Business Law Objective 6.0- Roles Of Financial Institutions Quiz

The bank will repossess Mike's car because he has not made a payment in over 6 months. Repossession is a legal action taken by the bank to take back the car due to non-payment. Once the bank repossesses the car, they may choose to sell it in order to recover the outstanding loan amount.

In this transaction, Stephen is using his home as collateral for a loan. Collateral refers to an asset that is pledged as security for a loan. If Stephen fails to repay the loan, the lender can seize his home and sell it to recover the amount owed. Therefore, the term "collateral" accurately describes the use of his home in this transaction.

Christian is reconciling his bank statement. This involves comparing the transactions listed on the statement with the transactions recorded in his checkbook to ensure they match. By doing this, Christian can verify the accuracy of his account balance and identify any discrepancies or errors.

Traveler's checks would be the best option for Daniel to take with him on vacation as he does not wish to carry cash. Traveler's checks are a type of negotiable instrument that can be used as a form of payment and can be easily replaced if lost or stolen. They provide a safe and convenient way to make purchases and access funds while traveling, as they can be used like cash but can be replaced if lost or stolen.

Belinda should immediately verify that her account balance will cover the check she wants to write. This means she should check how much money she has in her account before writing the check to ensure that she has enough funds available. By doing so, she can avoid the risk of writing a bad check, which could result in fees, penalties, and damage to her financial reputation.

In this transaction, Shawn is identified as the "Maker." The maker of a promissory note is the person who promises to pay a certain amount of money to the payee (in this case, Larry) at a specified time in the future. The maker is responsible for making the payment according to the terms of the promissory note.

The Fair Credit Billing Act could help Craig correct the error of his credit card bill still showing a charge for the returned stereo. This act provides protections for consumers in cases of billing errors and unauthorized charges. It allows consumers to dispute and correct billing errors with their credit card issuer, ensuring that they are not held responsible for charges they did not make or for products they returned.

When Susie loses her credit card and unauthorized charges are made before notifying the issuing company, she is liable for $50. This means that she is responsible for paying $50 of the unauthorized charges made on her card.

Bart's situation indicates that he is unable to repay his debts and needs to sell off his assets to pay creditors. Chapter 7 bankruptcy is the most appropriate option for him as it involves the liquidation of assets to discharge debts. Chapter 11 is typically used for businesses seeking reorganization, while Chapter 12 is specifically for family farmers or fishermen. Chapter 13 involves a repayment plan, which does not align with Bart's circumstances. Therefore, Chapter 7 is the best choice for him.

Lorin uses the check writing procedure of writing close to "Pay to the Order of" to avoid negligence when writing a check. By writing close to this line, she ensures that there is no space for someone to add additional names or alter the payee information. This helps to prevent any fraudulent activity or unauthorized changes to the check.

A stale check refers to a check that has not been deposited into an account after a certain period, usually six months. In this scenario, if Terri forgets to deposit the check to her account for six months, it would be considered a stale check.

The previous balance method is being used by Theresa's credit card company. This method calculates finance charges based on the balance at the end of the previous billing cycle. It does not take into account any payments or purchases made during the current billing cycle. Therefore, the finance charges are added to the previous month's ending balance to determine the total amount owed.

The term "Debtor" identifies Daniel because he is the one who buys goods on credit or borrows money. A debtor is someone who owes money or is obligated to pay a debt to another party. In this case, Daniel is the one who has taken on the debt by purchasing goods on credit or borrowing money, making him the debtor.

Karen should use the Special/Full endorsement on the checks to make the deposit. This endorsement allows her to deposit the checks into her business account without any restrictions or limitations. It ensures that the funds will be credited to her account and can be used for her business purposes.

The Fair Debt Collections Act protects Vince against the threats made by his credit card company. This law regulates the actions of debt collectors and prohibits them from engaging in abusive, unfair, or deceptive practices when attempting to collect debts. It provides consumers like Vince with certain rights, such as the right to dispute a debt and the right to be treated respectfully and fairly. Therefore, Vince can rely on the Fair Debt Collections Act to address his concerns and ensure that he is not subjected to harassment or unfair treatment by the credit card company.

When James pledges a security for a car loan, the term used for this pledge is collateral. Collateral refers to an asset or property that a borrower offers as a guarantee to the lender in case they are unable to repay the loan. In this case, James is offering something of value, such as the car itself, as collateral to secure the loan. If James fails to repay the loan, the lender can seize the collateral to recover their losses.

The purpose of bankruptcy laws is to give debtors an opportunity to recover from overwhelming debt. Bankruptcy laws provide a legal framework for individuals or businesses who are unable to repay their debts to seek relief and start afresh. It allows debtors to eliminate or restructure their debts, protect their assets from being seized, and establish a plan to repay their creditors over time. By providing this opportunity, bankruptcy laws aim to give debtors a chance to regain financial stability and rebuild their lives.

The Equal Credit Opportunity Act protects Joan against being turned down for a loan based on her gender or marital status. This law prohibits creditors from discriminating against applicants on the basis of race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. Therefore, Joan can rely on this law to ensure that she is not denied credit solely because she is a single female.

The term "acceptor" identifies the store in this transaction because the acceptor is the party who accepts a check and agrees to cash it. In this case, the store is accepting the check and providing the cash to Bob. The acceptor is responsible for verifying the authenticity of the check and ensuring that there are sufficient funds to cover it.

Terri should make a restrictive endorsement on checks that she deposits into her own account. A restrictive endorsement includes the phrase "For deposit only" along with her account number. This type of endorsement restricts the use of the check to only be deposited into Terri's account, preventing anyone else from cashing or depositing it. It provides an extra level of security for Terri's funds and helps to ensure that the check is only used for its intended purpose.

The Fair Credit Billing act was passed by Congress to assist individuals like Mark in correcting disputes on their credit reports. This act provides consumers with the right to dispute and correct billing errors on their credit card statements. It outlines the procedures that credit card companies must follow when a consumer disputes a charge and requires them to investigate and resolve the dispute within a specific timeframe. This act aims to protect consumers from being held responsible for incorrect charges and ensures that their credit reports accurately reflect their payment history.

Terri should make a Special/Full endorsement on the check she used to pay her rent. This type of endorsement allows the payee to specify how the funds should be used and ensures that the check can only be deposited into the specified account. By making a Special/Full endorsement, Terri ensures that the check can only be used for paying her rent and cannot be transferred or cashed by anyone else.

Terri should make a "Blank" endorsement on the check she cashed. This means she should simply sign her name on the back of the check without adding any additional instructions or restrictions. By doing this, Terri authorizes the bank to process the check and give her the cash value.

The Fair Credit Reporting Act protects Jan against her landlord's threat to report unsubstantiated debts on her credit. This act regulates the collection, dissemination, and use of consumer credit information, ensuring fairness, accuracy, and privacy in credit reporting. It gives consumers the right to dispute inaccurate information and requires credit reporting agencies to investigate and correct any errors. Therefore, Jan can rely on this law to prevent her landlord from damaging her credit with false or unverified debts.