1. Explain open delivery term.

2. Describe a three-party secured transaction. Provide an example.

3. Critical Legal Thinking Question

Until their graduation from college and professional schools, many students have borrowed money to pay tuition and living expenses. At this point, when a student might have large student loans and very few assets, he or she might be inclined to file for bankruptcy in an attempt to have the student loans discharged. To prevent such abuse of bankruptcy law, congress amended the Bankruptcy Code to make it more difficult for students to have their student loans discharged in bankruptcy. Student loans are defined to include loans made by or guaranteed by governmental units; loans made by nongovernmental commercial institutions such as banks, as well as funds for scholarships, b benefits, or stipends granted by educational institutions. The Bankruptcy Code now states that student loans cannot be discharged in any form of bankruptcy unless their nondischarge would cause undue hardship to the debtor or his or her dependents. Undue hardship is construed strictly and is difficult for a debtor to prove unless the debtor can show severe physical or mental disability or inability to pay for basic necessities, such as food or shelter for his or her family. Why did the U.S. Congress make the discharge of student loans more difficult than the discharge of other loans? Is this a "good" policy? What is undue hardship? Co-signers (e.g. parents who guarantee their child's student loan) must also meet the heightened undue hardship test to discharge their obligation.