Bus Law 2 (Daisy Arabella)

PROJECT 2

Total Points Possible: 20

Instructions:

Below are three problems related to Creditor Rights and Debtor Protection, Secured Transactions and Bankruptcy. The first two problems are 5 points each and the third problem is worth 10 points.

The first involves debtor protection.

The second deals with a secured transaction.

The third involves a bankruptcy.

You may use whatever sources you find in your research to answer the questions. However, please identify these sources and provide appropriate attribution.

Good Luck!

PROBLEM 1:

You are a lawyer for Legal Aid. A young woman who is obviously distressed visits your office and says that several months ago she bought a refrigerator from an appliance dealer, and that she had to pay $200 per month for 12 months for it. She also says that she lost her part-time job and has not made any payments for three months and has been receiving threatening voicemail messages from a bill collector. She says that “they are threatening to take her refrigerator” and also “report her to her boss”. In your interview with the young woman, what information would you need from her to fully understand her situation, and based on that information, what advice would you give regarding her rights, the rights of the creditor and a course of action. PROBLEM 2: Your client is a bank. Your client has asked your advice on the following transaction: The bank’s customer, a retailer dealing with electronic goods, is opening a new store. The customer has requested a loan to pay for inventory and has told the bank that the inventory will be moved in and out through sales. In order to secure the loan, that is, have a security interest in the inventory, the bank has asked your advice as to how best to proceed.

1. What advice would you give the bank on using the inventory to secure the loan? 2. What are the requirements under Article 9 of the UCC to create and perfect the

security interest? PROBLEM 3: Mr. and Mrs. George Smith are a retired couple living on George’s pension from a 401K plan and both their social security payments. They have three children and four

grandchildren. They recently renovated their home, having taken a second mortgage on the property to pay for the work. The home’s market value is $700,000, $500,000 of which is encumbered by two mortgages and a home equity line of credit. Mr Smith is a retired CPA and each year prepares income tax returns for high-net-worth clients who pay him lucrative fees for his service. During the rest of the year, the couple travels around the world. Their travels are paid for by credit cards, which are paid off from the income tax return preparation fees. Unfortunately, Mr. Smith recently lost two of his biggest clients and as a result suffered a drastic cut in income, resulting in an inability to pay off the credit card debt. In addition, Mrs. Smith suffered a rare illness that was not fully covered by Medicare or their supplemental health coverage. Mr. Smith is also a co-signer on his oldest grandson’s student loans and has been making payments on his grandson’s behalf due to the latter’s unemployed status. The credit card balances total $28,650 and the medical bill totals $3,250. The student loan has a balance of $22,000 and the monthly payment is $250.00 The Smith’s assets include their home, described above, a collection of artwork valued at $50,000, two automobiles (a Mercedes Benz, current Blue Book value at $30,000 but subject to a $23,000 auto loan balance and a fully paid for Ford Taurus, valued at $7,000) and a RV, currently valued at $150,000 but subject to a $75,000 RV loan balance. Mrs. Smith also has a jewelry collection valued at approximately $12,000. Furniture in the home is valued at $10,000, including a grand piano and some inherited rare pieces. The Smiths also own stocks and bonds valued at approximately $150,000 and their on-hand cash is approximately $5000.00. Because of the loss of the income tax preparation income and the inability to pay off the credit card debt, the Smiths are experiencing a negative cash-flow. Their liabilities now exceed their assets. The Smiths have now filed for bankruptcy protection under Chapter 7 and are also seeking a Homestead Exemption to keep their real and personal property. In addition, two weeks prior to filing for bankruptcy, in response to the annual funding drive of the local church, the Smiths made a $5000 charitable donation. The Smith’s total assets are $509,000.00. The Smith’s total liabilities are $629,900.00 (does not include the grandson’s student loan). The combined monthly income for both Mr. and Mrs. Smith is $8,000.00. The monthly expenses total $7,250.00 (including minimum payments on the credit card debt and the student loan payments). You are the Bankruptcy Trustee. How would you dispose of the estate? How would you deal with the Homestead Exemption? How would you deal with the $5000 charitable donation?

