the liquidator contests or disputes the claim,
the court shall allow, hear and resolve such contest except when the case is
already on appeal. In such a case, the suit may proceed to judgment, and
any final and executor judgment therein for a claim against the debtor shall
be filed and allowed in court; and
(e) no foreclosure proceeding shall be allowed for a period of one hundred
eighty (180) days. (FRIA, sec. 113)
7. Discuss the procedure for suspension of payments
(b) This is filed with the court of the province or city in which he has resided for
(c) He shall attach to the petition, as a minimum: (1) a schedule of debts and
(d) If the court finds the petition sufficient in form and substance, it shall, within 5
(a) When an individual debtor who, possessing sufficient property to cover all
his debts, but foreseeing the impossibility of meeting them when they
become due, may file a petition that he be declared in the state of
suspension of payments
six months prior to the filing of his petition.
liabilities, (2) an inventory of assets, and (3) a proposed agreement with his
creditors
working days from the filing of the petition, issue an order:
(a) calling a meeting of all the creditors named in the schedule of debts and liabilities at such
time not less than fifteen (15) days nor more than forty (40) days from the date of such Order
and designating the date, time and place of the meeting;
(b) directing such creditors to prepare and present written evidence of their claims before the
scheduled creditors' meeting;
(c) directing the publication of the said order in a newspaper of general circulation published
in the province or city in which the petition is filed once a week for two (2) consecutive
weeks, with the first publication to be made within seven (7) days from the time of the
issuance of the Order;
(d) directing the clerk of court to cause the sending of a copy of the Order by registered mail,
postage prepaid, to all creditors named in the schedule of debts and liabilities;
(e) forbidding the individual debtor from selling, transferring, encumbering or disposing in
any manner of his property, except those used in the ordinary operations of commerce or of
industry in which the petitioning individual debtor is engaged so long as the proceedings
relative to the suspension of payments are pending;
(f) prohibiting the individual debtor from making any payment outside of the necessary or
legitimate expenses of his business or industry, so long as the proceedings relative to the
suspension of payments are pending; and
(g) appointing a commissioner to preside over the creditors' meeting.

8. Discuss the principles laid down in the following cases:

(a) Guanco v. Antolo

(b) Pascual v. Universal Inc.
(c) Central bank v. Morfe
(d) Philippine veterans bank v. Montillas

Credit Transactions Essay 2011

1. what information must a creditor disclose to each person to whom credit is

extended prior to the consummation of the transaction?
1. discuss the form of organization and capital requirements of a financing
company?

2. when may the pledgor ask that the thing pledged be deposited?

2. what remedies are available to a pledgee in case he is deceived as to the

substance or quality of the thing pledge?

3. discuss the procedure for extrajudicial foreclosure of real estate mortgage

4. distinguish antichresis from real estate mortgage

4. how are common credits paid?

5. discus the principles laid down in the following cases:

(a) Central bank v. Morfe

(b) State investment house v. CA
(c) DBP v. NLRC
(d) Robles v. CA

Credit Transactions Essay 2010

1. Monchi owned a vintage Patek watch. Needing money to finance his law Art. 2085. The following requisites are essential to the contracts of pledge and
studies. He delivered said watch to Archie (a friend in the jewelry business) mortgage:
for sale. Instead of offering the watch to his customers, Archie pawned the
watch to Ablaza pawnshop and spent the money to buy a pair of Channel • (1) That they be constituted to secure the fulfillment of a principal
earrings for his new girlfriend. When Monchi found out about it, he obligation;
immediately went to the pawnshop to get back the watch. The pawnshop (2) That the pledgor or mortgagor be the absolute owner of the thing
refused to return it unless first redeemed. The pawnshop acted in good faith pledged or mortgaged;
in accepting the pledge. Monchi filed a replevin case to recover the watch. (3) That the persons constituting the pledge or mortgage have the free
Decide with reasons. disposal of their property, and in the absence thereof, that they be legally
authorized for the purpose.

