Which of the Following Is True of Disposition of Collateral

question 77

Multiple Choice

Which of the following is true of disposition of collateral?

• A) Disposition of collateral must be a public proceeding.
• B) The debtor is entitled to receive any surplus collateral that remains after disposition.
• C) The debtor need not be notified of the disposition as the creditor has complete claim on the collateral.
• D) Disposition of collateral occurs when the default is by the creditor.

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Definitions:

Surrenders Control

The action of relinquishing authority, power, or ownership over an entity, asset, or decision-making process to another party.

Transfer of Receivables

This refers to the process where a company assigns the right to collect cash from its outstanding invoices to another party, often in exchange for immediate cash.

Collateralized Borrowing

Borrowing funds while providing assets as security or collateral for the loan in case of default.

Restructuring Gain

Income or positive financial impact resulting from alterations made to a company’s operations, structure, or strategy aimed at improving efficiency or reducing costs.