Ceditors Rights & Bankruptcy Flashcards
Clear Lake Credit Corporation lends funds to Donny, a consumer, to apply to the cost of a boat, which is the collateral for the loan. An enforceable security interest requires
a. a written agreement and Clear Lake’s possession of the boat.
b. a written agreement or Clear Lake’s possession of the boat.
c. the boat seller’s acknowledgement of the loan in writing.
d. Donny’s possession of the boat.
b. a written agreement or Clear Lake’s possession of the boat.
The payment of Hu’s debt to Ian is guaranteed by Hu’s personal prop¬erty. To give notice of his interest in Hu’s property to other creditors, Ian is most likely to
a. attach a bright label to Hu’s property.
b. e-mail other potential creditors.
c. file a financing statement with the appropriate authority.
d. publish a notice in local newspapers.
c. file a financing statement with the appropriate authority.
Portia owes Bon $500 on their contract, but refuses to pay. To collect, Bon files a me¬chanic’s lien, under which security for the debt is repre¬sented by
a. Portia’s personal property.
b. Portia’s real estate.
c. the $500 owed under the contract.
d. the contract.
b. Portia’s real estate.
Michael contracts with Jill to fix the brakes on her Honda Civic. Jill leaves her car with Michael, but refuses to pay when the work is done. Michael refuses to return the car until she pays. Michael’s lien on Jill’s car will end
a. in thirty days.
b. in sixty days.
c. when Michael voluntarily surrenders possession of the car.
d. when Jill obtains a court order requiring Michael to return the car.
c. when Michael voluntarily surrenders possession of the car.
Friendly Credit Corporation (FCC) believes that Gary may dispose of the assets that FCC expects to receive as payment for Gary’s debt before FCC can obtain a judgment. FCC may ask a court to issue a writ of
a. attachment. b. contribution. c. execution. d. redemption.
a. attachment.
A court awards a judgment to Alice, who is the creditor, against Ada, who is the debtor. After the judgment, Alice requests a court order to seize Ada’s property to ensure that the judgment will be collectible. This is
a. a judicial lien.
b. a writ of attachment.
c. a writ of execution.
d. a violation of most state laws.
c. a writ of execution.
Muffins-2-Go buys a truck from Street Vehicles, Inc., under a contract signed by Riley, Muffins-2-Go’s president, making him personally liable if Muffins-2-Go does not pay the loan. Riley is
a. a guarantor.
b. a surety.
c. a co-surety.
d. a co-creditor.
a. a guarantor.
Dina asks Edie to co-sign a credit application so that she can borrow money and buy a truck from First Street Motors. If, after the loan agreement is signed, Dina agrees to a higher rate of interest without telling Edie, then Edie is
a. discharged from the agreement.
b. liable at the higher rate of interest.
c. liable at the lower rate of interest.
d. liable for the principal only.
a. discharged from the agreement.
William is a surety for Jeannie’s loan from Richard. Richard knows of William’s existence. When the loan comes due, Jeannie tries to pay Richard, but Richard rejects the payment. William is
a. released from any obligation on the debt. b. required to pay the amount of the debt to Richard. c. required to pay up to half of the amount of the debt to Richard. d. required to pay the amount of the debt to Jeannie.
a. released from any obligation on the debt.
Consumer Credit, Inc. (CCI), lends $1,000 to Joe. Kay acts as Joe’s surety. If Kay pays the loan, she gets
a. any right that CCI had against Joe, but not a right to be reimbursed by Joe.
b. a right to be reimbursed by Joe, but not any right that CCI had against Joe.
c. any right that CCI had against Joe and a right to be reimbursed by Joe.
d. none of the choices.
c. any right that CCI had against Joe and a right to be reimbursed by Joe.
Drew and Earl are brothers. They agree to act as guarantors on a loan made by their sister, Flo. Flo defaults on the payments and Drew re¬fuses to pay. Earl pays the debt. Earl can recover from
a. Drew and Flo under the right of proportionate liability.
b. Drew and Flo under the right of reimbursement.
c. Drew under the right of contribution and Flo under the right of subrogation.
d. no one, because the parties are brothers and sister.
c. Drew under the right of contribution and Flo under the right of subrogation.
Mary’s home is in a state that has a $30,000 homestead exemption. Mary de-faults on a $60,000 debt that she owes to Nina. Mary’s home is sold at auc¬tion for $80,000.
- Refer to Fact Pattern 15-1. If Nina recovers less than she is owed, she can realize the difference from
a. any property that Mary owns.
b. only exempt property that Mary owns.
c. only nonexempt property that Mary owns.
d. property that any other member of Mary’s family owns.
c. only nonexempt property that Mary owns.
Mary’s home is in a state that has a $30,000 homestead exemption. Mary de-faults on a $60,000 debt that she owes to Nina. Mary’s home is sold at auc¬tion for $80,000.
Refer to Fact Pattern 15-1. Mary will receive
a. $0. b. $30,000. c. $50,000. d. $60,000.
b. $30,000.
Mary’s home is in a state that has a $30,000 homestead exemption. Mary de-faults on a $60,000 debt that she owes to Nina. Mary’s home is sold at auc¬tion for $80,000.
Refer to Fact Pattern 15-1. Nina may recover
a. $0. b. $30,000. c. $50,000. d. $60,000.
c. $50,000.
Mary’s home is in a state that has a $30,000 homestead exemption. Mary de-faults on a $60,000 debt that she owes to Nina. Mary’s home is sold at auc¬tion for $80,000.
Refer to Fact Pattern 15-1. Other property Mary may own that may be ex-empt from satisfaction of judgment debts includes
a. any property that Mary wishes to exempt. b. investments that Mary has made in her family’s businesses. c. recreational vehicles that Mary uses on weekends. d. tools that Mary uses in her trade.
d. tools that Mary uses in her trade.