Third persons who are not parties to the principal obligation may secure the latter
by pledging or mortgaging their own property. (1857)

- Action for Replevin will prosper since there is no valid pledge. Archie is not the
owner of the item.
2. when may a pledgor require that the thing pledged be deposited? (1) if the creditor uses the thing without authority, (2) if he misuses the thing any
other way and (3) If the thing is in danger of being lost or impaired because of
negligence or wilful act of the pledgee (Art. 2106)

2. What is the effect of the invalidity of mortgage on the principal obligation? (a) Principal obligation remains VALID - what is lost is only the right to foreclose
the mortgage as a special remedy.
(b) Mortgage deed remains as evidence of personal obligation.

A mortgage merely secures the fulfillment of the principal obligation. (Book, p.

398)
3. DIscuss the steps in extrajudicial foreclosure (ARC-DIN-REA) 1. Filing of application before the Executive Judge through the Clerk of Court

2. Clerk of Court will examine whether the requirement of the law have been
complied with, that is, whether the notice of sale has been posted for not less
than 20 days in at least 3 public places of the municipality or city where the
property is situated, and if the same is worth more than P400.00, that such
notice has been published once a week for at least 3 consecutive weeks in a
newspaper of general circulation in the city or municipality

3. The Certificate of sale must be approved by the Executive Judge

4. In extrajudicial foreclosure of real mortgages in different locations covering

one indebtedness, only one filing feecorresponding to such debt shall be
collected

5. The Clerk of Court shall issue certificate of payment indicating the amount
of indebtedness, the filing fees collected, the mortgages sought to be
foreclosed, the description of the real estates and their respective locations

6. The notice of sale shall be published in a newspaper of general circulation

7. The application shall be raffled among all sheriffs

8. After the redemption period has expired, the Clerk of Court shall archive the
records

9. No auction sale shall be held unless there are at least 2 participating

bidders, otherwise the sale shall be postponed to another date. If on the new
date there shall not be at least 2 bidders, the sale shall then proceed. The
names of the bidders shall be reported to the Sheriff of the Notary Public, who
conducted the sale to the Clerk of Court before the issuance of the certificate of
sale.

(Both for real estate and chattel mortgage) - Under Act. No. 3135 and 1508
4. what is the measure of application of the fruits to the interest and principal
antichresis?
4. when may a mortgagor (natural and juridical) exercise his/its right of
redemption?
5. what is an affidavit of good faith? what is the consequence of its absence?
5. when may a mortgagee foreclose the chattel mortgage? can the mortgagee
recover deficiency?
6. when are the rules on preference of credits applicable?
The fruits of the immovable, which is the subject of the antichresis, must be
appraised at their actual market value at the time of the application.
When the real estate mortgage constituted by it is extra-judicially foreclosed.
The right may be exercised:
(a) natural persons - Within the term of one year from and after the date of the
sale (date of the registration of the certificate of title with the Registry of
Deeds)
(b) juridical persons - Within three months from the registration of the certificate
of sale
An oath in a contract of chattel mortgage wherein the parties "severally swear
that the mortgage is made for the purpose of securing the obligation specified in
the conditions thereof and for no other purposes and that the same is a just and
valid obligation and one not entered into for the purpose of fraud.”
Effect of Absence
• The absence of the affidavit vitiates a mortgage only as against third persons
without notice like creditors and subsequent encumbrancers.
• The special affidavit is required only for the purpose of transforming an already
valid mortgage into a “preferred mortgage”; it is not necessary for the validity
- Thirty days from the time that the condition is broken (default of the
mortgagor).
- GR: Mortgagee may recover deficiency (no provision saying otherwise).
However, in instances involving a sale of movables by installment, the
mortgagee can recover the deficiency. (Book, p. 528)
Applies only where two or more creditors have separate and distinct claims
against the same debtor who has an insufficient property. Before the perefence
may be invoked, there must first be a proceeding (liquidation/dissolution) where
the claims of the creditors will be determined. (Book, p. 535)
6. how is preference among credits annotated in virtue of judicial order Priority rule applies to credits annotated in the Registry of Property.
determined?
• There is preference among the attachments or executions according to the
order of the time they were levied upon the property
• Pro-rate rule does not apply.