Project 2 Instructions

Always submit your best, most thoughtful work. Assignments should be well-organized and should demonstrate the level of writing expected of college students. Present your ideas as thoroughly as you can, providing examples and appropriate citations, (using the Publication Manual of the American Psychological Association, 6th edition). It is usually better to write too much than to turn in a sketchy response. Your writing style is very important, and you will be graded on this aspect of your work in such areas as grammar, punctuation, etc.

Creative approaches, evidence of critical thinking, and detailed answers are required. If you disagree with the materials presented in the course, argue your point with verifiable examples and outside data, properly documented and cited. Remember that even paraphrased material requires proper citation (use APA format, both within the text and in your reference list). Post your assignments as an attachment in your assignment folder on or before the due date (use Word or an RTF file format). No late submissions. Make a backup copy of your work in case you experience computer or network problems when you are uploading your assignment. Submitted assignments will be considered your final submission and submissions by email afterward will not be accepted.

Review and use the instructions and rubric for each assignment. Review the APA guidelines under Course Overview prior to submission. Divide your paper into sections and headline each section. Papers should be approximately 1,250 words, not including title page and references. There is no maximum limit. Check that all citations and references are correct and noted within your paper. Turnitin may be used to review each paper for plagiarism.

Project 2 This project requires you to identify and analyze legal issues and make recommendations based on one or more fact patterns. The issues will relate to the concepts covered in weeks 3, 4, and 5, about negotiable instruments, secured transactions, creditor and debtor rights, and bankruptcy,

Project 2 Grading Rubric (20 points/20% weight per project)

  Outstanding Superior Good Substandard Failure

  7 5.95 5.25 4.55 3.85

Identificati on of

relevant issues and

legal doctrine

accurately identifies all

relevant issues,

identifies all relevant legal

doctrines, explains in depth how

legal doctrines apply to relevant issues

accurately identifies

some relevant issues, and identifies

some relevant legal /

conclusion(s)d octrines,

explains some points

regarding how legal doctrines

apply to relevant issues

inaccurately identifies some/all relevant issues, inaccurately identifies some/all relevant legal / conclusion(s)d octrines, partially explains one or more points regarding how legal doctrines apply to relevant issues

inaccurately identifies some/all relevant issues or does not identify any relevant issues, inaccurately identifies some/all relevant legal / conclusion(s) doctrines, partially explains one or more points regarding how legal doctrines apply to relevant issues or

fails to identify relevant issues; does not explain applicability of legal doctrines

  7 5.95 5.25 4.55 3.85

Application of concepts/ developme nt

arguments or positions are

well- supported

with evidence from the readings/

experience; ideas go

beyond the course

material, recognizes

implications from

extended material and

concepts

arguments or positions are

mostly supported by evidence from the readings and course

content; ideas presented

demonstrate student’s

understanding of the

material and concepts.

arguments are more often based on opinion or

unclear views than on position

grounded in the readings of material or

external sources of material.

arguments are

frequently illogical and unsubstantiat ed; student

may resort to ad hominem attacks on the author instead of

making meaningful

application of the material

a meaningful attempt to explain or support ideas does not exist.

  3 2.55 2.25 1.95 1.65

Attention to

instructions

demonstrated full understandin g of requirements ; responded to each aspect of assignment

demonstrated understanding of requirements; missed one minor aspect of assignment

demonstrated some understanding of requirements; missed a key element or two minor aspects of assignment

failed to show a firm understandin g of requirements ; missed two key elements or several minor aspects of assignment

did not demonstrat e understandi ng of assignment requirement s

  2 1.7 1.5 1.3 1.1

Clarity, including grammar

writing is clear and easy to follow;

grammar and spelling are all correct; formatting

gives a professional

look and adds to readability

most ideas are presented clearly;

occasional spelling and/ or grammar

issues

wordy; some points require rereading to understand fully; more

than an occasional

spelling and/ or grammar

unclear and difficult to understand;

frequent spelling and

grammar issues

largely incomprehe

nsible writing/ poorly

written in terms of

mechanics and

structure. 

  1 0.85 0.75 0.65 0.55

Adherence to APA style

(6th ed.)

no APA style errors

attempts in- text citation

and reference list but 1 or 2

APA style errors are present

attempts in- text citation

and reference listing; APA style errors are present:

inconsistencie s in citation usage can be

found throughout

the document

attempts either in-text

citation or reference list but omits the

other

no attempt at APA style