Jo Purchases a Car from Used-Carz and Signs a Security

question 28

Multiple Choice

Jo purchases a car from Used-Carz and signs a security agreement that identifies Jo's "blue car" as the collateral. If Jo is unable to make payments, how likely would Used-Carz be in a suit to recover the collateral if Jo defaults on her payments?

• A) Very likely because Jo's car is identified as collateral.
• B) Unlikely, because the collateral is not clearly described in the written agreement.
• C) Very likely, because, although the collateral is not clearly described in the written agreement, creditors cannot lose rights to collateral.
• D) Very likely, because collateral need not be identified in a security agreement.
• E) Unlikely, because Used-Carz must first attempt to repossess the car.

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Definitions:

W-2

A W-2 form is a tax document issued by employers in the United States to employees, indicating the amount of wages paid and taxes withheld during the year.

W-3

A tax form used in the United States to summarize the total wages paid and taxes withheld for employees to the Social Security Administration.

Federal Unemployment Tax Return

A tax return specifically for reporting the amount of federal unemployment tax a business is responsible for paying, related to the wages paid to employees.

Form 940

An IRS form used by employers to report their annual Federal Unemployment Tax Act (FUTA) tax.