7. Relative to the implementation of the Truth in Lending Acts, what information Section 4. Any creditor shall furnish to each person to whom credit is extended,
must a creditor furnish each debtor prior to the consummation of the prior to the consummation of the transaction, a clear statement in writing setting
transaction? forth, to the extent applicable and in accordance with rules and regulations
prescribed by the Board, the following information:

(1) the cash price or delivered price of the property or service to be acquired;

(2) the amounts, if any, to be credited as down payment and/or trade-in;

(3) the difference between the amounts set forth under clauses (1) and (2);

(4) the charges, individually itemized, which are paid or to be paid by such
person in connection with the transaction but which are not incident to the
extension of credit;

(5) the total amount to be financed;

(6) the finance charge expressed in terms of pesos and centavos; and

(7) the percentage that the finance bears to the total amount to be financed
expressed as a simple annual rate on the outstanding unpaid balance of the
obligation.

8. Discuss the principles laid down in the following cases:

(a) Central bank v. Morfe

(b) State Investment House v. Citibank

Credit Transactions Essay 2009

1. Dindi was an importer of Mikimoto pearls from Japan. Vency would sell for
Dindi on commission basis these pearls. One day, Vency needing money to
support her love for night life and without the knowledge of Dindi, pledged
twenty strands of these pearls in Ablaza Pawnshop. Thearafter, Vency went
into hiding. When Dindi discovered what Vency did, she immediately
demanded return of the pearls. Having acted in good faith in accepting the
pledge, Ablaza pawnshop refused to return the pearls unless first redeemed.
Could Ablaza pawnshop’s position be sustained? Decide with reasons.

2. What is pactum commissorium?

3. what pleadings are prohibited in a corporate rehabilitation proceeding?

3. what should a rehabilitation plan include?

4. (a) what information must a creditor furnish the debtor in connection with
extension of credit? when should the information be given?

5. How is a pawn disposed on default of a pawner?

6. Discuss the procedure for foreclosure of real estate mortgage

7. what is antichresis?

7. in an antichresis contract, what is the measure of application of the fruits of

an immovable to the interest and the principal?

8. enumerate the documents that must accompany a petition for voluntary

insolvency

8. discuss the legal effects of a discharge

9. Discuss the principles laid down in the following cases:

(a) Central bank v. Morfe

(b) DBP v. NLRC
(c) Eastern shipping lines v. CA
(d) GSIS v. CA

Credit Transactions Essay 2008

1. On May 9, 2009, Dodie purchased the Amorsolo condo unit of Sunny and
caused the recording of the same in the Office of the Register of Deeds. On
January 30, 2007, the same condo unit was subject of a real estate
mortgage between Sunny and Larry which mortgage was also registered,
Sunny failed to pay his obligation and so Larry foreclosed the mortgage. The
condo unit was sold to Peter. When Dodie learned of the foreclosure, he
immediately started processing the transfer of title to his name. Peter
opposed the transfer of title. Decide with reasons.

2. What should a petition for corporate rehabilitation contain?

3. Does the pledgee have the right to cause the sale of the thing pledged? if
the answer is in the affirmative, discuss the procedure for the disposition of
the thing pledged. Is the pledgee entitled to recover deficiency?

4. discuss briefly the procedure for judicial foreclosure of real estate mortgage

5. What are the obligations of an antichretic creditor?

6. what is the effect of the absence of an affidavit of good faith in a contract of

chattel mortgage?

7. Discuss the order of preference with respect to credits evidenced by public

instruments and final judgements

8. Discuss the procedures for voluntary insolvency

8. What debts are released by dischared

9. what is dividend in insolvency?

