1. Introduction to SD's

Question 1

Which of the following is not an advantage conferred on creditors by (at least some) real security devices?

Question 1Answer

a. The creditor may require the debtor to agree at the time credit is advanced to forfeit its property in payment of the debt in the event of default.

b. The creditor may obtain the right to be paid in preference to other creditors out of the judicial sale of certain assets of the debtor.

c. The creditor may obtain the right of pursuit which allows the creditor to enforce its security rights against assets after the debtor has conveyed them to third persons.

d. The creditor may have the right to seize and sell property of the debtor that would otherwise be statutorily exempt from seizure.

Answer 1

a. The creditor may require the debtor to agree at the time credit is advanced to forfeit its property in payment of the debt in the event of default.

Question 2

Suretyship is–

Question 2Answer

a. a form of possessory security.

b. a form of real security over movables.

c. a form of real security over immovables.

d. a form of personal security.

Answer 2

a. a form of possessory security.

Question 3

Security is _________ to the obligation it secures, meaning that it is dependent upon the principal obligation and is transferred with the principal obligation without an agreement to that effect.

Question 3Answer

a. bonded

b. accessory

c. subsidiary

d. personal

Answer 3

b. accessory

Question 4

True or false: Security devices are always consensual (i.e., created through an agreement between the creditor and debtor).

Question 4Select one:
True

False

Answer 4

False

Question 5

In rem obligations–

Question 5Answer

a. are obligations in which the obligee’s recourse against the obligor is limited to particular property or to a specified class or kind of property.

b. are contrary to Louisiana’s public policy that obligors are obligated to fulfill their obligations out of all of their property and are therefore absolutely null.

c. are a form of security device.

d. may be made verbally or in writing.

Answer 5

a. are obligations in which the obligee’s recourse against the obligor is limited to particular property or to a specified class or kind of property.