9. Enumerate the properties of the insolvent that pass to the assignee

10. Discuss the principles laid down in the following cases:

(a) Central bank v. Morfe

(b) State investment house v. citibank
(c) Atok finance corp. v. ca
(d) Integrated realty corp. v. PNB

Credit Transactions Essay 2006

1. When shall the rehabilitation court issue a stay order? What shall a
rehabilitation plan include?

2. Joseph borrowed P1M from Golden Dime Corporation, a duly licensed

lending investor. As a security for the loan, he mortgaged his studio unit at
Cattleyta Garden. Joseph defaulted. After some negotiations, Joseph
executed in favor of Golden Dime a Deed of Assignment of the mortgaged
property in favor of Golden Dime. Is this assignment valid? decide with
reasons.

3. How can a contract of pledge bind third persons?

3. Can the pledgor alienate the thing pledged?

3. Can the pledgor deposit the thing pledged with another person?

3. What are the remedies of a creditor - pledgee who is deceived on the

substance or quality of the thing pledged?

4. Discuss the kinds of redemption and the period within which they may be
exercised

5. Who are entitled to exercise the right of redemption?

6. Discuss the effect of the absence of an affidavit of good faith in a contract of

chattel mortgage

7. What documents are required to be attached to the petition for suspension of

payment?

8. Why is insolvency inconsistent with suspension of payments?

9. Discuss the procedure for a valid offer of composition

10. Discuss the principles laid down in the following cases:

(a) Central bank v. Morfe

(b) Robles v. CA
(c) DBP v. Santos
(d) BA FInance corporation v. CA
Credit Transactions Essay 2003

1. What material facts must be included in the petition for rehabilitation?

2. What debts are NOT released by discharge?

3. Tom and Jervy mortgaged their land to Penny. While the mortgage debt are
pending, Tom and Jervy partitioned the land between them. Tom paid his
share of the debt. Is the mortgage on Tom’s share of the land extinguished?

4. Discuss the effects of death of the insolvent debtor pending the insolvency

4. What debts may be proved during the insolvency proceedings?

5. Distinguish pledge from chattel mortgage

5. Discuss the exceptions to the benefit of excussion

6. What are financing companies?

7. How are pawned articles disposed of on default of pawners?

8. DIscuss the principles laid down in the following cases:

(a) Central bank v. Morfe

(b) Bicol savings and loan association v. CA
(c) Integrated realty corporation v. PNB
(d) Republic v. CA
Credit Transactions MCQ 2013

1. Denotes the procedure adopted by the mortgagee to terminate the rights of (a) Redemption, (b) Foreclosure, (c) Execution
the mortgagor on the property and includes the sale itself -

2. Antichresis is perfected by - (a) Mere consent, (b) Upon notarization, (c) Delivery of the thing

3. and 4. The [(a) 10 day, (b) 15 day, (c) 30 day] period to foreclose a chattel (a) 10 day, (b) 15 day, (c) 30 day
mortgage is the minimum period after violation of the mortgage condition for
the mortgagor creditor to cause the sale at public auction of the mortgaged
chattel with at least [(a) 15 days, (b) 10 days, (c) 30 days] notice to the (a) 15 days, (b) 10 days, (c) 30 days
mortgagor and posting of public notice of time, place and purpose of such
sale, and is a period of grace for the mortgagor to discharge the mortgage
obligation

5. The difference between the value of the receivable purchased or credit (a) Financial leasing, (b) Lease rentals, (c) Purchase discount
assigned, and the net amount paid by the finance company for such
purchases or assignment, exclusive fees, services, charges, interest and
other charges incident to the extension of credit.

6. In the liquidation of an individual debtor, the liquidator shall submit a (a) 3 months, (b) 30 days, (c) 60 days
liquidation plan to the court within (answer) from his assumption into office

7. and 8. In an out-of-court or informal restructuring agreement or rehabilitation (a) 50%, (b) 67%, (c) 25%
plans, the same must be approved by creditors representing at least [(a)
50%, (b) 67%, (c) 25%] of the secured obligations of the debtor and by (b) 75%, (b) 100%, (c) 50%
creditors representing at least [(a) 75%, (b) 100%, (c) 50%] of the unsecured
obligations of the debtor
8. The rehabilitation proceedings shall commence upon the issuance of the (a) The securities and exchange commission, (b) Bureau of internal revenue, (c)
Commencement Order, which shall direct (answer) to file and serve on the Department of labor
debtor its comment or opposition to the petition or its claim/s against the
debtor.

9. In a court-supervised rehabilitation, the court shall have a maximum period (a) one year, (b) 180 days, (c) 90 days
of (answer) from the date of filing of the petition to confirm a rehabilitation
plan.

Credit Transactions MCQ 2012

1. The rehabilitation proceedings shall begin upon the issuance of the - (a) stay order, (b) commencement proceeding, (c) liquidation order

2. The Register of Deeds shall open and maintain a register of (answer) as an (a) financial leases, (b) pawned articles, (c) pledges
adjunct to the chattel mortgage registry

3. Pawnshop may grant such amount of loans as may be agreed upon (a) fifty percent, (b) thirty percent, (c) twenty percent
between the parties: provided, that the amount of loan shall in no case, be
less than (answer) of the appraised value of the security offered for the loan
unless the pawner manifests in writing the desire to borrow a lesser amount.

4. (answer) requires the delivery by the debtor of the real property given as (a) real estate mortgage, (b) chattel mortgage, (c) antichresis
security to the creditor

5. An insolvent debtor, by itself or jointly with any of its creditors, may filed a (a) 2/3, (b) 1/2, (c) 3/4
verified petition with the court for the approval of a pre-negotiated
Rehabilitation Plan which has been endorsed or approved by the creditors
holding at least, (answer) of the total liabilities of the debtor.

6. A creditor may file an obligation to the Rehabilitation Plan within (answer) (a) 30, (b) 15, (c) 20
days from the receipt of notice from the court until the Rehabilitation Plan
has been submitted for confirmation.

7. In suspension of payments, the suspension order shall lapse when (answer) (a) 30 days, (b) 45 days, (c) 3 months
shall have passed without the proposed agreement being accepted by the
creditors or as soon as such agreement is denied.

8. If no redemption is made within the prescribed period, the purchase at the (a) becomes, (b) will not become, (c) can become
auction sale (answer) the absolute owner of the property
9. Upon issuance of the Liquidation Order, no foreclosure proceeding shall be
allowed for a period of (answer) days.
10. As a result of the issuance of (answer) the juridical debtor shall be deemed
dissolved and its corporate or juridical existence terminated
Credit Transactions MCQ 2011
1. The affidavit of good faith is (answer) in a contract of chattel mortgage
2. In a judicial foreclosure of mortgage (answer) right of redemption after the
confirmation of the sale
3. Future property (answer) the object of a contract of mortgage
4. and 5. A thing under a pledgee by operation of law may be sold after
demand of the amount for which the thing is retained. The public auction
shall take place within (answer) after such demand. If, without just grounds,
the creditor does not cause the public sale to be held within such period, the
debtor (answer).
6. a registered mortgage right over property previously sold is (answer) to the
buyer’s unregistered right
7. The character of being an innocent mortgagee (answer) up to the date of
actual foreclosure and sale at public auction
8. and 9. A junior mortgagee acquires only the (answer) vested in the
mortgagor, and his right are strictly (answer).
10. In antichresis (answer) of the fruits at the time of the application thereof to
the interest and principal shall be the measure of such application
11. A chattel mortgage must be registered -
12. A preference (answer) to claims which do not attach to specific properties
13. Property held in trust by the insolvent debtor -
(a) 30, (b) 180, (c) 45
(a) commencement order, (b) liquidation order, (c) stay order
(a) an oath, (b) an attachment, (c) an undertaking
(a) there is, (b) there is no, (c) there can be
(a) can be, (b) may be, (c) cannot be
(a) one month, (b) two weeks, (c) forty five days
(a) may require the return of the thing, (b) may demand another auction sale, (c)
may appropriate the thing to himself
(a) interior, (b) superior, (c) is of equal weight
(a) ceases, (b) continues, (c) may continue
(a) right of redemption, (b) equity of redemption, (c) all the rights
(a) the same as, (b) equivalent to, (c) subordinate to
(a) fair market value, (b) assessed value, (c) actual market value
(a) within 30 days from execution, (b) within 15 days from signing thereof, (c)
anytime before the mortgagor has complied with his principal obligation and no
right of innocent third persons is prejudiced
(a) applies, (b) does not apply, (c) cannot apply
(a) should be excluded from the insolvency proceedings, (b) should be included
in the insolvency proceedings, (c) should be surrendered to the liquidator
14. No pawnshop shall close or transfer its place of business within (answer) (a) three months, (b) within 30 days, (c) within 15 days
after the expiration of the period for which any article or thing shall have
been taken or received by it at its place of business in pawn or pledges, or
before any such article or thing shall have been sold or otherwise disposed
of in accordance with the provisions of the law

15. The Truth in Lending Act (answer) to credit transaction which do not involve (a) applies, (b) does not apply, (c) can apply
the payment of any finance charge by the debtor

16. 17 and 18. An out of court or informal restructuring agreement or (a) fifty percent, (b) sixty seven percent, (c) twenty five percent
rehabilitation plan requires the approval by creditors representing at least
(answer) of the secured obligations of the debtor. It also requires the (a) seventy five percent, (b) sixty seven percent, (c) twenty five percent
approval by creditor representing at least (answer) of the unsecured
obligations of the debtor. Likewise, it must be approved by creditors holding (a) fifty percent, (b) twenty five percent, (c) eighty five percent
at least (answer) of the total liabilities, secured and unsecured, of the debtor.

19. The commencement order (answer) affect the right of a secured creditor to (a) thirty days (b) forty days, (c) fifteen days
enforce his lien in accordance with the applicable contract or law

20. The liquidation order (answer) affect the right of a secured creditor to (a) shall, (b) shall not, (c) may
enforce his lien in accordance with the applicable contract or law

21. Claims arising after the approval of the Rehabilitation Plan that are otherwise (a) are not, (b) are, (c) may be
not treated by the Plan (answer) subject to the Suspension Order

22. The court shall have a maximum period of (answer) from the date of the (a) one year, (b) six months, (c) three months
filing of petition to confirm the Rehabilitation Plan

Credit Transactions MCQ 2010

1. If the court finds the petition for suspension of payments sufficient in form (a) five, (b) ten, (c) fifteen
and substance, it shall, within (answer) working days issue an Order.

2. Upon motion of any interested party, the court may appoint a (answer) upon (a) assignee, (b) management committee, (c) rehabilitation receiver
clear and convincing evidence of actual or imminent danger of dissipation of
the debtor’s assets or other properties

3. Secured claim shall refer to a claim that is secured by a - (a) promissory note, (b) attachment, (c) lien

4. An out-of-court rehabilitation plan must be approved by at least (answer) of (a) sixty-seven percent, (b) eighty-five percent, (c) fifty percent
the secured obligations of the debtor -
5. The (answer) shall declare the debtor insolvent - (a) suspension order, (b) rehabilitation order, (c) liquidation order

6. Within (answer) from his assumption into officer, the liquidator shall submit a (a) three months, (b) six months, (c) two months
liquidation plan to the court -

7. The court shall have a maximum period of one hundred twenty (120) days (a) liquidation plan, (b) rehabilitation plan, (c) schedule of payments
from the date of the filing of petition to approve the -

8. Any decision of the rehabilitation receiver regarding a claim (answer) shall (a) may, (b) may not, (c) shall not
be appealed to the court -

9. (answer) pledge is one which is created by the agreement of the parties - (a) voluntary, (b) legal,(c) equitable

10. (answer) is the remedy available to the mortgagee by which he subjects the (a) foreclosure, (b) redemption, (c) liquidation
mortgage property to the satisfaction of the obligation -